Suburban home-selling blues

This past June, my wife and I decided to sell our home.

We live in a small-ish three bedroom townhouse and even before our daughter was born, it was already stuffed to the gills with living things. In addition to my wife and I, we also had two cats and two dogs. Once Isabel came along, the house was suddenly thrown into chaos. Humans were tripping over dogs, dogs were tripping over cats, everyone was tripping over Isabel, and so forth. Our townhome had officially become too small.

So the time had finally come for us to (gulp) sell our place and get a “real” house… One that had a formal dining room, a 2-car garage, a yard and a deck. The whole enchilada.

We’ve made some major upgrades since we moved in three years ago and our unit is among the nicest in the complex. Unfortunately, the Alpharetta market is flooded right now with condos and townhomes, most newer than ours. So we knew we wouldn’t walk with much money, if any, from the sale. But we still thought that we could sell within a couple of months and still break even.

After four long months on the market, our MLS listing expired this week. Not only did we fail to sell our home, we never got a single offer.

It’s been a long story, I know, but there’s a point.

In four months we never got an offer. Yet during that period, four other units in our complex, all with identical floor plans, were sold. Only one of the four was nicer than ours (the other three didn’t have nearly as many upgrades as we did) and only one of the four was listed for substantially less than ours (about $5,000).

That means that two units offering less value for the same price were chosen instead of mine. And throughout the process, we got virtually no negative feedback about the place. Certainly nothing that should have been a deal-breaker. So why should inferior units sell before mine?

The failure here, as I see it was in marketing and salesmanship. Which, as a marketer, is a little painful to admit. I had hired a real estate agent who promised to be an aggressive negotiator. I didn’t realize at the time that “negotiating”, to her way of thinking, didn’t begin until we had an offer on the table. So how will we get a buyer to the table, I asked her. “We’ll just have to wait and see,” would be her response.

Here’s what would happen: someone would come to see our house and their real estate agent’s information would be recorded digitally in the infra-red lockbox doohickey that was on my door. The Marketing 101 response at that point would be to follow up. “Turn strangers into friends” as Seth Godin says. But my agent, the expert with 20+ years of experience stuck with “We’ll just have to wait and see.” Likewise, I stuck with her.

As time went by, I found that my agent would not contact other agents at all unless they came to show the place a second time. The information stored in the lockbox, which could have well been dozens of leads, all went to waste. When she did contact other agents, the conversations (as they were reported back to me) seemed a casual “Thanks for coming by, where else are you looking and when do you think you’ll make a decision?” rather than “What did you think, what are your concerns and what can we do to make this work?”

I can’t know for certain, but it seems like my unit lost out to inferior ones because my real estate agent was losing out to superior ones. When my listing did expire, I didn’t think twice about letting my agent go.

So now what next? Being someone like myself, someone who understands sales and marketing and someone who is used to conducting negotiations without an intermediary, I have to wonder why I should be so dependent on the world of real estate agents to make this work.

And unlike some other markets where selling “by owner” is a viable option, the Atlanta market is particularly entrenched in the traditional real estate agent network. And especially since there’s such a housing surplus in Atlanta, agents won’t show houses that are for sale “by owner.”

But, now agentless, I do have other “hybrid” options that allow me to have more control of the process and may save me from playing “agent roulette” again.

There are online agencies that will, for a fee, still allow you to list on the MLS without having to deal with a selling agent and at closing, you would only have to pay commission to the buyer’s agent. There is also at least one “partial-service” agency in Atlanta that has a similar model but offers an agent who will assist with contract negotiations for a 1% commission.

Being frustrated with the agent system, I will likely end up going with one of these two options… But I have to imagine that I’m not the only one. There are probably thousands of people in the same position that I am at this very moment, looking for a better way to sell their house: with minimal interference from third-parties and with less money going into the pockets of real estate agents.

Keep in mind also that the high commission rates charged by real estate agents are a holdover from a time when agents were a more crucial part of the process. It was difficult for “regular folks” to find all the houses that were available and do any kind of meaningful competitive analysis on a particular area or neighborhood. Now, thanks to the Internet, I have just about as much information at my fingertips as my agent does. But I am still required to pay her the same price even though I no longer need her to do my research.

It’s very possible that I, and others like me, may be the beginning of a critical mass that will force the real estate industry to change in a big way.

I’ll keep posting on my progress. Until then, if anyone is interested in a modestly priced three bedroom, 2 bath townhouse convenient to GA 400 and downtown Alpharetta, please let me know.

-E.