Fairway Realty Marketing Plans

Overview

“The tradition in real estate has been that the commission has been stated as one number.  For example it might be stated as or 6% or 7%.  Remember that each company sets their own commission structure and there are no set fees in the industry.  Every company including ours is free to set the commissions as we determine necessary for our business to operate.  You might ask:  “Why is the commission so high or why do I rarely find an agent willing to negotiate?”  This represents my opinion but, based on my experience and research, there are a number of problems with the way the Real Estate industry operates that contributes to their cost of doing business but the main problem is this.  Real Estate agents typically work on a contingency basis without any contingency fee up front.  What other industry works that way?  I can’t think of any, can you?  Attorneys may do it on occasion when they are real sure of winning the case.  So, the commissions you may have paid in the past and considered high is because you are paying the agent for all the people they have schlepped all over town with their expensive car and $3.00 a gallon gasoline who didn’t buy anything from them.  Or the listings they have had and serviced and advertised that didn’t sell because they were overpriced or some other reason.  At Fairway Realty, we probably can’t change the entire industry.  In fact, we don’t want to.  We only want to change it for us and for our clients.  So, you save more of your equity and we operate profitably with less income per transaction.

Although typically expressed as one number, the commission is a sum of two components.  There is a “listing” or I like to call it a “marketing” component and then there is the “selling” component.  Generally, there has been a 50/50 split of the total commission.  Thus, if the stated commission was 6%, 3% would go to the “listing” broker and agent for “marketing” the property and the other 3% would be offered to the “selling” broker and agent for bringing a buyer.  This is one of the areas where Fairway Realty is unique.  We give you the option of setting each component individually depending on your circumstances such as how quickly you’d like to sell and how much exposure you’d like to have for your home.

In listing your home, the “marketing” company is the one that I represent.  We will market and advertise your home depending on the plan you select.  As your listing broker, Fairway Realty represents you.  We will discuss that more later but first let’s discuss the “Selling” commission

FAIRWAY REALTY COMMISSION PLANS

SELLING COMPONENT

With about 500 agents in Aiken and around 1500 in Augusta & North Augusta, I think we can agree that the most important factor in successfully selling your home is listing it in the Multiple Listing Systems.  This provides the greatest exposure of your property.  Fairway Realty is unique in that it lets you choose how much you’d like to offer agents to show and sell your home. 

You select the commission plan below that you’d like to offer to induce a Realtor to show and sell your home.  Indicate by initialing the percent of the sales price you’d like to offer.  The rule of thumb is always be competitive with your competition. And when the market is slower, it can make sense to offer a Bonus or little more commission to the Buyers agent. So find out what the other brokers are offering in your area and use that as a guide. We can provide you with that information.

___      4.0%    This would about 1 percent higher than the what we see a majority of the time in the Aiken market and a half percent higher than the Augusta/North Augusta markets and would really provide extra sincentive for an agent to show your home. This would be advised if you desire to move quickly and really want to try and get your home noticed.

___      3.5%    This would be about ½ percent higher than the majority we see in the Aiken market and could make it stand out and get priority treatment by agents. 

___    3.0%    This would be what we typically see a majority of the time in the Aiken market.  This would be recommended if you desire adequate showing of your home to sell within the average time on the market (about 180 days).

___    2.75%   Occasionally we see this number offered in the Aiken MLS.

___    2.5%    We see a percentage of listings offering this in the Aiken MLS although the frequency is growing.  There might be some resistance to showing from some agents but I’d say if you are not urgent to sell, give this a try. 

LESS THAN 2.5% IS NOT RECOMMENDED OR OFFERED WITH THE RARE EXCEPTION OF A VERY HIGH END PROPERTY BECAUSE: 

1.  I have reviewed the Aiken MLS and out of 981 homes on the market, there are 5 offering less than 2.5%.  4 of the five are very high end properties priced between $1.8M and 4.3M.  The other is on for $595K and is in Barnwell and has been on the market over 8 months as of 5/27/07. 

2.  Futher, I have reviewed the sales and since 1/1/07 there have been 488 sales.  Only 3 of those were at 2% or less.  One of those was presold by the same agent that listed it and one was a very high end property selling at $2.8M.  (These figures were taken in July, 2007)

SELLING COMMISSIONS

The “Selling” company is one who finds a buyer for your home.  Sometimes, since we are marketing your home, one of our agents may be the one who finds a buyer for your home.  We may do that with them as a customer or it’s possible with your’s and the buyer’s permission to represent both you and the buyer.  In either case, we would then earn both the “listing” and the “selling” side of the commission.

Since the “Selling” side of the commission goes to the company who brings the buyer, we let you decide how much you want to offer the “selling” agent and company to incent them to bring a buyer of your home.  For resale residential properties, we see “selling” commissions offered in the Aiken, North Augusta and Augusta areas generally in the range of 2.5% to 3.5. Very rarely do we see it a bit higher or lower.  Keep in mind that you may be in competition with other properties in the area and you may want to provide at least as much or perhaps even a higher incentive than those in order to make your home stand out to agents who have prospective purchasers, particularly if you want to sell quickly.  Although I have no specific knowledge of this, it is possible that some agents might avoid showing your home if they feel that the commission offered is less than acceptable to them and they can earn more by showing other properties.  For this reason, we generally do not accept listings that offer less than 2.5% and might only consider it for very high end properties.  If, after listing your home for awhile and if it doesn’t seem to be getting the exposure you’d like, it can always be increased.

MARKETING COMMISSIONS

At Fairway Realty, we put you in the driver’s seat and let you decide what services you would like and thus, what commissions you will pay to market your home.  We offer plans from basic services to full service plus with fees as low as $500 plus 1%.  Thus, the total commission you pay could be as low as 4%  plus $350. (2.5% Selling Commission plus 1.5% Marketing Commission plus $350 listing fee.).

FAIRWAY REALTY COMMISSION PLANS

MARKETING COMPONENT

One of the highest costs of marketing real estate is advertising.  And, believe it or not, it’s one of the least effective means of selling real estate.  I was once told by an advertising executive of the Aiken Standard that statistics show that less than 4% of homes are sold by newspaper advertising. 

So, why is the Sunday paper full of real estate ads?

1.    It’s what’s called institutional advertising.  They’re really advertising the Real Estate company in order to get more listings.

2.    It makes their sellers happy to see their home in the paper.

So, what sells homes?

The number one answer is the Multiple Listing Services.  With about 500 agents in the Aiken MLS and about 1500 in the Augusta/North Augusta MLS, the odds are that one or more of those agents will have someone looking for your home.  Fairway Realty is a member of both Multiple Listing Services for maximum exposure.  Few Realtors are members of both as we are.

The number two answer in today’s market is the Internet.  It is now being stated that over 93% of people looking for a home begin their search on the Internet.  When I began working in Real Estate in Aiken over 5 years ago, the first thing I did was build my website.  It is the most popular real estate website in Aiken and much of my reason for success and the basis for starting Fairway Realty.

THE PRECISE DETAILS OF OUR PLANS WILL BE PROVIDED WHEN WE MEET IN PERSON

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