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I do think it is unclear on the site. It's the reason I became curious and called them. I don't understand why it says it's an auction either. They say you team up with a local agent and sign a contract for the length of time that you chose. They have told me that nothing additional would come out of my pocket and the buyers would pay a total of 5% additional on top of the agreed price. It was interesting to me since I've never seen a home marketed this way unless it was an auction. Of course, curious me wanted to find out.
For agents, just curious, does it matter where your commission is coming from? I would think as long as you are paid, it wouldn't matter. I think it would be misleading to buyers that would think the seller was paying the commission because this is the traditional way. It would be clearly stated in the lisiting but would realtors pass by your listing if you went this route? As Brandon said, I would expect to price my house for 5% less. Therefore, it would get sold quicker. I am not in a rush to sell my house but on the other hand, it's a PIA showing a house. Keeping it spotless constantly, getting dogs out, dropping everything at the last minute to show it, stress, etc, ect. I know, I know, it's all part of selling a house.
I do think it is unclear on the site. It's the reason I became curious and called them. I don't understand why it says it's an auction either. They say you team up with a local agent and sign a contract for the length of time that you chose. They have told me that nothing additional would come out of my pocket and the buyers would pay a total of 5% additional on top of the agreed price. It was interesting to me since I've never seen a home marketed this way unless it was an auction. Of course, curious me wanted to find out.
For agents, just curious, does it matter where your commission is coming from? I would think as long as you are paid, it wouldn't matter. I think it would be misleading to buyers that would think the seller was paying the commission because this is the traditional way. It would be clearly stated in the lisiting but would realtors pass by your listing if you went this route? As Brandon said, I would expect to price my house for 5% less. Therefore, it would get sold quicker. I am not in a rush to sell my house but on the other hand, it's a PIA showing a house. Keeping it spotless constantly, getting dogs out, dropping everything at the last minute to show it, stress, etc, ect. I know, I know, it's all part of selling a house.
Just some thoughts......
Commission is always a buyer expense, so structuring it that way does make that point clearer. It is also not typical or common in the market.
All this lets you do is advertise a lower listing price than comps support, separating the commission from the price.
Just don't expect to net more at sale, or to attract a broad buyer pool with this approach, unless your local market supports sellers strongly.
Many consumers, and agents, harbor superstition about the commission expenses, and have kneejerk reactions to "Who pays?"
Further, you want to see how that 5% fee is rolled into a loan.
Does part of it go back to your FSBO site? They can't work for free, and the ads they sell on the site can hardly be expected to be their sole revenue source.
Commission is always a buyer expense, so structuring it that way does make that point clearer. It is also not typical or common in the market.
All this lets you do is advertise a lower listing price than comps support, separating the commission from the price.
Just don't expect to net more at sale, or to attract a broad buyer pool with this approach, unless your local market supports sellers strongly.
Many consumers, and agents, harbor superstition about the commission expenses, and have kneejerk reactions to "Who pays?"
Further, you want to see how that 5% fee is rolled into a loan.
Does part of it go back to your FSBO site? They can't work for free, and the ads they sell on the site can hardly be expected to be their sole revenue source.
This particular company...let's call them "X", probably charges 5% regardless and probably gets 1% with the list agent getting 2% and the buyer broker getting 2%. If no buyer broker the list agent probably gets 4%. the seller can probably opt to pay a higher co-broke if they feel it's necessary in their market. Probably. Some owners probably use them get an agent and the probably forego the auction process after learning more and end up listing with a traditional listing. Probably. But that's probably just some guessing on my part.
Can the 5% be rolled into the loan? Probably if the agents structure the contract that way but that's just a guess on my part.
This particular company...let's call them "X", probably charges 5% regardless and probably gets 1% with the list agent getting 2% and the buyer broker getting 2%. If no buyer broker the list agent probably gets 4%. the seller can probably opt to pay a higher co-broke if they feel it's necessary in their market. Probably. Some owners probably use them get an agent and the probably forego the auction process after learning more and end up listing with a traditional listing. Probably. But that's probably just some guessing on my part.
Can the 5% be rolled into the loan? Probably if the agents structure the contract that way but that's just a guess on my part.
I guess similarly. Offer choice, and funnel leads to most profitable.
I do think it is unclear on the site. It's the reason I became curious and called them. I don't understand why it says it's an auction either. They say you team up with a local agent and sign a contract for the length of time that you chose. They have told me that nothing additional would come out of my pocket and the buyers would pay a total of 5% additional on top of the agreed price. It was interesting to me since I've never seen a home marketed this way unless it was an auction. Of course, curious me wanted to find out.
For agents, just curious, does it matter where your commission is coming from? I would think as long as you are paid, it wouldn't matter. I think it would be misleading to buyers that would think the seller was paying the commission because this is the traditional way. It would be clearly stated in the lisiting but would realtors pass by your listing if you went this route? As Brandon said, I would expect to price my house for 5% less. Therefore, it would get sold quicker. I am not in a rush to sell my house but on the other hand, it's a PIA showing a house. Keeping it spotless constantly, getting dogs out, dropping everything at the last minute to show it, stress, etc, ect. I know, I know, it's all part of selling a house.
Just some thoughts......
I just wrote an offer on a Xome auction listing. The listing agent gets 2%, the buyer agent 2%, and xome gets 1%. There is a form agents sign that state how they break it down. Agents can always have a buyer agency agreement to make up any shortfalls if the commission isn't satisfactory. You price your home as you would, and then on the form, the agent pulls out the 5% commission breakdown. The buyer doesn't pay it separately, it is essentially a net sheet. They just tell you the buyer is paying it, when in reality it works exactly like it always has, the number is just in a different column.
You do need to know that you might not be on the local MLS. In this case, my buyer found the listing on Redfin because it was on the MLS that covers Portland and not the one that covers Salem. So unless a buyer found it and shared it with their agent, local agents would never see it.
That site has been around for years, and is trying to expand/change it's business model.
It's dependent on two things. First, there is no guarantee there is a "local" agent that's bought into the company and pays for the leads.(or whatever the model is to recruit local agents). Second, there is no guarantee that one's house would be listed in the correct MLS. There are MLS systems all over the country. Sharing of that data has changed over the past few years, but not everywhere. For example, it would be a waste of time/money to be listed in the MLS for city X when you live 100 miles away in city Y. Unless a buyer is going to realtor.com, zillow, etc. they will never see your house online.
That site has been around for years, and is trying to expand/change it's business model.
It's dependent on two things. First, there is no guarantee there is a "local" agent that's bought into the company and pays for the leads.(or whatever the model is to recruit local agents). Second, there is no guarantee that one's house would be listed in the correct MLS. There are MLS systems all over the country. Sharing of that data has changed over the past few years, but not everywhere. For example, it would be a waste of time/money to be listed in the MLS for city X when you live 100 miles away in city Y. Unless a buyer is going to realtor.com, zillow, etc. they will never see your house online.
Keep looking for a different flat fee service.
It is super-easy to get professional listing at 5%, without all the intrigue.
But, ideas abound how to stick a spoon in the soup without delivering much substance.
Plenty of venture money flying around for those things, and while some consumers may benefit, a great many others seem merely further confused.
I just wrote an offer on a Xome auction listing. The listing agent gets 2%, the buyer agent 2%, and xome gets 1%. There is a form agents sign that state how they break it down. Agents can always have a buyer agency agreement to make up any shortfalls if the commission isn't satisfactory. You price your home as you would, and then on the form, the agent pulls out the 5% commission breakdown. The buyer doesn't pay it separately, it is essentially a net sheet. They just tell you the buyer is paying it, when in reality it works exactly like it always has, the number is just in a different column.
You do need to know that you might not be on the local MLS. In this case, my buyer found the listing on Redfin because it was on the MLS that covers Portland and not the one that covers Salem. So unless a buyer found it and shared it with their agent, local agents would never see it.
I do think it is unclear on the site. It's the reason I became curious and called them. I don't understand why it says it's an auction either. They say you team up with a local agent and sign a contract for the length of time that you chose. They have told me that nothing additional would come out of my pocket and the buyers would pay a total of 5% additional on top of the agreed price. It was interesting to me since I've never seen a home marketed this way unless it was an auction. Of course, curious me wanted to find out.
For agents, just curious, does it matter where your commission is coming from? I would think as long as you are paid, it wouldn't matter. I think it would be misleading to buyers that would think the seller was paying the commission because this is the traditional way. It would be clearly stated in the lisiting but would realtors pass by your listing if you went this route? As Brandon said, I would expect to price my house for 5% less. Therefore, it would get sold quicker. I am not in a rush to sell my house but on the other hand, it's a PIA showing a house. Keeping it spotless constantly, getting dogs out, dropping everything at the last minute to show it, stress, etc, ect. I know, I know, it's all part of selling a house.
Just some thoughts......
It seems like a sleigh of hand & non-standard & I really think buyers in my area wouldn't accept it.
The thing about "lowering your price 5%" probably just isn't going to work.
If you manage to get the property on Mls at a 5% reduced price & it doesn't sell for some reason, in my area, if you re-listed with a "traditional" agent later, that 5% reduced price is going to show up in Mls & the buyers are going to start their negotiations there. Especially on a stale listing.
Days on the market are everything in my world- it's the best indication of what the market thinks of a property- as a buyer, I can justify a low offer with days on the market & as a seller I'll use the inverse tactic (why would I go down $xxxxx on a property that's been on the market for xx days?). Anything non standard can affect those days on the market.
So if you have to price your home 5% less to be competitive because the buyer is paying the commission, I do not see how this is worth the 1% savings of hiring an agent and having them list it. Hiring an agent has many benefits: it is less work on you, the listing will reach more potential buyers, buyers are not going to get angry and walk due to the small print subterfuge (they pay the commission), etc... To me, a 1% savings is not enough to have me use this service.
Quote:
Originally Posted by Zippyman
It seems like a sleigh of hand & non-standard & I really think buyers in my area wouldn't accept it.
The thing about "lowering your price 5%" probably just isn't going to work.
If you manage to get the property on Mls at a 5% reduced price & it doesn't sell for some reason, in my area, if you re-listed with a "traditional" agent later, that 5% reduced price is going to show up in Mls & the buyers are going to start their negotiations there. Especially on a stale listing.
Days on the market are everything in my world- it's the best indication of what the market thinks of a property- as a buyer, I can justify a low offer with days on the market & as a seller I'll use the inverse tactic (why would I go down $xxxxx on a property that's been on the market for xx days?). Anything non standard can affect those days on the market.
Excellent point.
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