Coldwell Banker Has a National Sales Event By Taking Advantage of Home Sellers?
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Okay, I know this will be snarky, but I can not help myself.
Coldwell Banker has announced they are having a National 10 Day Sales Event. I have been trying to formulate a post on it, but I think that listing the problems I have with this would be better.
- First, it degrades the agents. Every agent I know hates the perception they have as a profession. The best fight it every day. Yet running a promotion in this way makes me think of a car lot promotion. If you end up getting a buyer to contract, are you going to give him the bums rush to the finance managers office?
- Who is giving the discount? It is your clients. Essentially you have told them that the price they have listed the house is a good one to get the listing, now you are asking them to lower their price for your sales effort? Mrs. Smith, we are running a promotion. Please take a $40,000 price cut on your home to help us with our promotion.
- What does Coldwell Banker have in the fight? I would be much more impressed if they said we are having a sale on our listings and participating agents will cut our commissions in half for the duration. Or that whatever corporate fees that Coldwell charges their agents and brokers are rebated to the consumer? That would be showing they have a dog in the fight.
- And finally, it highlights one of the greatest weaknesses in the National Agency/Agent/Homeseller relationship. The National agency, in this case Coldwell Banker, does not care about the individual home seller. They are worried about the bottom line and are willing to put the agent’s relationship with the home seller in jeopardy to help their marketing.
If I was selling with a Coldwell agent and was approached with this promotion I would tell them to shove it where the proverbial sun will not shine, and then seriously wonder about the agents and agencies commitment to me and my needs.
“Despite the difficult headlines regarding our overall economy, the residential real estate market has been showing several positive signs over recent months that could be signaling a tipping point,” said Jim Gillespie, president and chief executive officer, Coldwell Banker Real Estate LLC. “Because of higher inventory, buyers have more homes to choose from and they can take advantage of near historically low interest rates and affordability levels that are the best they have been in years. The recent housing and economic recovery legislation also provides first-time homebuyers with the added incentive of a $7,500 tax credit.(1)
“Yet our research and discussions with our brokers and sales associates shows that in many markets sellers remain reluctant to list their homes at the proper prices necessary to attract buyers,” continued Gillespie. “It’s our hope that the Coldwell Banker 10-Day Sales Event will move buyers off the sidelines and into the market. We are embarking on this initiative — which has never been done before on a national basis — because we believe it is critical for Coldwell Banker, as an industry leader, to help serve the needs of those individuals listing homes with a Coldwell Banker broker and to help move the U.S. real estate market in the right direction.” via PR MarketWatch.
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Comment by Jason Sandquist on 7 October 2008:
Unfortunately I work for this company and do not believe in the promotion at all. I didn’t even approach my clients to participate.
Comment by G-II Varrato II on 7 October 2008:
Ok… I understand your frustration. But to help you refocus your disapproval here are some sobering facts.
In Maricopa County Arizona, the Arizona Multiple Listing System reported from September 1st through 30th over 6,700 homes closed. Of that number of transactions, nearly 90% were in the price range of $0.00 to $350,000. Nearly 65% sold in the price range between $100,000 and $250,000. Those homes that fell in the mid-range of the $100,000 to $250,000 sold for up to 10% less than list price. The homes in this set spent, on average, 30 days LESS on the market than those homes that would not or could not reduce their price.
These statistics demonstrate two things. First, sellers are being told by buyers, “…Mr. & Mrs. Seller, your home is not worth… to me… what you want to sell it for.” Second, too many real estate agents are not willing to educate their seller client about the character of the market and the naiveté of the pool of buyers. Therefore sellers are either not discouraged to enter the real estate market with an overpriced listing, or… even more disappointing is that sellers are encouraged to enter the real estate market with an overpriced listing. Neither scenario serves the seller any positive result.
Sellers put their homes on the market for only one reason… to get it sold. Sellers do not put their homes on the market to get them LISTED! All the advertising and marketing in the world will not result in the successful sale of a property that is overpriced. It’s simply can’t happen. Appraisers won’t find the value, banks won’t lend on the overprice listing and sound thinking cash buyers will not pay more for a property than it is worth.
Value is not in the eye of the seller. Value has always been in the eye of the buyer. Real estate is like a commodity. It’s a lot like GOLD, or IBM stock. Buyers of GOLD, or IBM don’t fall in love with the commodity, they simply spend what it is worth to them, based on buying trends. The same is true of real estate, with one exception; buyers DO fall in love with real estate. They buy real estate with emotion, unlike stocks, or precious metals or stones. But at the end of the day… Real Estate is worth what it’s worth. No more and no less.
So, while you may feel the Coldwell Banker Sale Event is self serving, you could not be farther from the truth of the matter. The has two focuses; the first is to help sellers understand that, if they wish to stay in the market, they must price their property appropriately and second, to encourage buyers to pull the trigger. It’s time to make their move.
Sincerely
Lori & G-II – Coldwell Banker Residential Brokerage, Phoenix, AZ
Comment by Kevin Schmidtchen on 7 October 2008:
WOW…this is scary. I agree that the good agents in this industry are always on the alert to promote what we do for clients. The perception is often negative, but once someone from the “outside” learns about how hard good Realtors work and what we do, they respect greatly in the end all our efforts etc. To then hear about this “promotion” is extremely sad. I know a lot of good agents at Coldwell…but I would not want anything to do with this.
BLOG: http://www.SantaBarbaraRealEsateVoice.com
Kevin Schmidtchen
Sotheby’s Int’l Realty
Comment by Tom Royce on 7 October 2008:
Lori and G-II
Thanks for the comment, but would it not be incumbent upon the agent to get the pricing correct the first time, not to hope for a sale and marketing campaign through a corporate entity to achieve this.
Car salesmen are not agents, they are salesmen. So Nationwide sales make sense for operations that rely on salespeople.
Real Estate agents are agents. They have a duty to their cleints (not customers) that far exceed the role of salesperson. To accept a listing that is unrealistically priced is not ethical if the expectation is to talk them down later, even though it happens all the time. (That is one of my pet peeves.) Your job is to be completely honest with your clients and to do all you can to get a sale.
If the need to achieve this is done by corporate offering National Sales Days then the Coldwell model is broken in my opinion.
Comment by Terry Hand on 10 October 2008:
Tom,
I am a commercial REALTOR with our local Coldwell Banker Commercial affiliate (2 different corporations), so I am not involved in this per se, but I am part of the industry.
I understand your point of view, but here is my thinking on the subject. This is a market the likes of which we have never seen before. I think that all Coldwell Banker is trying to do is create buzz in the market place with one goal in mind- get the property sold. When was the last time you saw a house sell at 100% of listed value? Not in this market. Who said that helping a seller determine a price for their home was a science? I believe that it is in many cases more art than science.
I think that also you miss the idea of the time value of money. If you sell a home for 10% less today but you sell it instead of 6-12 months from now, which is better? Especially if you have to drop it 10% 6 months from now. Which was smarter?
We are in a market in which auctions are being used, buyer incentives, anything (legal) that will get the property sold. I believe that this is just another opportunity to think outside the box.
Semper Fi,
Terry L. Hand
Athens, GA
http://www.CommercialRealEstateAthens.com
Comment by Karlie Kee on 11 October 2008:
I am a broker owner of a Coldwell Banker franchise. I was given this opportunity and CHOICE as to participate in the event or not. We (agents,staff,management,SELLERS)”chose” to participate. As we gave this marketing opportunity to our sellers as their CHOICE we had 65 sellers participate and over 500,000 dollars in resulting price reductions in our little part of the community. “We” received much needed support and exposure from our corporate affliate and much media support in our area for our sellers in these challenging times. The ultimate goal being to bring buyers and sellers together and motivating buyers to get moving off the fence. What has resulted is a true team effort by our clients,agents and affliates to react proactively in a never before seen market where the same old same old isn’t working. I can tell you that in our office this has been a success.
Sellers have benefited by the marketing efforts. Our office has worked night and day working to put this event together. Without a team effort and lots of hard work it couldn’t have happened. Some Sellers, otherwise unwilling to reduce prices were given additional motivation and support. Agents have had a positive event to focus on and every time a price reduces their commissions are reduced as well, so in fact they are participating in the reductions. My agents at a time when they are struggling financially reached deep to support their clients efforts through putting their precious few advertising dollars full force in this effort. Buyers are benefiting not only from the reductions but through our affliates support of this event and offering true savings on loan fees and closing costs. The sale just began yesterday. We are hoping for additional benefits for all as it begins. However this event has already been a true success for all of us.
In times like these those that step out of the box and try new things are often criticized even if they are successful. I contend that those sitting on the sidelines doing nothing but complaining and whining about the situation and judging the actions of others, have very little hope of having their opinions receive much merit.
I for one am very proud of Coldwell Banker Corporate, our local office, our management,staff, agents, sellers, buyers and affliate companies for not only their efforts but their proactive attitudes. I am proud to serve and take pride in our service to our communities. Rather than demeaning anyone I think anyone in this industry should be giving kudos to those trying to make a difference!
Comment by John on 11 October 2008:
I completely agree with Lori.
She says: “Second, too many real estate agents are not willing to educate their seller client about the character of the market and the naiveté of the pool of buyers.”
Far too many agents are afraid of loosing possible business and as a result many opt to take on listings that are overpriced in hopes of a price reduction later. Very sad in my opinion.
Comment by Tom Royce on 11 October 2008:
John
I guess that is my problem, that agents will tell their clients to get the listing and then look to discount it later. This is probably the worst trait in Real Estate agents as when they bring a realistic offer on an overpriced listing, it looks like they are trying to screw their sellers.
That is my biggest problem with the Coldwell Banker sale. You are not selling homes for a builder, they own the inventory. You are not selling cars for a dealership, they own the inventory. Selling homes for a family means you are their agent. Acting like you are selling inventory like a builder is disingenuous. With individual home sellers their needs can not be put into a 10 percent off sale, and in my opinion it goes against all that a Realtor should stand for.
Comment by Karlie Kee on 12 October 2008:
For the record, this was NOT a 10% off sale. Each individual seller CHOOSING to participate decided on their price reduction with only a minimum in place. In our office it was not a percentage but a dollar amount of $5000.00. It was an opportunity for the seller not a mandate
Comment by Rick Murphy on 21 October 2008:
The responsibilty of the Realtor is to market their listings. The “10 Day Sale” was an exceptional marketing opportunity for Coldwell Banker listing customers. The event attracted national, regional and local media coverage which focused on the properties for sale.As a Managing Broker for Coldwell Banker in south Florida, the “10 Day Sale” was a tremendous success for our customers.
Comment by Frank Morelli on 1 November 2008:
I am not in the real estate business, but I happen to be buying into a co-op and selling my home, as it happens, both with Coldwell agents. The news of this sale almost scuttled the deal on the co-op which had passed the lawyer’s review period. I felt as if I had bought a brand new car just prior to an unexpected super sale, in other words, duped. And as a seller, i am infuriated that Coldwell, while not offering to lower its commission is brow beating customers into lowering prices. I am sure many sellers are unrealisitic and do little to make their property attractive, we saw that first hand in this recent period. But, we have a buyer because we did a study of comparable houses in our home area, got three cma’s, put several thousand dollars into preparing our house to show, and priced our house to gain attention. Despite the current financial crisis, we have a serious, qualified buyer who agreed to a price in our acceptable range. Coldwell is now advertising another “sale” for November. Both of our real estate agents happen to be friends, so we will not tell Coldwell to shove it, but I will definitely think twice in the future before considering Coldwell.
Comment by blackfoot on 20 November 2008:
The housing and credit markets are a mess right now. Several major banks that engaged in questionable subprime mortgage lending are smoldering in ruins. The housing market that had been stellar until last year finally collapsed, leaving behind a wake of steadily depreciating homes. The number of home foreclosures continue to spike as many home owners who took advantage of interest only adjustable mortgages are now faced with the daunting task of dealing with mortgage rates that are resetting at higher levels. The U.S. economy has sputtered and is now possibly sinking into the initial stages of a recession, further sapping consumer confidence in the economy and the housing market. If you are a home owner, the situation certainly looks grim and valuation prospects don’t look good. But if you are a renter and aren’t looking to buy anytime soon, life is good. If you have been relishing the opportunity to take advantage of the current housing malaise as a renter, well now is as good of a time as any to reap the housing bonanza - through lower rental prices.