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Question- If a seller knows they want say 400k for their home and they know that people in todays market might come in lower +20k and that they also have to pay a realtor's commission approx +20k, wouldn't they then price their home at say 440k-450k.
Only sellers that are poorly advised do this.
Quote:
Originally Posted by LCMT
Question- If approx 20k goes to commission than isn't the real value of the home according to comps 20k less. Why factor in the realtors commission as the real value of the home?
The value of the home is the price someone is willing to pay for it regardless of new carpet, painting, decorating allowances, closing costs, preapids, points, or commissions. If a buyer is willing to pay a certain price for a home with commission built in, then that is the value.
The buyer's agent commission does not go away just because there is no buyer agent. The listing broker is entitled to keep it, as it is theirs to divide up. You will have to convince the broker to take less commission. And you don't know what the commission structure they have with the seller may be.
Exactly. The seller has contractually agreed to pay X% at closing. Will the seller reduce the asking price by the 3% that would have been due the buyer's agent in order to make the sale? Maybe. But what if the bottomline for the seller was actually 5-7% below asking when the house was originally put on the market?
As a listing agent, my mouth waters when a get a first time home buyer with no buyer's agent! Yes, there's more work for me since I have to do all the paperwork, but I'll make more money and the transaction will go very well for the sellers. As the listing agent, I work for the sellers and since there won't be a buyer's agent to nit-pick - it's smooth sailing!
One thing i'm concerned about is the buyer agent who also represent sellers and try to gear me toward his own listings. Isn't that a conflict of interest? How can I negotiate against my own agent? Actually I was sent a list of a property by an agent (who was recommended by a friend) that was $10k more than comparable properties currently on the market. Should I get an agent that exclusively handles buyers?
I would slap the listing agent in the face to knock some sense into them if they thought they were going to keep 6% commission on a sale without a buyer's agent (that's as a seller or a buyer, but especially if I was the seller). They need to get a clue if they think they should get that for the little work they have done. They were only going to get 3% if there was a buyers agent, so they definitely do not deserve any more that that.
That said, a buyer's agent can sometimes be a necessity only for the access to getting into houses to look at. We used a buyer's agent recently that was ****ing clueless as hell, but it didn't matter since I was much more efficient at finding houses in our price point and that appealed to us, but we just needed him to let us in, so we needed him for that.
I would slap the listing agent in the face to knock some sense into them if they thought they were going to keep 6% commission on a sale without a buyer's agent (that's as a seller or a buyer, but especially if I was the seller). They need to get a clue if they think they should get that for the little work they have done. They were only going to get 3% if there was a buyers agent, so they definitely do not deserve any more that that.
That said, a buyer's agent can sometimes be a necessity only for the access to getting into houses to look at. We used a buyer's agent recently that was ****ing clueless as hell, but it didn't matter since I was much more efficient at finding houses in our price point and that appealed to us, but we just needed him to let us in, so we needed him for that.
If you signed a contract that you agreed to pay the listing agent /company 6% upon completion of sale-----------why is it any of your business what they do with that 6% after the house sells ?
If I signed a 6 % contract, the house got sold, I pay the 6%-----I couldn't care less if the listing agent /company kept it all, gave half to the buyer, or gave it all to the buyer, or went on a 10 day drunk.
It would be absolutely none of my business as they fulfilled the agreement I signed.
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I would never list a house with an agent first off unless it hasn't sold for >3-4 months. Secondly, I would write into the contract that 6% will be given in commission (3% to BA, 3% to SA), but if no buyer's agent is present, then they get 3%. I would NEVER sign a contract that would allow a listing/selling agent a full 6% if there isn't a buyer's agent. I don't know why any seller would, as that takes a huge chunk of change off the table for you to negotiate a lower price/contributing to closing of a potential buyer. Remember you can write in your own provision to any contract, don't let an agent/broker tell you otherwise (the same way the commission % is negotiable too)
I would never list a house with an agent first off unless it hasn't sold for >3-4 months. Secondly, I would write into the contract that 6% will be given in commission (3% to BA, 3% to SA), but if no buyer's agent is present, then they get 3%. I would NEVER sign a contract that would allow a listing/selling agent a full 6% if there isn't a buyer's agent. I don't know why any seller would, as that takes a huge chunk of change off the table for you to negotiate a lower price/contributing to closing of a potential buyer. Remember you can write in your own provision to any contract, don't let an agent/broker tell you otherwise (the same way the commission % is negotiable too)
"Never" is such a big word.
So, you are saying you would not want your agent to bring a buyer?
See, that commission you would withold can easily be collected by diverting the buyer to another property where the Seller would be glad to pay for a buyer.
And you would not want someone else in your agent's office to bring a buyer in dual agency?
Of course, the "agent" is the BIC for the firm, and anyone under the BIC is in either dual agency or designated agency.
If the firm does not allow designated agency, then you would not allow the firm to bring a buyer?
Oh, yeah...
The agent may well have an agreement with the buyer wherein the buyer will compensate the agent a commission if the seller refuses to.
The listing agreement language cannot prevent the agent from collecting from the buyer, and the net cost of the house to the buyer is the same as if the agent collected the full commission.
Interesting stuff.
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. The seller has contractually agreed to pay X% at closing. Will the seller reduce the asking price by the 3% that would have been due the buyer's agent in order to make the sale? Maybe. But what if the bottomline for the seller was actually 5-7% below asking when the house was originally put on the market?
