If a person will forego their compensation - will they be motivated enough to move your product with all the gusto necessary? It is a myth that all an agent has to do is hang a shingle in your front yard - and then "they will come". It isn't like that.
Exposure happens behind the shingle - open house, multiple caravans, flyers, web mails, web commercials - its all time consuming and that is just the tip of the iceberg.
Let me share this with you because it is so pertinent to your situation:
Mother purchases house on recommendation of part-time agent son. Mother makes great deal because it is a foreclosure in great neighborhood - but way to much home for mom - and right off a busy (and getting busier) street.
Mom wants to sell - parttime agent son says upgrade, upgrade, upgrade - home is upgraded to the hilt.
Mom trusts son's parttime RE knowledge - oops.... home's equity now lost to upgrades...
Homes location and necessary selling price (due to high priced upgrades) : home on market over one year.... oops - but he was a family member.
Now please don't take this as a ding on your family member. But there is an old saying about working with family. Make no mistake - you are "working" with family now.
The rules for family should be the same as the rules for non-family - if you want to stay cordial in the family sense.
You are already showing signs of second guessing your family member by posting your question.
Keep it business like and you can't go wrong - but don't short yourself by not expecting full service : no matter what the commission.
Your RealtorÂ® family member is the best person to answer that question. In the state of Florida all real estate commissions are negotiable, and there are many options for cooperation with agents who will bring a buyer. The most important factor today is price. If your home is priced aggressively (and aggressively is what it takes in most parts of Florida today) it will sell. If it is overpriced (even a little bit) there is no amount of salesmanship or commission incentives that will make a hesitant buyer take action. Donâ€™t be afraid to re-visit your marketing plan and re-vamp to keep up with this dynamic market. That is why the MLS change form was created. Best wishes and much success to you : )
And give your family member a huge "thank you"... they're doing you a big favor, and saving you lots of money.
The truth is that none of us responding know your market. So evaluating the commission rate is not something we can or should do.
However, I do have some questions. I've read your profile. You seemed concerned about the service you are receiving. Because your property is currently listed, it is unethical for us to "interfere" with the listing.
I will offer some general comments. You should consult with your Realtor before taking any action.
1. I like the comment about marketing costs. Is your relative paying for the marketing out of his own pocket? Or is the family helping out? When I market a listing I spend over $1000 in the first month. If no one is helping with the costs, it is possible that the relative doesn't feel comfortable asking for help.
2. When anyone lists a figure on commission I am concerned. Commission are negotiable. However, that means UP and DOWN. Depending upon the circumstances I see commissions from half a percent to ten percent. Your Realtor should make a reccomendation, and assuming you trust this family member, I would be inclined to take his/her advice.
3. In most cases, paying an above-market commission rate is less expensive than taking a price reduction. Most markets are buyer's markets, so if Realtors represent the buyer in 90% of the cases, would it not make sense to incent the buyers's agents?
4. The three factors the affect the sale of a property are price, condition, and timing. I don't know your situation. Your Realtor should have worked with you to develop the proper marketing of your propety, including setting the right list price, preparing the property for sale, and exposing the property to the market.
If the property has had no showings, the price is usually high.
If the property has showings, but no offers, what feedback have you received? Price is probably too high.
If the property has had showing and low offers...listen to the market.
If other homes, like yours, have sold since yours listed, look at them. What do they offer? The best values always sell first (all things being equal).
Show this email to you family member and discuss your concerns openly.f Listen to what your Realtor says.
If 3% offer of compensation is competitive for your marketplace, buyer agents will bring their buyers.
Since you are not paying the listing agent to promote or advertise your property, you might want to explore the extent (or limit) of exposure you will receive. Selling and promoting a property is more than simply entering it into an MLS system.
Will your Realtor be readily available to assist you, buyer agents, and buyers who inquiry directly on your property? Discuss this with your Realtor. If your Realtor provides solid representation for you, then you've got a great deal. If not, free on the sell side might not be the best option.
Gain an understanding of what your Realtor is going to do for you to promote and represent you. Then decide if your expectations and the anticpated services are lining up well.
I think the family member neglected to explain something to you. When you sign the listing agreement, a % of commission is entered. Hypothetically, the norm might be 5 or 6%. If your agreement says 3% than it is obviously below the norm. HOWEVER, that 5 or 6% is then split as a co-broke and what goes into the MLS that the buyer's agents see might be 2 to 4%. If the norm for the co-broke is 2.5 to 3%, yes you will attract agents.
Does that family member OWN the agency or work as a one person operation? Most Realtors have to split their commission with their Broker/office. So lets say a standard agreement would be 6% commission and the co-broke is listed as 3%. After the sale, your agent then splits the 3% with their Broker/office. For newbies, that 3% might be split 50/50 (1.5%/1.5%) but for experienced agents the split might be .5% to the office and 2.5% to the agent.
So the family member might be giving .5% to the Broker/office, doesn't charge you their 2.5% and lists the co-broke as 2.5%. That is still fine if the co-broke norm is 2.5%. However if the co-broke norm is 3% then 2.5% is not enough.
Ask the family member to further explain everything to you. If they can't or don't have the time, find a non-family member to represent you at full commission for FULL service.
In South Florida, especially Miami, it's all about price!
Hopefully your trusted family member and RealtorÂ® has taken a hard look at your competition and found a listing price point that is just below similar properties on the market. If your asking them to work for free, (and I've done it to) at least be 100% clear on what you wish to accomplish.
I would not say there's a "standard" rate in any market, as this is not in line with a free market system. You can obviously pay more or less than the 3% mentioned below. It's really up to you. Everything is negotiable.
A better question to ask would be if the realtor is not charging his fee who is going to pay to market the property and what incentive do they have to assist in the selling process. Realtors do "work" for their commision as there are ALOT of steps involved in the selling process. I tell my customers selling or buying a home is not "a transaction", it is a process which involves many steps along the way.
This comment goes to all the agents here... Scenarios like this one are a reason why, we, as Realtors are sometimes under-appreciated. People out there think this is what we do to sell homes. Just list it and they will come... and it's soo easy, you don't even need to pay me.
I personally spend a lot of $$$ marketing and selling my listings. I don't offer discounts for that reason. Does this family member have the resources to properly market your property without potential income from the sale?
Will you agent be available to market your home, negotiate offers, meet inspectors, appraisers and represent you throughout the transaction? It is important you have a clear picture what will be done to get your home sold.