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My husband and I are selling our home in the Coastal NC area. Our home is not officially on the market; however we have found some perspective buyers. What is a fair commission rate to ask from a realtor to list our house if we have already found a buyer? Or should we go the FSBO route? Not to open a Pandora’s box but we are weighing the pros and cons of both.
We did FSBO in Wilmington in early 2006 and it worked out fine (but it was very much a seller's market then). We advertised that we would allow buyers agents a 3% commission, but our buyer didn't use one, so it was a non-issue. We were told the commission is usually 6%, split b/w buyer and seller if there is more than one agent involved. We had also seen other FSBO go with the 3% to buyer's agent. If you only have one agent for buyer and seller (which is allowed in NC), or already have a buyer, you might could go less than the 6% total. Just depends on the agent(s), I suppose. OF course, now someone is going to say this is totally off, but that's my experience, for what it's worth.
Maybe I missed something. If you have a prospective buyer, why do you need a real estate agent. The main purpose of a real estate agent is to put a seller and buyer together.
Do you need a value of your property? Look first to your property tax value. NC is pretty good on that. Maybe historically it lagged the market and maybe today it is above the market. Have an interested buyer? Look at comparable properties to yours. I suggest zillow.com, but real estate agents will howl about that! You can narrow down the price with an agreed upon appraiser for a few hundred dollars.
If you have a buyer, or when you do, you can have everything (the purchase agreement and closing) profesionally done by an attorney at much less in cost.
What do I mean? You heard earlier about an approximate 6 percent commission. Let us assume that you are trying to sell a $100,000 house. Listing with an agent will cost $6,000.00. Using an attorney to protect you will probably cost you $400 to $600, including deed preparation (+/- $100).
This leaves you and the buyer with a substantial amount of "wiggle room" on the price. If they are 5% less than you would accept with an agent's fee, you would still come out ahead.
If the Buyer wants an agent, fine. Let them pay for it. Any question, please feel free to ask. I will give you my free advice.... then ask an attorney (and I do not like attorneys!)
I agree with vq1. Lawyers will do this for about $500 or so. You don't necessarily need an agent if you have a buyer. If they have a buyer's agent, that agent may expect to be compensated (2.4-2.5%). Factor that into the price or ask them to pay their agent.
"Do you need a value of your property? Look first to your property tax value. NC is pretty good on that"
Although most coastal areas just went thru a tax revaluation, Do NOT rely on the tax records for fair market value. Particularly since the coast is currently going thru a re-adjustment period. Sales in my coastal area are the worst in 5 years with a 2 year supply of inventory. The inventory is having to adjust accordingly.
The first question you need to ask yourself is, "Do I want to market this house to keep owning it, or to actually sale it?" Many homeowners are asking to much for their homes in this slow housing market. Your impact on the market is a 30 day window at most. The first one to see your home is going to be a Realtor, if your house is on the MLS. With a competent Realtor, you can come to a reasonable market price, the tax value is probably 10% over what the actual sales price will be. A good Buyer's Agent will pick you to pieces if you do a FSBO, and your home is priced wrong. Buyer's are wise that it is a Buyer's market. I would recommend at least speaking with a good Realtor, and discuss the pros and cons of the market.
My husband and I are selling our home in the Coastal NC area. Our home is not officially on the market; however we have found some perspective buyers. What is a fair commission rate to ask from a realtor to list our house if we have already found a buyer? Or should we go the FSBO route? Not to open a Pandora’s box but we are weighing the pros and cons of both.
Costal,
You have to know a very important thing.
A Real Estate Agent does NOTHING MORE than bring a buyer to your house or you to a house for sale.
The big thing you must worry about is at the SETTLEMENT TABLE.
Both the buyer and seller must be represented.
The sad thing about REAL ESTATE AGENTS? They know nothing more and in some case less than you about finance; and, in more that a few cases will not even show up at settlement. In fact, if a fee isn't paid to the agent buy the people conducting the settlement the real estate agent won't even show up.
We are fortunate that we have a young man who is a financial investor and deals with mortgages. I've know him all of HIS life and he will only charge us the bare minimum at the table. We may get stuck with some charges for the buyer's agent but we won't be at their mercy.
Unfortunately, people think that selling FSBO (as we are) means they will pay nothing. You have to have SOMEBODY represent you at the table.
I think one of the most amusing parts of FSBO are the agent/s who call and tell you THEY HAVE A BUYER READY TO BUY YOUR HOME.
Of course, they (the agent) must see you FIRST. They will tell you they have to sign you up before the buyer comes in. Need I tell you what bunch of horse crap that is?
Does this sound like a used car salesperson?
Best of luck.
It is a seriously damaged home sales market. Believe me, we know.
Just don't get talked into something you will regret.
Dennis
Woodlynne
njprintman,
It is a common technique for listing agents to contact a FSBO and tell them that they have a buyer- All in the attempt to gain the listing.
But-For a Buyer's Broker to do their job they must visit the home and inspect it for their buyer client. The Buyer's Broker will first seek compensation from the seller and must have a signed agreement with that FSBO-So one way or another-A Buyer's Broker will be getting something signed from that FSBO.
By the way-The FSBO compensation agreement is one of many stock forms used by Realtors. It is not open ended. This document will have the name of that one potential buyer on it-No one else. It is a three party agreement between broker, FSBO and that one potential buyer.
Now as far as your comment of, "A Real Estate Agent does NOTHING MORE than bring a buyer to your house or you to a house for sale.", well-That's simply incorrect-For many reasons. But I'll list just give you an example of one.
All of my Buyer Clients are first pre-approved financially. We do not show a single property until our clients visit a lending institution and we know exactly what their borrowing capabilities are-And most importantly-What the client is most comfortable with. Even if they are going to pay cash-We get a letter from the bank. Is the FSBO going to pre-qualify all of their potential buyers? How much is it worth to the seller to know that every buyer walking thry their door way is financially able to purchase right then and their.
And don't forget that the Buyer's Broker has already spent, "XYZ" amount of time and effort finding out what the buyer wants and wading thru the multitude of options.
So now a buyers broker is bringing a fsbo a financially ready, able and willing buyer who, on a worst case scenario- has a very strong interest in buying the house.
And I haven't even brought up the due dilligence involved.
Bill
It really breaks both ways, when people USE people. I visited a Seller who was doing the FSBO thing, and I do believe that if a Seller can do everything to sale their home themselves, then by all means, go for it. Some FSBO's make it, but many do not, and they get tied up in legal problems, or tie their house up for months because the buyer can't close. This particular FSBO called me to discuss the market, and I explained to them the options of marketing and the CORRECT price for their home. Well I didnt get the listing, but their home sold shortly after I spoke with them. They used my info on price, and secured a Buyer, because their price was way to high. Selling your home is NOT like selling your car. Yes, both have a title, but one doesn't sell just because you kick the tires. As, I said, consult a good Realtor, and just discuss pro's and con's, it may save you a lawsuit, at the minimum, money...
If you want to talk to someone who gets asked regularly and used for free advice, just talk to an attorney or a CPA.
Some realtors bring pre-approved buyers, but not all. You can also require that to show the house as a FSBO. Just ask for their pre-approval --- might be wise with how things are in real estate now. There are good agents and bad agents, and everything in between, like all professions. Sme times they help fix problems, but sometimes they just let the attorney deal with it, who is usually getting paid much less than the real estate agent, by the way.
To avoid problems/ a picky buyer's agent if you go the FSBO route, get your house inspected by a reputable inspector and fix whatever needs fixing, or deduct from your asking price. Give the inspection to your buyers up front.
Get an attorney to represent you and they can get you any forms you need, like a NC disclosure.
The buyer will choose their attorney to do the actual closing, that is their choice. Your attorney will prepare your deed for you and review the settlement forms, and whatever else you need done, but usually it's a couple of hundred dollars at most.
A real estate agent may be necessary if you don't have a buyer and don't have the time to market and show the house yourself. If you want to get the best of both worlds, there are firms that just list you with MLS for a small one time fee. That will get you lots of traffic if you use it well, but you don't have a agent to coordinate showings, etc.
By the way ---- sale is a noun and sell is a verb.
A house is "for sale," they had a "yard sale," but a person will sell their house.
If you want to sell your house, put it up for sale and see what happens.
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