Selling a home and the related commisions

[toldozer]

1 hour ago, thefuzz said:

I don't work in that side of the industry....never have, hope I never do.

As to your work environment, good for you.  However, if you are a new agent, who wants help with lead generation, marketing, mailers, etc...then a big brokerage house is what you may want to chase after....or not, there are options.

Oh absolutely,  my choice isn't for everyone but has been great to me.  As for the comments about the commission split wasn't intended to be rude so I hope you didn't take it that way just wanted to make sure no one was getting taken advantage of lol

[thefuzz]

7 minutes ago, toldozer said:

Oh absolutely,  my choice isn't for everyone but has been great to me.  As for the comments about the commission split wasn't intended to be rude so I hope you didn't take it that way just wanted to make sure no one was getting taken advantage of lol

Oh, heck no, that was more of a simplistic write up of a younger/greener agent.

I've been in the biz now for 20 years....as hard as that is for me to imagine.  I operate in a really specialized niche in the industry, tough to break into it, and even tougher to get out.

[Cullenator]

Talking to a guy who seems to be open to a flat fee with bonuses.  Like 10% of anything above list, +cash for each additional offer he has to manage, and additional cash if we dont have a deal (not a closing but a deal) in 3 weeks.

 

Fortunately my part of the world is still very much a sellers market with high desirability and low inventory.  Homes in my surrounding area often go under contract in a week to ten days and dont often come back on the market.

[thefuzz]

6 minutes ago, Cullenator said:

Talking to a guy who seems to be open to a flat fee with bonuses.  Like 10% of anything above list, +cash for each additional offer he has to manage, and additional cash if we dont have a deal (not a closing but a deal) in 3 weeks.

 

Fortunately my part of the world is still very much a sellers market with high desirability and low inventory.  Homes in my surrounding area often go under contract in a week to ten days and dont often come back on the market.

You need to be careful, did he bring up the "10% over list" idea?

Where are you located?

[Cullenator]

1 minute ago, thefuzz said:

You need to be careful, did he bring up the "10% over list" idea?

Where are you located?

No that was our idea.  I want to respect that if we agree to list at a fair price and he busts his hump to pit buyers against each other and get the price up he gets compensated. 

 

Fortunately for us we live in a community that has 4 or 5 different home plans so there are many homes with our exact floor plans and I cant count on both hands the number of them that have sold in the last year so comps are pretty straight forward.

[thefuzz]

Just now, Cullenator said:

No that was our idea.  I want to respect that if we agree to list at a fair price and he busts his hump to pit buyers against each other and get the price up he gets compensated. 

 

Fortunately for us we live in a community that has 4 or 5 different home plans so there are many homes with our exact floor plans and I cant count on both hands the number of them that have sold in the last year so comps are pretty straight forward.

OK.  I'd have to look back into the rules, as I don't practice general brokerage, and don't do "offers" on anything....but I'm pretty sure that's illegal.

I get pretty frustrated with many in my field over the "offers" thing.  My response to them is always the same "are we making offers, or buying real estate?"  In those exact words.  Now, again, I don't operate in that line of the business, so take that, and what I'm about to say with a grain of salt.

I don't like the pitting of buyers against each other.  Don't like pricing a home just below it's value to drive offers over list.  Would prefer the home be listed for a fair price, and for the deal to proceed like a fair deal.  There are transactions where both buyer and seller can walk away happy, unfortunately, this is not one of those markets.

The way this market, and sellers have pitted buyers against each other isn't a good thing, not now, not down the road, and hasn't ever been in the past.

[Cullenator]

1 minute ago, thefuzz said:

OK.  I'd have to look back into the rules, as I don't practice general brokerage, and don't do "offers" on anything....but I'm pretty sure that's illegal.

I get pretty frustrated with many in my field over the "offers" thing.  My response to them is always the same "are we making offers, or buying real estate?"  In those exact words.  Now, again, I don't operate in that line of the business, so take that, and what I'm about to say with a grain of salt.

I don't like the pitting of buyers against each other.  Don't like pricing a home just below it's value to drive offers over list.  Would prefer the home be listed for a fair price, and for the deal to proceed like a fair deal.  There are transactions where both buyer and seller can walk away happy, unfortunately, this is not one of those markets.

The way this market, and sellers have pitted buyers against each other isn't a good thing, not now, not down the road, and hasn't ever been in the past.

That's good info.  Ill look into the legality thing 'cause I'm not looking to be one of those guys. 

I just want to reward our listing agent for a job well done but don't want to just fork over an excess of money if we get a full price offer on day one and the agent did the barest minimum to get the house in MLS.

[thefuzz]

Just now, Cullenator said:

That's good info.  Ill look into the legality thing 'cause I'm not looking to be one of those guys. 

I just want to reward our listing agent for a job well done but don't want to just fork over an excess of money if we get a full price offer on day one and the agent did the barest minimum to get the house in MLS.

If that is the case, just do a for sale by owner.  Pay an attorney to draft a contract, and cut out the entirety of the mess.

Is the broker local, have you met him, how much volume does he move?

One point on your second sentence, the work STARTS when the first offer is made.  Not the pictures, not the getting it in MLS, not the CMA (comparative market analysis), etc....

The pain is after contract, not before...so if you want to reward him, just pay him like a normal broker.

Also, please consider just how important your single job is, once the contract is in place?  If his slice of the pie is small, just what are the chances of him slipping out of the movie theater to take a call from you or the closing attorney?  Zero?  Less?

Either way, good luck, more than happy to help if I can.

[CanadianCat]

This is the world I live in. Im a real estate developer where Im from and we hire agents to sell our product. When I do our proforma and I see the 5% commission we pay it always hurts - yet we always pay it.

So I wanted to give a slightly different perspective then just the commission price...

- When you hire an agent you are also paying for their contact list. A good agent is building a big clientele list and they should know what they want. This is why good agents can make a quick sale. They already know 10 people that are looking for a house in that area/price range. So while it sucks to have a quick sale as it seems they did nothing for it, a good agent spends their career building that list. 

- Agents split commissions. So if you negotiate the commission too low other agents will avoid showing that house because they would get paid less. Sounds dumb, but this is 100% true. Typical commission in 5-6% if you reduce it to 4% some buying agents will simply not show this home to their client. 

- The above is why you need to pick your selling agent so carefully. Because the most money you can make as an agent is if they double end the deal - they get the full commission. So picking a big wig will likely result in a faster turn around for the same price as a JR agent with no contacts. 

Personally I would love to not use an agent to keep that money but they do have their value. 

[LinvilleGorge]

2 hours ago, thefuzz said:

You need to be careful, did he bring up the "10% over list" idea?

Where are you located?

Yeah, that's the first thing that crossed my mind. Sounded like a "underlist this thing and make BANK scheme".

[toldozer]

2 hours ago, CanadianCat said:

This is the world I live in. Im a real estate developer where Im from and we hire agents to sell our product. When I do our proforma and I see the 5% commission we pay it always hurts - yet we always pay it.

So I wanted to give a slightly different perspective then just the commission price...

- When you hire an agent you are also paying for their contact list. A good agent is building a big clientele list and they should know what they want. This is why good agents can make a quick sale. They already know 10 people that are looking for a house in that area/price range. So while it sucks to have a quick sale as it seems they did nothing for it, a good agent spends their career building that list. 

- Agents split commissions. So if you negotiate the commission too low other agents will avoid showing that house because they would get paid less. Sounds dumb, but this is 100% true. Typical commission in 5-6% if you reduce it to 4% some buying agents will simply not show this home to their client. 

- The above is why you need to pick your selling agent so carefully. Because the most money you can make as an agent is if they double end the deal - they get the full commission. So picking a big wig will likely result in a faster turn around for the same price as a JR agent with no contacts. 

Personally I would love to not use an agent to keep that money but they do have their value. 

90% of homes aren't sold by the agent that lists the property.  Also if I don't show a house because of the commission I could lose my license so while agents don't like a lower % most of us won't ignore a listing because of it.  I look like poo if a client asks why I didn't mention a property to them.  Also all of my clients have a custom search set up for them from the get go and I couldn't weed out by % even if i want to. We probably bitch about it to our spouse but that's about it

[CanadianCat]

22 hours ago, toldozer said:

90% of homes aren't sold by the agent that lists the property.  Also if I don't show a house because of the commission I could lose my license so while agents don't like a lower % most of us won't ignore a listing because of it.  I look like poo if a client asks why I didn't mention a property to them.  Also all of my clients have a custom search set up for them from the get go and I couldn't weed out by % even if i want to. We probably bitch about it to our spouse but that's about it

Sorry I was not referring that they would NOT show a home, its just that the agent will obviously hype up their products 1st. 

[PanthersATL]

A good agent --- especially after showing a potential buyer a certain number of homes -- will eventually know exactly what home/features will be worthwhile and which ones won't be.

We had one agent bring us to a house with "we know you're going to hate (a) (b) (c), but thought we'd show it to you anyway".    We hated (a) (b) (c) for exactly the reasons the realtor expected.   They were efficient in narrowing down available options for us to look at, saved a LOT of time

[Cullenator]

This thread has opened my eyes to what sellers agent do so this is by no means a slight...

 

 

But buyers agents earn every fuging penny.  Every one we have ever had made us feel like we were their only client and ultimately got us in to the right home that we needed, at the right price, with the right concessions from the sellers, for that point in our lives.