Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Hello,
I need some advice regarding selling my house. I plan to hire a seller’s agent to represent me. According to the listing agreement he wants 6% of the listing price, out of which 2.5 % of the purchase price goes to the buyer’s broker. The language of the listing agreement is confusing. Is this normal? I always thought that it is more common to split it 3% +3%. My concern is that this will delay the sale of my house since other brokers will not want to bring their buyers. Also, the property is to be listed with CRMLS. I have an impression that this is not enough exposure. No specific web sites are mentioned. The listing period mentioned is 6 months. Is this normal? Can I request it to be shorter? Is there anything else that I have to consider or pay special attention to? Any advice would be greatly appreciated. Please share your experience and wisdom. Thanks!
all of those issues are negotiable and if you don't like his terms find another agent. If you are in a buyers market I'd do the split the other way, 2.5 to the listing agent and 3.5 to the buyers.
I am writing to thank everyone who responded to my post. I contacted two more agents. Anybody heard about a flat fee agents? How does it work? Thanks again!
Re flat fee...some agents, myself included prefer to sell homes not using flat fee services, as they often do not provide any other service, beyond putting it on the mls. So the buyer agent ends up having to basically don't he work of the listing agent plus buyer agent...ie getting contracts signed, explaining contracts, handling negotiations, inspections, making sure seller properly discloses items, gets contracts to proper people, etc. Often the seller doesn't know what items are normally paid by seller, etc.
From a listing agent perspective, you often are dealing with a company not familiar with your market, you have to get your own professional pics and flyers done, handle all marketing and advertising, staging home, keep on top of recent comps, be able to provide good comps if your property doesn't appraise, handle showings, etc.
For someone that has a lot of experience selling their home, it can work to use a flat fee service, but if you aren't experienced at it, I'd steer clear.
(But I would insist listing agent pays buyer agent at least 3 percent. Also make sure they use a professional photographer that is experienced in real estate photos. And get professional flyers made. Verify what they will do for marketing.)
all of those issues are negotiable and if you don't like his terms find another agent. If you are in a buyers market I'd do the split the other way, 2.5 to the listing agent and 3.5 to the buyers.
I've never felt that incentivizing the agent with "extra" commission has a major impact. However, disincentivizing them by offering a "low" commission certainly has a negative impact. So, long as you're offering a competitive co-broke fee you'll be fine. No need to offer more than what most other people in your market are offering.
My concern is that this will delay the sale of my house since other brokers will not want to bring their buyers.
Quote:
Originally Posted by hopeeug
Anybody heard about a flat fee agents? How does it work? Thanks again!
So, you don't want there to be a delay in selling the house by offering less to a buyer's agent, but you want to entertain a flat fee service that would alienate even more agents who don't want to do two jobs for the pay of one? You can't have it both ways. You either want a full service agent representing you while marketing to full service agents to bring in a buyer, or you want to pay a flat fee to list the property and you do all the work along with the buyer's agent doing double work.
Please also look at the term of the contract. If you want to sell, I would not recommend signing up for 6 months. Try 60 days, and extend the contract if the realtor is working hard for you and dump them and move on to the next if they are not working. A 6 month commitment lets the realtor sit back, relax and let someone else sell your house.
If you are considering a flat rate realtor, make sure it is an outstanding, highly qualified, motivated, and preforming realtor. Not some part time smoe who just lists your property and sits back and lets someone else sell it. NO OTHER realtor will look twice at your house as they will not get paid as much as for selling your house vs. other property so other realtors will only show your house if a potential buyer they are working a lot with forces the issue.
And to sell, make the commission split even or more to the selling agent, less to the listing agent.
So, you don't want there to be a delay in selling the house by offering less to a buyer's agent, but you want to entertain a flat fee service that would alienate even more agents who don't want to do two jobs for the pay of one? You can't have it both ways. You either want a full service agent representing you while marketing to full service agents to bring in a buyer, or you want to pay a flat fee to list the property and you do all the work along with the buyer's agent doing double work.
1: The listing office, will rarely sell your home. This is preached into all buyers, to always have a buyers agent working for them, not the selling agent who will be beholding to the seller. You have to figure, the home will be sold by someone in an office other than where you list if.
2: Commissions to the selling office are an important factor. If the norm in your area, is a 50/50 split between offices, then if the commission is below that amount to selling office, your home is not going to be sold. If a buyer finds it on the Internet and wants to see it, the selling agents in town will steer the buyers away from it. They figure if you are so cheap that you want to short the selling office, they do not want to sell your house. Example: $100,000 house for example purposes. A normal 6% commission split between two offices, means each side gets $3,000 and $1,500 will go to the salesperson. If he commission is 5% the salesperson gets $1,250. Multiply that for sale of a $500,000 house as is common in some cities, and that means the salesperson gets $1,250 less money. That is why the salespeople do not show homes that are listed with flat fee agencies, and short pay commissions to the salesperson.
Lets look at facts. Total sales of homes by total number of active agents shows the average sale per agent is under 3 per agent. When we consider that 20% of all agents will sell 80% of all homes, the average drops, and a lot of agents will not sell even one home. The truth is, the majority of agents cannot afford to work to sell short commission properties. And agents know how to steer buyers away from short commission properties.
All my years in the business I only sold 6 homes as personal residences and they were as a favor to good close friends. I bought and sold many, many homes to and for investors when the hold period was over. I have sold as many as 14 homes in a day to investors. When we sold them we wanted full price offers and a fast sale. We would offer for a full price sale, a FREE vacation package to Mexico or Honolulu. One week hotel, and air fare for two package tour. It was offered on the condition that the selling office would give it as a bonus to the selling salesperson. I would make one brochure on the property, and one on the vacation, staple them together and deliver one for each salesperson and broker at each of the 33 offices. They all sold for full price, and within a week. On some where it took an hour to call on all offices, the home was sold before I or whoever was passing them out, could get back to our office. Would cost less to give this bonus than any reduction demanded on the price. Many were sold by the time it hit the MLS. And this was legal, as the seller was offering the vacation and was the one offering the terms it was to be given.
I am telling you my secret, as it worked. Cut the commission short, and expect the agents in town to ignore your property, and to steer buyers away from it. They cannot afford to sell it. Increase the commission and property sells quickly. A lot of the property I handled would have a 8% to 10% commission. Harder the property is to sell or exchange and the less people that know how to actually sell that type of property, the higher the commission. Home sales may be 5% or 6% on the average but the big properties handled by other than house sales people will have higher commission. That is one reason I worked with investors.
A lot of salespeople and brokers will deny the facts above, but that is how agents and brokers operate. It is the same throughout the sales world. I spent 10 years selling furniture, and managing stores. I spent 10 years working in the corporate world as high as Division Sales Manager for half the country for an old company. I spent the rest of my work life as a investment/exchange specialist real estate broker. I made before the real estate business, $125,000 a year in today's dollars plus, and it went up considerably in the real estate business. No matter what the product, the top salespeople will be working on commission and bonus plus spiffs. They work for the top dollars, and do not work to sell the short dollar items.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Thank you!
