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Since 1987 we've sold our 3 homes (all in California) by owner, in other words, NO selling agent... The last one was a custom built (designed and built by our own 4 hands) on a 20 acre almond ranch in cenral California. We thought it would take 8 to 12 months to sell. It sold in a week.... The buyer had an agent, whom we paid (the agency) 2.5 percent. I probably paid too much for what they did, considering the buyer saw the for sale by owner signs, called their agent who couldn't "find the listing", and the buyer had to come back to get the phone number on the sign to give to the agent!!! But it's better than 6 percent of 750,000 !!!!!
I'm tempted to try FSBO, but I really don't know what I'm doing, how to price the house and need help dealing with multiple offers.
I'm not saying realtors don't add value. I think they do. I just think in my particular case, the going rate is too high.
I'm not really swayed by the argument that the easy houses pay for the hard ones. I think more work should= more commission.
I'm going to interview a few listing agents and ask what's the lowest they will go. It may be that they all will stick to their guns and keep it at 6%. In that case I will try FSBO.
Do you not think it's worth paying an agent for helping you sell the house, pricing it right, and dealing with multiple offers and, in the end, advising you on the best way to sell your home?
I feel like you have two options: sell it yourself, or get an agent to do it for you. Again, I say, there is nothing wrong with negotiating commission. Just be reasonable. Even if you settle on 5%, you're saving $4k on a $400k sale. That's not too bad. And, mind you, you're really only paying your agent half of that to do the work. The other half is going to the agent who brings the buyer. (In some cases, this would be the same agent). So, if you settle on 5%, then only 2.5% is going to the listing agent. Are you OK with paying that for somebody helping you with the things above?
Do you not think it's worth paying an agent for helping you sell the house, pricing it right, and dealing with multiple offers and, in the end, advising you on the best way to sell your home?
I feel like you have two options: sell it yourself, or get an agent to do it for you. Again, I say, there is nothing wrong with negotiating commission. Just be reasonable. Even if you settle on 5%, you're saving $4k on a $400k sale. That's not too bad. And, mind you, you're really only paying your agent half of that to do the work. The other half is going to the agent who brings the buyer. (In some cases, this would be the same agent). So, if you settle on 5%, then only 2.5% is going to the listing agent. Are you OK with paying that for somebody helping you with the things above?
I think 4 or 5% is more reasonable. Again. I think the above is worth something, but $24,000 on 400K seems to be excessive to me. If it's not, and no one is willing to work for less than that, so be it, but I wanted to see if these things were indeed negotiable, given that I've always paid the 6 percent.
Problem. The majority of homes, are sold by a small percentage of the agents in a city/town. 85% of people that go into the real estate business, fail out of the business in a short period of time. Many never sell even one home. Most homes will not be sold by the listing office.
Normal 6% commission breaks down to 1.5% to listing agent and 1.5% to the listing office. 1.5% to the selling agent, and 1.5% to the selling agent. Average agent sells 6 to 12 homes a year, and many less.
The good selling agents, are not going to fool around with a property with a short commission. They will sell the homes where they are paid to do it. Their buyers are too valuable to fool around selling a home for a discounted commission.
Their to be in the business are too high, to take a short commission, and after paying expenses for the month not having any money left for personal income. The median income for successful agents is $40,000. But out of that, they have to pay car expenses, and many other expenses most people never consider.
That is why you see homes that have a short commission stay on the market month after month. They are selling the homes that they are fairly paid to sell.
Some agents like myself, specialized in commercial/investment and even less like I did specialized in multiple party real estate exchanges including property in several towns or states. My most distance properties were in Belize and Costa Rica that I handled. Exchanges would normally be a 10% commission, as very few agents handled them, and we were paid for our expertise and connections to other exchange brokers. In the first week in the business, I sold 2 small apartment houses to 2 different buyers, and exchanged 16 unit upscale apartment house for a large irrigated farm the following week. I did more business in those 2 weeks than most agents do in a year.
I did not sell homes for personal use, as I could not make any real money doing it. I have watched many good men and women leave the business when they only sold homes for personal residences. I know why good agents do not take short commission listings. They could not afford to do it. And knowing if they did, no good agent wanted to sell those listings. In fact they would steer buyers away from them to other listings where they could earn a living.
This is very common, actually. If a buyer's agent has a written employment contract with their buyer for them to be paid 3% (negotiable), but the listing agent is only offering 2% per the MLS, (as the MLS is a contract between agents) then the buyer gets to bring cash to closing for the difference.
If your price is $400k, then the buyer gets to pay $4000 in addition to their closing costs. How likely is it that the buyer would cross this house off their list because they don't want to pay an additional $4k on top of the price they're paying? Very likely.
But most of all, what kind of taste does the buyer have in his house for a seller who isn't willing to pay their buyer's agent the "going rate" for the area? It's an immediate thought of how negotiations are going to spiral downwards and repairs will probably be cringed at... and then the buyer talks themselves out of viewing it because of their perception of how the seller might be... goes full circle...
Anyone who passes over a home for a 1% increase in price is beyond stupid.
You get what you pay for....If you do a 1% Help You Sell, I guess we will see the OP back here when they don't understand why they didn't pick up on the problems with the lender letter. Or how on earth did the get stuck paying for _________?
If you want the best representing you, I think 5% would be reasonable. Let's say you are fortunate enough to sell 50K over list - do you know what to look for to insure that offer will close? Do you think the inexperienced agent that is handling your sale would know?
Yes, many are successful selling on their own, but they probably had the buyer's agent involved and wouldn't recognize something being *off* because no one is going to point it out to them. Or, just because they've had 2 great experiences doesn't mean their 3rd sale (or yours) won't be the sale from hell. No, not fear tactics. If it was that easy, don't you think more would be doing it? If your house is that great, it just means you have more to lose. Did you take shortcuts within other areas of your life?
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