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I agree with your post, except for the last sentence. Its "there" for me now and for many others, just not for everyone.
If you don't want to pay 6% then either DIY or negotiate the commission. You can sell your own, I can sell my own but lots of people can't, won't, or don't. If you don't like using agents or paying those commissions then DIY. How much time is it costing you to take time off to show, negotiate or run around for paperwork, let inspectors in etc. Those are the things you're paying for. What if your house doesn't sell for 6 months? Or a year? You prepared to show a house run around take the time to do all that? What if the deal falls apart at the last minute? I guess if you're retired or have a very understanding boss you can. What if you don't? I know if I had a employee who was constantly taking off time to sell their house (even as understanding as I am) eventually I would get pretty ticked off.[/quote]
We agree. In fact, I also don't have to sell my house if I don't want to. I'm only suggesting to the agents out there that if they were more open to negotiation -- or more openly expressing their willingness to negotiate a lower fee -- they might tap into a market of people like me, who might want some help, just not 6%'s worth.
[/quote]The agents who charge less probably do less also. If you're ok with that then go for it. I doubt any agent will go and do the same thing for 1/2 to 1/3 the money unless they were just desperate for work.[/quote]
Full agreement again.[/quote]
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What I meant by its not there, is the unneeded services of a agent. One day agents simply will not be not as plentiful as they are today. At one time there were thousands of travel agents. Sure they are still around but nowhere as plentiful. Websites and DIY took that service that a lot of people used and pretty much chopped it up, ground it up into fish food.
Eventually (I feel) brokerages will still have agents that do the same job as today with todays conmissions , but there will also be offered a more advisory than hands on with the customer type service. If two people get together and both agree that they dint need the full service eventuslly the industry will accomodate that more and more as it becomes a accepted practice.
The only problem is that the buyer will want to pay less because there wint be a agent, and the buyer will want more in their pocket.
Look it's really as simple as are you willing to take the time to research how to give your house maximum sales/advertizing exposure, then field and vet all potential buyers, go through all the paperwork, bring in and work with their lender, do your side of the contract making sure you don't make a mistake, have your own insurance against errors and omissions etc. Basically do everything that you are legally required to do as a FSBO. Then go for the FSBO. But I guarantee you there will be agents who will steer their customers away.
As long as you offer them their share they should have no issue with it. But people are fickle
Since I am planning to FSBO my house this spring, I have been following this thread with interest.
I'd love a little bit of help from a realtor so I don't understand why the percentage commission. At my accountant I pay $xxx for a tax return, at my Dr I pay $xxx to remove my brain tumor. Why can't I pay a realtor $20,000. for specific, specified, limited tasks?
In my area prices are very high and inventory very low, so one open house & multiple offers (above askiing price) normally come in. Clearly a realtor would only need to do a few days work and with a 6% commission would pocket well in excess of $100,000. So why the percentage?
Virtually every other profession is a specific fee for service. I'd love to have the option of buying a very few services.
Yes, and when the service is rendered, the fee is generally paid.
In the real estate business, many time service is rendered, but for one reason or another the deal falls apart (not because of the agent)--sometimes at the last minute. Time and money spent by the agent - no fee paid/received
Yes, and when the service is rendered, the fee is generally paid.
In the real estate business, many time service is rendered, but for one reason or another the deal falls apart (not because of the agent)--sometimes at the last minute. Time and money spent by the agent - no fee paid/received
Exactly! If my brain surgeon charges me $xx to remove my brain tumor and it still comes back, it is the fault of neither of us and he still gets paid. If I contract with you to provide sales assistance, I would still be under contract to pay you the agreed sum, no matter the outcome, same as with my accountant, surgeon, or any other service I request and enter into a contract with.
Exactly! If my brain surgeon charges me $xx to remove my brain tumor and it still comes back, it is the fault of neither of us and he still gets paid. If I contract with you to provide sales assistance, I would still be under contract to pay you the agreed sum, no matter the outcome, same as with my accountant, surgeon, or any other service I request and enter into a contract with.
If you wish to pay a real estate broker by the hour, there's probably someone in your area who would agree to that arrangement. From reading numerous posts, it seems that many agents on here would agree to do that--for the right price. By-the-hour service is usually not the norm because most people would rather pay only if they sell. It's the same with many attorneys--they advertise "no fee unless you collect" (and an attorney will often take 1/3!). Real estate brokers are little different: "no fee unless you sell". But feel free to seek a different arrangement. Remember, everything is negotiable.
Exactly! If my brain surgeon charges me $xx to remove my brain tumor and it still comes back, it is the fault of neither of us and he still gets paid. If I contract with you to provide sales assistance, I would still be under contract to pay you the agreed sum, no matter the outcome, same as with my accountant, surgeon, or any other service I request and enter into a contract with.
Well the brain surgeon has control over the process of surgery. The agent does not control the buyer and seller. As such, there is much more risk.
There are fee-for-service/hourly agents in your area. Unless you are in a rural place. Then probably not. If you can't find them on the web, start calling to find an agent that does flat or hourly rates.
I think people minimizing the importance of realtors is just a continuation of the growing trend of minimizing the importance of education and domain expertize. Are there bad realtors out there? Sure, but most have significantly more knowledge on the topic of real estate transactions than the average Joe. There are so many factors a play that can cost a buyer/seller unnecessarily, why risk it?
To use your example, its as though Nordstrom's is in control of the shirt market, and when Walmart comes along, rather than recognize that some people don't want $$$ shirts, to protect their perceived interests, Nordstrom's argues that only the $$$ shirts are worth anything. I say Nordstrom's can choose to sell the $ shirts or not, but its ridiculous to argue that only $$$ shirts are worth wearing -- in fact, those are the shirts that some people want. The markets for the two types of shirts are different; Nordstrom's market will never be threatened by Walmart. If anything, it is Nordstrom that could threaten Walmart by also selling the $ shirts.
Except nobody here is arguing that except you. Multiple people, many of them agents, have told you that there are options. For me it's a cost analyses and it's not worth my time to work for reduced commissions. I have cost and I have time invested so I expect compensation for my skill and expertise. I offer a 1% plan with reduced services but the commissions are paid up front. Not a single person has ever taken that option.
From my own experience as a recent buyer, the few FSBOs in my area were mostly grossly overpriced. One in my neighborhood, where comps had been selling in the low 200s, listed his house at $365,000 -- and it was actually in worse condition than those nearby. Also did things like included unfinished bsmt / attic space in the sq ft number, etc.
I suppose its possible a seller like that would have insisted on the same number no matter what a realtor told him, so in that sense maybe a realtor would have been of no additional value -- the house would have sat unsold for two years either way. But the pattern was common enough that I almost didn't want to bother reading new FSBO listings since the likelihood of them being priced sanely seemed low.
So how does a more traditional brokerage compete with those alternative (cheaper) brokerages? Would it not make sense to also offer the same choices? My impression is that many agents/brokers are in denial and fighting for their survival, when it really doesn't have to be that way. As far as I can tell, Redfin is doing quite well.
Redfin only exists in higher end markets. Their model doesn't work in middle class areas. They aren't in my city, for example, because the average home price is $180,000. So does a business whose model requires a certain home price work well? I don't define working well that way.
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Originally Posted by CapnTrips
Let me clarify -- not that all brokers should lower all their fees, but that they also openly offer the alternative services. Also, instead of "fighting for their survival" I should have said "paranoid about their survival."
Traditional brokerages won't offer alternatives because it won't work in their business model. It's that simple. Brokerages are in the agent business. Agents are in the client business. That is why the ones to offer alternatives will not be the large franchises. It will be small indie brokerages.
Realtors can bring people in to show your house. A sign outside or a post online might not get them to come to you.
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