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.
We're going to be selling our house this summer. It kills me to pay 20k to have a realtor list the house. My inclination is to go with a flat-fee agency who will only list the house on our MLS for $300, and to offer a 2.5% commission to a buyer's agent. I'm trying to play devils advocate with myself - help me out here.
A listing agent:
1) Is the gatekeeper between you and the MLS. Without MLS exposure, you're limiting yourself to a far smaller group of buyers.
2) Develops a "marketing plan". Oh please, it's the MLS exposure, location, price, condition and style of the house that will sell it, not some fancy "marketing plan".
3) Helps price your house. I can pay an appraiser $300 to do that.
4) Arranges showings. Big deal. Our last house had three showings before it sold. Not a lot of work. The buyer's agent is the one who actually does the showing.
5) Present and negotiate offers. I'm a big boy, I can do this myself.
6) Work thru contingencies.
7) Attends closing?
All of these things I can do myself with some time and a little money.
try selling your property yourself, for a few months,,,if you believe brokers are overpaid.
I advise that to many sellers thru the years
and some DO sell it themselves and save money....
but also be prepared- better yet brace yourself, for low-ball FSBO searchers, that have seen the late night R.E. informercials
and will offer you 57k for your 200k house and look you right in the eye as a legitimate offer
after about 6 of these low ballers, that you will want to shoot, then you'll start to appreciate what a broker working for you does. These low ballers are looking for the desperate folks behind on thier mortgages, going thru bankruptcy, and the word FSBO advertises this
95% of fsbo's in this area end up listing with an agent
as for a discount broker....thats like hiring a handyman to build your house, not a competent carpenter/home builder- if you are going to do it-do it right
try selling your property yourself, for a few months,,,if you believe brokers are overpaid.
I advise that to many sellers thru the years
and some DO sell it themselves and save money....
but also be prepared- better yet brace yourself, for low-ball FSBO searchers, that have seen the late night R.E. informercials
and will offer you 57k for your 200k house and look you right in the eye as a legitimate offer
after about 6 of these low ballers, that you will want to shoot, then you'll start to appreciate what a broker working for you does. These low ballers are looking for the desperate folks behind on thier mortgages, going thru bankruptcy, and the word FSBO advertises this
95% of fsbo's in this area end up listing with an agent
as for a discount broker....thats like hiring a handyman to build your house, not a competent carpenter/home builder- if you are going to do it-do it right
What harm is a lowball offer? If you require a buyer to be pre-qualified for your asking price you will weed out most of the lowball silly offers. It takes me less than 6 seconds to find the offer price on a contract. It takes me no time to ignore it, and about a minute to respond.
Competent people who have studied the market and know the pitfalls can easily sell on their own. The only real problem with FSBO if you are competent and informed is adequate exposure and other agents who can't show the FSBO and still get paid.
What harm is a lowball offer? If you require a buyer to be pre-qualified for your asking price you will weed out most of the lowball silly offers. It takes me less than 6 seconds to find the offer price on a contract. It takes me no time to ignore it, and about a minute to respond.
Competent people who have studied the market and know the pitfalls can easily sell on their own. The only real problem with FSBO if you are competent and informed is adequate exposure and other agents who can't show the FSBO and still get paid.
what harm is a low ball offer??
why none at all....until...
emotions get involved, ,,,,and many times, this is what happens with fsbos....many potential buyers will look at the house, knowing they wont or cant pay anywheres near the asking price- after the fsbo buyers look at the house, take notes at anything that will detract value- sit across the kitchen table to the owners and offer half the asking price,,,,the owners get very p.o'd
and insulted... not all,,but most do,,,remember, its still there house, they have emotional attachments..
most of us realtors know how this works...if a particular potential buyer really insults the sellers,,,then they will NOT want to deal with these buyers - not only in multiple offer situations...
you are still dealing with human beings, not everyone is an accountant...
i've seen many a times some fast talking new yorkers or massachusettes buyers come up to maine, sit in front of the owner and give them such a saleman pitch,,,that the owners will simply say- get that prick out of my house...right now
I wish I had a dollar for every smart-ass Ive met that think they are an authority on everything- real estate
Under ideal situations...things go smooth, but its in times of trouble...and most contracts of 1000 variables that can go wrong..
thats why brokers have a bit of an attitude at times....this business isnt black and white, and when lawyers get involved...thats when it really gets fun..
before I was a broker, I was a huge skeptic of brokers,,,the pay, commissions and all....then I got licensed, I lost 5 good friends the first yr,,,,,the deals died and who did they blame??
also, in 3 contracts I got between the crossfire of lawyers and didnt sleep for ten days...the lawyers got paid and the deals fell apart
A good broker wheres 50 different hats.....look at ALL the different areas they have to be an expert at- thats why 90% of the folks that get licensed,,,,,arent around in three years-they are competing with very competent professionals
A listing agent's sole job is as a marketing agent. Their job is to get bodies through your home and the stats have changed. Twenty years ago, 20 showings would result in approx. 5 offers. Today, that has changed drastically. Frankly, you hire an agent to spend money on your home....money they have no guarantee they will ever get back. From the signs to the open house refreshments, everything comes out of that agent's pocket. I have had sellers want me to spend thousands of dollars on their properties with splashy tv ads, radio spots and glossy brochures. If they were a FSBO, would they market like that? Not a chance. They figure that all a listing agent does is put out a sign and hope for the best. Many are that way, but if you inquire in your area, you will find the one who tells the truth bluntly, and if you listen, she/he will leave no stone unturned financially, physically, morally, ethically, to get your property sold, because that is what you have charged them to do, and it is their jobs. I was proud of being a realtor and proud of the job I did because many people were in their "dream homes" due to my efforts and my checkbook. In 30 years, how many sellers would have split those costs with me for a reduction in a yet-to-be-determined sale commission. Not one....So if you want to sell your home FSBO, God Bless You, and I hope it sells because you have to be a marketer to compete with all those other listed homes.
That makes no sense. Just using a realtor to list the property does not raise the price that a willing seller will pay. Period. I dont care what the statistics say.
You either have a property worth X, or you have a property worth Y....Getting a realtor will not change the value of the property you have. If your not a good negotiator don't do it yourself, but an agent can not make another person offer more money for the same property than a non-agent....unless the agents are in cahoots, in which case the buyers agent is in serious breach of his fiduciary duty.
The only real down side to not using an agent when listing that I can see is that many Buyers agents are still out there looking out for their own and will ignore your listing b/c they dont want to deal with someone who did not use another realtor.
I have run into that time and time again....Otherwise an educated person who understands their market, financing, and the process, is more than capable of selling their own home without an agent.
You are exactly right as far as negotiating is concerned. I was recently a buyer again and went through half a dozen agents. I asked how they were going to submit the offer and negotiate it. In one case with a house I liked the agent didn't do anything but submit my offer. He offered no justification for my price which was based on recent solds only blocks away on quiet streets and this house was on a busy street.
It wasn't until I brought all this up that it dawned on him to do this. It ended up messing everything up.
I even found out after firing agents that couldn't negotiate their way out of a paper bag, that I was able to do better resubmitting offers on the same properties the agent did. I ended up getting a place my last agent said would go for 25k more than I ended up paying for it. Boy would I have been ripped off if I'd agree to pay what she thought I should. This house needed so much in the way of repairs and renovations. As it is, I think I paid too much.
The seller of this house hired an agent to do only the marketing --not to handle any offers-- as it turned out. So although I had to figure out how to reach the sellers ...as the listing agent was not forthcoming and tried to get me to agree pay HER a commission ...I eventually found them- no thanks to her and negotiated directly with them. I think they as sellers got a good deal. The house did not show well and they were lucky I came along.
When shopping for an agent, it is almost impossible to determine their negotiating skills with a simple "interview" as some agents have suggested. Sure spending a few hrs with an agent may allow one to assess their personality and chemistry, but how do you assess the agents ability to negotiate?
Once an offer is placed and negotiations start, the direct communication is b/t the selling and buyer agent. The sellers and buyers, who have the most at stake, are insulated from this and really have no idea how their offer or counter is being presented. They (seller and buyer) are only notified of the response... "sorry the sellers did not like your offer, they don't think you are serious and want to cease negotiations". In this case the buyers have no idea how effectively their offer was presented and negotiated by their BA.
So what is a buyer to do?
First, when negotiations reach a stalemate, request to a face to face meeting with the other party. This gets everyone at the proverbial table and allows one to assess their agents negotiating skills. It also insures that your points are being accurately communicated to the other party. It has been my experience that the buyer and seller dominate the negotiations and the agents assume a "wall flower" role, but maybe that's just my type A personality coming through.
Second, sign a BA agreement on a property by property basis ( a short listing agreement if selling). I have never had a BA agent refuse this. In the unlikely event that they do, and you really like the agent, compromise and state in the BA agreement that the buyer has the right to terminate the employment after an offer has been submitted and ultimately rejected. That way if you don't like the way your BA handled the offer the buyer has option to move on. If the buyer is satisfied, they will sign the BA for the next offer.
I can only speak for myself, but I put pretty much zero stock in any agent (or buyer or seller for that matter) in being a good "negotiator".
As a seller I want to know what the offer is. How much and what terms. End of story. I will either accept, counter or reject. There is absolutely nothing an agent (or buyer) can do to "negotiate" with me other than submitting a new offer.
I can only speak for myself, but I put pretty much zero stock in any agent (or buyer or seller for that matter) in being a good "negotiator".
Are you including yourself in this group?
Sounds like you are skeptical that the art of negotiating even exists.
Quote:
As a seller I want to know what the offer is. How much and what terms. End of story. I will either accept, counter or reject. There is absolutely nothing an agent (or buyer) can do to "negotiate" with me other than submitting a new offer.
IMO, this is a very black and white view of a what in reality is a complex and multidimensional process. All things equal, there are times when subtle factors can bring parties together or drive them apart.
I can only speak for myself, but I put pretty much zero stock in any agent (or buyer or seller for that matter) in being a good "negotiator".
As a seller I want to know what the offer is. How much and what terms. End of story. I will either accept, counter or reject. There is absolutely nothing an agent (or buyer) can do to "negotiate" with me other than submitting a new offer.
You are a pretty assertive person though. Most people are not and really rely on the advice given to them by real estate professionals. I'd say 95% of the time my clients go with my recommendation. We have a lot of influence over consumers during the transaction so it is important to appreciate how much consumers depend on us to guide and advise them and treat that trust with respect. You aren't like that, and there are others like you, but many, many people aren't.
It kills me to agree with RESkeptic, but there just isn't really a way to know who is a good negotiator until you are in negotiations. Hopefully as online reviews continue to grow consumers can at least start to get a sense of whom might be good. Hopefully that plus your gut feeling will steer clients in a better direction.
Sounds like you are skeptical that the art of negotiating even exists.
IMO, this is a very black and white view of a what in reality is a complex and multidimensional process. All things equal, there are times when subtle factors can bring parties together or drive them apart.
Yes, I include myself in this group. And yes, I am skeptical in how many transactions there is any negotiating "skills" that actually come in to play.
I'm not saying it never happens, but how many times is it just passing numbers back and forth until it either gets accepted or dies?
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.
