Your Thougts on Real Estate Commission

I used an owner-assist service and then listed the property on MLS with a lower-than-avg commission. I paid 2.5% commission.

There's other ways, but then again I did this in a slightly hotter market than now.
 
If you get a realtor and pay less than 6%, you might as well not even get a realtor as the only buyers you will get will be drivebys and not from buyers agents. Buyers agents will not show your house if they find out you are paying less commission to them. They will only show your house if they HAVE to.

For instance. Lets say you are selling a 3bd/2ba home for $250k. Now lets say I am a buyers agent with a client in the market for a $250k 3bd/2ba house. I go to the multiple listings and I see 50 houses that are 3bd/2ba priced at $250k. As a buyers agent I split that 6% with the sellers agent and get $7500 if i sell a house. When I look at your house I see I will only get $5k. Why would I show your house before the other 50 homes? I wouldnt. And if by some miracle the buyer had not made up his mind by the time I got to your house, what are the odds that this lookieloo buyer is going to buy YOUR house and not the other 50 houses I already showed him? I will tell you...the odds are 1 in 50. In reality though, A buyers agent will most likely have 100s if not 1000s of homes to show to the buyer and the buyer will have already bought before he even gets to see your home most likely.

So its either better to pay 6%, or sell it yourself. Dont worry about getting sued. Just read a "buying & selling a house for dummies" book and you should be ok. Just remember to give full disclosure on everything that is wrong with the house. As long as you do that, the buyer will likely not get anything if he tries to sue you. If you leave something out (like the roof leaks and you painted the ceiling to hide that fact) then the buyer can sue you for 3 times the cost to fix it. If you didnt know the roof leaked, they cant sue for shit. Burden of proof is on the buyer.

Dont pay half a commission though as you are just throwing your money away. Pay it all or nothing as you will be better off with either of those two choices.


-Peil
ex-realtor
 
Quote from peilthetraveler:

If you get a realtor and pay less than 6%, you might as well not even get a realtor as the only buyers you will get will be drivebys and not from buyers agents. Buyers agents will not show your house if they find out you are paying less commission to them. They will only show your house if they HAVE to.

For instance. Lets say you are selling a 3bd/2ba home for $250k. Now lets say I am a buyers agent with a client in the market for a $250k 3bd/2ba house. I go to the multiple listings and I see 50 houses that are 3bd/2ba priced at $250k. As a buyers agent I split that 6% with the sellers agent and get $7500 if i sell a house. When I look at your house I see I will only get $5k. Why would I show your house before the other 50 homes? I wouldnt. And if by some miracle the buyer had not made up his mind by the time I got to your house, what are the odds that this lookieloo buyer is going to buy YOUR house and not the other 50 houses I already showed him? I will tell you...the odds are 1 in 50. In reality though, A buyers agent will most likely have 100s if not 1000s of homes to show to the buyer and the buyer will have already bought before he even gets to see your home most likely.

So its either better to pay 6%, or sell it yourself. Dont worry about getting sued. Just read a "buying & selling a house for dummies" book and you should be ok. Just remember to give full disclosure on everything that is wrong with the house. As long as you do that, the buyer will likely not get anything if he tries to sue you. If you leave something out (like the roof leaks and you painted the ceiling to hide that fact) then the buyer can sue you for 3 times the cost to fix it. If you didnt know the roof leaked, they cant sue for shit. Burden of proof is on the buyer.

Dont pay half a commission though as you are just throwing your money away. Pay it all or nothing as you will be better off with either of those two choices.


-Peil
ex-realtor
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Its funny you mention that one broker we spoke with said he would not show a FSBO because the lack of representation means hassles for him and it makes sense.

I appreciate the feedback guys.

I guess I believe most are internet savvy like us on this forum. When we bought this place 6 years ago we found most of the places we looked at on realtor dot com and went from there. So fliers in the box and postcards don't know it means much these days I believe, but its a relative to the market as the say. The one thing our buyer broker did, which I don't know if it legal is tell us the days on market, when I saw 200 I said discount. If we decide to pay 6% I want an agent that knows our subdivision inside and out not just someone from the area. I should be interesting when we get the CMA because that will be make or break on whether we do it or not. Its tough because we aren't desperate but that's what we are competing against at least some of them are.
 
In the last 9 months I have sold 4 houses. All with a realtor. Three of them were under contract within 10 days of listing them. The fourth took about 3 months. I paid 5% commission in each case. What did the 5% get me? Exposure and experience. Don't need either one? Then don't pay for it. Oh, and in each case, the listing agent was not the selling agent. So, tell the 6% agents to take a hike. Chances are all they are going to do is list the property on MLS and maybe show it a few times. Another agent is where you will likely find your buyer.
 
the industry is one of the most ridiculous monopolies out there. i am hoping zillow and the internet will kill them off for good. you're paying somone tens of thousands of dollars to unlock a fucking door and take buyers on a tour?? give me a break.

when i sell my home i won't be using an agent. i'd rather reduce the price by 2% or even 3%.

agents aren't worth shit anyway. the most important factor in selling your home fast is the price. any home can sell in 1 month even in the toughest economy if the price is right. and i don't care if you have the world's best agent, if your home is overpriced it will not sell.
 
It's fairly simple, and I've done it myself with 7 figure properties.

Write an excellent ad, including great pics. For ideas, review high end properties and properties of strong local agents.

Hire a company to list it on the MLS for you for a flat fee of $300-500. This step eliminates the sell side commission of 3% or whatever it is for your area. Some local agents will also list your property on the MLS for a flat fee of $500 and no representation.

Most buyers initially find properties via realtor.com, which is fed by the various regional MLS systems. You do not need a selling agent to attract buyers.

In the MLS listing, specify the usual full buyer's agent commission for your area.

Once you get an offer, it's not hard to negotiate with the buyer's agent for a reduction of 0.5% or 1.0% in his commission.

To keep everything clean and simple, require buyer's agents to make offers using the standard purchase agreement and addenda forms for your state. Some buyer's agents will draft addenda using sloppy language; instead you want them to use the standard forms. Consider engaging an attorney to review offers with you and to represent you at closing.
 
Quote from startraitor:

With technology cut them out entirely. Exchange base bid and ask individual properties, transparent for all to see and participate. A fee based professional could handle the legalities and logistics but price discovery would take place in the purest and most efficient form.
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This is a good idea. Realtors would say it wouldn't work because, among other things, people would be insulted by low-ball bids on their house. But in our business, we know it's just a harmless bid, it's not a transaction price.
 
It seems like most people do things backwards. In a bad real estate market where the agent has to work their his or her tail off to sell your house - people want to skimp on commissions and/or try to sell it themselves.

Then in a strong market, when real estate agents hardly have to lift a finger to sell your house, people figure - what the heck, I'll use an agent. This is when you should try to sell it yourself - if that's your thing.
 
FWIW We sold a second home, on a lake in the Midwest, eight years ago, in the low $500s. The market at that moment was lukewarm -- not hot, but not dead. We tried assisted-FSBO for a couple months, and got only realtors visiting (looking for a listing) rather than authentic buyers. Eventually we gave up and listed with a full-priced broker, and sold fairly quickly to an out-of-town buyer who "fell in love with the house" -- a buyer we would never have met without the realtor. The realtor got both ends of the commish (the buyer was her client also). One factor that would-be FSBO sellers underestimate is that the best buyers -- affluent out of towners who are moving into town because of a job transfer, and want to get settled ASAP -- typically won't fool around with FSBOs.
 
Quote from Rodney King:

FWIW We sold a second home, on a lake in the Midwest, eight years ago, in the low $500s. The market at that moment was lukewarm -- not hot, but not dead. We tried assisted-FSBO for a couple months, and got only realtors visiting (looking for a listing) rather than authentic buyers. Eventually we gave up and listed with a full-priced broker, and sold fairly quickly to an out-of-town buyer who "fell in love with the house" -- a buyer we would never have met without the realtor. The realtor got both ends of the commish (the buyer was her client also). One factor that would-be FSBO sellers underestimate is that the best buyers -- affluent out of towners who are moving into town because of a job transfer, and want to get settled ASAP -- typically won't fool around with FSBOs.
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what was your asking price when it was FSBO and what was the price when you listed with a broker?
 
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