Why am I looser selling the home? Whats wrong with this picture?

[bpollen]

Originally Posted by TurtleCreek80

If the numbers ($200k and $250k) are accurate, then you didn't buy in the best location back in 2005. I have a family member and a very good friend who both bought $200-225k homes in Dallas in 2005. One sold their home for $330k 2.5 years ago (worth $400k-ish now) and the other is under contract for $425k (as a hip pocket listing, never even hit MLS). You'd probably be less sour if your home had appreciated more than 2% per year in one of the best Dallas markets of all time.

Do realtors have as much skin in the game as owners? Yes and no. Great realtors get more $ for most houses than lousy ones. They also have their reputation to protect as selling homes is their livelihood. If you've ever had a contract go south (to the point where attorneys were needed or almost needed), a great realtor is well worth the 6% split. But selling your home is their business, not their largest financial asset (as it is for the average seller) so they won't be as emotionally charged as you will being the seller.

I live in Dallas. If your friend bought a home in Dallas for $200-225k in 2005, and sold it for $330 in 2013, then your friend lucked out and her area became one of the several "hot" areas or she made improvements (53% increase in 8 years).

Dallas is one of the hottest real estate areas in the country. So there's that. Especially now (prices increased 8% this year). But buying a home for $215k and selling it for $330k is over a 53% percent increase in 8 years, which is not normal. It takes about 20 years to double in price if you're in a normal price range (not too high). So that would be a 50% increase in 10 years. My guess is that under normal conditions, without improvements or the area being specially hot, her home would have sold for around $300k-$310k (a 35% increase).

But Dallas is an unusually hot area in recent years.

Still I would think the OP's home would be in the range of $300k in value (a 50% increase in 10 years).

[Jbeechuk]

"Agents do not have no steaks in your home"


LMAO

[unihills]

Originally Posted by Jbeechuk

"Agents do not have no steaks in your home"


LMAO

Unless the Realtor is sneaking a ribeye into the freezer when nobody's looking.

[Brandon Hoffman]

Don't be looser, tighten it up a bit.

Originally Posted by rambo999

Letz say I bought a home 10 years ago at $200K and my home appreciated to $250. I finally decided to sell the home...

Orginal price: 200K
New home price: 250K
-- Property appreciated 50K

Total costs I will incur selling home including agent commission is around 8%.

Out of 50K - Listing and Buyer agents agent 15K (i.e. 30% of my net gains not 6%)
As a selling owner I get only 30K....(i.e 60% of my net gains)

I owned the home for 10 years, paid all monthly mortgages, insurance, all home improvements/repairs, etc....gained little more than the listing + buyer agent together (who did not pay any of my mortgage, insurance, any repairs/improvement).

Well, you are paying the agent for the work, time, and risk. Your equity has nothing to do with that. It would be same percentage regardless of your equity...even if you were upside down.

Originally Posted by rambo999

If the home does not sell, you are the one stuck with bills and agents have very little to loose.

If your home doesn't sell the agent also does not cover their time or expense. What's your question?

Originally Posted by rambo999

Agents do not have no steaks in your home

We could change that. If you invited agents for steaks in your home some of them would likely accept the invitation.

Originally Posted by rambo999

Agents ... making all this big money? What is wrong this picture?

It's my time and risk to handle a complex legal transaction on your behalf with no guarantee of pay. You are also paying for my business overhead. If you don't want to hire an agent you can sell it yourself, though if you did I suspect you'd have a fool for a client.

[ringwise]

Originally Posted by rambo999

That is the problem...the commission needs to be on profit not on the total sales price. They had no stakes in the homes they sell (not sell), not paid a single bill or any of your principal/interest/taxes. It makes sense some formula (not necessarily 6% but little higher 10%) based on the net gains (profit) is fair to everyone...why is that needs to be on total sales price? Current formula based on total sales price is unfair, giving too much of free money to agents. Buyers/sellers both are getting ripped, this whole market is controlled by few making these agents rich. You never see a buyer/seller getting rich, where as you can see many real estate agents own multiple homes and are rich. Why is that?

Don't like the fee, negotiate one that works for you. Don't want to pay a commission, sell it yourself.

Of course they haven't paid a single bill. They also haven't lived there, which you have.

Do you complain about the markup on groceries when you get to the cashier? It's the system, take it or leave it.

[oldtrader]

You bought your home just before the real estate bubble burst, and homes lost value.

A few years ago, your home was probably worth less than you had paid. If you had sold then, you would not have made a profit and you would have lost money. The Realtor would still have charged you a commission selling it so you could take the loss.

You are now selling it, and the profit is less than you would like as the real estate market has increased. The Realtor still will charge you a commission but you now will make a profit.

As to Realtors making a lot of money. 5% do, I know as I was one of them in this group till I retired. A total of 20% make from a living to the ones that make the top money. 80% of Realtors go broke and leave the real estate business. A lot of them will not even sell one property, or have one of their listings sold. They have big expenses and make no commissions and end up losing money even being in the business.

The median income for Realtors (half make more and half less) is less than the median income for all Americans. Real Estate like professions has it's super stars that make a lot of money. It also has the rest of the Realtors making a decent living, down to the majority that are low paid. Many wold consider making a profit equal to minimum wages, a step up.

When you consider the expenses a Realtor has to pay out of their pocket, the share of the commission the Realtor gets is not a lot of money.

I did not work a lot on 6% commission properties. 6% if for selling homes. A lot of my business involved 10% commissions. This included 1031 exchanges, especially multi party exchanges when there could be half a dozen or more properties involved in the transactions. Land parcels. And hard to sell property. This kind of business always had a higher commission, as it is more difficult and involves knowledge that most Realtors do not have.

When working on property exchanges involving multiple states, and some with overseas property as part of the transaction, you had to have a lot more knowledge than most agents possess. Often I had to become a principal and draw no commission, but lined up a series of exchanges involving several properties buying and selling instead of a commission structuring my profit in the process. And I did not do it, for a 3% commission either.

I often listed property owned by an agent/broker or a member of their family, because this transaction was far above the owner agent/broker. They did not know how to make it happen. I was also brought in when they had the different properties lined up, but had no idea of how to structure such a transaction. I would become the selling agent, and structure and write up the transaction for my piece of the action. Don't say they should have brought in a lawyer to do it, but the lawyers are not trained to do this type of transactions, and have had different lawyers send the agents/brokers to me to handle it. Some I had never met, but had gotten my name from other lawyers that knew me, and recommended me. The lawyers got no cut of my commission for sending me a referral as it would have been illegal for me to pay them.

People like me, make big money in real estate. But most of the ones selling your house do not. They could not survive if they only charged a commission on any profit the average seller makes. They would all go broke if they tried it. Their expenses would exceed their commissions.

[City Guy997S]

Somewhat related.....

I have been watching a house that a local realtor has listed for sale for about 15 months. It is a nice house, in a gated community and owner died/kids inherited it. List price started at 1.1mm, dropped to 999K. County values the house at 650ish, realtor now lost the listing and property is FSBO........899K

I like the house and if I was to make an offer 750K would be all the money.

[otterhere]

Selling (and buying) without a realtor may be "rare," but...


First house, saw it being renovated and asked what they'd take to stop now; agreed on a price and SOLD. Second house, liked it and asked if interested; said they were just about to put in on the market. Agreed on a price and SOLD. Third house, friend who was a tenant there told me landlord was thinking about selling it. Agreed on a price and SOLD. Fourth house, expressed interest; two years later, owner asked if still interested. Agreed on a price and SOLD.


Maybe I'm just lucky? Or pushy!

[oldtrader]

Years ago in San Jose California my wife's brother and wife were getting their home ready for sale as they wanted something nicer. Nice 5 year old 2 story home. Saturday he was mowing the lawn out front when a Realtor showed the house next door.

When they came out the BIL asked if they were going to be their new neighbors. They told him no, what they really wanted was a 2 story like his. Told them he was going to put it on the market on Monday. They wanted to see it, and he showed it to them. He knew the value and told them the price. They told him they wanted to buy it.

After about 15 minutes he turned to the Realtor and asked him if he was going to write it up. The poor Realtor thought he was loosing a sale which was his first one. When he realized my BIL meant for him to be both the listing and selling agent he was one happy man. Wrote it up, and closed a month later when they closed on their new home.