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Yes they do and I've had three clients over the years pay me my fee when the house failed to sell. I did everything I agreed to do, which is written into the contract. They paid me with no problem.
I think that js1mom's point is that the seller of a property that is properly priced and sells quickly is charged the same as a seller of a similarly priced property that requires more time, effort, and resources on the part of the real estate agent.
In this case the similar priced property is just over priced. No amount of advertizing is going to make it sell for as much as the other unless they find the one buyer in 10 billion that is insane. It doesn't matter how much you advertize if the house is over priced it won't sell.
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That means that the owner of the easily sold property is subsidizing the owner of the difficult to sell property.
The former is being overcharged and the latter is getting a bargain.
That is assuming all Realtors take over priced listings.
QUOTE]Faced with an inventory that is easy to move and an inventory that is hard to sell, what would a retailer, say an automobile dealership, do? Would the salesperson want to show the aqua Caddy, when the silver ones sell like hotcakes? Why should the salesman try to steer his customers toward the hard to sell vehicle at all?
Why not only have silver caddy's to begin with?
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I think it's the same with houses. If the agent perceives that selling a particular property will be a hassle, it just sits and does not get shown. Why waste the time on the fixer upper when everyone is buying updated condos?
You don't get it. They get the same attention from the listing agent. The buyer chooses what they want to look at.
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Although commission rates are theoretically negotiable, I have never been able to get a real estate company to budge. You can call every company in town, and the rate is exactly the same.
The individual agents decide this. We are independent contractors.
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The owner of the hard to sell property should have to have more skin in the game. And I have to believe an experienced realtor knows from day one what those properties are.
Yes, I have a crystal ball that tells me this every time.
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I tried the FSBO route with our current home. I fixed up and staged the house, paid an online company for the MLS listing, took photos, made flyers, the whole bit. It did not sell. Guess what? When we hired the "best" real estate pros in town, at their going commission rate, they could not sell it, either. There were very few showings and only one couple came back for a second look. This was before the market tanked, by the way, and the price was fair.
If it never sold then no it wasn't. It was priced too high.
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Why? The house is custom built and has some quirks, including an indoor swimming pool (25 yards ) which is actually part of the house, not a separate structure. The kitchen needed updating. The location is stellar. Not part of the problem. And we have nine acres --- in a subdivision of mostly smaller homes and lots with a few like ours.
Definitely, predictably, not an easy sell. Have to find someone who wants the pool.
So the bottom line is that I should be charged a higher rate than someone selling a more traditional home with the features current buyers are looking for. But for the premium price, I would expect premium service. That means more marketing. Not just putting it on MLS and waiting for buyers' agents to ask to show it.
So, a Realtor should waste a bunch of money on your over priced house for a huge fee they won't ever get because you won't do the logical thing and just lower the price?
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We took the house off the market.
Why? What is the plan now?
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It is time for the system to be revamped. The seller should not pay the buyer's agent. If a buyer wants his own agent, he should hire one and inexperienced buyers should do so, considering it an educational expense. Buyers should have access to the MLS. You can blind the sensitive stuff, like when the owners will be on vacation. A buyer could then contact the listing agent for each home he wants to see. With the features available on the internet, a buyer can get a very good idea whether a home is one he really wants to visit. This is more like what we do when we buy a car. We don't bring someone to tag along while we visit car dealers to negotiate the price and take a cut of the commission, do we?
All of this is possible now. Most buyers don't choose this route.
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The seller should be given an a la carte menu of services with prices. Not willing to risk that the house will not sell? Do it yourself.
Speaking of the internet, it does increase the chance for a successful FSBO. Right now the realtors control the buyers. The buyers have no skin in the commission game. The internet will allow sellers and buyers to get together without the middle man. Then what happens to the real estate agent? He's stuck with an inventory of aqua Caddies.
I think that js1mom's point is that the seller of a property that is properly priced and sells quickly is charged the same as a seller of a similarly priced property that requires more time, effort, and resources on the part of the real estate agent.
That means that the owner of the easily sold property is subsidizing the owner of the difficult to sell property.
The former is being overcharged and the latter is getting a bargain.
Faced with an inventory that is easy to move and an inventory that is hard to sell, what would a retailer, say an automobile dealership, do? Would the salesperson want to show the aqua Caddy, when the silver ones sell like hotcakes? Why should the salesman try to steer his customers toward the hard to sell vehicle at all?
I think it's the same with houses. If the agent perceives that selling a particular property will be a hassle, it just sits and does not get shown. Why waste the time on the fixer upper when everyone is buying updated condos?
Although commission rates are theoretically negotiable, I have never been able to get a real estate company to budge. You can call every company in town, and the rate is exactly the same.
The owner of the hard to sell property should have to have more skin in the game. And I have to believe an experienced realtor knows from day one what those properties are.
I tried the FSBO route with our current home. I fixed up and staged the house, paid an online company for the MLS listing, took photos, made flyers, the whole bit. It did not sell. Guess what? When we hired the "best" real estate pros in town, at their going commission rate, they could not sell it, either. There were very few showings and only one couple came back for a second look. This was before the market tanked, by the way, and the price was fair.
Why? The house is custom built and has some quirks, including an indoor swimming pool (25 yards ) which is actually part of the house, not a separate structure. The kitchen needed updating. The location is stellar. Not part of the problem. And we have nine acres --- in a subdivision of mostly smaller homes and lots with a few like ours.
Definitely, predictably, not an easy sell. Have to find someone who wants the pool.
So the bottom line is that I should be charged a higher rate than someone selling a more traditional home with the features current buyers are looking for. But for the premium price, I would expect premium service. That means more marketing. Not just putting it on MLS and waiting for buyers' agents to ask to show it.
We took the house off the market.
It is time for the system to be revamped. The seller should not pay the buyer's agent. If a buyer wants his own agent, he should hire one and inexperienced buyers should do so, considering it an educational expense. Buyers should have access to the MLS. You can blind the sensitive stuff, like when the owners will be on vacation. A buyer could then contact the listing agent for each home he wants to see. With the features available on the internet, a buyer can get a very good idea whether a home is one he really wants to visit. This is more like what we do when we buy a car. We don't bring someone to tag along while we visit car dealers to negotiate the price and take a cut of the commission, do we?
The seller should be given an a la carte menu of services with prices. Not willing to risk that the house will not sell? Do it yourself.
Speaking of the internet, it does increase the chance for a successful FSBO. Right now the realtors control the buyers. The buyers have no skin in the commission game. The internet will allow sellers and buyers to get together without the middle man. Then what happens to the real estate agent? He's stuck with an inventory of aqua Caddies.
1. Your home was over-priced. Few, if any, qualified people saw value equal to or near your price. If it had been priced properly, it would have been shown and sold. That is factually how markets work.
2. Buyers have the right to hire and pay an agent directly. Already. No systemic revamp is needed, other than fresh attitude and beliefs on the part of consumers.
3. Buyers already have the right to contact listing agents directly. No revamp needed to accomplish that.
4. Consumers have access to a great deal of MLS-related information already. And it is not a public utility, but a privately-owned facility.
5. What do car lots, electronics stores, etc, do when they want to move specific inventory? They offer spiffs and increased commissions to salespeople on sales of that inventory. It is ethical and legal, although it prompts the salesperson to steer customers towards specific inventory, rather than product that may actually serve the customer better.
Buyers agents serve clients, not customers, and ethically must disclose the spiffs and increased commissions. Not so the car sales person.
6. Who would make up the list of services? I do a lot of stuff that no one could ever imagine ahead of time, but surely don't mind stepping in to do, because it should help my client under the arrangement in place.
7. I control no buyer. Never have. It is not my role.
Yes, clients who pay more sometimes subsidize those who pay less. Particularly true in the case of higher end home buyers and sellers who pay more than lower end buyers and sellers.
Leveling that off would typically mean raising costs for people in the sub-$150,000 range, because 5% of $80,000--$100,000 doesn't produce enough revenue. Agents who average low dollar sales work themselves to exhaustion doing enough business to survive. So they need higher end sales to average out the revenue over a year's time.
I think it's the same with houses. If the agent perceives that selling a particular property will be a hassle, it just sits and does not get shown. Why waste the time on the fixer upper when everyone is buying updated condos?
This isn't true at all. The fixer uppers are for investors. There are agents that specialize just in investors. Selling fixers to seasoned investors are some of the best folks to work with. They know their stuff and make quick informed decisions. Rookie investors are a whole other ballgame...
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Originally Posted by suzy_q2010
Although commission rates are theoretically negotiable, I have never been able to get a real estate company to budge. You can call every company in town, and the rate is exactly the same.
Do you have three agencies in town? My city of 150,000 has 532 real estate brokerages and I can guarantee that if you called ALL of them you would not get the same rate. Promise. It's true. I can give you a list of phone numbers to start calling over the weekend if you like.
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Originally Posted by suzy_q2010
The owner of the hard to sell property should have to have more skin in the game. And I have to believe an experienced realtor knows from day one what those properties are.
Yes and no. Yes we can walk in and know that a house is quirky and waiting for the right buyer. The right buyer could already be out there though and the house sells in 24 hours. Sometimes it takes two years. That's the gamble we take with the commission model.
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Originally Posted by suzy_q2010
I tried the FSBO route with our current home. I fixed up and staged the house, paid an online company for the MLS listing, took photos, made flyers, the whole bit. It did not sell. Guess what? When we hired the "best" real estate pros in town, at their going commission rate, they could not sell it, either. There were very few showings and only one couple came back for a second look. This was before the market tanked, by the way, and the price was fair.
The price was fair in your mind, but not fair in reality. Market value is what the average buyer is willing to pay. No buyers, means not at market value.
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Originally Posted by suzy_q2010
So the bottom line is that I should be charged a higher rate than someone selling a more traditional home with the features current buyers are looking for. But for the premium price, I would expect premium service. That means more marketing. Not just putting it on MLS and waiting for buyers' agents to ask to show it.
Ask a future agent to add an addendum to your listing agreement that spells out EVERY piece of marketing they will do for you. Have it in writing. Mine goes down to how many color flyers they get.
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Originally Posted by suzy_q2010
It is time for the system to be revamped. The seller should not pay the buyer's agent. If a buyer wants his own agent, he should hire one and inexperienced buyers should do so, considering it an educational expense.
I agree that buyers should pay their own agent, but the reality is that they would just ask for more closing costs from the seller to compensate. Practically nothing would change but semantics.
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Originally Posted by suzy_q2010
Buyers should have access to the MLS. You can blind the sensitive stuff, like when the owners will be on vacation. A buyer could then contact the listing agent for each home he wants to see.
Um...have you not been on the web. Most MLS's have a public site that gives out loads of data. They can always contact the listing agent, but many buyers like their buyer agents and want their input on the house.
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Originally Posted by suzy_q2010
With the features available on the internet, a buyer can get a very good idea whether a home is one he really wants to visit. This is more like what we do when we buy a car. We don't bring someone to tag along while we visit car dealers to negotiate the price and take a cut of the commission, do we?
Well a car comes off the assembly line exactly the same as the model before. Homes are built by different builders and sub contractors. They just aren't the same thing. You don't have to worry about zoning, landslide zones, overlay zones such as flood plains, underground oil tanks, radon, lead paint, asbestos, meth labs, etc with cars.
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Originally Posted by suzy_q2010
The seller should be given an a la carte menu of services with prices. Not willing to risk that the house will not sell? Do it yourself.
They can. This is called fee-for-service and there are many agents that offer services this way. Just because you aren't aware of it doesn't mean that it doesn't exist.
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Originally Posted by suzy_q2010
Speaking of the internet, it does increase the chance for a successful FSBO.
Absolutely which is why there is no reason to complain about agent commissions. It's never been easier to get your property out there and do it yourself.
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Originally Posted by suzy_q2010
Right now the realtors control the buyers. The buyers have no skin in the commission game. The internet will allow sellers and buyers to get together without the middle man. Then what happens to the real estate agent?
Agents don't control the buyers. The buyers seek out service from a service provider. Some buyers just don't want to meet directly with sellers. Having the middle man allows them to negotiate harder than they would in person. Most people don't like confrontation or appearing rude, hence they stink at negotiation. Buyers know this and that's why agents will always be around. They hire us to ask for the things they are don't want to do directly.
So you do not accept properties that may be difficult to sell?
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You don't get it. They get the same attention from the listing agent. The buyer chooses what they want to look at.
Ah, but the marketing is what brings in the potential matching buyer.
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The individual agents decide this. We are independent contractors.
You are independent, but everyone in the community charges the same commission. In other businesses, this would be considered price fixing.
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Yes, I have a crystal ball that tells me this every time.
That's why you have some aqua Caddies on the lot. Do you turn down listings if you do not think you have a buyer for that particular property?
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If it never sold then no it wasn't. It was priced too high.
So, a Realtor should waste a bunch of money on your over priced house for a huge fee they won't ever get because you won't do the logical thing and just lower the price?
The price was set with input from an experienced real estate agent. We made it clear that we would consider any realistic offer. We did not get any offers. Not even a low ball.
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What is the plan now?
We are still in the house. I am planning to update the kitchen. We have sold the property we planned to build on. I sold it myself, paying a buyer's agent 3%, when the market started to fall. We got a little over our purchase price. The only reason I sold it was because the handwriting was on the wall at that point for its potential value to drop considerably.
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All of this is possible now. Most buyers don't choose this route
.
Right now, buyers do not have to pay any commissions. Why should they want to?
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I wish I controlled my buyers.
You may not be able to control how they act --- and I am sure there are people you have showed 40 houses to who never bought one --- but you sure do control what houses they get to see.
Sure...the first client wanted to price 10% higher than I suggested. I reminded him that he was choosing to pay me regardless. He refused to drop his price despite getting no showings AND knowing he was paying me no matter the outcome. He paid me at expiration and went through two more agents...still unsold three years later.
The other two decided to terminate their listings and rent the houses out instead. On one of the terminations, they did so after 60 days and because I didn't do everything in the contract at that point in time, I did give them a bit of a credit.
It wasn't a big deal. I sent them an invoice and they could pay me via PayPal or check. All three paid. There is no glossing over my listing agreement. We go clause by clause when it gets signed. People know exactly what they are getting, and I'm with 2B, I work with decent people only. I'll take a difficult listing (I have a couple right now) as long as the sellers are good people.
I don't do short sales on flat rates though. Those are commission only as the seller isn't in a position to pay me regardless.
You may not be able to control how they act --- and I am sure there are people you have showed 40 houses to who never bought one --- but you sure do control what houses they get to see.
This used to be true, but with all the listings sent all over the net buyers are looking themselves. 90% of buyers are searching online for homes. I've had two buyers in 8 years only look at homes I pulled. They were both Boomers.
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You may not be able to control how they act --- and I am sure there are people you have showed 40 houses to who never bought one --- but you sure do control what houses they get to see.
Influence, sure.
Control? Not really. Why bother to try?
I influence people to recognize that there are power lines, steep lots and driveways, properties backing up to busy highways, etc, because no one wants to waste time.
And if a client wants to see the house, I try to get the showing.
This isn't true at all. The fixer uppers are for investors. There are agents that specialize just in investors. Selling fixers to seasoned investors are some of the best folks to work with. They know their stuff and make quick informed decisions. Rookie investors are a whole other ballgame...
I meant the statement about fixer uppers as rhetorical. I still think that an agent is going to want to show the easier property to sell over the more difficult one.
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Do you have three agencies in town? My city of 150,000 has 532 real estate brokerages and I can guarantee that if you called ALL of them you would not get the same rate. Promise. It's true. I can give you a list of phone numbers to start calling over the weekend if you like.
Then you have more competition. My community is smaller, and I did check with all the residential firms in town.
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Yes and no. Yes we can walk in and know that a house is quirky and waiting for the right buyer. The right buyer could already be out there though and the house sells in 24 hours. Sometimes it takes two years. That's the gamble we take with the commission model.
But you are asking all the sellers with easy to sell homes to subsidize your gamble.
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The price was fair in your mind, but not fair in reality. Market value is what the average buyer is willing to pay. No buyers, means not at market value.
See my post above. I think it's the quirks, not the price. We had bought property to build on, we were motivated, and our agent was told we would be willing to be flexible on the price. We had very few showings and no offers.
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Ask a future agent to add an addendum to your listing agreement that spells out EVERY piece of marketing they will do for you. Have it in writing. Mine goes down to how many color flyers they get
.
Looks like we are going to be here for a while. We are not underwater, but now the price would have to go way down. We will update the current house and stay here.
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I agree that buyers should pay their own agent, but the reality is that they would just ask for more closing costs from the seller to compensate. Practically nothing would change but semantics.
Um...have you not been on the web. Most MLS's have a public site that gives out loads of data. They can always contact the listing agent, but many buyers like their buyer agents and want their input on the house.
Yeah, buyers love their agents because they do not have to pay them. And in today's environment, buyers are asking for and getting just about everything they want.
We have friends who just bought a second home, for cash. They got the house and everything in it, from the furniture and the decorations down to the towels for the bathrooms and the pots in the kitchen. And it is very nicely finished.
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Well a car comes off the assembly line exactly the same as the model before. Homes are built by different builders and sub contractors. They just aren't the same thing. You don't have to worry about zoning, landslide zones, overlay zones such as flood plains, underground oil tanks, radon, lead paint, asbestos, meth labs, etc with cars.
And the buyer who needs someone to evaluate those things should hire a buyer's agent.
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They can. This is called fee-for-service and there are many agents that offer services this way. Just because you aren't aware of it doesn't mean that it doesn't exist.
Let's just say the agents here were not enthusiastic about doing it.
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Absolutely which is why there is no reason to complain about agent commissions. It's never been easier to get your property out there and do it yourself.
And I predict more sellers will be doing it.
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Agents don't control the buyers. The buyers seek out service from a service provider. Some buyers just don't want to meet directly with sellers. Having the middle man allows them to negotiate harder than they would in person. Most people don't like confrontation or appearing rude, hence they stink at negotiation. Buyers know this and that's why agents will always be around. They hire us to ask for the things they are don't want to do directly.
So how do you condone dual agency? How can you possibly "negotiate harder" for both the seller and the buyer at the same time? Since the agent's commission is higher with a higher sales price, there is inevitably a bias for the seller.
And you do determine what houses people see. Some buyers may be more savvy and do more internet shopping, but you are the one who opens the lock box and lets them into the house.
See my post above. I think it's the quirks, not the price. We had bought property to build on, we were motivated, and our agent was told we would be willing to be flexible on the price. We had very few showings and no offers.
"Quirks" equal deficiencies. "Price fixes all deficiencies." If the property is marketed well, it is noticed, and then the value has to be right.
...
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Originally Posted by suzy_q2010
So how do you condone dual agency? How can you possibly "negotiate harder" for both the seller and the buyer at the same time? Since the agent's commission is higher with a higher sales price, there is inevitably a bias for the seller.
Many agents will not work in dual agency. Sending a buyer to the listing agent, as has been recommended by some is encouraging dual agency.
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Originally Posted by suzy_q2010
And you do determine what houses people see. Some buyers may be more savvy and do more internet shopping, but you are the one who opens the lock box and lets them into the house.
About the time a buyers agent refuses to show homes the client wants to see, or tries to steer the client to homes they don't want to see, it gets pretty easy to see who is in control, and it isn't the agent.
This is so solidly fundamental to the agency relationship and responsibility, and bears repeating.
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) which is actually part of the house, not a separate structure. The kitchen needed updating. The location is stellar. Not part of the problem. And we have nine acres --- in a subdivision of mostly smaller homes and lots with a few like ours. 
