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I've had experiences with a couple really good realtors and one bad realtor. The bad realtor was representing me as a buyer, though, so that isn't too pertinent to this thread.
I'd say that you need some evidence that the realtor is marketing your home, is trying to network with others regarding your property, and if it isn't selling is sitting down with you to figure out what changes can be made. If the realtor's attitude to list your place and then sit and wait for an offer, they are just along for the ride and you need to cut them loose. That is no better than the insurance agents who make a rider commission off of you for life just because they wrote you a generic friggin life insurance policy.
I think realtor's commissions will go the way of stockbroker's commissions soon. It used to be that to do anything in the market, you had to pay a stockbroker a 5% commission. Imagine having a decent nest-egg, $200K or so, and paying $10,000 to a guy just for hitting a button to place a trade for you. I witnessed it as an intern at a large brokerage house. Today, you still have the option of full-service, but the commissions are much more negotiable and competative due to the online marketplace.
Granted, a good realtor adds value and should by all means make some money. I have no problem with a hard-working realtor making a nice income. None at all. But should the commission be this 6-7% fee that is has been forever, regardless of if the house is a condo, a mansion, sells in a day or a year? I don't think so.
Location: Lakeville, MN - 4th nicest place in the nation to raise a family
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Hi Barbara,
That's a good point about home pricing, and here's my view (non-Realtors are now going to get a look at the vicious underbelly of Realtors, BEWARE):
If you, as a business owner, accept a listing for more than what it will sell for - you just took on a HUGE liability. You'll now have to pay for advertising over a longer period, hold opens, spend tumultuous amounts of time, and look bad to others when the home doesn't sell ---- All this so that 6 months from now your client can accept a much lower (more realistic offer), if at all.
It's not worth it. When I advise people on the market value of their home, I give them a 30 day, 60 day, and 90 day price - explaining that the length of time on the market decreases the overall probablility of sale. If they don't like what I have to tell them, fine - there's plenty of people willing to step in and charitably donate money, time, and sanity. They call me to sell their home, and that's what we do.
Location: Lakeville, MN - 4th nicest place in the nation to raise a family
285 posts, read 1,178,877 times
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Commissions 101 (I'll make this short and sweet):
Rule 1: You can always pay less.
Rule 2: You get what you pay for.
I'm a 7% Realtor - period. If the person is buying a home with me, of course I will make a small concession. When I cut 1% from my commission, I'm essentially giving up 22% of my income.
Now, if I'm so gracious and willing with MY money - how do you think I'm going to act with YOURS? And if I can't negotiate my own compensation - how in the world can I negotiate yours?
But one of the biggest problems is getting selling to be more realistic with their price on the house. If your honest with them, the go with the Realtor who lists the house for want the seller wants. I don't get it?
You've both made an excellent point on "pricing." I've never understood how someone wants to sell his/her home and there is a "bottomline amount of money the seller(s) want in their pocket." What does "needing X amount of money for the next venture" have anything to do with the fair price for the home and/or what a buyer would be willing to pay for such a home at any given time?
I agree with Robert & Barbara. I've been in real estate for 25 years. I've got a degree in Finance and a minor in Architecture. Over the past 25 years, I've acted as a broker or principal in $350 Million in transactions. I've developed apartment communities, shopping centers, large residential communities and built numerous houses and condos. I've also represented some of the nations top corporations, (Delta Air Lines, Coca-Cola, Wal-Mart) in real estate deals.
I see these knuckleheads complete a three-week course and think they are ready to go. I read an interesting column today that the industry needs to lose about 25% of the agents - I have never found anything I could agree with more!
I disagree. Again, looking at the investment industry, the "flattening of the world" has made it so that the same information is available to the average investor that is available to the pros. That means that someone who is willing to accept some risk can do so in return for a much lower fee. That happened when my average cost to place a stock trade dropped from $100 to $12, even though the quality of info I had at my fingertips was improving!
Recently I've seen the "recent solds" data for homes sales being posted on many realty websites. That is a start. I think the industry will change dramatically over the next 5 years.
And yes, there will still be a percentage of people, maybe a large percentage, who would rather pay that $28,000 to sell a $400,000 home. But I won't be one of them.
Quick question to the realtors out there -- what would you think of increasing the amount of training time an required for a new realtor accreditation (and tougher periodic tests for existing realtors), and then removing the state requirement that you have to be with a large agency in order to practice realty?
It seems to me that introducing more competition, and more opportunities for a non-Coldwell, non-Edina, non-Remax sole proprieters to get in the biz would benefit the innovation and pricing in the industry. By increasing the standards, you would ensure that proprieter is knowledgeable.
This is basically what the medical profression does.. highly regulate who gets into the industry, but once you are in, allow you to practice however you please. You can sign on with a big hospital if you want, or you can hang out your own shingle and go for it.
I disagree. Again, looking at the investment industry, the "flattening of the world" has made it so that the same information is available to the average investor that is available to the pros. That means that someone who is willing to accept some risk can do so in return for a much lower fee. That happened when my average cost to place a stock trade dropped from $100 to $12, even though the quality of info I had at my fingertips was improving!
Recently I've seen the "recent solds" data for homes sales being posted on many realty websites. That is a start. I think the industry will change dramatically over the next 5 years.
And yes, there will still be a percentage of people, maybe a large percentage, who would rather pay that $28,000 to sell a $400,000 home. But I won't be one of them.
Very improbable. They are simply entirely different kinds of sales. One involves the automated commerce in thousands of similar items in multi million total volumes. The other involves the sale of a very few very expensive items all of which are to some degree unique.
Even the discount models have proven less than robust. It is clear that one can, under some circumstances, run an efficient RE operation at well less than the going rate. It is also clear however that the discount model is fraught with peril for the operator. It is based on the maintenance of relatively high volumes to overcome the lower commission levels. Works fine as long as you got the volume. But things get slow...discounters volume drops, the rest of the RE world drops price raking of more of the volume and the discounter can no longer make his nut. By by Discounter.
Oh I think FSBOs will remain alive and well but I don't think they will grow any. Works well in certain markets and is a disaster in others. Trying to sell FSBO now in Las Vegas has to be a quite unrewarding task.
Quick question to the realtors out there -- what would you think of increasing the amount of training time an required for a new realtor accreditation (and tougher periodic tests for existing realtors), and then removing the state requirement that you have to be with a large agency in order to practice realty?.
I have a RE license in 2 states - both states require 3 week training classes and quite frankly, it should be more. Also, one state requires continuing education and the other state does not. I think the continuing education should be mandatory in all states. I don't know what state you are in, but in most states, there's no requirement that you have to be with a large agency. You just need to be a broker and complete the necessary requirements per your state rules.
If it's such a buyers market, where are the MN buyers?
We basically fired our old realtor, hired a new realtor, put in new appliances, totally redid our house, painted, remodeled, painted the basement floors anad shined glass block in our basement. WE put 3k into our house just to sell it for a lower price. We had a few showings then they raised interest rates. We have now had no showings in 2 weeks. Buyers have dropped off the planet. I know if anyone can sell our house it's our new realtor. We are relocating whether or not our house sells, we will just have to eat the cost while it is on the market. Luckily my husband and I have the ability to do this. Our market is horrid here in MPLS. Even with a great realtor...or so I think (remax) we are having problems. I would highly advise anyone in MN to hold off on buying or selling right now. It's supposed to be a buyer's market...but where are the buyers?
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If it's such a buyers market, where are the MN buyers?
