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As long as the basic 2% commission to the buyers agent is offered, I don't see a need to offer more to entice agent's to show my home. In this market, I would assume an agent just wants to make any commission and would aim to show a house that is most likely to meet a buyers criteria and thus get that "Offer" on a house to eventually close and make a commission. I had two accepted offers fall through due to 1-The buyer couldn't sell her co-op to buy my house, and 2- The other buyer couldn't get the financing needed. With two accepted offers at close to asking price, my agent says we don't need to drop the asking price by a standard 5% to get the traffic going again but recommends increasing the commission offered by 1/2%. Any thoughts?
Many agents are starting to use buyer agency agreements with their clients that guarantees their fee. So if an agent has an agreement with a buyer for a 2.7% take and you are offering 2%, the buyer has to pay the agent the additional .7%. Some buyers may elect to not see your home because they don't want to pay any additional fees. What percentage you offer isn't as important as making sure that you are competitive with other commission offerings. Agents tend to base their buyer agency agreements on the average commission offering.
If 2% is competitive, then I would stick with that. I'd lower the price or offer incentives to buyers.
ok, you had traffic when it was first listed? and out of that you got a couple of offers from not the best of buyers. We like buyers to be Ready, Willing and Able.
Your buyer number one that couldn't sell condo, they we were ready and willing, but not able (needed to sell) and with buyer number 2 they were ready and willing, but again not able since they didn't have rock solid financing when they offered.
My point is you did not attract a Good solid buyer at the price you are and the commission you are at.
IF your commission is equal to or better than other competitive properties (I don't care about basic or standard or whatever word anyone wants to use, look at YOUR competition and what is being offered)..... then you don't have to do anything there. BUT IF it is not equal to or better than the comp properties, then you need to get it so. (see the reason above.)
And now PRICE. If you are not getting traffic and your property is not priced aggressively ahead of the competition AND you are serious about selling..... then it is time to change your pricing.
I'm sure you don't want to hear that, but you asked......
Many agents are starting to use buyer agency agreements with their clients that guarantees their fee. So if an agent has an agreement with a buyer for a 2.7% take and you are offering 2%, the buyer has to pay the agent the additional .7%. Some buyers may elect to not see your home because they don't want to pay any additional fees. What percentage you offer isn't as important as making sure that you are competitive with other commission offerings. Agents tend to base their buyer agency agreements on the average commission offering.
If 2% is competitive, then I would stick with that. I'd lower the price or offer incentives to buyers.
Pay closing costs, prepay their mortgage for a few months, pay down points...
I had some folks who are relocating here from another state who painted the entire interior to the taste of the buyer in order to get a sale. The buyer went and picked their paint colors and it was done prior to COE. House was totally ready for them when they moved in.
ok, you had traffic when it was first listed? and out of that you got a couple of offers from not the best of buyers. We like buyers to be Ready, Willing and Able.
Your buyer number one that couldn't sell condo, they we were ready and willing, but not able (needed to sell) and with buyer number 2 they were ready and willing, but again not able since they didn't have rock solid financing when they offered.
My point is you did not attract a Good solid buyer at the price you are and the commission you are at.
shelly
Quote:
Originally Posted by middle-aged mom
Most transactions that fall apart have a tendency to be close to the asking price. Why is this?
The market is telling you that you need to take further action to attract a qualified buyer, ready, willing nd able to close.
Wow! Great advice from Silverfall, Shelly, and MAM. The only thing I'd like to add is that price is the #1 determining factor in how quickly your home will sell. Neither commission incentives or buyer incentives will sell a home if it's priced too high. You want to be competitive in your local market on all fronts, but especially on price and condition.
Buyers these days want to get the best Value for their $ right now. I like to suggest to sellers that they preview other homes in the same price range and look at their home as a buyer would. Is it the best one out there for the money? If not, you'll either need to improve the condition or drop the price.
Don't forget while you were under contract with potential buyers that couldn't close you were off the market. If your market is anything like my market you could have lost 5% or more over that time.
In a declining market the sooner you close the better your bottom line. Consider the incentives that Silverfall has given you, but pay attention to the ability of a buyer to close.
While it's nice to get your asking price in an offer, the price is only one aspect of the sales contract.
Before going to contract make sure that your buyer has taken the time to be pre-approved for the loan that they will need to close. Pre-approval is different from pre-qualified. Your agent should be able to explain the difference.
If your going to consider anyone that needs to sell a house before closing on your house, make sure that their house is on the market and priced aggressively to sell.
The goal is to close not just take offers.
Last edited by FLBob; 10-27-2008 at 05:37 PM..
Reason: typo
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Focus on closing
