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Quick question for the Realtors that frequent this board. My folks are getting ready to put their home on the market but are concerned about having to give up 6-7% for commissions because they haven't owned their home for a long period of time. Are there any realty companies/brokers in the area that offer flexible commission rates?
Quick question for the Realtors that frequent this board. My folks are getting ready to put their home on the market but are concerned about having to give up 6-7% for commissions because they haven't owned their home for a long period of time. Are there any realty companies/brokers in the area that offer flexible commission rates?
There are several companies that offer "flat fee" or commission rates lower than the 6-7% you stated in your post.
I would highly recommend that your parents interview several Realtors (full service, flat fee, etc) prior to making their decision. They also have the option of marketing it themselves, and offering a percentage to an agent representing the buyer. Many sellers would prefer not to deal with most aspects of selling a home themselves.
One thing to keep in mind, is that with fewer buyers on the market right now (time of year combined with public perception), the last thing your parents should do is allow a Realtor to reduce their marketing in exchange for a lower commission or flat fee.
I personally charge 6% when I list a home, but it is important to also understand that less than 25% of that commission actually ends up in my hands after compensating the buyer's agent, marketing, etc. Even less when you include my tax liabilities, Realtor dues, general marketing not specifically related to a property, or if a home is on the market for more than 90 days.
Just some food for thought, and I hope that helps.
PS - Just because your parents haven't owned their home for a lengthy period of time, doesn't mean that their home isn't worth enough to yield some profit after closing. It is a case by case basis, but I have sold homes when the owner had lived in it for only about 18 months, yet still remained in the positive after everything was paid out (commission, state fees, attorney fees, tax prorations, etc).
One thing I would wonder about - maybe some of our resident realtors would comment - if other agents know that the fee is less... will they show the house to their clients if most other comparable houses have a higher commission?
One thing I would wonder about - maybe some of our resident realtors would comment - if other agents know that the fee is less... will they show the house to their clients if most other comparable houses have a higher commission?
Well, of course not, that would be unethical.
Anyway, if you are choosing to use a listing agent who offers a flat fee or lower commission, make sure THEY are taking the hit. 99% of the time, a buyer's agent brings the offer, and you do not want to do anything to deter that from happening (not that I'm implying that anyone is unethical). On the flip side, if the listing agent is reducing their commission, they will most likely not offer various marketing that full-service listing agents do. While our market is great compared to others, there are still fewer buyers out there, and every seller needs the maximum amount of exposure possible.
To clarify, if I were to do the commission at 5%, as opposed to my normal 6%, and I'm dealing with the average sale price of a home in Greater Greenville (about $175,000). If that home is on the market for three months, after the buyer's agent (3%), marketing expenses (specific to that property), fees, etc, then I would be left with $1,172 after three months. Then I still have to pay Uncle Sam.
Originally Posted by roadpony One thing I would wonder about - maybe some of our resident realtors would comment - if other agents know that the fee is less... will they show the house to their clients if most other comparable houses have a higher commission?
Quote:
Originally Posted by ckeegan
Well, of course not, that would be unethical.
Thanks. That confirms something I was wondering about. When we were shopping last year for an agent to list a piece of land (in another state), that's what we were told when we balked at 10% commission on land. We didn't list with that agent. However, I have also since learned a bit about the usual difference in listing fees between homes and land. I'm still glad we didn't list with that agent.
Thanks. That confirms something I was wondering about. When we were shopping last year for an agent to list a piece of land (in another state), that's what we were told when we balked at 10% commission on land. We didn't list with that agent. However, I have also since learned a bit about the usual difference in listing fees between homes and land. I'm still glad we didn't list with that agent.
Yeah, land is a bit different as far as commission structure, and the type of work it entails.
As for agents, some work harder for the commission than others, and some spend a lot more of that commission on marketing than others.
I'm glad you're glad you didn't go with that agent, since it's better than the regret after months of wasted time.
To clarify, if I were to do the commission at 5%, as opposed to my normal 6%, and I'm dealing with the average sale price of a home in Greater Greenville (about $175,000). If that home is on the market for three months, after the buyer's agent (3%), marketing expenses (specific to that property), fees, etc, then I would be left with $1,172 after three months. Then I still have to pay Uncle Sam.
as a builder in the upstate resent that comment
IF you were to only make $1172 after 3 months (wich i find that hard to believe since a full page ad in the real estate guide is $500/mo (how many listings can you fit on that full page ad?)... i would consider that to be good money for you due to the fact that all you did was drive to the sellers house, sign a contract, log the info into the mls, maybe show the house a few times, let the buyers agent sell the house, you show up to the closing and collect a check. No more than 4-5 hours of work.. for $1172 at worst, i would say thats not too bad.. get yourself 20 listings and wait to collect a check
dont forget to mention, if you sell the house you are pulling $8750. (or $10500 in the case of you selling for 6%)
that gets me thinking.. the sad part about that. if that $175,000 house was a new home, the builder would be making $17500 on that same house (if it doesn't sit long).... where is your risk?
IF you were to only make $1172 after 3 months (wich i find that hard to believe since a full page ad in the real estate guide is $500/mo (how many listings can you fit on that full page ad?)... i would consider that to be good money for you due to the fact that all you did was drive to the sellers house, sign a contract, log the info into the mls, maybe show the house a few times, let the buyers agent sell the house, you show up to the closing and collect a check. No more than 4-5 hours of work.. for $1172 at worst, i would say thats not too bad.. get yourself 20 listings and wait to collect a check
dont forget to mention, if you sell the house you are pulling $8750. (or $10500 in the case of you selling for 6%)
that gets me thinking.. the sad part about that. if that $175,000 house was a new home, the builder would be making $17500 on that same house (if it doesn't sit long).... where is your risk?
I totally understand that a builder's risk is great compared to a Realtor's. So the "gain" that is gross after a sale seems small. But don't misunderstand what a Realtor does to sell a house. I've been a Realtor and worked 12-15 hours a day, though I had only a few listings sometimes. Some of that work was "campaigning" or working with buyers. But a lot is working with the sellers who have listed their homes. You need to try to answer the phone each time you see it is one of your sellers calling, or call back immediately. You need to take care of their every concern. The more time you put into it, the more you don't want to lose them as a client, but want to make sure they sell their home, AND WILL RECOMMEND YOU after that to other people, OR YOU WILL RECEIVE NOTHING for your work. This is a side of "risk" that a builder doesn't have. He always has the home, and may sell for much less than he hoped, or he can hold it, but there is value there. There is no value in a listing that is realized until it is sold. So when a Realtor says they receive a certain amount for sale of a home, remember they may have had a few homes that were withdrawn from the market that never sold, or were foreclosed on. The $1172 that is mentioned is not an "average" net from a commission. It is a net of a successfully sold home. If an agent gives you an average amount per home listed, it is going to be a lot smaller number.
I believe that there is a mistake in the cost of the Real Estate Guide. I pay more than double the $500 mentioned above for that one magazine alone. You may be referring to the Real Estate Book, which is a much smaller book.
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