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Isn't the seller's agent's commission negotiated beforehand? When you hired your agent did you have a contract or say oh 'this x%age will you be your commission?'
Appraisers use the same methods as realtors do and I would bet they are much more accurate with their appraisals that realtors are with comps. When was the last time you heard of a bank ask an impartial realtor to comp a house to approve a loan? When was the last time you heard a bank require 2-4 appraisals in order to approve a loan? I think NEVER ...
Appraisers do not have the advantage of knowing the inventory and local market. Many agents, especially those working out of area, also don't know. It matters. An appraiser is not going to know the reason that the comparable house down the street sold for $X because it had a devil worship alter in the basement with 5' ceilings. The MLS and tax records do not have this kind of information. An agent who knows the dirt does. It becomes a negoitating advantage.
Banks pay Realtors to perform BPOs ( Broker Price Opinion), all the time. Thousands are executed each day.
Not too long ago, the major lenders were increasingly relying on AVMs ( automated valuation models) and drive-bye appraisals for 100% financing loans. I think the financial meltdown has demonstrated banks are probably not the best business model to follow to determine value.
You had the option to give up less than 1% of your sales price to make a deal happen at 304k and opted to not to. Instead, you asked the Realtors to reduce their pay by 20% before taxes are even taken out to make the deal happen. A pay that you agreed to pay ahead of time in writing on a contract I might add. When the Realtors refused to accept 20% less than you agreed to pay them the buyer walked over $2500.
Alright people, who's fault is it that the the OP didn't sell the home? We have 3 choices: the seller (for not coming off her price by less than 1%), the buyer (for not coming up on their offer by less than 1%), or the Realtors (for not accepting a 20% pay reduction from the predetermined amount)?
Extremely well written and understandable answer - that I 100% agree. I'd rep you - but apparently I need to spread some more around.
Quote:
Originally Posted by middle-aged mom
I am however, going to comment about the seller showing her own home because it was not convenient for the agent to do so, herself. Professionals have back-ups. They do not impose on their clients to show their own property, especially since most buyers prefer to be able to see property without the owner trying to sell it to them.
The only thing I have to add is that I don't think the agent was imposing on the client to show their own property. The only times I have ever had a listing agent (and NEVER a seller) meet me & my clients at a property is -- 1. When the listing agent had indepth information about a new construction property that was just framed out and 2. At high end properties - $1M plus.
To the OP: Did you make it clear to the listing agent that you expected her to be at every showing?
Hi Frozen Angel, I'm a serious buyer.
A co-worker of mine just bought his house. The house was originally listed in mid 2006 for over $1.3 Million. They received what they considered a low-ball offer at about $1M. Fast-forward from mid 2006 to mid 2008 (2 years later), they have received zero offers since their low-ball offer of $1M. They have now lowered their price to $950K. My co-worker comes along and makes an offer for $700K. They counter at $750K and the deal is done.
I sympathize with the seller as they had no crystal ball to predict the future of the housing market.
You first put your house on the market in 2007. A lot (outside of your control) has changed since 2007.
Isn't the seller's agent's commission negotiated beforehand? When you hired your agent did you have a contract or say oh 'this x%age will you be your commission?'
I admit now after seeing the negative feedback from the reators here on CD, I see it was naive of me to think that the commission was based on $349K and that the realtors wouldn't be flexible even if the seller had to drop their asking price down tens of thousands of dollars to make a deal. It NEVER occurred to me that the realtors would not want to contribute to make the deal happen. I personally think that stinks and is against all my other business experiences. It seems that the realtors have done a good job sticking together on that one which is why they can afford to be inflexible. I don't see why realtors should be exempt from having to negotiate their commissions to make a deal. I was taking the biggest hit in spite of how Brandon was playing with the numbers. If this is the standard practice for realtors, then I see realtors as being inflexible and you can even see it here from these RE agents responses to my post.
Hi Frozen Angel, I'm a serious buyer.
A co-worker of mine just bought his house. The house was originally listed in mid 2006 for over $1.3 Million. They received what they considered a low-ball offer at about $1M. Fast-forward from mid 2006 to mid 2008 (2 years later), they have received zero offers since their low-ball offer of $1M. They have now lowered their price to $950K. My co-worker comes along and makes an offer for $700K. They counter at $750K and the deal is done.
I sympathize with the seller as they had no crystal ball to predict the future of the housing market.
You first put your house on the market in 2007. A lot (outside of your control) has changed since 2007.
I admit now after seeing the negative feedback from the reators here on CD, I see it was naive of me to think that the commission was based on $349K and that the realtors wouldn't be flexible even if the seller had to drop their asking price down tens of thousands of dollars to make a deal. It NEVER occurred to me that the realtors would not want to contribute to make the deal happen. I personally think that stinks and is against all my other business experiences. It seems that the realtors have done a good job sticking together on that one which is why they can afford to be inflexible. I don't see why realtors should be exempt from having to negotiate their commissions to make a deal. I was taking the biggest hit in spite of how Brandon was playing with the numbers. If this is the standard practice for realtors, then I see realtors as being inflexible and you can even see it here from these RE agents responses to my post.
You're looking at it incorrectly. Of course Realtors negotiate their commissions, much more that most commission based sales people, as it's required by law that our commissions be negotiable. And when I negotiate a commission, I expect the terms of the negotiated agreement to be firm. We've agreed that the work I will do for you, and the risks I will take in getting the property marketed & sold, are worth a percentage of the agreed upon sale price of yrou house. As the client, YOU decied if I will ever get paid, as I can't force you to accept an offer, even if I think you're insane for letting it go by. So wen an offer comes in that is a bit lower thn you want to accept, I don't think I should have to give you part of my agreed upon commission so that you can pocket as much as you wanted to. Remember that by accepting my commission as a percentage of the sale price, I've already tied my income to that sale price, and the lower price you take, the less money I make.
I admit now after seeing the negative feedback from the reators here on CD, I see it was naive of me to think that the commission was based on $349K and that the realtors wouldn't be flexible even if the seller had to drop their asking price down tens of thousands of dollars to make a deal. It NEVER occurred to me that the realtors would not want to contribute to make the deal happen. I personally think that stinks and is against all my other business experiences. It seems that the realtors have done a good job sticking together on that one which is why they can afford to be inflexible. I don't see why realtors should be exempt from having to negotiate their commissions to make a deal. I was taking the biggest hit in spite of how Brandon was playing with the numbers. If this is the standard practice for realtors, then I see realtors as being inflexible and you can even see it here from these RE agents responses to my post.
Why do you think there is a "requirement" for a Broker to have to lower their commission if the selling price was lower than the listed price?
Now, if that is what you (a seller) wants, then negotiate it up front with the Broker - put it in the listing contract. Get it agreed to.
Seems to me you are assuming far to much. And please, keep in mind, Brokers and Agents are in business to make a living. Their overhead does not go down simply because an offer for less than the list price is made.
Realtors, please lets not take over this thread. The OP specifically asked Realtors not to give opinions (which I was very careful not to do in my summary). I'm curious to see what the the general public thinks.
And FA, I did not "play with the numbers". They are legit. You or the buyer had less than 1% to make the deal work and you asked each Realtor to take a 20% pay reduction (and probably more because usually if the agent agrees to the reduction it comes only out of their split and the company does not share in the loss). That is very signicant. If you were hired to do a job, did it, then at the then the owner asked you to give back 20% of your salary for the year because the company didn't do as well as hoped, would you?
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