A Beverly Hills Homeowner Saves Two Percent On Agent's Commissions And Loses More Than $2 Million
Another homeowner mistakenly thinks he could save money by saving on agents' compensation, hires a real estate agent based on commissions and loses more than $2 million in equity.
By: Irina Hill
BEVERLY HILLS, Calif. - Oct. 24, 2019 - PRLog -- After interviewing leading Beverly Hills Realtors, a homeowner decides to hire an agent who agreed to charge the lowest commission. The house was sold for $2.25 million below the asking price affecting the value of every house in the neighborhood. Was it worth it?
Several months ago, Irina Hill was competing with other leading Beverly Hills Realtors to market a Beverly Hills luxury estate. The homeowners had been disappointed before, when the house didn't sell, so this time they were particularly selective.
The competition narrowed down to two candidates. Irina Hill with her target marketing approach charged 6% commission. Another agent agreed to list the house for 4% commission. Thinking that he would be saving a lot of money, the homeowners decided to save 2%.
Effective marketing of real estate requires investment of agents' personal money. Especially when it comes to luxury markets, finding the most opportune buyer requires significant resources for research, graphic design copywriters, postage and other services. When agents discount their fees to bare minimum, they cannot do what needs to be done.
In the end, after being in the market for two months, the house was sold for $2.25 below the asking price. This was the lowest sale per square foot in Beverly Hills Flats, just over $550.
"We just sold a little condominium, not a house, in North Hollywood, not Beverly Hills, for $500 per square foot. In Beverly Hills most of the homes have been selling for more than $1,000 per square foot. Now we have a sale that is going to affect the values of the entire neighborhood. One homeowner thought they would save almost $200,000 in commissions. As a result, they and every neighbor lost several millions in equity. A high price to pay for two percent of commission."
"We may charge higher commissions, but we give a performance guarantee. We put our own money on the line. If we don't achieve promised results, we cut our commissions. We write it in the contract. Don't even consider hiring agents who would not put their own money as a guarantee of their performance."
To find out the REAL value of your home and three things you should do to increase its value, text the address to Irina at (310) 467-2277 or go to http://www.BHHomeValue.com
Irina Hill, Realtor, MBA, CPA, PLMC