Are you selling your home? (Hope: flat fee, real estate, condo)
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I did a flat fee service of $300 to put on multiple listing and then a 2% selling commission with a $1500 bonus as an added incentive and have had absolutely no problems with getting agents to show the home......Got 2 offers in 7 days....
I worked in real estate for almost 10 years although it was about that long ago but felt comfortable enough in handling my end and handling the appts/showing and so on.....
It's not that I don't think that agents dont deserve the commisions but I honestly didnt want to spend that $.......when all is said and done it will still have cost us just under $10k even doing it that way....
My house sold itself so to think we would have spent another $10k to the listing agent and only had the house on the market for 4 days before getting my first offer would have just been a slap in the face......because at that point it was midweek and the most the agent would have been able to do for us was putting it on mls.
For a while the norm was 4% but now I hear more and more are going to 5%. The realtor we use has been at 5% even while others were at 4%. Also, some brokers are offering contracts where the lower 4% rate applies in the beginning but the longer the house remains on the market the higher the rate inches up, to a max of 5%.
Even as recently as five years ago the standard commission was between 6% and 7%. Hopefully it will never go back up that high again!
Tom, do you think commissions are likely to ever go back up to the previous 6% or 7% range?
Also, to what do you attribute the drop from that former level to the current 4%-5%?
I think that the lower commission prices on Long Island compared to other places is a function of the price of homes. They really started to come down in 2003-2005 when there was intense competition for listings and homeowners could easily sell themselves. Today, sellers need real estate agents more then ever, so we are seeing commissions begin to creep up. I'm not sure, though, if they will ever return to previous levels.
Wow, I didn't realize that LI's current 4%-5% commissions were lower than other parts of the US; but I took a quick look over in the Real Estate Forum and it does seem that posters from other parts of the country are indeed talking about 6%-7%! In fact one realtor in Indiana states that a 6% commission is considered "reduced"!
I just assumed that commissions had come down pretty much nationwide but I guess not. So it looks like the state of realtor commissions here is actually something for LI sellers to feel good about!
Looking back, you're right on those dates. The house my SO sold in 2002 was at 7% commission, although if he had agreed to an office exclusive instead of an MLS, they would only have charged 6%. Anyone we knew at that time who was selling a house, was paying 7%.
Tom, do you think the emergence of "discount" 2% and 3% realtors at about that same time (early 2000s) had anything to do with the full-service brokers lowering their commission rates? In other words could it in part have been a PR move to compete with the discounters and push them further out of the market for potential listings?
In terms of the market conditions, would you say that:
A Seller's Market (when there is lots of buyer competition for the houses available; therefore buyers are easily found with little work needed on the part of a listing agent or a FSBO) = Lower Commission Rate, in order to entice the seller to list with you
A Buyer's Market (when there is a larger supply of homes, thus buyers are choosier and harder to obtain; therefore a seller needs an agressive marketing strategy and exposure that a realtor can provide) = Higher Commission Rate, because the realtor is "worth more" to the seller
That theory would explain the trend of commission rates on LI compared to other parts of the country. In most other parts of the US, it has now become a Buyer's Market (or so the media keep telling us!) and commissions are still high there. IMO Long Island is much less of a Buyer's Market than elsewhere (whether it's still a Seller's Market depends a lot on the actual house being sold); perhaps we're kind of a "semi-Seller's Market" still? And as a result of that, the commissions here are lower than in the true Buyer's Markets elsewhere?
Tom, do you think the emergence of "discount" 2% and 3% realtors at about that same time (early 2000s) had anything to do with the full-service brokers lowering their commission rates? In other words could it in part have been a PR move to compete with the discounters and push them further out of the market for potential listings?
I would agree that the discount brokers put pressure on for all to lower their rates. However, as the demise of Foxton proves (despite their massive advertising expenditures), sellers do not choose their agents based solely on commission rate.
Quote:
Originally Posted by totallyfrazzled
In terms of the market conditions, would you say that:
A Seller's Market (when there is lots of buyer competition for the houses available; therefore buyers are easily found with little work needed on the part of a listing agent or a FSBO) = Lower Commission Rate, in order to entice the seller to list with you
A Buyer's Market (when there is a larger supply of homes, thus buyers are choosier and harder to obtain; therefore a seller needs an agressive marketing strategy and exposure that a realtor can provide) = Higher Commission Rate, because the realtor is "worth more" to the seller
That theory would explain the trend of commission rates on LI compared to other parts of the country. In most other parts of the US, it has now become a Buyer's Market (or so the media keep telling us!) and commissions are still high there. IMO Long Island is much less of a Buyer's Market than elsewhere (whether it's still a Seller's Market depends a lot on the actual house being sold); perhaps we're kind of a "semi-Seller's Market" still? And as a result of that, the commissions here are lower than in the true Buyer's Markets elsewhere?
Hate to say it, but we are in a full blown buyers market. Unless a home is priced and marketed extremely agressively, it simply will not sell.
I sold my last condo in Newsday for about $45.00 .
When was that?
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