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Old 09-05-2014, 09:24 AM
 
2,676 posts, read 4,550,113 times
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Did you miss the word "substantially" with "more"? The cost of most other products and services in NoVA is generally less than 20% higher than the national norms, while housing ranges from 50-100% more, according the most online calculators. You can buy the same Amazon.com products for the same prices anywhere. Utilities and health services here are pretty close to national means across all types of communities. And, in my example, I deliberately did not choose a low cost town but instead a moderately high priced metro area as a comparison. So yes, I think an agent should make a bit more per house here than in Minneapolis, but I don't believe s/he should make a LOT more.

AND--certainly if a house properly prepared and priced sells in a few days with little or no marketing costs to the agent, as is the case in my neighborhood and has been true for a long time--a case can be made for a lower percentage than in an area where a similar house would require lots of time, effort and expense to sell.

This is why I am not surprised to see, on my favorite unlink-able real estate site, that many commissions shown are 5% (and a few lower) rather than 6%.
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Old 09-05-2014, 09:51 AM
 
Location: northern va
1,596 posts, read 2,148,318 times
Reputation: 1381
Quote:
Originally Posted by ACWhite View Post
Did you miss the word "substantially" with "more"? The cost of most other products and services in NoVA is generally less than 20% higher than the national norms, while housing ranges from 50-100% more, according the most online calculators. You can buy the same Amazon.com products for the same prices anywhere. Utilities and health services here are pretty close to national means across all types of communities. And, in my example, I deliberately did not choose a low cost town but instead a moderately high priced metro area as a comparison. So yes, I think an agent should make a bit more per house here than in Minneapolis, but I don't believe s/he should make a LOT more.

AND--certainly if a house properly prepared and priced sells in a few days with little or no marketing costs to the agent, as is the case in my neighborhood and has been true for a long time--a case can be made for a lower percentage than in an area where a similar house would require lots of time, effort and expense to sell.

This is why I am not surprised to see, on my favorite unlink-able real estate site, that many commissions shown are 5% (and a few lower) rather than 6%.
It's relatively easy to get a house under contract, the real fun starts when you're moving from contract ratification to settlement.
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Old 09-05-2014, 10:42 AM
 
1,784 posts, read 3,000,145 times
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Three factors I think affect this topic:

1) Using the same agent on both the buying and selling sides. I think this should factor into a reduced commission since you're agreeing up front to give somebody double business.

2) The Internet. It has blown away barriers of access to information, and this I believe has direct effect on people's real estate buying habits.

We spent months on Redfin looking at dozens (if not 100+) houses, gauging prices for different areas, going to open houses on our own, running comps, etc. so that we were able to narrow our search down to a couple particular areas that we had become pretty familiar with. We also spent many weekends and evenings driving through the neighborhoods to get more familiarity. Then we brought our realtor out at the very end to look at a few high-potential places (most of which we had previously seen at open houses). We reduced the realtor's amount of time out and about showing us houses, and I believe some of that opportunity cost (i.e. time = money) he recoups should be awarded back to us.

3) The cost of housing in this area. I realize COL is higher here, and pay in general is higher here, but generally not at the same proportion as housing. Basically what ACWhite said above. 6% may have made sense back when a SFH cost $300K, but when homes are $600K+, it seems a bit much.
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Old 09-05-2014, 03:25 PM
 
Location: Virginia-Shenandoah Valley
6,602 posts, read 10,935,313 times
Reputation: 5647
Quote:
Originally Posted by spencgr View Post
It depends on what they do for you. Will they be actively marketing your house with multiple open houses? Or will they just throw it on the MRIS and see what happens? 3% is fair for a good realtor (3% to each realtor, but you don't get a lot of negotiating power over the buyer agent), but everything is negotiable.
She is not big on Open House's and from what I've seen in my neighborhood with 2 homes that sold recently I can see why. She said people don't attend these like they did in the past. We had 2 immediate neighbors sell their homes this summer with this agent selling one of them. Very few people came to either home during the open house for each.
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Old 09-05-2014, 03:26 PM
 
Location: Virginia-Shenandoah Valley
6,602 posts, read 10,935,313 times
Reputation: 5647
Quote:
Originally Posted by kutra11 View Post
6% was probably fair in the days before ziprealty, trulia, redfin sites did not exist. The only way to know of MLS listings was to rely on the realtor. But nowadays, an informed and research-oriented buyer can do all the groundwork him/her-self by accessing these Web sites and shortlisting the houses he/she would like to actually see.

Don't get me wrong... ...a realtor does add value with his/her experience with house features/repairs, resell opinions, closing, and more, but IMO, the 6% should be knocked down to a standard 3% in today's age... ...1.5% for seller's agent and 1.5% for buyer's agent. Period.
Wow. I didn't expect this. Especially from another agent.

Correction. I thought this was a post of yours Kww when I responded.
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Old 09-05-2014, 03:31 PM
 
Location: New-Dentist Colony
5,740 posts, read 9,000,950 times
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Quote:
Originally Posted by geevai View Post
We used our realtor recently at 5%. I'm not sure 6% would have mattered much, but I felt that they weren't much more than paper pushers, particularly on the buying end. I found the house I wanted on Redfin myself. It wasn't the easiest trying to schedule showings either...and she just happened to believe every house we looked at was good for us. I wouldn't pay more than 5% unless you really need your hand held throughout the entire process. I tend to research the heck out of things so I felt like my realtor didn't add much value beyond what I wouldn't have been able to find out on my own.
We had almost exactly the same experience. Very disappointed with our Wrong and Foster realtor who sells a lot in Arlington. He gave bad advice. We did all the staging ourselves. He wouldn't work on weekends. Never again. Next time we'll use Redfin.
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Old 09-05-2014, 05:46 PM
 
Location: northern va
1,596 posts, read 2,148,318 times
Reputation: 1381
Quote:
Originally Posted by Bigfoot424 View Post
Wow. I didn't expect this. Especially from another agent.

Correction. I thought this was a post of yours Kww when I responded.
I don't believe in the 6% model and have never charged it. I also do not believe in the business model that Redfin and other discount brokerages employ. Nothing wrong with competition
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Old 09-05-2014, 05:50 PM
 
Location: New-Dentist Colony
5,740 posts, read 9,000,950 times
Reputation: 3858
Quote:
Originally Posted by kww View Post
I don't believe in the 6% model and have never charged it. I also do not believe in the business model that Redfin and other discount brokerages employ. Nothing wrong with competition
OK, I'll bite. What do you see as bad about the Redfin business model? As I understand it, the realtor is paid according to client satisfaction. Are you saying this is unfair to the realtor, is insufficient compensation to motivate them, or something else?
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Old 09-05-2014, 06:08 PM
 
Location: northern va
1,596 posts, read 2,148,318 times
Reputation: 1381
Quote:
Originally Posted by Carlingtonian View Post
OK, I'll bite. What do you see as bad about the Redfin business model? As I understand it, the realtor is paid according to client satisfaction. Are you saying this is unfair to the realtor, is insufficient compensation to motivate them, or something else?
I don't want to clog up Bigfoot's thread. I'll PM you later if that's okay.
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Old 09-05-2014, 06:34 PM
 
Location: New-Dentist Colony
5,740 posts, read 9,000,950 times
Reputation: 3858
Quote:
Originally Posted by kww View Post
I don't want to clog up Bigfoot's thread. I'll PM you later if that's okay.
Sure!

To answer Bigfoot's question: I think we got a 1% discount for using the same guy to buy the next house after we sold our old one. So I guess we paid him 5% altogether.
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