I am also a property owner, so I guess I can answer your question from both perspectives. First off agents should do more than just advise on the right price, here is what you should get from your agent:
1-current market condition (you should also do your homework, the agent's perspective is based on their opinion, no one can accurately predict the market, but since agents do this for a living they should have a better idea)
2-list of SOLD comparable properties (anyone can get the price of available apartments in the area, just google them)
3-present you with a marketing plan (this includes targeted markets, eBrochures, online listing or whatever works for your property)
4-take professional pictures of the apartment (not a point & shoot) i.e.: I use a cannon DSLR with a wide lens and then use photoshop to make the pictures stand out
5-agents broadcast the listing to all brokers in town (this you can not do on your own unless you are a licensed agent and subscribe to certain services)
6-agents are your buffer when a buyer comes through and wants to negotiate a price it is ALWAYS better to have a buffer
7-depending on the type of property, certain properties cost a fortune to advertise (this is property specific)
8-follow up and follow through. Agents should keep a log of all prospects and make the necessary phone calls to get an accurate idea of why the property is not selling or how to increase interest in the property
9-you probably do not want to answer a phone call about your property at 10 pm or on the weekend for that matter.
10-the commission is negotiable, but like many others have mentioned the lower the commission, the less attractive the property will be; however, I do want to add that I will still show my client any available property. As a seller's agent I will not advise to go lower than 5%, as a buyer's agent I have my buyer's interest, so I will show any and all properties.
As an owner, I sell and rent my inventory personally, but that is because I am a Broker! and I know the ins and outs of the market and have access to lots of resources non-Brokers/agents do not have.
If you don't have to sell now, don't. Maybe you can rent your place for a while until the market rebounds. If not, you can try to go FSBO for a while and see how that works out.
BTW I often include a clause in my contract that if my company acts as a dual agent we discount the commission to 3%, in your case that is only 20k (assuming the 680k is fair market value)
Leanard, feel free to contact me with any questions. If you decide to hire a Broker and you like my approach shoot me an email. I am also licensed in NJ, so if you need any info. (Hudson County) let me know as well.
Here's the very simple fact. Real estate brokerage is a service. It is not a public utility, the use of it is not mandated by law or even custom. You don't have to hire a broker if you don't want to. That is really the entire point.
If you choose not to use a brokerage service, then your job is to get 94% of market value through your own resources, and I think I my colleagues in New York would agree with me that, since life is short, if you want to play real estate broker with your property, then, have at it.
But there's no need to minimize our contributions to the process; if you doubt the statistics, then at least have the courtesy, when in the company of real estate brokers, to give us more than, "I saw regular direct buyers." At least consider that some of them may have been represented by a broker, and elected to see the property on their own.
All the best,
One last thought, can a broker make financial sense of selling your condo for a different arrangement? My market is different than yours, but when I list a property I front the expenses for marketing it, my time for preparing it and my knowledge and experience for advising my seller. When I list a home, if it doesn't sell I'm out my time, money with nothing to show for it.
Your local agents will tell you what their fees are, but it has to make sense for everyone.
I sold a home about 2 years ago. I thought I'd try it myself. What a mistake! I have a friend in advertising who gave me a lot of tips and helped me get my ad on a few "insider" sites and print places. At first, I offered nothing in terms of agent pay. I got some calls. Most of the people were either not serious or were just dreaming and couldn't afford to buy it. I took some advice from a broker on here as an idea to offer an 3% payment to any agent who brought a buyer. I got some calls from agents but most wanted just to list my place with them. Long story short, I eventually listed with an agent at Cocoran named John. I probably shouldn't put his last name here. You can email me for his name if you want. He sold my place for more than I honestly thought he could. And the market was really bad 2 years ago.
I think my real problem on my own was my inability to get it in front of enough people. I also found that brokers are not that willing to show for sale by owners. It MIGHT have something to do with the process itself and how much can go wrong. I think for sale by owners probably fail more than sales with brokers.
The 6% does seem like a lot. But so does the cost of coffee at starbucks or what my doctor charges me for a 3 minute appointment. I will say that the NY Times cost way too much for me to advertise there more than just a couple of weeks. That probably eats up a lot of a brokers take.
Good luck. I don't think I'd try it on my own again. Especially not in this market. There is a ton of stuff out there to compete with.
Let me know if you want my agent's name.
The difficulty that you will face is that you will have to deal with every buyer's agent that comes through the door. Assuming each buyers agent has 1-5 active buyers, it doesn't pale compared to being on the Manhattan version of the MLS. Bond allows us to advertise for FSBO's periodically, most agencies don't, but you can never get word out to the 90% of the buying public easily and with out paying commission. Well before I became an agent I was purchasing, fixing up and selling my property. I always did it with an agent to make sure the process was smooth on the buying side, and then on the selling side I hit 90% of the buying public in one fell swoop. I didn't have the time to waste as the market was changing to get my money out.
It seems to me that the issue is you getting your money out of the property, not the cost of the commission. If you don't have to sell, don't. Rent the condo. If you do have to sell, you might want to think of it this way. If the company that you are employed by (not your own company) had a bad year, would you assume that they would drop your salary and bonus by 16% or more when in fact you would have to work a lot harder for them because their pricing may not be just right? Harder to when folks like BOND do way more for their clients than the rest (video, media optimisation, professional photography, best marketing materials on the market, time spent etc).
In the end of the day, you will always get what you pay for.
Are you goign to be doing double the work or paying double the overhead/costs to sell a $600K aptmt over a $300K apt? No! Will you be doing 3 times the work to sell a $900K apt over a $300K aptmt? No! What if you post it online and it sells immediately, are you really putting in the same amount of time as someone that has to go thru 3 open houses. The prices should be determined on a case by case basis. But yet its somehow ok to say 6% the standard. Almost all people posting are agents and are going to come up with something to disagree or say how wrong this is. But as with any profession, clearly laying out your costs and including a % of profit for yourself would be easier to explain then justifying "6%". Noone is asking you work for free or for peanuts but what you ask for is High.
Yes. I am an agent, but I can tell you I have seen sellers successfully market and sell their properties on their own. I have helped a few. If you would like to discuss this further contact me. I would be glad to give you a few of the secrets they used.
Lee Williams, VP
Lic. Real Estate Agent
Rutenberg Realty, LLC
That said a good broker will explain to you what they are doing, how they are going to do it, their strategy on selling and you'll soon understand why they can charge what they charge.
At the same time i've seen horribly lazy brokers whenever i've gone to open houses, where they'll sit around and just have you walk around yourself, know nothing about the property or the surroundings, not bother to send follow-up emails, or blow-off a buyer that they don't think is 'serious' (sometimes i dress/look like i really can't afford something that i am seeing). Word of mouth is very powerful when finding a good broker.
I have recently written an article about this issue, here is a link http://www.trulia.com/profile/id1691577/blog/ see if it is useful for you.
Also, about the amount of commission to the RE Pro.
It is really irrelevant how much you have paid for your unit. Letâ€™s just assume that you bought it 10-12 years ago for much less. Then, instead of losing money you would make a very nice profit. Is it OK then for you to pay 6%? The agent has to invest certain amount of time and the money to properly market and sell your property. Also, do not forget that the commission is split equally between the seller agentâ€™s company and buyer agentâ€™s company, which makes it 3% for each, and the agents will get paid according to their split within the companies (about 50-60% in general). There are so many other units to choose from with 6% or even 8 % commission. How motivated the agents will be if you offer less? Use your logic now.
May be you should consider to Short Sale your unit, but it is an unpleasant process which will decries your credit and you have to be qualified for it.
The most costly item you'll encounter is the necessary advertising. Without it you stand zero chance of selling. It takes on average around 6 weeks to find a buyer for a properly priced property (countless weeks more if pricing is off or there's something about the building or the property itself that causes buyers concern). My understanding that 2-weeks of posting on the NY Times costs a couple hundred bucks, not to mention the fact that you'll need great photos (maybe another $100-$200 for photogrpahy). Count on coughing up around $1500 or more for all this while you're in the marketing phase of selling (and this is just the basic advertising - a good broker will have this listing out on countless real estate websites - including Trulia! All at their own cost - the broker is fronting the money and taking the risk as part of the service to the client!).
Then there's the HUGE investment of time. A broker is a full-time professional, able to devote full-time attention to a listing, so the hundreds of hours spent answering calls and emails from possible buyers requesting information on the property (basically at all times, day and night, weekend and holiday included), scheduling appointments into busy complicated schedules, hosting many dozens of showings at the unit (plus often second or third showings for the truly interested buyers), and then handling the back-and-forth of a typical negotiation, are part of our job - question is: do you want (or can you find the time) to make it YOUR full-time job? If you find yourself at home often and have a lot of patience, perhaps you can.
The last HUGE investment is that of skill and knowledge of the little loopholes and problems that can sink a deal and send you back to the drawing board emptyhanded (but then require even more cash investment to run those ads again and more time investment to start showing anew). A good experienced broker knows these first-hand and that's also part of the service we sell - our clients can rest assured that their broker (whose fortunes are directly connected to their ability to get their clients to the closing table), will make darn sure that every possible loophole and potential problem is averted in advance of a deal sinking, if there's even the remotest chance of that happening. If you're one of the rare sellers who knows exactly what to look out for, what questions to make sure get answered, and what procedures need following you will be successful.
I'd be more than happy to explain more of the details to you if you feel like calling - not trying to convince you to list, just looking to help! Best of luck! Charlie Summers, Bellmarc Realty, 917-376-1648
Where I do business some might say it doesnt make sense that a one bedroom condo cost that much. But things are different everywhere.
Leonard try and sell it on your own. Do your research on how best to market and negotiate.
Tip: Try working with buyers agents instead. You wont have to pay a commission at that point. Research buyers agents. I wish you the best of luck on your sale. Stay positive and open to all ideas and thoughts.
Well, actually it makes a lot of sense for two reasons:
First, marketing. Let's say that you and your agent have a 5% deal as all commissions are negotiable. The agent therefore advertises that the co-broking agency (not agent) gets 2.5% if they bring you a buyer. The average commission is 3% which is a 17% higher fee to the buyerâ€™s agent. Currently there are a lot of apartments/inventory or the market vs. normal levels. If you were a buyer's agent, with the ton of inventory on the market that meets your buyer's criteria, and via your computer system you have the ability to prioritize the listings that meet your buyer's criteria by total commission, where are you going to take them first? You are going to take them to the apartments that meet your buyer's criteria that are 3% (or more), and only if they can't find anything, will you move down that list in commission. So that means that the most motivated buyers (those with agents which is about 95% of buyers in the market) will probably purchase an apartment before yours is even shown to them. Does it make sense to put your apartment last on their list of apartments to see?
Defining the amount of money. Commissions are co-broked. This means that the 6% you pay is then divided by 2. The broker of your agent gets the 3% and then the agent will get half of that. That 1.5% must cover hourly and over head (meaning time searching for new deals/working with buyers who may drop out, advertising, desk fees, office supplies and the like ). This may seem like a lot of money to you, but your agent will probably spend at least 100 hours on your apartment total, and then must use that money to cover all the overhead time, and costs. This becomes at times a very low hourly for the agent when you consider the overhead costs. This is the reason that the average agent in NYS makes around 48k or so per year despite working 7 days a week, all day and usually most nights, only getting paid if they actually close a deal. It is a huge risk to be a real estate agent as deals and listings can always fall apart particularly in this more difficult market between buyer nervousness and difficultly keeping mortgages and closing together - both of which expert agents can manage well. Most of this is behind the scenes, and are things that you will never see. Do you think you will acquire the best agent by paying less money?
What I would tell you though, is choose an agent based on how smart they are (tend to make better deals), is honest and hardworking (you want the truth), whether they provide you comps and on-going market research, how well they understand the dynamics of the industry, what their customer service is, is not a push over (would you want an agent who you pushed over negotiating the sale of your apartment?), and who will always tell you the truth even if you don't want to hear it. Also, be sure they have been in sales (not rentals only) for a few years. That means they have survived (95% are gone with in a year), are basically paying their bills or more (meaning they probably have a good reputation and have done quite a few deals), and should professionally be able to manage your listing.
your Realtor the listing agent will do much more than just suggest a price, and we can go into that although of the Realtors here have already done so, but it seems to me that you think that 6 % is just too much, well here it goes!
When you go to your doctor do you and your insurance pay?
When you see an attorney, do you pay?
you hire an architect? do you pay?
Of course you do! Now understand when you pay your commission the total amount does not go to YOUR
Realtor alone, we would all be millionaires believe me! It is usually split in 4, i.e. part of your commission will go to your Realtor's brokerage company and then split in 2 between the brokerage and your Realtor acc. to their agreement, the other part of your commission will go to the brokerage of the Agent who brings the buyer who buys your property, and that brokerage company in turn also splits their portion with that Agent,
so its split amongst 4 entities.... When you look at hours, money spent, efforts, expertise, professional advice and guidance about the pricing, marketing, may be staging of your place etc. etc. open houses and so much more, at the end the hourly rate may surprise you....
So have another look at your situation, when did you buy and for how much
why do you want or need to sell
then discuss alllllll your options with your Realtor
and figure out what your best approach should be or whether selling at this time
is just simply not the best solution, but if for any reason you HAVE TO then discuss
all your available options I hope it is going to work out for you......
Hope this helps a little and makes you a bit more sympathetic to the services Realtors provide~
You may just have bought at the height of the market and now you are selling at a kind of bottom
and you may not be able to sell even at the price you bought your property, but I am not familair with
the Manhattan market...
Good Luck to you!
Edith YourRealtor4Life! and ChicagoConnection
I know you'd love to hear from "regular people" but as you noticed, here, mostly brokers answer your questions. Why don't you talk to some of your friends, co-workers or people in your building. They might be able to give you non-broker advice.
The other suggestion I have for you is, don't sell. If you know you will lose money and don't have to sell, don't do it. If you have to sell, then do that.
You don't have to use a broker. I encourage sellers to do it themselves, some do succeed. Manhattan Real Estate is a different animal. Different from even the outer boroughs, so when other agents tell you that the commission is negotiable, they are right, BUT you will get the most traffic at 6%. With a lot of inventory out there, the buyers agents will show their customers listings that they will make 3% on. Also, a lot of brokerage firms are not allowed to work with FSBO's and only show listings that have an agent attached to them.
As far as buyer that you have seen Veena is right, I send a lot of buyer to open houses by themselves. I am only 1 man and can't be everywhere all at once.
You will get traffic at 5% (2.5%/2.5%) but not as much and it will also depend on how unique and desirable your apartment is. I have done 5% and it takes me longer to sell that even though I treat ALL my listings with the same care and attention.
So to summarize:
Don't sell if you don't have
Please Try to Sell yourself
Do the best you can
BOND New York
A broker does a lot more than suggest a price and make a flyer. If that is all you are getting you are paying too much at any commission structure. My consistent advice here in Trulia is to find the best agent available first, decide what commission make sense second. A great agent will bring value to the table and more than justify their fee. A bad agent or none at all will cost you in more ways than just a commission; lost sales, bad advice, risky practices that put you and/or your belongings at risk.
You are dealing with what many are, buying at or near the top of the market and trying to sell near the bottom. If you can put off selling long enough, the market may come back. On the other hand if it drops more and you must sell, you may regret not getting out now.
The good news is whatever you buy, assuming you do, will also be in the down market and when things recover you'll gain it then. Best of luck.
The 6% commission is not set in stone. I completely understand your perspective and since you will be selling your property for not that significant amount of profit you want to keep the expenses low.There are many offices that will work with you to list as low as 1%-2%. As agents we understand that each seller needs and situation is different and there is no cookie cutter method that works for everyone.
If you would like to discuss further, please give me a call.
Licensed Real Estate Agent
Cruse Realty / Cruz Network
yes you can discuss your commission they charge but the low your get them the less traffic you get from other Brokers but you will get exposure as Michael said you can get Broker firms down but once you go below a certain do you really think they will do there best to sell you unit and also as Michael said you can use FSBO yes you save lots of money but what kind of clients are stop buy your home? Good/Bad/maybe crazy/maybe to stake out your house to rob? you never know who is coming.
and when you have a buyer and you start negotiating and you come to a deal and just before the closing you buyer cant get a loan . now you wasted your time sad but this happen all to offen.
Gary has a good Answer just Interview firms / there agents.
I wish you the best of luck in what ever way you go.
Director of Sales
Senior Sales & Rental Agent
Certified Property Manager
Living Source Residential
1 west Street Suite 100
New York, NY10038
Lic. Real Estate Agents
For Rentals (914)450.5116
For Sales (646)943.1610
Its indeed frustrating to sell on your own or wrap your head around the 5/6% Broker commission you need to pay out. There is one thing if I may mention, those people who you think are direct buyers may often be sent to the Brokers OHs by the Buyers Agent who has pre-registered them and cant always be there on hand with their Customers. Sometimes they are neighbors from the building who are curious to see what renovations this listing has and what justifies the asking price. Sometimes it is people who are just curious to look around every once in a while but may be always just looking. Brokers pre-qualify their clients and make sure neithers time is being wasted.
However you may want to go ahead and sell it yourself and strike out!
Interview at least three agents and discuss your situation. They will either show you justification for the commission they charge or offer you alternatives.
All the best,