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In other States, discount real estate brokers are taking real estate transactions away from full commission realtors just like what we saw happen to full commission stock brokers. Now you can buy or sell stock unassisted on the web for <$7.00/trade. The same "do-it-yourself" craze is now impacting the Real Estate industry....not in Florida just yet, but now that the precedent has been set elsewhere, it will be here soon. It saves sellers ~2.75% of the selling price, so sellers pay ~3.25% instead of 6%.
In Georgia, the #1 realtor is a lady (Rhonda Duffy of Duffy Real Estate) who heavily discounts her commissions. The 6% days are ending there, and 3.25% is the new normal for sellers in-the-know.
We sold our Georgia home in 2017 with a new type of discount broker that we paid $350 + One Quarter of One Percent! Thus, it cost us 3.25% + $350 to sell (since we paid the buyer broker 3%). The discount broker saved us 2.75%-$350 which to us was ~$17,000!
They did a great job, so we sent them 5 more seller-clients from our neighborhood. They are now the #1 listing agent in a development of 400+ high end homes ($400k-$1.5M). From their 1st listing in our neighborhood (friends of ours who told us about them) to having >1/2 of all listings took them just 4 months! It was facilitated by word-of-mouth on our community's Tennis courts, and the Nextdoor web site (which allows neighbors to interact via the web).
Our discounter had our listing professionally photographed, and had it on MLS, and 100+ real estate web sites (Zillow, Realtor.com, ect), all w/in 72 hours of our initial call. We actually slowed the process down by 1 day to call our attorney to make sure it was all legit...which he assured us it was. They next-day-aired us via FEDEX a "smart" lockbox, and the phone calls/texts, and showings began on day 4. The home sold in less than average days-on-market and for a $/sqft that was above the average.
We knew the name and phone # of every person showing our home, as they had to go through us to gain access. We insisted that all prospective buyers be pre-approved, and our property was shown by appointment only. We no longer had to rely on buyers agents leaving their business cards on our counter. We'd call each buyers agent who showed our home for feedback. The lockbox would send us an email of the name and phone # of every agent showing our home the moment the lockbox was opened. If an Agent made a showing apointment and no-showed, we'd know that too, so we'd call them to discuss.
We negotiated our deal directly with the buyer's agent. We had our offer contract reviewed by our attorney, and set our closing date at the buyers agents title company's office. Our attorney spoke with theirs prior to the closing to make certain everything was in order (this is a must).
We had a real estate attorney guiding us every step of the way which is a must in the do-it-yourself real estate world. The attorney cost a small fraction ($450) of what we saved ($17,000!) by eliminating the full commission listing agent. We did have to interact with showing agents and negotiate our deal, but I liked having that control. I didn't have to rely on any listing agent to relay showing activity, or feedback.
Soon, discount brokers will be here in Florida, and it will change everything. Remember the "By Owner" company? That was a train wreck. This time around, they got it right. I don't know why its not here in Florida yet, but I'm guessing real estate lobbyists are to blame. All it takes is 1 lawsuit to break through that wall. People like me who are moving to Florida from States who already have discount brokers in place will bring the practice here..by legal force if need be.
2 must have's for when your time comes to sell using a discounter. 1 is a highly recommended real estate attorney before signing anything. 2 is a home inspection by a licensed home inspector who regularly inspects homes in your immediate area.
Our inspection was clean, so we put a copy of it next to our disclosure statements and printed MLS sheets. When the offer came in, we countered, and then the Buyers agent used the home inspection tactic to try to drive down our counter further. We replied that our inspection findings were made available and had been built into the listing price. 1 day later, they accepted our 1st counter, and the deal was done.
A 3rd potential tip would be to have your home appraised if you do not have multiple comps on your street (or streets nearby) that sold in the past 12 months (disregard short sales & foreclosures). We had several, so we just used those to calculate list price and saved $. Zillow has a tab for recent sales to gather comps.
This isn't as effortless as having a listing agent, but for $17,000, I was willing to put in the time
Commissions have been coming down (in many areas) for decades - even in the 1990's it was regular to have a 5% fee in many places where we lived (NJ, PA).....
People have varying circumstances - many people cannot stomach being the ones that show their house to prospective buyers. I have no problem with it myself.....but we have multiple houses, so it wouldn't work out as well for us since we may be somewhere else.
The best Realtor I know up here (New England) is a woman who will show and sell anything...even "for sale by owner" and such things..even when she doesn't even know if she will make a dime. She takes her role with the BUYER seriously and ends up doing quite well. Even the most hard-nosed "sell it myself" type is likely to be fine with paying a 10K fee to the Realtor that sells their 350K+ house.
It's no different than other markets. Stuff that "sells itself" is often sold at a lower margin. Products that need more selling skills need to have a higher margin.
I think I spent $75 or some very low price for an MLS listing (through some Florida realtor online site) for the lot I recently sold in SRQ.
Time is money...and there are enough people who feel that way that Realtors have plenty of work as long as their officers and brokers don't pack too many of them in and have them all competing against each other.
Many smart Realtors seem to specialize in particular neighborhoods and become known as the true experts...often they live in the same area. Many others look for lifelong relationships, often selling or buying 3 or 4 properties for many of their clients over the decades.
We never showed the home ourselves, or even stayed on property. We'd provide an ample time window, and let the buyer's agent know the home would be vacant for them to show. We'd do an internet search on the buyers agent to be sure they were legit. If anything was odd, we'd call the main office to verify the agent.
Listing agents seldom meet buyers agents and "sell" the home as you imply. That only happens only if the seller explicity asks for their agent to be present for all showings. I looked at a home in Panama City Beach like that, but the agent remained outside while we walked through. That was 1 time out of Hundreds homes I've looked at through the years. She didn't try to sell us at all. She just asked if we had and ?'s, and that was it.
By eliminating a middleman (or the monkey as Peter the Brit calls them), we saved a wagon full of peanuts.
Nothing new, tons of discount brokerages (Ummm Redfin?? that's their whole model).
Majority of people end up having an over priced listing or takes longer to sell. You were an exception, not the rule.
At the end of the day, people don't want to deal with people (or weirdos off the internet who don't have an agent or nosy neighbors) so they hire someone to do the job. You essentially paid $1350 to use a lockbox and got $100 in free photos. Next time just use a flat-fee MLS service and buy a $40 smart lockbox, save yourself another $500 in fees..
You can change your own oil right? Buy the filter, buy a drip pan, unplug the filter, let it drain, replace filter, add new oil, done... yet there's tons of Jiffy Lubes around the country.
Nothing new, tons of discount brokerages (Ummm Redfin?? that's their whole model).
You can change your own oil right? Buy the filter, buy a drip pan, unplug the filter, let it drain, replace filter, add new oil, done... yet there's tons of Jiffy Lubes around the country.
The TireRack warehouse is near me and you cannot believe how large it is!
This is where you order tires...they come UPS, and the place has agreements with dozens of shops in your area to install them for an amazing price.
The internet has definitely changed things in certain Real Estate Markets. If the prospective buyer does a vast amount of the work researching, finding, driving by, checking comps, etc.....then the need for "full service" is not as great. That's when you have to find out who the Realtor represents and decide whether you need your own agent, etc.....
And, no matter what, all the paperwork can be a nightmare.
There is also a tendency these days where everyone wants things "for free" or more accurately "included". This is why cars have better and better warranties and they take care of a lot of problems even outside of warranty. My VW 120K miles is getting thousands of dollars worth of work done on it - for nothing. And, nothing had gone wrong with it.
Houses are one of the last things - especially in Florida - where the buyer has to truly beware. Between the climate and the cheapo construction and the chinese drywall and the buys and the pipes in the slabs and much more....it's tough to get a house that won't need a lot of work unless it's already been reworked or fairly new.
I'm surprised that since it's legal here that a "Rhonda Duffy" #1 volume producer hasn't emerged. Rhonda dominates the Atlanta market due to her low commissions. She also advertises on the radio constantly, like the weird car sales guy does here. Her ads are what made me aware of Discounters, and led me to start asking neighbors about them. The one we got refered to and wound up using cost much less than Rhonda Duffy, but they do very little advertising.
I suppose the reason the Discounters have not taken over here is due to all the older sellers that are afraid to try something new. It's hard to teach an old Dog new tricks. I'm not a big do-it-yourselfer, but when there's $17,000 in play, I can learn. I'd estimate we spent no more than 40 hours of extra time doing it. That's a pay rate of $425/hour. I'm semi-retired, so I had the time to do it, but if I was working 50 hrs/wk, had kids still at home, and my wife also worked, we may not have had the time.
A few posters mentioned paperwork. We had very little paperwork to deal with. Maybe 2 hours worth, mostly gathering the data for the MLS listing form. But then, we found the old one from when we bought the home and just plugged a lot of the data into the new form. The whole process was really much easier than we thought it would be. The worse part was having agents call to schedule a showing, no show, and not even have the courtesy to call. They didnt even realize they were dealing with the homeowners, they thought they were dealing with a listing agent, so they were being discourteous to their own peers...who does that? That really lowered my opinion of Agents. I called their Brokers each time it happened (3 times I think) to let them know how unprofessional their agent was. Those calls were well-received.
Next time, I probably will take it to the next level as Marc Middleton suggests above. I started down that path, but had difficulty getting our listing onto all the web sites, so bailed. Then, I learned that Brokers farm that part of it out to another company, so I'll just do that next time. Do the lockboxes they sell at Home Depot send the emails? That was a very nice feature. We also liked knowing how many people were seeing our listing online week to week.
Last edited by beach43ofus; 08-13-2018 at 06:22 AM..
The cost of holding onto even a middle-of-the-road house can easily add up to 20K per year....so that "17K in play" is not always the case. I've seen many a seller, realtor or not, be penny-wise and pound foolish.
The savings will melt away really quick if you don't sell....fast!
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