Will You Retail or Wholesale Your Home? – Which Approach is Right for You?

Posted by Ambergate Realty Advisors on Wednesday, November 4th, 2015 at 11:13am.

If you are like many home, condo or investor real estate sellers in the metro Edmonton market, you are looking for the most effective way to sell. And as an aside why not also get a discount on commissions?

The internet has ensured it’s never been easier to advertise for buyers and to expose your home or property to the widest possible market. It might be tempting therefore to try and ‘skip the middle man‘ and try to sell direct.

However, what you might not realize is that the real estate market has ‘layers’. Each layer has certain characteristics and the quality of your outcome may be directly affected by which layer you choose to market into.

I like to think of these layers as: Retail, Wholesale and Sub wholesale. 

Let’s examine the unique aspects and characteristics of each layer in detail.

Retail

This is the top layer of the market, where most homes and condos are sold. It’s also where you can expect to be exposed to the highest quality buyers and to receive the most money for your home or investment.

Retail buyers are expecting to see well prepared homes, enjoy a streamlined purchase process and they will pay you full market value for the experience.

To access these buyers, you must work with a traditional Realtor® or a boutique brokerage. Both of these practitioners will be using the same essential marketing tools. The boutique may also be using enhanced tools that the traditional Realtor® has NO time to use, or cannot afford to use, for example a Facebook business page, or a custom built website for marketing to niche buyers.

Unfortunately, this option normally costs the most amount of money. Why?

Traditional agents might be forced to charge high commissions for 2 reasons. First they pay large fees to trade under the big brand name they have on their business cards and signs. Second they have to make money on those homes that do sell, to cover their expenses for their listings that they don’t sell.

What does this mean? Based on recent analysis, only about 50 to 55% of listings put onto the Edmonton MLS® System actually sell when listed with traditional Realtors®.

An alternative would be to find a fee based service program such as the one offered at Ambergate Realty Advisors.

With a program like this you pay a little at the start to save a lot at the end.

Wholesale

In this the middle layer the market you will be exposed to experienced investor types and starting to get into the mainstream buyer group, that is the value conscious consumer who is looking for a home. You will reach this market by using for sale by owner companies, or one of the discount brokerages that have emerged in recent years. I have noticed that because you are openly advertising the fact that you are trying to save money on fees, some buyers will be very cautious and may wonder if you have tried to skimp in other areas like home maintenance.

The buyer may also wish to enjoy cost savings too. Expect to receive low ball offers.

It’s also been my experience that this approach works well at the lower end of the market and less well in the mid - priced and luxury priced markets.

Sub – Wholesale

Buyers who are active in this the bottom layer of the market fall into 2 camps. First, experienced investor types who are looking for under exposed real estate that they can purchase well under market value.  The second group may be challenged by: poverty, no credit history or very poor credit history. These buyers may ask you for no money down and rent to own options. By watching the market over time, I have noticed that predominantly lower priced homes and condos can be sold this way. You will reach this market segment if you restrict your advertising to a homemade or store bought ‘for sale’ sign and advertise purely on free advertising websites.

Expect to receive extreme low ball offers and some very creative ‘no money down’ proposals from this buyer group.

Want more information about our discount and flat fee home selling programs? Please feel free to call our broker owner Stuart Neal at: 780-760-2014 or visit www.LowestRealtyFees.com

Lowest Fees & Best Results, 

Note this blog was first published on www.LowerRealtyFees.com  in early 2015. It was revised, updated and reposted on www.AmbergateHomes.com in October 2015.

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