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As a seller, I can't really see a buyer agent putting in $30,000 worth of work. I have done real estate deals without any agents, but this listing I am thinking of throwing up on MLS through a flat fee site.
Buyers will most likely be foreigners, have cash and already own land here. Where this property is, it's the dirt that's valuable, so no need for staging an open house or multiple tours.
That being said, I would also be interested in if anyone wants to weigh in on this:
No matter how unethical it is, let's face it, money motivates. I have a buyer coming out, from what I sense, I don't think he's very interested and it might be the agent who is really trying to drive home this deal. I told him I would pay buyer's commission and while no numbers were discussed, I assume he thinks it's the usual 3% that is common here, at least for regular homes, I am not sure if that number is different when the listings hit seven figures. If he sells my place and asks for 3%, I am inclined to give it to him, but going forward I would like to know what other professionals think.
Do commissions shrink as listing prices goes up or if the sale is pretty straight forward? I know you can basically structure the deal however you want it, but I would like to see if there is consensus within the profession. It's in WA and during my search of "commission" I saw someone post that they weren't sure if any WA Realtors post here regularly, I should of checked the date, but forgot to.
Thanks for reading and really I would appreciate any thoughts, even if it's to yell at me that yes, they do earn that $30k, pay the buyer agent and pay a listing agent you worthless FSBO*!!!
*though, in my searches most of you guys are very nice to FSBO types, so thanks for that!
Last edited by perigee; 10-14-2015 at 08:02 PM..
Reason: I hate that I only have a limited amount of time to catch my typos
no. you don't cut commissions just because the price is high.
Different example...
Why does ebay get 10% of whatever I sell? Selling a $5000 item is no harder than selling a $5 one.
It's just how it works.
There are so many agents out there competing for buyers and sellers that maybe this one deal is one of two she will do all year. If you only paid her by #hours x $$$, she would be broke on the street.
In socal, million dollar listings are a dime a dozen. Usually we give 2.5% to the buyer side. Some go down to 2.25%. Weak listing agents go down to 2%.
Those who dare to give only 1.5% commission or less to the buyer broker have a hard time selling.
Some offer a fixed dollar value, which usually amounts to 1% too.
But the best buyers agents would feel insulted by such a low amount.
Think of it as your opportunity cost. What do you give up by lowballing the buyerside commission?
on the flip side, no amount of commission will sell an overpriced listing. Are you sure your land is worth a mill?
Discussing commission rates among agents is one of those "third rail" things so I'll just make this observation. After reading your post, it occurred to me (probably because of the recent debates) that while most Americans think that it is entirely reasonable that as selling prices increase, commission percentage rates should decrease, yet for some reason most of those same people believe that the more income a person earns, the higher the tax rate they should pay. It's just one of those interesting social phenoms for me. I'm not making a judgment either way...just an interesting thing.
As for you, OP...everything in real estate is negotiable and, as a wise boss of mine once told me many years ago, "If you don't ask, you don't get."
If you'll agree to less from me I'll agree to less from you. Details negotiable. I've done deals for nothing but a promise from the principal to treat me fairly. I need a few handshake deals a year to maintain my faith in humanity. So far, so good.
I do think you're crazy for not hiring an agent. I work in a very hot market where often the dirt is the most valuable part of the property so pretty similar to your location. I can tell you without a doubt that there is a huge difference between getting a house sold which any FSBO can accomplish in a hot market and getting the house sold for the most money possible in the shortest amount of time possible while also avoiding potential problems in the transaction and making it as smooth a road to the closing as possible. This is probably your biggest single asset and personally I wouldn't trust myself to handle such an important and high dollar transaction if I didn't have the right background and knowledge.
Quote:
Originally Posted by oh come on!
There are so many agents out there competing for buyers and sellers that maybe this one deal is one of two she will do all year. If you only paid her by #hours x $$$, she would be broke on the street.
Personally, I'd be more than happy if the agents who do 1 or 2 transactions a year went out of business. There are way too many of us out there and usually the low volume agents don't know their back side from their elbow. So, they're only hurting the industry and their clients. Keeping these people in business is not a great argument for paying a particular commission rate IMO.
What I will say is that an agent deserves to be paid more on a more expensive property than a lower priced one. Sadly, we live in a very litigious society and the dollar amounts that people sue for are much higher in higher priced homes than they are in lower priced homes. I also find buyers/sellers in higher price points demand a different level of service than most buyers/sellers at lower price points. So, I am forced to spend more time and expend more money on higher dollar clients. Often, I find myself spending time/money on things that really are not going to help the high dollar client just to keep them happy. Lower dollar clients (generally speaking) allow me to be more effective with how I spend my time/money.
Quote:
Originally Posted by bbronston
Discussing commission rates among agents is one of those "third rail" things so I'll just make this observation.
Yup. Commissions are 100% negotiable and colluding on commission rates is 100% illegal.
Well first off, thank you both for sharing your views, it is very helpful to myself and possibly to any lurkers out there, trust me I know.
That post was getting too long, so I didn't want to bore anyone with how I came to a price. If you are interested keep reading, if not, please feel free to share any other thoughts or insights.
Let me say, my properties are investment properties, not single family, we're talking sub-dividable, commercial and Ag. Pricing is a bit market research and a bit how long do you want to wait. One property has an adjacent acreage that a Hong Kong group has been trying to sell for a decade, welcome to raw commercial land in up and coming city.
One of the reasons I am not going with a selling agent is that I have a different timeline when it comes to selling properties. I don't mind waiting for my buyer. The neighboring property sold for 4 million, but it brings in a lot more money a year then mine, though with some investment mine could also bring in $250k a year. Similar properties only come on the market once or twice a year, priced at around $750k and they are gone as soon as they list. Too me, that means they left money on the table.
I almost had it sold at over a million, but a currency drop and a partnership falling apart stopped that deal. Currently, at just under a million and not officially listed only by word of mouth I have had some tire kickers. It may take awhile to sell, but it's paid for, generates income and shows it's self.
Other then waiting for a buyer, it should be a pretty straightforward sale, and I guess that's why I was asking about going lower on the commission. I have done the footwork, I have the answers, buyers are educated and experienced. Though, if lowballing an agent means they won't bring me a buyer, I guess I will suck it up and give them their money. Though, maybe I can hope for a Realtor like 1insider
no. you don't cut commissions just because the price is high.
Different example...
Why does ebay get 10% of whatever I sell? Selling a $5000 item is no harder than selling a $5 one.
It's just how it works.
There are so many agents out there competing for buyers and sellers that maybe this one deal is one of two she will do all year. If you only paid her by #hours x $$$, she would be broke on the street.
In socal, million dollar listings are a dime a dozen. Usually we give 2.5% to the buyer side. Some go down to 2.25%. Weak listing agents go down to 2%.
Those who dare to give only 1.5% commission or less to the buyer broker have a hard time selling.
Some offer a fixed dollar value, which usually amounts to 1% too.
But the best buyers agents would feel insulted by such a low amount.
Think of it as your opportunity cost. What do you give up by lowballing the buyerside commission?
on the flip side, no amount of commission will sell an overpriced listing. Are you sure your land is worth a mill?
Commission is negotiable. I can only speak for myself, but I would take less percentage to list a million plus house. If the OP just starts asking around I think he'll find numerous agents willing to do it.
Commissions aren't paid according to what the agent needs. I see that argument in these threads from time to time. The whole idea about it should be x amount because they may only sell a few a year is just wrong. Jobs should be paid what they are worth to the consumer.
Making the buyers side of the commission too low can make it harder to sell. Buyers agents may have a signed buyers agreement with their client that includes a minimum commission they are due. A buyer is then required to make up the difference if the sellers side isn't offering enough. Discouraging thing if you are a buyer going into this expecting commission to be paid from the sellers side.
I do think you're crazy for not hiring an agent. I work in a very hot market where often the dirt is the most valuable part of the property so pretty similar to your location. I can tell you without a doubt that there is a huge difference between getting a house sold which any FSBO can accomplish in a hot market and getting the house sold for the most money possible in the shortest amount of time possible while also avoiding potential problems in the transaction and making it as smooth a road to the closing as possible. This is probably your biggest single asset and personally I wouldn't trust myself to handle such an important and high dollar transaction if I didn't have the right background and knowledge.
Personally, I'd be more than happy if the agents who do 1 or 2 transactions a year went out of business. There are way too many of us out there and usually the low volume agents don't know their back side from their elbow. So, they're only hurting the industry and their clients. Keeping these people in business is not a great argument for paying a particular commission rate IMO.
What I will say is that an agent deserves to be paid more on a more expensive property than a lower priced one. Sadly, we live in a very litigious society and the dollar amounts that people sue for are much higher in higher priced homes than they are in lower priced homes. I also find buyers/sellers in higher price points demand a different level of service than most buyers/sellers at lower price points. So, I am forced to spend more time and expend more money on higher dollar clients. Often, I find myself spending time/money on things that really are not going to help the high dollar client just to keep them happy. Lower dollar clients (generally speaking) allow me to be more effective with how I spend my time/money.
Yup. Commissions are 100% negotiable and colluding on commission rates is 100% illegal.
I agree that we could really afford to have most agents leave, but I've been in this business a long time and surprisingly have found how much business one has or doesn't have isn't and indication of how well they know what they're doing. It's an easy license to get and someone can be in business for decades and still be a dunce.
Commercial/investment properties are a different beast than residential properties. I don't know about your area, but most commercial agents don't use the MLS in my area. Do they use it down there? Just thinking that a flat fee listing might be a waste of time. Residential and commercial agents don't typically go back and forth.
I agree that we could really afford to have most agents leave, but I've been in this business a long time and surprisingly have found how much business one has or doesn't have isn't and indication of how well they know what they're doing. It's an easy license to get and someone can be in business for decades and still be a dunce.
I would agree with that. You can't definitively say that an agent knows what they're doing based on the volume of business they do. However, if an agent consistently does a low volume of business chances are they're doing something wrong.
Anyway, that's entirely another topic and I don't want to gum up the thread.
Quote:
Originally Posted by Silverfall
Commercial/investment properties are a different beast than residential properties. I don't know about your area, but most commercial agents don't use the MLS in my area. Do they use it down there? Just thinking that a flat fee listing might be a waste of time. Residential and commercial agents don't typically go back and forth.
Same thing in my market. The majority of the commercial agents don't use MLS.
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