Real estate agent's commission (Orlando, Winter Park: flat fee, loan, selling a home)

[annerk]

Originally Posted by chopchop0

More likely, the other poster likely failed to realize that realtors can work on more than one property at a time

I think both of our statements are valid.

I also think a good real estate agent is worth 6% plus some. My neighbors listed Monday with a very highly rated agent. They had two showings yesterday. The house is gorgeous and the listing was impeccably written to really highlight in both words and photos the features of the home. It is not an inexpensive home and is not priced at all aggressively.

By using a great agent they will sell quickly and for top dollar over using John Doe agent who fills the listing with typos and blurry photos and thinks putting it on the MLS is marketing and sits one open house to get a bunch of leads but not particularly to sell the home.

[BMR1974]

Even as a Realtor you can become complacent about how much you are charging at times. You feel bad, especially with friends or family. And then you realize all that you do during a "routine" real estate transaction. There are hundreds of functions that you perform as a representative of the buyer or seller. Hundreds. And you do this all at your expense. Yes a $5000 commission is great, but there is gas, cell phone bills, advertising, dues for MLS access, your time which is virtually all hours of the day. If you are working for a broker, you are paying them part of your commission to cover insurance and their costs. You coordinate inspections, appraisals, repairs, access and safety of the property, legal paperwork, closings, sometimes moving services. This is all worth money to a buyer or seller. Seller's typically have no time to deal with moving, packing and all the other things I just mentioned. Sure you can sell your own house, but you will need to factor in all of those items and your time to do so in order to accurately measure whether or not it's worth it. And unless you do it everyday, you could very well make a very costly mistake.

[Bobdreamz]

Originally Posted by BMR1974

Even as a Realtor you can become complacent about how much you are charging at times. You feel bad, especially with friends or family. And then you realize all that you do during a "routine" real estate transaction. There are hundreds of functions that you perform as a representative of the buyer or seller. Hundreds. And you do this all at your expense. Yes a $5000 commission is great, but there is gas, cell phone bills, advertising, dues for MLS access, your time which is virtually all hours of the day. If you are working for a broker, you are paying them part of your commission to cover insurance and their costs. You coordinate inspections, appraisals, repairs, access and safety of the property, legal paperwork, closings, sometimes moving services. This is all worth money to a buyer or seller. Seller's typically have no time to deal with moving, packing and all the other things I just mentioned. Sure you can sell your own house, but you will need to factor in all of those items and your time to do so in order to accurately measure whether or not it's worth it. And unless you do it everyday, you could very well make a very costly mistake.

Thank you for pointing out how much Realtors do behind the scene! I have been one for 20 years now and it's annoying as heck when Sellers want to cut your Commission rate. Imagine working for a Seller (the Boss) for a 6 month listing period and investing your own money to be told by the Seller at the end that you should be paid less! I don't bother with such riff raff if you are so worried about saving a few bucks go find a discount realtor then wonder why your house hasn't sold.

[volk2k]

Originally Posted by Bobdreamz

Thank you for pointing out how much Realtors do behind the scene! I have been one for 20 years now and it's annoying as heck when Sellers want to cut your Commission rate. Imagine working for a Seller (the Boss) for a 6 month listing period and investing your own money to be told by the Seller at the end that you should be paid less! I don't bother with such riff raff if you are so worried about saving a few bucks go find a discount realtor then wonder why your house hasn't sold.

Serious question here...

What exactly do you personally do differently to market a $200K house versus a $300k house versus a $400k house to justify the 50% - 100% increase in commission over that $200k house? Please itemize the differences and use concrete examples.

I believe that real estate sales associates/Realtors provide a great service and deserve to be compensated, but think this notion of an 'industry standard' of 6% is pretty archaic.

I also find it annoying that Realtors find it offensive that I would even question or negotiate this rate.

[chopchop0]

Originally Posted by volk2k

Serious question here...

What exactly do you personally do differently to market a $200K house versus a $300k house versus a $400k house to justify the 50% - 100% increase in commission over that $200k house? Please itemize the differences and use concrete examples.

I believe that real estate sales associates/Realtors provide a great service and deserve to be compensated, but think this notion of an 'industry standard' of 6% is pretty archaic.

I also find it annoying that Realtors find it offensive that I would even question or negotiate this rate.

Larger value homes are harder/take longer to sell

[volk2k]

Originally Posted by chopchop0

Larger value homes are harder/take longer to sell

Really? In my neighborhood of $400k+ homes they are off the market in less than two weeks if they are priced realistically.

But that still does not answer the question.... What exactly is the agent doing differently on a 200k home vs 400k home... That justifies 100% more commission?

I get the multi-million dollar market and the lengths you need to go to there... But we are talking average priced homes in Orlando.

[idr591]

Originally Posted by chopchop0

Larger value homes are harder/take longer to sell

I don't think that's true. Poorly priced homes are harder/take longer to sell regardless of price point.

For example, a well priced waterfront home in Winter Park will not last a week on the market. A well priced Thornton/Delaney Park home will not last a week on the market.

[BMR1974]

Originally Posted by volk2k

Serious question here...

What exactly do you personally do differently to market a $200K house versus a $300k house versus a $400k house to justify the 50% - 100% increase in commission over that $200k house? Please itemize the differences and use concrete examples.

I believe that real estate sales associates/Realtors provide a great service and deserve to be compensated, but think this notion of an 'industry standard' of 6% is pretty archaic.

I also find it annoying that Realtors find it offensive that I would even question or negotiate this rate.

A well priced waterfront home could take a year or more to sell. I know a few currently on the market for that time. They are priced well within the thresholds in which they should be. There are far fewer buyers in some price points. This means more marketing costs, higher end open houses, etc.

Again, there is no industry standard commission. Some markets it is 7-9%. Would you find it annoying if someone asked you to take a pay cut for your job? Considering the average real estate agent makes around $50,000 per year, I don't see where they are charging too much for their services.

[idr591]

Originally Posted by BMR1974

A well priced waterfront home could take a year or more to sell. I know a few currently on the market for that time. They are priced well within the thresholds in which they should be. There are far fewer buyers in some price points. This means more marketing costs, higher end open houses, etc.

Again, there is no industry standard commission. Some markets it is 7-9%. Would you find it annoying if someone asked you to take a pay cut for your job? Considering the average real estate agent makes around $50,000 per year, I don't see where they are charging too much for their services.

Find me a well priced Chain of Lakes home in Winter Park that has been on the market for a year and I will buy it and pay you 6%.

I'm a physician. People DO ask us to take pay cuts. Nearly every year. Are you aware of insurance companies or Medicare ever RAISING their reimbursements? The reality is, marketing and selling a home is easier now than it was 10 years ago. Times have changed.

[volk2k]

Originally Posted by BMR1974

A well priced waterfront home could take a year or more to sell. I know a few currently on the market for that time. They are priced well within the thresholds in which they should be. There are far fewer buyers in some price points. This means more marketing costs, higher end open houses, etc.

Again, there is no industry standard commission. Some markets it is 7-9%. Would you find it annoying if someone asked you to take a pay cut for your job? Considering the average real estate agent makes around $50,000 per year, I don't see where they are charging too much for their services.

Million dollar mansions are one thing... They still don't warrant a straight 6%...

I am still not hearing why the agent of 400k home deserves 100% more than a 200k home.

Paycut? This is sales. There is no salary to cut.

The market is flooded with agents who can enter the market without a college education or simply on a whim.

They are not all entitled to $50k a year.