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We just sold our home using a flat fee broker (it cost us less than $500 in listing fees). We paid about $14,000 to the buyer’s broker but saved about that much by not having a full service listing broker. However, I would not recommend it to everyone.
I have sold a home before (through a realtor) and my husband and I both have advanced professional degrees (I say that not to brag but you let you know our background). I did a LOT of research on staging a home and selling a home (the internet is a beautiful thing). I pulled info on a ton of comparable properties. We created a great sign and flyers. We put together a detailed property information booklet. We marketed primarily through the MLS. My husband did all the showings (and has a job that is flexible enough for this).
So here’s why I think most people would want to use a listing broker (besides all the work involved):
We priced too high to start with. That was okay for us because we were not in a big hurry and could afford to test the market. If you’re trying to sell quickly, pricing it well is more important.
We were able to pretty much able to stay unemotional about the process and the house (especially critical during the negotiations). In our case the buyers were very nice but if they hadn’t had an agent, things could have gotten uncomfortable. Agents probably help smooth things over.
When our appraisal came in low, we were able to successfully appeal it. I’m not sure everyone would feel comfortable with that process without an agent.
Our lawyer was sloppy. This doesn’t necessarily have anything to do with agents but if we hadn’t been familiar with the details, an agent might have been able to help (this one is pretty tenuous).
On the plus side, we saved $14,000 and we were able to sell for a lower price to the buyers (I know those two things together might seem like double-counting but we probably wouldn’t have sold for $14,000 less and finding buyers for $14,000 more would have been tough).
We just sold our home using a flat fee broker (it cost us less than $500 in listing fees). We paid about $14,000 to the buyer’s broker but saved about that much by not having a full service listing broker. However, I would not recommend it to everyone.
I have sold a home before (through a realtor) and my husband and I both have advanced professional degrees (I say that not to brag but you let you know our background). I did a LOT of research on staging a home and selling a home (the internet is a beautiful thing). I pulled info on a ton of comparable properties. We created a great sign and flyers. We put together a detailed property information booklet. We marketed primarily through the MLS. My husband did all the showings (and has a job that is flexible enough for this).
So here’s why I think most people would want to use a listing broker (besides all the work involved):
We priced too high to start with. That was okay for us because we were not in a big hurry and could afford to test the market. If you’re trying to sell quickly, pricing it well is more important.
We were able to pretty much able to stay unemotional about the process and the house (especially critical during the negotiations). In our case the buyers were very nice but if they hadn’t had an agent, things could have gotten uncomfortable. Agents probably help smooth things over.
When our appraisal came in low, we were able to successfully appeal it. I’m not sure everyone would feel comfortable with that process without an agent.
Our lawyer was sloppy. This doesn’t necessarily have anything to do with agents but if we hadn’t been familiar with the details, an agent might have been able to help (this one is pretty tenuous).
On the plus side, we saved $14,000 and we were able to sell for a lower price to the buyers (I know those two things together might seem like double-counting but we probably wouldn’t have sold for $14,000 less and finding buyers for $14,000 more would have been tough).
The #1 issue to list with a real estate company is to have your property in the MLS, unless you are in a rural area where there aren't too many MLS members.
I'm in the Chicago market and there are about 35,000 members in our MLS. It's simply a number's game- your market, statistically speaking, yoru marketing can't compete with having your property data exposed to that many people.
The NAR does a survey every year where they compare FSBO sales to Realtor represented sales and the represented sales have always had a higher sales price.
I realize there are a lot of bad real estate agents. But if you find a good one, then their fee should be mostly offset by the higher price that they are able to bring. Not to mention guiding you through a transaction.
Most agents don't charge buyers for their services. That means that the typical buyer is being represented by an agent who is not going to have any interest in houses that aren't listed in the MLS. Very few buyers are not being represented by agents, so that means that the majority of the buyers in the market won't be directed to your unlisted house.
Did you read my post? We were on the MLS using a discount broker and it cost less than $500 (versus $14,000 more for a full service agent). Most buyers look on the internet and that's where most of them saw our home. It would be difficult (not to mention unethical and stupid) for an agent to try to "hide" a home if it meets the buyers wants/needs.
I'm not sure what you mean when you say "most agents don't charge buyers for their services." Yes the fee comes from the purchase price but the buyer is still paying for the buyer broker fee in the purchase price.
Actually, when we bought our place, we beat out someone else who offered a bit more. I personally think that helped because the listing agent wouldn't have had to split his fee. Whatever the reason, the agent convinced the seller to sell to us for a lower price than the other offer.
Did you read my post? We were on the MLS using a discount broker and it cost less than $500 (versus $14,000 more for a full service agent). Most buyers look on the internet and that's where most of them saw our home. It would be difficult (not to mention unethical and stupid) for an agent to try to "hide" a home if it meets the buyers wants/needs.
I'm not sure what you mean when you say "most agents don't charge buyers for their services." Yes the fee comes from the purchase price but the buyer is still paying for the buyer broker fee in the purchase price.
Actually, when we bought our place, we beat out someone else who offered a bit more. I personally think that helped because the listing agent wouldn't have had to split his fee. Whatever the reason, the agent convinced the seller to sell to us for a lower price than the other offer.
So, you're saying that the listing agent violated their fiduciary responsibility to their client, the seller, in order to get you the house? Risking losing their license and thus, their entire income, not just the small amount that might have been saved on their commission in that one deal? You really believe that?
How do you know this about the other offer, by the way? Do you know the terms of the other offer, as well? How well qualified the other buyer was? What their timeline was for closing? How much they asked for in the way of closing costs and other seller concessions?
There's a heck of a lot more than price that goes into evaluating and comparing two offers.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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Good for you! I'm always happy to hear a success story. Especially the successful appeal of an appraisal.
I love the "test the market" comment. It usually comes from a "I wish my home was worth X, but I know deep down it isn't". It's a test that already has an outcome.
I just did a transaction where I charged the buyer $500 to fill out all the forms after he and the seller had come to an agreement. There were 2 actual transactions, one for a home and one for the adjacent land. When he told me the price he was paying, it was all I could do to keep a straight face and not provide any comps for him. He didn't ask.
So, you're saying that the listing agent violated their fiduciary responsibility to their client, the seller, in order to get you the house? Risking losing their license and thus, their entire income, not just the small amount that might have been saved on their commission in that one deal? You really believe that?
How do you know this about the other offer, by the way? Do you know the terms of the other offer, as well? How well qualified the other buyer was? What their timeline was for closing? How much they asked for in the way of closing costs and other seller concessions?
There's a heck of a lot more than price that goes into evaluating and comparing two offers.
There was no way you could prove a breach of fiduciary responsibility. So he wasn't risking anything. There are plenty of ways to walk the ethics line without crossing it (in all professions). I didn't say he violated his fiduciary responsibility. He presented both offers to the owner and the owner chose which one to accept. He told the owner that we were more "solid". And we may have been. However, The motivation to make our deal go through (and almost double his commission: $14k instead of $28k) was certainly there. For other savvy buyers that don't mind carting themselves around to see different properties, that is something to consider.
I know about the other offer because the realtor told us about it (probably to try to get us to pay more). Another couple of data points. The realtor was sanctioned by the State in a previous transaction. Doesn't prove he was shady but it's not a common occurrence. The realtor was also pissed because the other offer didn't have an agent when he first saw the property and then showed up with an agent when he made the formal offer.
You seem upset. I'm not sure why. I'm on here to share my experiences with others so that they might learn something. I am only commenting on my own personal experiences. I'm not saying real estate agents are bad people. Feel free to ignore me if my experiences if they are not helpful to you.
Good for you! I'm always happy to hear a success story. Especially the successful appeal of an appraisal.
I love the "test the market" comment. It usually comes from a "I wish my home was worth X, but I know deep down it isn't". It's a test that already has an outcome.
I just did a transaction where I charged the buyer $500 to fill out all the forms after he and the seller had come to an agreement. There were 2 actual transactions, one for a home and one for the adjacent land. When he told me the price he was paying, it was all I could do to keep a straight face and not provide any comps for him. He didn't ask.
Thanks ! Obviously there are a lot of gotchas in real estate. I would recommend an agent for most people...
I'm not upset at all. Just seeing something that could get that agent in trouble, and pointing out that the price is only part of the story. You say that the listing agent said you were more solid, and that may very well be the case. Just recently, a client of mine had two full price offers come in, one from someone who had already been through the entire approval process and only the house would have to qualify, with a short closing time and a normal earnest money deposit and option fee and period, and reasonable seller concessions. The other was pre-qualified, with a very small earnest money deposit and option fee with a long option period and a longer-than-average close time, and they asked for a lot of seller concessions. Even if the second's offer had been higher, the likelihood is that the seller would have gone with the first, simply because it was less likely to fall out.
You're attributing to the fact that you didn't have an agent something that could have (and probably was) been attributed to something entirely different that had nothing to do with that. It's not being "upset" to want that to be perfectly clear to thread readers.
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