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There are different ways to gauge whether a price is excessive or not and different perspectives.
From an agent's point of view, they have expenses, they have other things that they could be doing with their time that might make them more money, etc. This is reflected in the price. Not much different than a painter who might quote an apparent high price to paint a bathroom because he needs to travel to the job, take time quoting it and dealing with the customer (somewhat fixed costs no matter the size of the job) and he might be taking time out of bigger jobs that he could be doing or even time taken to chase new big jobs (so 'opportunity cost'). These are all very valid points but that's the agent's perspective, which is mainly what you're getting here.
From the client's perspective (which is the only perspective that should matter to you), you need to look at the value you got from it and what other ways you could have done this. Only you can answer that and in the end it may have been very good value to you (perhaps you sold it much faster, got a higher price, etc) or maybe it was poor value (e.g. you might have been able to do it with a couple of hours of lawyer time saving you loads of money).
This is not a criticism but the agents here would be much better off answering this question from YOUR perspective rather than from their own. Obviously the cost base of something has a strong influence on the price of it but it's not a valid way to justify that price to the customer. That's just like someone asking if a house is overpriced and the sales price being justified by the fact that the owner paid much than the asking price 10 years ago, owes more on it than the asking price, and put 100k of decorating into it... and is moving to a more expensive area so needs the money for his next house!
Raw land and lower prices are difference than percentages of regular houses at higher prices. The amounts seem reasonable, otherwise it's not worth the agent's time and energy to make less when they still have to put insurance onto the transaction and pay all their fees. There is a cost to doing business...
I agree. I charge a $3000 minimum including the co-broke so any time I get into those lower price points I just charge a 3k flat rate.
Back in 2014, we listed a dump of a property located in the rough side of town. List price was $20k, and finally sold 480 days later for $9,300. The agreed upon total commission was $2k, and that's what we got at closing.
That buyer flipped the house and sold it in 2 months for $30k. The buyer's agent got $750. I don't know the listing commission, since it was handled by another brokerage, but if the comm was split 50/50, then it was a 5% total comm.
We have land for sale for 125K which I am going to lower it to 99K in a few months since it will be one year by then. And into long term cap rates. So my concern was the percentage it took to sell this land might be the same percentage will be deducted from our 99K land. But that doesn't sound like the case here.
That was my concern, really and it was addressed. Thank you everyone
it sounds like you need to have an agreement on the rate before you sign, and then double-check when you sign.
Yes good thinking. My guess is the typical 10% commission on land would apply to the 99K price but when we lower it in 2 months, I'll ask our Realtor.Land probably won't sell before that, it is over priced which is a blessing. Don't want it to sell quicker than a year or taxes will be too high
And if I insist on using a certain title company used to buy the property and sell this property, their rates are pretty standard and set.
Yes good thinking. My guess is the typical 10% commission on land would apply to the 99K price but when we lower it in 2 months, I'll ask our Realtor.Land probably won't sell before that, it is over priced which is a blessing. Don't want it to sell quicker than a year or taxes will be too high
And if I insist on using a certain title company used to buy the property and sell this property, their rates are pretty standard and set.
Don't fall into the belief that there is a "typical" 10% commission on land. Commissions are negotiable. Shop around.
FWIW, I spend much more time answering calls and emails from potential buyers on raw land listings than I do for house listings.
Not complaining, I've retained many clients in the process. But for some reason far more buyers who are calling about raw land don't (yet) have an agent. Most people who are looking at homes, do have an agent, so I get agent calls instead.
Just wondering if other agents have the same experience.
FWIW, I spend much more time answering calls and emails from potential buyers on raw land listings than I do for house listings.
Not complaining, I've retained many clients in the process. But for some reason far more buyers who are calling about raw land don't (yet) have an agent. Most people who are looking at homes, do have an agent, so I get agent calls instead.
Just wondering if other agents have the same experience.
I got a call on a vacant lot from a woman who wanted to build a yurt.
I referred her to the Town planning department.
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