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.
I'm gettting ready to bring a SFH to market. The market is solid, I've got plenty of comps, an appraisal and a couple market analysis'. I have yet to decide if I will go the "e-buyer" route as I'm waiting for responses from two of them.
If I end up listing, I'll go with a flat-fee agency, probably "houzeo". I've been to this rodeo before and it has worked well for me, as I have the time and inclination to work with the showings and such.
That said, I'm seriously considering making the buyer's commission 1%. Ballpark, this is a $500k home, so that's $5k out of my pocket for minimal input for me, as I'll have a real estate attorney and title company all ready to go.
I have been "advised" by someone in the realty community in my area that some agents will not show a house with that low of a commission. I say "poo!" to such a thing. I would be curious to hear the opinions and experiences of the real estate professionals on the forum if they have experienced such a situation, and how they dealt with it (or not.)
It is against their code of ethics to not show homes because of lower commissions but that doesn't mean it doesn't happen. I wouldn't doubt that some agents who claim they would never break their ethics would do it subconsciously. What I do know is that some realtors without many listings will work harder to find buyers for other realtor's listings and they certainly aren't going to go after small potatoes. A seller's agent is a seller's agent. A buyer's agent is a buyer's agent.... but they are also a seller's agent for anybody with a listing.
On one end of the spectrum you have FSBO with commissions of zero, and on the other end are listings with the highest commissions. You are putting your property closer to the FSBO end of the spectrum. You can do your own research but the studies I've read show a correlation between higher commissions and higher sales prices, whether or not ethics have anything to do with it is a subject worthy of it's own thread.
Even if all the properties are on the MLS, what brings buyers and sellers agents together frequently is good old fashioned networking. They tend to network sideways. The 1% brokerages network with each other, and the 5+% agents network with each other. Usually the best agents and brokerages don't join the race to the bottom. In other words, you get what you pay for.
This just got real complicated in our state, due to changes stemming from some of the recent nationwide lawsuits. I don't think they're good changes, but they are the law so it matters not what I think. If I had to guess, there is similar movement to create or update the buyer agency agreements in other states as well after these court cases.
These changes dictate that we now must sign compensation agreements with buyers at the beginning of our relationship with the buyer, before showing homes. When we do show homes, if sellers are offering less than the pre-agreed amount or percentage, we have 3 options: we can ask for it in our offer, buyer can pay the difference at closing, or we can fill in a blank for what to do.
Whether buyer agents will show homes that are below the compensation they've agreed to with their buyer depends on what they agree to with that buyer in that agreement. If buyer is unwilling to pay the difference, they can select the option to not be shown listings that offer less than the agreed rate.
So the answer is, at least in this state, agents may very well not show homes with low offered compensation, if that is the agreement with their buyer. Buyers who are tight on cash will not be able to afford to pay extra at closing to cover the difference. Buyer agents may not wish to write in that they categorically agree to accept less. Accepting less is not one of boiler plate options!
I think the new forms, and the policies they're encouraging, are terrible for everyone, but they are the rules we now live with, until they are changed.
I will say there is a widely held belief that fsbo and flat fee sellers are harder to deal with than those with full service agencies, so doing extra work for less money is not something many brokers look forward to.
Last edited by Diana Holbrook; 03-13-2024 at 09:22 PM..
And this is the crux of the commission lawsuits: the peer pressure "scripts" not to show homes that have lower offers of compensation. Agents who are mature and successful are perfectly capable of negotiating their fees when there are lower offers of compensation. So, do what you want.
On a side note, as part of the settlement agreements, I know that RE/Max required agents in my city to show all listings regardless of commissions as part of the settlement. I would guess that is nationwide. I assume that KW and the Anywhere brands probably had similar requirements as part of their settlements. If they are big in your area, then it might be less of a concern.
These changes dictate that we now must sign compensation agreements with buyers at the beginning of our relationship with the buyer, before showing homes. If sellers are offering less than the pre-agreed amount or percentage, we have 3 options: we can ask for it in our offer, buyer can pay the difference at closing, or we can fill in a blank for what to do.
Whether buyer agents will show homes that are below the compensation they've agreed to with their buyer depends on what they agree to with that buyer in that agreement. If buyer is unwilling to pay the difference, they can select the option to not be shown listings that offer less than the agreed rate.
What I find interesting about this strategy is that if a buyer finds an agent that would do it for less so that they could pay out less, they are stuck with the agent. Do your new agreements allow them to terminate at will or do they have to wait for it to expire?
What I find interesting about this strategy is that if a buyer finds an agent that would do it for less so that they could pay out less, they are stuck with the agent. Do your new agreements allow them to terminate at will or do they have to wait for it to expire?
There's no express termination at will. Legally, they'd have to wait for it to expire. Time will tell how many of these get enforced. I think it is terrible policy.
(I was updating my original reply when you were quoting in an attempt to be clearer (it's so complicated now)... so it differs a bit now)
Last edited by Diana Holbrook; 03-13-2024 at 09:50 PM..
Do what you want, you can always make a change before you go under contract.
I listed a house that had been a FSBO once. I didn’t know he signed a contract before listing it with me until day of closing. I asked my broker what to do. He said I agreed to represent him so I should go to closing. Well what do I do about the second buyer? My broker said the seller needed an attorney.
First buyer shows up to closing, having signed the documents in escrow on their place and wanted to do the same with this property until funding. Colorado is a fund at closing state. I asked the seller if he wanted to wait for buyer one or go with buyer two. Buyer two put down earnest money and a better price.
Things worked out for buyer two. Buyer one called me a few times, but couldn’t get the retainer together for an attorney.
Real estate transactions can be smooth or as nutty as possible. Most are in between.
No one cares what you offer your agent’s brokerage or the selling agent’s brokerage. It’s your decision, your property and your time.
Thanks for bringing in the topical information, Diana! This property is in Florida, and I’m not sure we are seeing any effects of the recent litigation over commissions and fees.
I’m not considering this to cut an agent out of a transaction, that’s not my motivation - it’s nothing more than an effort to maximize the return in investment, nothing more. I’ve gone FSBO, flat fee, full-on representation, you name it. I know the difficulty of doing an FSBO and in this case I would rather go flat fee.
The market in my area is pretty good, with DOMs in the 10 day to 2 week range, and the last few month's sales being around the 98-99 percentile for selling price to list price. I don’t think I’ll have much difficulty selling with the property priced competitively. We’ll see.
I’ll continue to watch this thread and read comments as we go.
I'm gettting ready to bring a SFH to market. The market is solid, I've got plenty of comps, an appraisal and a couple market analysis'. I have yet to decide if I will go the "e-buyer" route as I'm waiting for responses from two of them.
If I end up listing, I'll go with a flat-fee agency, probably "houzeo". I've been to this rodeo before and it has worked well for me, as I have the time and inclination to work with the showings and such.
That said, I'm seriously considering making the buyer's commission 1%. Ballpark, this is a $500k home, so that's $5k out of my pocket for minimal input for me, as I'll have a real estate attorney and title company all ready to go.
I have been "advised" by someone in the realty community in my area that some agents will not show a house with that low of a commission. I say "poo!" to such a thing. I would be curious to hear the opinions and experiences of the real estate professionals on the forum if they have experienced such a situation, and how they dealt with it (or not.)
Thank you,
RM
Fact:
There ARE unethical agents who won't show the property, who will not provide the listing to clients, who will disparage the property to dissuade their clients.
Probably agents you want to avoid anyway.
This is why higher co-broke commissions are offered in down markets, to be competitive and draw traffic.
If your market is brisk agents, including the clowns, will climb over each other to get into the house at 1%.
When explaining our NCREALTORS Buyers Agency Agreement commission provisions, I would set 2.4% as the "expected compensation." I would tell the prospective client, "That is the commission offered in nearly 90% of our MLS listings. Some are higher. Some are lower. I will let you know if it is higher, so you can judge if I am responding to inducement rather than looking out for you. . If it is 2%, I will probably work for that. But, years ago, we had a firm offering $1.00. You are great folks with a cute toddler, but I cannot work for a buck."
Every house I showed, I would provide the agent version of the listing to the client, by email or print. That included the commission, % or flat amount.
On a tangent:
In my state, North Carolina, a listing agent who puts a house on the market without walking through it to meet basic responsibilities for discovery and disclosure is also just about the lowest form of licensee.
Unfortunately, no one turns them in, so that is nearly unenforced.
Last edited by MikeJaquish; 03-14-2024 at 06:23 AM..
Fact:
There ARE unethical agents who won't show the property, who will not provide the listing to clients, who will disparage the property to dissuade their clients.
Probably agents you want to avoid anyway.
This is why higher co-broke commissions are offered in down markets, to be competitive and draw traffic.
If your market is brisk agents, including the clowns, will climb over each other to get into the house at 1%.
When explaining our NCREALTORS Buyers Agency Agreement commission provisions, I would set 2.4% as the "expected compensation." I would tell the prospective client, "That is the commission offered in nearly 90% of our MLS listings. Some are higher. Some are lower. I will let you know if it is higher, so you can judge if I am responding to inducement rather than looking out for you. . If it is 2%, I will probably work for that. But, years ago, we had a firm offering $1.00. You are great folks with a cute toddler, but I cannot work for a buck."
Every house I showed, I would provide the agent version of the listing to the client, by email or print. That included the commission, % or flat amount.
On a tangent:
In my state, North Carolina, a listing agent who puts a house on the market without walking through it to meet basic responsibilities for discovery and disclosure is also just about the lowest form of licensee.
Unfortunately, no one turns them in, so that is nearly unenforced.
Good points, Mike, and I totally understand. It's always good to have the POV of the folks on the other side of the transaction. As always, you've made some very salient points. Thank you!
For what it's worth, the last fixed-fee listing we did, back in 2020, the listing agent/broker did a "market analysis" using the listing photos (which were professionally done.) The broker was waaaaay off in their numbers and even argued with us about our listing price. We went with the price we chose, having done our due diligence. The house sold for $15k over our ask, so we got validation for our price.
RM
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.
