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We will be selling property in the near future which we have completely renovated and looks brand new.
We have dealt with many realtors over the past few years and we are looking for 1 who will develope a relationship with us with a reduced commission.
We would like a contract for 4% if they sell it or 5% split. We hope that the future sales will make it worthwhile for everyone.
I attempted this with 2 agents that both got insulted.
Our profit margin is not great so I was hoping someone would work with us.
Also, we want full service with good communication.
Am I wishing for too much?
Thanks for your response.
I feel you are going at this problem from the wrong direction. You are about to hire the agent you deserve. An agent who not only won't advertise your property correctly, but likely can't. I assure you that if you will research your market for the right agent, you'll be better off paying a 7% agent than you will trying to pay for an inferior quality 4% agent.
How do you find a worthwhile 7% agent? Interview, ask questions, seek referrals. It sounds as though you are trying to sell an investment property, if so join your local "REIA" (North Carolina Real Estate Investors Association) and listen.
I'd start with a CRS who may have a GRI, likely a Buffini, or Sweathog Graduate. I am a RE/MAX broker-owner and I absolutely swear by most (but certainly not all) RE/MAX agents with 10 or more years tenure. I'd seek a RE/MAX agent who is a consistant 100% Club or better Award winner.
Ask for references, and ask for a list of homes sold, days on the market, etc.
Happy hunting! Best wishes for success in selling your home for a better than even hoped for price.
I've told this story so many time, the regulars here will roll their eyes, with "here she goes again."
Quick version - I had probably one of the top agent/franchise owners in our area, her personal team working with my brother. He was not going to be passed off to someone else at contract time - and because it was my brother, she probably would have rebated most of the commission anyway. (You just don't go promising things like that so early on in the game......way too many things can go wrong). Well, PenFed had a 1% rebate and the discount turned his head. The credit union agent was an order taker, and most likely, my brother wound up paying far more than he should have in a neighborhood that was riddled with pre-foreclosures. He lost far, far more than his silly rebate.
Don't be pound foolish. The above poster is correct, your approach will get you the agent you deserve. Now if you have two transactions, a sale and a purchase, it is not out of the question for a Realtor to cut you a break on the total package. One of the most detrimental things a seller can do is overprice their home from day one. If your Realtor is pricing in a rebate, chances are, your home won't be priced right.
Work on finding a good agent and the rest will falll into place.
So you want someone to do full service work for a discounted price? The ones that will agree typically are the ones that are new or desperate. I think you're setting yourself up for failure. The ones that give their money away quickly will normally give yours away even faster.
It cost money and valuable time for an agent to market a property. Pay your agent less than the market average and you can bet it will lead to one thing - less marketing.
We will be selling property in the near future which we have completely renovated and looks brand new.
We have dealt with many realtors over the past few years and we are looking for 1 who will develope a relationship with us with a reduced commission.
We would like a contract for 4% if they sell it or 5% split. We hope that the future sales will make it worthwhile for everyone.
I attempted this with 2 agents that both got insulted.
Our profit margin is not great so I was hoping someone would work with us.
Also, we want full service with good communication.
Am I wishing for too much?
Thanks for your response.
My experience is that those asking for discounts are notoriously the most difficult to work with. GOOD Realtors don't need to discount their service for you. The ones that will discount are more likely than not, not very good.
You're asking for top notch service, but you're not willing to pay for it. Yes, you're asking for too much. If you can't afford to sell, don't sell.
One of the things that sellers don't understand, and probably it's never been explained to them, is that the commission based fee is similar to the attorney's contingency based fee.
When an attorney consults with a client, s/he charges an hourly fee which is to pay for their time and knowledge.
If the client is wanting to go after someone for money, and doesn't want to pay an hourly fee, because the end result may not end up in their favor, then they can ask the attorney to work on a contingency fee basis.
If the attorney accepts that contingency case, they will want around 35% of the proceeds in addition to their hard costs.
The attorney in this case assumes all the expenses and the RISK that s/he will not be paid. Consequently, the fee must be higher than the hourly fee.
One can call that insurance. The client is insured against any out of pocket costs, and the cost of the insurance is a larger end fee to the attorney for assuming the risk.
It is the same with Realtors with the commission base.
The client pays nothing if the house does not get sold. The Realtor puts out upfront money for marketing, and assumes the RISK that s/he will not be paid, and will lose the invested marketing funds.
Consequently, the commission based fee must be higher than it would be in an hourly fee basis where the Realtor is paid for all his time and expenses as the transaction proceeds.
Perhaps what is needed is an option for clients:
An option for the commission based fee
An option for an hourly fee, with a retainer
An option for a package of specific services, whereby the Realtor is paid an upfront retainer, and paid for the services weekly as the transaction proceeds.
Sellers (or buyers) with different real estate knowledge may need different levels of services, and the packages can be developed for several levels.
Sellers usually don't understand how difficult it is when a Realtor spends a couple thousand dollars on marketing, and 40 hours servicing a listing, only to have the seller cancel the contract.
Or buyers who use 40-60 hours of a Realtors time, and then decide they don't want to buy; or now that they know the area and have decided on a community, they fire the Realtor and use their Aunt Sally, the part time Realtor, to write the contract and "keep it in the family".
The commission based fee whereby the Realtor only gets paid for a closed transaction, balances out some of the many hours that clients waste for the Realtors where they don't get paid.
The hourly fee, and/or fee for package of specific services allows the Realtor to be paid for all of his/her time, and will be cheaper for the clients who go through with a transaction.
Each buyers/sellers will each pay for the time and service of the Realtor, whether or not they close a transaction. So the end result is that the buyers/sellers who close on a transaction don't have to pay more for the transaction to make up for the buyers/sellers who take advantage of Realtors and use their services for free.
If a listing agent offers x % to the buyers agent, and the buyer wants the buyers agent to give him/her part of his earned commission, then the buyer can agree to assume the risk.
The buyer would pay a retainer fee and an hourly fee, or package of services, or both, so the buyers agent is guaranteed to be paid for his time and service. The amount of the commission to be given to the buyer would then be negotiated. This would be a win/win situation.
Captain Bill, I know of at least a couple of Realtors who offer those options as part of their service, and who report that the vast majority of consumers go for the agent taking all the risk rather than being paid by the hour or by the specific service whether the house sells or not. Apparently the vast majority of consumers would rather risk paying more if their house sells than paying less for specific services or hourly services and carrying the risk themselves.
One of the things that sellers don't understand, and probably it's never been explained to them, is that the commission based fee is similar to the attorney's contingency based fee.
When an attorney consults with a client, s/he charges an hourly fee which is to pay for their time and knowledge.
If the client is wanting to go after someone for money, and doesn't want to pay an hourly fee, because the end result may not end up in their favor, then they can ask the attorney to work on a contingency fee basis.
If the attorney accepts that contingency case, they will want around 35% of the proceeds in addition to their hard costs.
The attorney in this case assumes all the expenses and the RISK that s/he will not be paid. Consequently, the fee must be higher than the hourly fee.
One can call that insurance. The client is insured against any out of pocket costs, and the cost of the insurance is a larger end fee to the attorney for assuming the risk.
It is the same with Realtors with the commission base.
The client pays nothing if the house does not get sold. The Realtor puts out upfront money for marketing, and assumes the RISK that s/he will not be paid, and will lose the invested marketing funds.
Consequently, the commission based fee must be higher than it would be in an hourly fee basis where the Realtor is paid for all his time and expenses as the transaction proceeds.
Perhaps what is needed is an option for clients:
An option for the commission based fee
An option for an hourly fee, with a retainer
An option for a package of specific services, whereby the Realtor is paid an upfront retainer, and paid for the services weekly as the transaction proceeds.
Sellers (or buyers) with different real estate knowledge may need different levels of services, and the packages can be developed for several levels.
Sellers usually don't understand how difficult it is when a Realtor spends a couple thousand dollars on marketing, and 40 hours servicing a listing, only to have the seller cancel the contract.
Or buyers who use 40-60 hours of a Realtors time, and then decide they don't want to buy; or now that they know the area and have decided on a community, they fire the Realtor and use their Aunt Sally, the part time Realtor, to write the contract and "keep it in the family".
The commission based fee whereby the Realtor only gets paid for a closed transaction, balances out some of the many hours that clients waste for the Realtors where they don't get paid.
The hourly fee, and/or fee for package of specific services allows the Realtor to be paid for all of his/her time, and will be cheaper for the clients who go through with a transaction.
Each buyers/sellers will each pay for the time and service of the Realtor, whether or not they close a transaction. So the end result is that the buyers/sellers who close on a transaction don't have to pay more for the transaction to make up for the buyers/sellers who take advantage of Realtors and use their services for free.
If a listing agent offers x % to the buyers agent, and the buyer wants the buyers agent to give him/her part of his earned commission, then the buyer can agree to assume the risk.
The buyer would pay a retainer fee and an hourly fee, or package of services, or both, so the buyers agent is guaranteed to be paid for his time and service. The amount of the commission to be given to the buyer would then be negotiated. This would be a win/win situation.
Bravo! Excellent post.
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