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Old 08-14-2013, 06:51 AM
 
Location: Charlotte, NC
177 posts, read 387,726 times
Reputation: 158

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Quote:
Originally Posted by Verde Brook View Post
Let me explain...let's just say I know this business well.

First of all, your agent doesn't take 6% and run to Nordstrom with it.

Let's take an average transaction where the agent (in this case a "listing agent") represents the seller. 6% commission? Let's do the math.

Off the top, 3% normally goes to the buyers agent. Gone. That leaves the listing agent with 3%. Long before the closing they will have already spent at least 1% out of pocket on things like advertising your home, marketing materials, continuing education, Multiple Listing Service fees, lockbox fees, REALTOR association fees (very expensive), etc. That leaves them with basically 2%. Normally, half of that goes to their firm. Bottom line....a selling agent really makes about 1% off the sale of one of their listings.

Do not ask an agent to discount their services. You get what you pay for. How's the split? You want your listing agent to settle for 5%? Are they offering 2% to a buyers agent and 3% for themselves? It's considered unethical but, think a buyers agent will take a discount for their hard work too....or do you think they will show the house down the street offering them the full 3%?

It's a commission only business that is getting hot again folks You want a top producer, offer more of a commission. Want to sell fast? I'd say give at least 7% commission for your agent to play with. Have them offer the buyers agents the 4%. That's a good place to put your incentive. In today's market the agents who will settle for a lesser commission might be a little despirate for clients. Take the hint?

There may be opinions but, that's the cold truth.
In my opinion the HOME sells itself...not the realtor. I know that will ruffle some feathers, but I feel that if you have a clean, well-priced, well-staged home and it is on the MLS, it will sell itself. We have bought 4 homes in the past 8 years and I know what it takes to get a home sold: PRICE & staging. Get rid of the clutter, get the home in immaculate condition, price it well based on comps in your neighborhood, and get it out on the MLS. We sold our last home by paying the listing agent a flat fee of $500 to get it out on the MLS and we did the rest. It was sold within 30 days. Of course, we offered 3% to the buyer's agent. If you know what it takes to sell and you don't need a realtor holding your hand, this is the way to go. The problem with this route is that most people think their home is worth more than it really is and they don't know how to truly clean out the clutter to make it show well. If you can do those 2 things you can save a lot of money on commissions.
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Old 08-14-2013, 07:05 AM
 
Location: State of Being
35,885 posts, read 67,009,663 times
Reputation: 22370
There are many ways to negotiate a commission. And the higher priced the house, the more likely a realtor is to cut the commission, b/c they are still going to make a nice chunk of cash off the house.

For a 6% commission on a $300K house, it is $18K, wh/ has to be split, of course. But on a $500,000 house, a 5% commission is $25K . . . wh/ still leaves everyone feeling good.

Also, you can always do bonuses . . . lower commission but direct bonus to selling or listing agent or both (depending on your circumstance). That can actually be a better deal (for the realtors) in some cases than a 6% commission.

Find a realtor you trust and figure out how to keep everyone happy and fairly compensated and cut whatever deal you wanna cut.

Just remember - realtors are human - and if there are 3 houses in a neighborhood, priced similarly, but one means substantially less commission . . . you tell me which house they are not going to push . . . ????
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Old 08-14-2013, 07:41 AM
 
7,672 posts, read 9,863,873 times
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Anifani, it's true the buying/selling agents split the commission but that commission also has to be split yet again with their managing broker IF they aren't a broker themselves. So I can see them quibbling a bit on a lower priced home.

I also agree with aquafish that it's the house and price that sells the home and the realtor can make it smoother transition during the negotiating/closing.
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Old 08-14-2013, 08:37 AM
 
37 posts, read 32,585 times
Reputation: 42
Quote:
Originally Posted by aquafish41 View Post
In my opinion the HOME sells itself...not the realtor. I know that will ruffle some feathers, but I feel that if you have a clean, well-priced, well-staged home and it is on the MLS, it will sell itself. We have bought 4 homes in the past 8 years and I know what it takes to get a home sold: PRICE & staging. Get rid of the clutter, get the home in immaculate condition, price it well based on comps in your neighborhood, and get it out on the MLS. We sold our last home by paying the listing agent a flat fee of $500 to get it out on the MLS and we did the rest. It was sold within 30 days. Of course, we offered 3% to the buyer's agent. If you know what it takes to sell and you don't need a realtor holding your hand, this is the way to go. The problem with this route is that most people think their home is worth more than it really is and they don't know how to truly clean out the clutter to make it show well. If you can do those 2 things you can save a lot of money on commissions.
Well, you are half right. Well priced, staged homes do sell faster and yes, you can even save some cash with those MLS listing services...IF you know EXACTLY what you are doing. If all it takes is the MLS, a sign and a clean well staged, well priced home why do you think Realtors even exist? To keep folks from royally screwing themselves, that's what.

A close neighbor of mine needing to get every dime out of his sale listed recently through one of those flat fee MLS services and struck out on his own. In the beginning it was fun, easy even. He took his own photos, placed his own sign and waited. He got a little unsettled a couple of times with some of the folks touring the home, (I could write a whole page on just the safety aspect alone here) but he wasn't attacked or anything so that worked out. Then he got an offer! On a standard real estate contract. Lots of pages....written in the "realestatese" language. Yeah, he had a closing attorney but not one serving as a Realtor. Needless to say, after some back and forth negotiating he accepted the offer.

Right before closing, he got a little nervous and asked me if I would please just glance at the document. (Guess by now you figured out I am a Realtor) I walked him through the contract, explaining what each paragraph meant. Needless to say, he had made a serious mistake in misunderstanding what a certain part of the document meant and was giving the buyer additional cash ($5000 to be exact) that he didn't intend. He was mortified. This man was not a first time home buyer either.

Those listing and sales contracts change constantly. Realtors must attend multiple classes each year to keep track of those changes. I can't tell you how many times people have told me about horrible mistakes they have made selling their homes on their own. It wasn't staging the home, marketing or even nailing the price that got them. It was understanding the contracts.

I can represent myself in a court of law too but, I don't think I would do it...know what I mean?
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Old 08-14-2013, 10:28 AM
 
Location: Charlotte, NC
177 posts, read 387,726 times
Reputation: 158
Quote:
Originally Posted by Verde Brook View Post
Well, you are half right. Well priced, staged homes do sell faster and yes, you can even save some cash with those MLS listing services...IF you know EXACTLY what you are doing. If all it takes is the MLS, a sign and a clean well staged, well priced home why do you think Realtors even exist? To keep folks from royally screwing themselves, that's what.

A close neighbor of mine needing to get every dime out of his sale listed recently through one of those flat fee MLS services and struck out on his own. In the beginning it was fun, easy even. He took his own photos, placed his own sign and waited. He got a little unsettled a couple of times with some of the folks touring the home, (I could write a whole page on just the safety aspect alone here) but he wasn't attacked or anything so that worked out. Then he got an offer! On a standard real estate contract. Lots of pages....written in the "realestatese" language. Yeah, he had a closing attorney but not one serving as a Realtor. Needless to say, after some back and forth negotiating he accepted the offer.

Right before closing, he got a little nervous and asked me if I would please just glance at the document. (Guess by now you figured out I am a Realtor) I walked him through the contract, explaining what each paragraph meant. Needless to say, he had made a serious mistake in misunderstanding what a certain part of the document meant and was giving the buyer additional cash ($5000 to be exact) that he didn't intend. He was mortified. This man was not a first time home buyer either.

Those listing and sales contracts change constantly. Realtors must attend multiple classes each year to keep track of those changes. I can't tell you how many times people have told me about horrible mistakes they have made selling their homes on their own. It wasn't staging the home, marketing or even nailing the price that got them. It was understanding the contracts.

I can represent myself in a court of law too but, I don't think I would do it...know what I mean?
I agree flat fee listings are not for everyone. I'll even say they only about 15-20% of home sellers could successfully do the flat listing. But, I'm glad that flat fee services exist for the few of us who know what we're doing. As for the contract negotiations, I hired a realtor (for another flat fee) to do the contract negotiations for us and review the contract. I'm just saying that the traditional 3% to the seller's agent is not always the best route. I paid a fee for the MLS listing, ordered my own wide angle photos, paid for my own lockbox, and paid a flat fee for contract negotiations and it worked well. As far as the safety of having people tour your home, we always had a buyer's agent with the buyers when touring. That's no different than if we were going with a full service agent. Your seller's agent isn't always going to be there when there are people in your home, at least in our experience with full service agents that was not the case. Just saying, full service agents are great for people who have never sold before, don't have the time to deal with it, or don't know what they're doing. But, I'm glad that a la carte services are now available.
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Old 08-14-2013, 01:32 PM
 
37 posts, read 32,585 times
Reputation: 42
I will agree these discount, flat fee firms can be really awesome.....right up to the point you might find yourself in a pickle. Then, from what I've heard, no one takes the responsibility. It's all on you.

As long as that fact is properly disclosed, I don't see any harm.
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Old 08-14-2013, 02:34 PM
 
Location: State of Being
35,885 posts, read 67,009,663 times
Reputation: 22370
Quote:
Originally Posted by momtothree View Post
Anifani, it's true the buying/selling agents split the commission but that commission also has to be split yet again with their managing broker IF they aren't a broker themselves. So I can see them quibbling a bit on a lower priced home.

I also agree with aquafish that it's the house and price that sells the home and the realtor can make it smoother transition during the negotiating/closing.
Yeah . . . I have a broker's license.

So I do know about splitting commissions, something that was explained by a poster prior to what I posted. I didn't know I needed to lay out that same scenario in re: to "splitting commissions" with both your own agency and the other broker and his/her agency.

I also agree that the house (and curbside appeal) are what sell a house, and most importantly, the location, but I believe the OP was simply asking about COMMISSION, was he not?

And my point was 1. you can negotiate a commission if you wish and if any realtor out there will agree to your proposal. 2. you can also add bonuses, either to the selling agent, or to the listing agent, or both. and 3. you need to remember that the whole reason to have an MLS is so that many agents will have access to your house, but if that agent will make substantially less commission by selling your house as opposed to your neighbor's, then you can bet he/she will "favor" the house w/ the higher commission. I am not saying this as a slam against realtors. I am just telling you what I noticed when I was in the business.

A realtor is going to show you any house you want to see.
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Old 08-14-2013, 02:40 PM
 
Location: State of Being
35,885 posts, read 67,009,663 times
Reputation: 22370
I would add . . . you are going to be using an attorney for closing . . . so if a person thinks he/she can provide some of the services themselves -- and wants to cut down on fees -- that is certainly something that can be done. There are many types of listing agencies out there! I wouldn't attempt it without some arrangement where I had access to MLS so my house gets a wide audience.

All my personal opinions, of course.
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Old 08-14-2013, 04:07 PM
 
37 posts, read 32,585 times
Reputation: 42
Darn those pesky little "Commission Rules"....always interferring with my conscience. Especially the ones that speak to ethics and how to properly disclose stuff. Such a grey area....

It seems that the biggest concern with savvy sellers wanting flat fee listings is that they believe they have the same access in the MLS that everyone else does. Not necessarily true. Read the very fine print. Although the National Association of Realtors has now rules in place for fair advertising with all types of brokerage services on multiple listing services, the FTC (to my knowledge) still has cases under review where those services did not offer all the public "feeds" to those clients who didn't have an exclusive contract with a real estate agent. They were on the MLS, and visible to all brokers but just not on ALL of the "feeder sites" for the public to see. In other words, sellers were under the impression that they were out there on the MLS with their flat fee service just like everyone else who happened to have a full service agent representing them.

Again, although there are now rules in place allowing "alternative brokers and real estate services" on MLS services they still don't necessarily guarantee equal visibility on public sites. Which is key.

Not to mention a seller also runs the risk of buyers agents simply being afraid to deal with someone other than another agent for fear that they might be dealing with someone who has no clue as to what they are doing.

Hey, I'm all for deal a too. Just as long as folks aren't under the impression they might be paying for something they simply aren't getting with a discount service. That being said, the defense will choose to rest at this point.
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