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You may have misunderstood...but I would never agree to that....get yourself a flat fee agent, and just get it on the MLS. Also get it on zillow and other sites like that. 6% is plenty, 9% is too much, 12% is extortion...
Generally though, when you agree to a 6% commission to the listing agent, the buyers agent is paid out of the listing agents commission.
Read the OPs previous posts. This is not a situation where a flat fee service would work effectively.
Whether the 3% is included or an add-on is unclear. Still, if the listing Realtor can get the property sold, 9% may be worthwhile. (What about a 'buyer's agent'?? Will they receive a split of the listing agent's 6% or ???). Before accepting, I would ask for a detailed explanation of exactly what the listing Realtor intends to do for you (eg; advertize in specific journals, include your listing in widely circulated journals, etc.)
- Also, How long an 'Exclusive listing' is the listing agent asking for? (There is no point giving them more than a 90-day listing, unless they are actually investing something up-front in getting a short-term sale of your property).
You might also want to establish a clear time/price criteria, tied to the higher, 'performance-based' commission. For example, if the Realtor can sell the property for you within 90-days at the asking price, you would pay 9%. For every 30-60-days beyond that, the rate would drop by 1%. (Why pay more unless you are actually getting more?)
It will not do you any good to give another (distant) Realtor an exclusive listing (at any commission percentage) ... unless you have some clear assurance that you have significantly increased your near-term sales probability... and are getting something for you 'extra $12,000 you will be paying!'
In the real estate business, the best agents that are able to move very hard to sell property like that owned by the OP, charge a higher commission to sell that hard to sell property. Lets look at why.
First 6% is the commission to sell normal property, that covers the brokers time, and expense to sell the property.
A difficult to sell property, costs a lot more for promoting the property and agents time to get it sold. Most agents won't touch the property, as they can sell 2 or 3 normal property with less effort than the one hard to sell property.
I took on and moved a number of difficult to sell property, when I was in the business. Hard to sell property was one of my specialties. I had friends around the country that also took on hard to sell property. Commission: Hard to sell property was/is a 10% commission item. A simple to sell property is worth 6%, but hard to sell property is going to cost more to sell. It is simply a fact of life, when something is going to take more of your time, and cost more to promote it and get it sold, any good agent that can move this type of property is not going to do it for the same fee as easy sell property.
I feel you are reaching someone that knows a lot more about moving hard to sell property and can possibly do it, as they know it is going to take more time and trouble, and more expense on the brokers part and will only handle the property if they are compensated for their extra time and trouble.
Your's is not the type of property you put in the Multiple Listing Book, or one of the real estate magazines and it will sell. That is for normal type properties. This is a unique property in a difficult to sell real estate part of the country. The odds are that the agent and his partner will be the ones that move it, not someone in the multiple listing service. And they are going to put up money to promote it, and are going to want to be compensated for their time. If you don't want to pay the extra fee, they will take on another difficult to sell property they will get paid to handle.
The one's that will take the property on, and do it for a 6% fee, are not going to get the job done. They are the ones that put the property in the multiple listing book, and then sit back and wait for someone else to sell it. As you have seen, most agents will not even do that as they give excuses why they won't list it.
Fact: 85% of the agents that go into the real estate business, will leave the business within 2 years. They leave because they cannot make enough money to live on, and when they run out of the money they had saved up to carry themselves till they are making money they have to leave the business.
Only 15% of the agents entering the business, succeed. Most of that group, will specialize in same town single family dwelling and often just in one area of town. About 2% of he original group will handle other property, which includes property like yours.
Also, How long an 'Exclusive listing' is the listing agent asking for? (There is no point giving them more than a 90-day listing, unless they are actually investing something up-front in getting a short-term sale of your property).
You are talking about time to swell a single family home in town. No good special problem property, will list it for only 90 days. Most will demand 6 month to a year listing.
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You might also want to establish a clear time/price criteria, tied to the higher, 'performance-based' commission. For example, if the Realtor can sell the property for you within 90-days at the asking price, you would pay 9%. For every 30-60-days beyond that, the rate would drop by 1%. (Why pay more unless you are actually getting more?)
Again you are talking about easy to sell property. No problem property Realtor is going to go for this arrangement. Hard to sell property like this one, takes time to get into the pipeline to move it.
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It will not do you any good to give another (distant) Realtor an exclusive listing (at any commission percentage) .. unless you have some clear assurance that you have significantly increased your near-term sales probability... and are getting something for you 'extra $12,000 you will be paying!
No one capable of moving this property with all the problems it has, is going to be local. There are none. I took on problem property all over the country and as far away as Belize, and Costa Rica. I had more than one well established real estate broker list property they or a family member owned, as they were not capable of moving it themselves, and called on me as a specialist to move it for them. They paid me my full 10% commission to move it. You are treating this property as if it was a normal in town single family dwelling. It is not, and requires a specialist in hard to move property.
You are talking about time to swell a single family home in town. No good special problem property, will list it for only 90 days. Most will demand 6 month to a year listing.
Again you are talking about easy to sell property. No problem property Realtor is going to go for this arrangement. Hard to sell property like this one, takes time to get into the pipeline to move it.
No one capable of moving this property with all the problems it has, is going to be local. There are none. I took on problem property all over the country and as far away as Belize, and Costa Rica. I had more than one well established real estate broker list property they or a family member owned, as they were not capable of moving it themselves, and called on me as a specialist to move it for them. They paid me my full 10% commission to move it. You are treating this property as if it was a normal in town single family dwelling. It is not, and requires a specialist in hard to move property.
While I generally agree with what you are saying, the seller needs some assurance that whatever distant Realtor has 'agreed to take on this listing for 9%' is actually a 'hard-to-move property specialist' who can move the property ... and not simply just another Realtor looking for a listing.
The seller has already been 'burned' once by a Realtor who sat on the listing for almost two years. For a $36K commission listing, a good specialist should be willing to either provide some evidence to substantiate his claims ... or be willing to offer some type of 'performance clause.'
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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I routinely list residential property for 5%. 3% for the selling agent (Which is what they expect to be paid) and 2% for me. The way our CA form reads, many sellers look at it and think I'm charging them 5% and adding on 3% more for the selling agent.
It's the most frequent question I get when the seller is autographing the listing form.
I posted the thread "House isn't selling: what to do" and had many helpful replies. Our house is a tough sell property (for several reasons) way out in the country. No realtor wanted the listing but talked to one recently who may take the listing but the selling costs are *much* higher than average for this area. Also, realtors here in NM are *transactional*. Standard commission is 6%. I was told my selling costs would be a non-negotiable 6% for him and 3% for his partner who lives closer and would do the showings. 9% is awfully high but then I understood that if another agent brings a buyer to me it would be another 3%9 to12% commission on around 400,000 is hard to swallow. Would like to hear some thoughts on this one (keep in mind, this is a tough area to sell in and I need to get out of here).
Well, my thought is that the agent who is telling you this isn't the right agent for it -- the partner who lives closer to you is the agent you should be dealing with, not this agent. Normally, an agent who takes a listing and "co-brokers" with another agent to sell SHARES their portion of the commission with the other agent, they don't tack on another 2-3% to the commission. To me, it sounds like the agent you first talked to doesn't have any buyers for that area, knows someone that does, but doesn't want to refer the listing to that agent. I'd be wary.
Well, my thought is that the agent who is telling you this isn't the right agent for it -- the partner who lives closer to you is the agent you should be dealing with, not this agent. Normally, an agent who takes a listing and "co-brokers" with another agent to sell SHARES their portion of the COMMISSION with the other agent, they don't tack on another 2-3% to the commission. To me, it sounds like the agent you first talked to doesn't have any buyers for that area, knows someone that does, but doesn't want to refer the listing to that agent. I'd be wary.
You still do not understand the problem with moving very difficult to sell property. Listing with an local agent, is not the solution. What you need is a specialist that knows how to move difficult to sell property. The local agent, will be the one to show the property and handle that sort of thing. The specialist is the one that can find the buyers. I never saw half the property I moved over all the years I was in the business. I put together complicate exchanges, and moved hard to sell property as I could find the ones that wanted to acquire the property. However, I was not going to Belize, Costa Rica or a distant state in the U.S. to show the property. A local agent could do that for me.
The local agent in this case, would show property when buyers are sent to him/her. That agent would find it almost impossible to find a buyer however.
Selling hard to sell property, is a specialty in itself, and involved different things than selling a single family dwelling in town.
Example: Every year I would go to the Real Estate Expo in Las Vegas. There would be 2,000+ brokers/agents that specialized in real estate exchanges and hard to move property. You would each produce an information package for every agent there, and would make a personal presentation on it with a very good moderator to help you. Agents that were interested in working with you, would then go to the other room, and gather around a table, and kick around ideas of who could help you on this property. We would have a state wide meeting every 6 months in several states, which I would attend when I had a buyer looking for something special, or had a hard to sell property, or exchange property which I would present there. We had monthly meetings in several parts of our state, and other states. Normal agents do not even know these meeting exist, and are not invited as they would not be trained to handle these types of properties.
I know top agents that handled exchanges and hard to move property, that moved a lot of property going to these meetings.
That is just one of the tools, hard to move property specialists use to move hard to sell property. Putting a property in the multiple listing book and waiting for someone to sell the property, is what normal agents do. It does not work on hard to sell property. Hard to sell property takes a specialist to move it. And this specialist is going to charge a higher fee, as they are going to have to spend a lot more time moving it, and spend more money than normal.
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Normally, an agent who takes a listing and "co-brokers" with another agent to sell SHARES their portion of the COMMISSION with the other agent, they don't tack on another 2-3% to the commission.
The agent is being honest. Normally they just quote 10% commission on hard to sell property, and make the deal with the other agent on hard to sell property. You co-list at 6% commission easy to sell single family homes, etc., not hard to sell property.
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9 to12% commission on around 400,000 is hard to swallow. Would like to hear some thoughts on this one (keep in mind, this is a tough area to sell in and I need to get out of here).
