By Alan J. Heavens
RISMEDIA, October, 2008-(MCT) – All real estate firms are alike.At least that’s what Consumer Reports says in an article headlined, “Buying, selling, remodeling: How to protect yourself in today ‘s rocky real estate market” in the September issue.
A survey of 15,000 Consumer Reports readers (yielding 9,100 responses) found few differences among the major real estate companies, either in overall performance or specific measures, such as attracting buyers.
Based on the responses, Consumer Reports did find RE/MAX franchises and independent agents were more likely to lower the commission they charged sellers below the traditional 6%.
The magazine points out, of course, that the respondents had to ask to have the commission lowered. In the case of RE/MAX, 77% who asked, received.
Here are some other findings from the survey:
• Paying less won’t hurt service. Though some agents reduced the number of tasks they performed for a smaller commission, most did not. Independent agents provided the fewest services overall, but the magazine said sellers with these agents seemed as satisfied as everyone else.
• Those who sold with an agent’s help received $5,000 less, on average, than their asking price. The 17% of respondents who sold their houses themselves said they received about what they had asked for.
• Houses are definitely taking longer to sell, but few of those responding (8%) gave up and took their properties off the market. Ninety percent said their houses were on the market for six months or less, although Consumer Reports says time on market appears to be getting longer.
I’ll point out here, in the hope of avoiding some nasty e-mail, that the percentage of those who sell their homes themselves and their success rates as given by the magazine differ from the results of previous surveys by the National Association of Realtors.
The Realtors’ group has consistently reported a decline in the percentage of “FSBOs” (for sale by owner) since the market downturn began 18 months ago, and it has maintained, in high times as well as low, that agent-represented sellers get higher sale prices than FSBOs, because the do-it-yourselfers tend to ask for less.
The truth, of course, lies somewhere in between.
Another facet of the magazine’s report that made for interesting reading came under the heading “Advice for owners: Don’t over-remodel.”
Long-time readers know that this has always been my recommendation-and also know the story about the seller who added a $60,000 kitchen and the buyer who bulldozed it the day after settlement.
Consumer Reports used Remodeling magazine’s “Cost vs. Value Report” to show paybacks for certain renovations, as I do every year, but it took a further step and surveyed appraisers about those changes. The contrasting opinions are fascinating. And once again, location made the difference.
Some of the magazine’s advice is fairly obvious. Under “Tips for Sellers,” the first is “Price It Right.”
Duh? Maybe not. Considering that a lot of sellers in this region are just starting to get the message that their houses aren’t gold mines means that agents still have their work cut out for them in the proper-price department.
If, however, you’re interested in buying a foreclosure (Go West, young people), here are a few pieces of very valuable advice:
• Skip property listings that charge a fee.
• Pay for a detailed home inspection. (Utilities likely have been shut off, so how can you tell what works?)
• Be patient (lenders drag their feet).
• Caveat emptor: In some states, sale of a foreclosed house may not be final because the law has a redemptive period during which the previous owner can satisfy the debt and regain the property.
As I said, it makes for interesting reading, although the magazine acknowledges that its readers might not be representative of the general population.
That means smarter, I think.
© 2008, The Philadelphia Inquirer.
