Negotiating Real Estate Commission (Howe: sales, broker, how much)

[HockDad]

I think that you get what you pay for. I paid a 5.5% commission, which was a lot on the last home, but my agent rocked and certainly paid for herself.

[loves2read]

The reason to use a "knowledgeable" realtor in my opinion is to be a buffer between you and the seller and the seller's agent...
we sold house in Bedford about 18 mo ago--
the market was not hot but was heating up

she was excellent--had professional photographer take great photos of the house (which we had had cleaned and which had no furniture), did great job for priceing, and certainly earned her money by dealing with the wacky person buying the house...
she was a nit-picking p-i-t-a who refused to use her own realtor who was her mom (and seemed totally out of it)...

there were couple of things that happened after the house was under contract--one was water leak from washer connection which caused dry wall damage, wet carpeting--had to be replaced and repainted, carpets dried, stretched, re-tacked--all within 48 hrs or less of closing--
one guy worked until 2AM and dried dry wall mud with hairdryer so they could paint the next AM--

our realtor made it happen--

our buyer was late getting her money from closing on a house she was selling
(she lied on the contract and said she didn't need the funds to close our house--
we didn't want a contract with a contingency)
and our realtor was dealing with all that back and forth

it just saved us (my husband especially) so much hassle...

if you don't want calls at 10om from YOUR buyer--get a realtor...

[MckinneyOwnr]

Originally Posted by TurtleCreek80

Agents who work for less than full commission are typically young and inexperienced - ie; not who you want to trust a Multi-$100k's transaction to. The only exceptions I've heard of are for super high ticket homes.

Disagree. There are a lot of agents out there who will cut their commission if you also agree to buy a home with them. The realtor we are working with now charges the standard 3% on the sale, but when we buy a home, she'll just take 1% and we get the rest. She's one of the top realtors in the area. My parents had the same deal with their realtor last year.

[JTC Mom]

Originally Posted by MckinneyOwnr

Disagree. There are a lot of agents out there who will cut their commission if you also agree to buy a home with them. The realtor we are working with now charges the standard 3% on the sale, but when we buy a home, she'll just take 1% and we get the rest. She's one of the top realtors in the area. My parents had the same deal with their realtor last year.

I know a neighbor who got a similar deal a few years back. A realtor friend of mine also told me that at her brokerage, the commission split between the agent and the firm changes based on how much they sell. In her case the agents split the 3% with their firm 50/50 for the first $x million in sales and the agent's share increases and the brokers share decreases after that. At a certain (very lofty) level, the agent gets to keep almost all or all of the 3% commission...so a very high producer in that kind of arrangement can "afford" to cut the commission since they don't have to pay out (as much) to their firm.

[4Movingeast]

I am more confused than ever regarding the necessity of a realtor in our situation. And yes, it's tl;dr totally. Sometimes you just need to see things written out.

Our area:
- Low inventory in our price range (comps say $425Kish on the conservative side)
- Highly rated public schools
- Good access to FW and Weatherford

Our specific home:
- Heavily wooded, large lot
- Classic design yet modern amenities- not trendy, not stereotypical for the area in a desirable way (in other words, the reason we pounced on the house in 08!)
- Does need some simple stuff if buyer is wanting brand spanking new feel but cheap stuff like paint and carpet (upstairs only, staircase and downstairs wide plank real hardwoods)- what I'm saying is house is in great shape but paint seems to be something people have strong opinions about. No weird colors going on. 3 realtors have said the house will show great, whatever that's worth.
- New roof this past summer, exterior of house painted, gutters installed
- High quality wrought iron fencing with 3 gates. Our HOA doesn't allow privacy fences, you have to do that with landscaping
- Fully landscaped, Truegreen has been coming and yard looks great
- Gated neighborhood, cul de sac, ranch behind us (safe and quiet)

It's not that I want to cut a realtor out at all, it's just that we really need the max amount of money to stay with us so we can put it down on the house we turn around and buy. You're thinking, "um yeah, doesn't everybody?" We didn't put anything down when we bought this house. Stupid, yes, we know. It was 2008 and our mortgage broker friend told us it would be fine. Definitely not blaming him or anyone- it is what it is. Will never do it again. Lesson learned. And we have struggled through this commute for 4 years hoping that the market would come back and allow us to right that wrong. And I know, it's nobody's fault but ours! Without losing the realtor commission, we are in striking distance of a 20% down payment on a nice house without touching any other assets. We may not have put 20% down on this house, but we sure bought at the right time if you look at $psf. Anyway, let the mushy tomatoes, "how could you ever be so stupid" fly. I figure the internet mockery I'm setting myself up for here will help inoculate me from future financial stupidity.

[loves2read]

all that stuff is water under the bridge--

The only thing I can say is
try it--set a deadline for how long you are willing to wait--
the prime selling season is over in May supposedly because people want to close and move during summer and be ready for new school session--

you will know soon enough if it is going to work

IF there is traffic in your neighborhood from house shoppers--they will be driving down lots of streets looking at what the neighborhood is like--not just at homes for sale in MLS--
at least a smart shopper would--

if there is no MLS listing within a block of your house now you will just have to put out signs to point people to your house IF your HOA allows that--some don't

[4Movingeast]

thanks Loves2Read. There are currently 2 homes on MLS in the neighborhood. I keep hearing rumors of a 3rd but no sign yet (and it's not on MLS)

and sorry to OP, hope this isn't too much of a hijack

[JTC Mom]

If you're inclined to try on your own, I think the advice above to give it a shot but set a time limit is good. Your house may sell right away or not, and if it doesn't a good realtor can really help. We got lucky selling on our own and it worked out well for us this time. We never listed our house or put up a sign. Our friends and neighbors knew we were moving away for a couple of months before we left and word of mouth that we were leaving generated interest, so we de-cluttered and held one open house and ended up with several offers. At the time I talked to a realtor friend and told her that if none of the offers worked out we would list with her. She offered to lower her commission...probably because we got so many offers with little effort that she figured she could sell it pretty easily.

My friend who sold last year "advertised" on early childhood PTA list serves for the park cities and lakewood. They held a single open house and got 5 offers. They Told me they were willing to pay 3% to a buyers agent, but the winning bidder agreed to pay the commission herself because she knew that at least a couple of offers came from people without agents.

My friend and I both agreed that if the sales had not worked out quickly we would have hired an agent. If you decide to try on your own, good luck!

[FalconheadWest]

You said you live in a gated community. How do you expect to get drive-by traffic for people to see your for sale sign? Are you going to put ads online with your gate code? Are you going to give the gate code to any Dick, Tom, or Harry that inquires about the property so they can drive by? Are your neighbors going to appreciate that? Doesn't sound like a well-thought out plan if you ask me.

[4Movingeast]

JTC Mom, thanks. I have been doing a bit of word of mouth advertising in our situation and who knows- there is every chance it could produce a buyer. Our small neighborhood is definitely viewed as one of the most desirable as far as $350-500K 'hoods (although with every sale that is increasing, which is good) I'm just a bit leery of having to show the house to strangers and would need to formulate a plan for that, which I'm sure could be done.

Falcon- yes, it's gated. There are times of the day that the gates are open, allowing for the school bus etc. Between word of mouth, the other listings in the neighborhood, locals visiting neighbors/ferrying kids to friends houses, and the realtor living right down the road, I figured we could still have a pretty decent amount of traffic. We have a generic gate code that changes every quarter to be used with contractors, or I could always buzz them in from the box. I actually have thought about it, and am still thinking about the challenges it would require, but thanks for your feedback. I detailed above the reasons we are considering FSBO- none of them being that we think realtors are unnecessary.