Here in Florida new home sales have been in the tank for quite a while. We’ve been seeing the ads by home builders in our local newspaper offering all types of incentives. For a while I thought it was just in Florida that this was going on - but after reading this article I”ve come to see it is more widespread.

Some of these incentives include price reductions, paying of closing costs, free swimming pools, free blinds, and even free patios. I’ve seen the incentives on new condos as well including an ad this week in our local paper for a condo offering closing costs paid, 2 years of homeowner’s association fees paid, and a 24-month home warranty for free. Another ad by a different builder is offering savings of $10,000 to $50,000 on select homes, a $5000 credit towards upgraded flooring or 42″ cherry cabinets, and a free upgrade to a glass top range or a side-by-side refrigerator. This is such a change from 7 years ago when we had our house built. Back then, if you waited even a week the price had increased by $1,000 and forget any type of incentive - you were just darned glad that you’d put the deposit down before someone else beat you to it.

I wrote the other day about our experience a few years ago in selling our home ourselves (without a real estate agent). If we were to sell our current home today we would do many of the same things again but with a few changes. What would we do different?

1. Advertising would be much more important. When we sold our house the last time, we were in the beginning of a seller’s market. That is not the case today. We would need to change our advertising strategy which would definitely include help from the MLS (Multiple Listing Service). There is a new web site www.iggyshouse.com that allows you to list on the MLS service for free. From their site:

This service would allow our home to be viewed by many more people. It also means that a real estate agent would be showing buyers our home and we would have to pay them a commission. We would negotiate the rate with each individual agent to get the best possible deal. In our area a standard real estate commission is 3-1/2% for the buyer’s agent and 3-1/2% for the seller’s agent which is a total of 7% for the real estate commission. So we could potentially save half of the real estate commission by only having to pay the buyer’s agent. Either way we would get more potential buyers because of the exposure with the MLS service.

2. Advertise on the Internet. We would have a web site with all the information on our home, with pictures and contact information.

What would we do the same?

1. Require the potential buyers to provide a pre-approval letter from the mortgage company and provide some personal information. I received a couple of good questions from readers regarding the requirement of getting personal information from potential buyers. We required the information for several reasons. We wanted to show the home only to people who were serious buyers. We felt that if we were showing people our home, then they needed to provide proof of who they were and if they were serious about buying our home, they would have no problems doing this. The house was shown by appointment only. When people called to inquire about the house we told them the requirements for us showing the house to them including an appointment, filling out a form with their information, and the pre-approval letter from their mortgage company. We did not schedule any “open houses”. The pre-approval letter showed their intent to buy a home and that they could afford it. We didn’t want to be wasting our time with someone who clearly was not going to be able to get the financing, especially if we had other offers to choose from.

2. We would still hire a home inspector and would hire the appraiser as well. With the current market slowing it is important to price the house right the first time. We’ve seen several houses on the market in our subdivision that have been sitting there for months. These houses are definitely priced too high for the current market.

3. Make the property as attractive as possible. This would include painting as needed and improving the landscaping.

4. We would hire the same real estate attorney and use the same title company as before. Since we already have these professional contacts, we don’t need to shop for them all over again.

Progressive Homesellers announced today that it is operating in Florida offering flat fee real estate commission.  This should present a welcome option to homeowners who do not want to pay the 6% or 7% standard real estate fees. 

“Florida homeowners can visit http://www.ProgressiveHomesellers.com and list their property for a flat fee of $3,995 with a Realtor in Progressive
Homesellers’ exclusive network. Each Realtor represents a recognized brand
like Coldwell Banker, Prudential, or RE/MAX and has been rigorously
prescreened for experience and client satisfaction. The seller of a
$400,000 home saves over $8,000 compared to the typical listing commission.  Sellers receive full representation, including pricing guidance, MLS exposure, a brand name yard sign, expert negotiation and complete support through closing.”

I think it sounds like a great idea, and another way for Floridians to save money.  

“We’re hopeful that Floridians will be as receptive to our concept as
home sellers in other parts of the country,” said Progressive Homesellers
CEO Jeremy Stamper. “Given Florida’s high real estate prices, six percent
is way too much to pay in commission. Now people all over Florida won’t
have to choose between a discount commission and a full service agent.”