Realtor commissions

[efinchatl]

Here is my two cents:
I have been involved in real estate, in one form or another, since the late 90s. I have been an investor, agent for a huge brokerage, and a broker for a couple of companies.

Commission is what you can negotiate, yes. However, that negotiated commission is split with the broker (Technically, all commissions are paid to brokers. The individual agent is paid by the broker via a pre-negotiated agreement) that represents the buyer. The average transaction sees a total of 6% commission with the listing broker and the selling broker (buyer’s representative) getting 3% apiece.

The commission paid to the buyer’s agent (broker) is sometimes called the “co-op” commission.

Most commission negotiation comes on the listing side of the transaction. The reason for this is that statistically, homes sell quicker and for more money when the co-op commission is at least 3%. I have done extensive research into this and if the co-op commission is less than 3%, the average number of days on market, as well as the selling price-to-listing price ratio increases dramatically. Therefore, when a seller negotiates a 5% commission, the listing agent is agreeing to 2% while offering a 3% co-op commission.

Why play to the buyer’s agent (broker)? Well, because upwards of 90%+ homes are sold with the help of a buyer’s representative. Downplaying them will decrease your odds of selling within a decent time frame at a decent price.

Flat fee: Ads for $149-595 listing packages are misleading because they fail to mention (until the listing agent is in your kitchen with paperwork) that there is a buyer’s fee of at least 3%. These companies also fail to mention that they offer no additional support at the advertised price point, but will offer “a la carte” services at an hourly or per-job rate. This is important as one of the guiding tenets of selling a home is Murphy’s Law. If there is anything wonky about the title, past liens, inspection issues, etc., the listing agent’s “a la carte” costs can go through the roof quickly. Also, from a lot of personal experience, these companies are very hard to work with when you are representing a buyer.

My advice: pick someone with good credentials that you trust. Make sure to call references and ask to see any statistics they have regarding their record.

Even though the emphasis is on the listing agent (this is the point that no one wants to hear), the responsibility of the sale is on the seller. The seller is where the buck stops in the process. Sellers tend to want to overprice the listing, not heed the advice from the agent when it comes to condition and curb appeal, and being a little stubborn when presented with the facts.
If you do choose an agent with good credentials and whom you trust, take his or her advice. They (we) see this daily while the average homeowner only sells every 5-8 years.

Hope this helps.

 

[Shovelhead]

Some great advice... thanks folks. I'm working on the place doing the minor repairs, cleanups in preparation of selling. I hate to do this but a 4 BR 3 bath house is just too big for a fat old man.... The next thing is finding that small brick ranch that would be a better home for me... Another dreaded chore "House Shopping"

 

[GAGunguy]

If you cant sell it fast enough, rent it.

We did this with out last house, it wasn't selling fast enough, so we rented it and then a year later gave the renters first refusal, they took it.

No real estate commissions, no bull****, worked out great.