I agree with Lara and not just because I work with her. With 25 to 50% of all home sales failing to close or taking weeks past the agreed upon closing date, professional assistance is even more important for the seller then the buyer. The state mandated seller disclosure is in itself a land mine. Buyers are able to sue 7 to 10 years after the fact and your attorney will not have the errors and omission insurance you will need. A buyer is protected by home inspectors, appraisers, their lender and even the opinion of friends and family. Additionally, a professional, experienced real estate agent can get your home exposed to the greatest number of QUALIFIED buyers in the least amount of time. Read the books, Tipping Point and The Outliers, if you want some good reading about the importance of practice in being successful in any endeavor. You have to do something regularly over a period of time to achieve mastery in any field. These books are available at Costco at a discount. If you decide to sell your home yourself, I suggest you hire a lobbyist to represent your interests in Olympia as the Association of Realtors has done to help the consumer by making sure a sales tax on home sales does not pass as well as other laws that are bad for the real estate market.

Tyler,

Although your economic or analytics make sense on paper or in type, I think you might need to consider the fact that it comes down to good old fashioned marketing and hard work to get a home sold in the SPOKANE market. We have alot of homes for sale and the competition is fierce. Without 24/7 marketing in every possible way, it's difficult to get showings. I still say it requires a professional to negotiate, market, and resolve all the things that may and can come up in a sale especially right now when in the final hour transactions are falling apart due to underwriting issues, appraisal problems (for lack of sales comparables, etc) inspections, etc. To state a REALTOR is only worthwhile in the time of a purchase...seems too broad as each market is different and truly refelective of it's condition.
Seriously, why must we defend our positions as Realtors all the time to justify the expense for the seller, the reality is this...you don't have to hire a professional, you do have the choice to do it yourself. Secondly, even if we did discount our commission, there would be still be an ongoing discussion for more services, more representation, and more results.
I wonder if doctors, accountants, lawyers, and other professionals are asked to discount their services?
Just sounding off...after 168 days of work...7 days a week, 24 hours a day without a break in order to take care of my sellers and buyers. I do this...because I care about my clients not how much money I will make. If you worry about the clients and their needs...the needs for monetary requirements seems to just flow and come back to you when you focus on the job and not the paycheck.

I'm intrigued reading this. I was hoping to find some answers. The author of freakonomics actually says people who don't use a broker tend to take about 1-2 months longer to sell, but sell for 10% more than those who use a broker. The reason he explains-- If a broker gets 6% commission on say a $200,000 sell, he/she makes $12,000. If he/she works really hard to get an extra 10% in price (sell for $220,000) they make $13,200 or $1,200 more. As you know some of that money goes to different people at the firm in reality their take home money goes up from something like $6,000 to $6,600. So if they put in extra significant extra effort they make an additional $600. However, if they use that same time towards selling another house they could make more. For example, if they could sell an additional 1 house with that time they would have made an additional $6000. Therefore, they actually would be losing $5,400 ($6,000- $600) by spending more time on your house. It doesn't make a lot of sense for them to work like that even with a code of ethics. According to his research they don't. He recommends using a broker/agent to buy, but not to sell. (As a fellow economics graduate, I think his arguement makes sense. I think it is more true when housing markets are hot (because the agents can get more benefit from completing more transactions). But I think it becomes less true in a cold market (because they are less likely to sell a higher volume than increase the price).) If I remember right, his research did not say anything about a cold vs hot market analysis.

I am using Reality Team. I am paying 1.5+3. Dan Ohlman mgr. 509 922 2220.

You may get an agent to take a lower commission - will they get you less money? is it worth it to pay a higher commission - that is the question. Commissions are always negotiable. In this market you want and need a hard working agent. If, the agent is going to give up their salary so quickly to reduce their commission - what will they do when negotiating the price of your home? Will they give in so quickly or work hard to get the best and hightest price possible?

Plus, the market is flooded short sale and bank owned properties with low prices. An individual can not compete or may not want to compete with these low prices to sell their home. But, they can compete and come out with money in the bank still. Make sure your property is show ready, ask a competitive price and offer a commission that will bring in the agents with their buyers. This combination is key - in today's market.

We have a lot of great local agents who are CRS, GRI and other certifications and do a great job--no need to get a referral from an agent across the country who then gets some of the comission. Look on the various web sites and pick a few to talk to and get educated on the local market

I would recommend interviewing a handful of agents and selecting the one that you believe would best market your home regardless of the commission. After you decide which agent you want, ask if their commission is negotiable. I recently got a listing because I stated my commission at the interview: 6%. The next agent came in and said the commission was 6% but he would take 5%. He dropped his commission without any prompting from the seller. The seller called me and told me they selected me because the other agent went from 6 to 5 too quickly and they didn’t like that he dropped his own salary so quickly. They then asked me if I could do 5%. I first explained to them again how the commission was split and what I would do to sell the house and they picked me then and there. At 6%.

Hello-Lots of great lengthy answers to your question here. If you would like to begin interviewing agents who specialize in your area, shoot me an email. I will be happy to refer someone to sit down and speak with-no obligation. Commissions are always negotiable-there are no fixed percentages. You need to sit down and have the agent(s) explain how they can agressively market your home in order for it to sell for the most money in the least amount of time. Then talk commission-you may learn in order to "get the most out of the house" doesn't necessarily mean cutting commissions. I hope to hear from you soon.

Lori Rossi
lori.rossi@nemoves.com

To Andy--
I personally give top notch service to all clients. I do know that full service brokers and agents generally spend more on advertising, technical development, staff development, & education to help the consumer, etc. I have personally had buyers get tremendous buys because they perceived the statistically documented practice of lower pricing to make up for less marketing and personal attention. There are a few limited service agents that give great service; but pretty soon you see them burn out. I object to the term "discount brokage" as the FTC has been ruling that term indicates that realtors have a set fee. A good business runs at a profit and studies have shown that to provide the level of service and expertise in the long run that the consumer needs; a mim of a 6% commission is necessary. This is my opinion supported by national statistics. I have sold homes listed by discount brokerages and not received any additional compensation from my buyer; because I was happy to see them get a dynamite deal. I certainly am not going to tell a seller that his price is low as that would be interfering with that agency. I personally have never had a buyer pay me additional compensation; however it is pushed in all the ABR etc classes. Consumers get the same data we get on the lower selling prices of limited service brokerages and on FSBO's. The consumer makes the choice of whether they want full service--and by this I mean advertising, personal web pages, color brochures, virtual tours and an agent that is available to take phone calls. BTW, Fannie Mae and Freddy Mac are now forbidden to pay less then 6% on a short sale; so the gov't has wised up even. You are right that the code of ethics as well as license law says we owe that fiduciary duty to clients. However, how do we prove a home is under priced--appraisers cannot even agree on value, it seems. So we go with the national stats and what we personally see when showing multiple similar homes to clients. They are going to choose the best value for them. As to the MS controlling our service level--all it controls is whether we put 6 pictures on the site as far as advertising goes. It is sort of like Nordstrom service vs. Macey's service. Macey's has outsourced their credit and depends on public sales, etc and are in trouble; while Nordstrom has created customer loyalty through top notch service. As a consumer, I would far rather go into a Nordstrom's then a Macey's because I know the staff is trained in customer satisfaction--rather then selling credit. Circuit City is out of business because of cutting service, thinking price would make the difference. They had the same product with the same warrantees, but the consumer went elsewhere. I personally switched from Circuit City to Best Buy when Circuit City got rid of their experienced people and outsourced their credit card servicing. Ethically, selling real estate is not just about fiduciary duty; it is as you said--treat others as you want to be treated. After meeting the criteria of the law and fiduciary duty, all we have is service. We are not a product as you said. I believe we are professionals and we need to come across to the public as such.
I believe the Code of Ethics demands better then the mim service level if we are to elevate the real estate profession. Finally I give my buyers and sellers a pledge of service guarantee. Again a buyer or seller needs to talk to more then one agent or get recommendations to know what to expect and how each agent works. We have many agents that do this as a second job and so are difficult to get a hold of and also do not keep up with education and do not know the inventory. A mim in my opinion would be someone who returns their calls and also has some advanced real estate education--ABR, CRS, GRI, CNS etc. Someone who is serious about real estate as a profession.

Hi, Mark & BJ,

Thank you for your comments. I can totally understand what you say. As a client, you may think like that but realtors must not do as a limited service broker.

Real estate regulationis and Realtor's code of ethics say that real estate agents and realtors owe fiduciary duty to their clients. Simply, fiduciary duty means that treat your client as treat yourself. This is the highest standard business relationship between two parites. That is equal to say limited service may have legal issues suck as malpractice and agent may lose the license and realtor title may be revoked. Gorvementys and Realtors association guide all the agents to be perform their full service to the clients. There is no any other legal choice like limited or partial.

The key probelm is the difference, the damage between DIY and working with an agent is very hard to be detected. That is why so many agents choose to be a liar, a cheater or a lazy person in the transaction. Consumers think about DIY or limited package because either they do not the difference which is hard to be detected or they find that many agents they know are liars, cheaters, lazy persons or just money makers.

Remenber, MS office has verious packages. Each package has the different quantity but the same quality. Real estate business is a service not a product. Real estate package is not splitable. All the items in the package are not counted by quantity only, but they are also counted by quality. Bases on what law and code of ethics say, In real estate, quantity and quality is the same things.

Please, allow me to say something to those real estate pros here. Real estate service is like jumping not walking. That means agents either donot take it or fully take it. They can stop or take a rest in any middle way where is called limited service.

Read my other writing, then you may understand more about me.

Andy

Limited Service or fee for service brokers generally charge less then the 6 or 7% needed by full service brokerages to provide the advertising, technology and support staff necessary to ensure a smooth sale in optimal time at a fair price. Limited service brokers geneally have only one strategy which is to price the home below the market for a fast sale. You will find that many limited service brokers have a short market time; but statistics show that fewer of their homes ultimately sell and when they do it is at a much lower price. You don't save any money until the house closes. Buyers have gotten wise to limited service brokerages and their generally lower prices and are paying their full service agents more to get the "deal". If your goal is to sell your home at the lowest price in the fastest time; use a limited service broker. If your goal to to get the most out of your home in the least amount of time; use a full service brokerge. Talk to or interview a couple of agents and choose the one who will give your home the most exposure to the market and will answer their phone so as to be available to you, other agents and potential buyers. There really is no such broker as a "discount" broker--they are merely limited service or fee for services. This model generally results in less money to the seller and a better buy for a buyer.

We all like to save money but would you go to a doctor just because he/she charges less or because he or she has the reputation of being the best in his profession. Interview several agents or get referrals from people you trust. Choosing an agent based solely on their commission rate may end up costing you money in the long run.

Jm,

Based on the listing agreement, you can know if you pay less than 6%. But how can you know if that agent will perform agent's duty as 6% agent? This is not a department store. When they say 50% off, they still sale you the wole thing not just part of the merchandize. How about the realtor's service? Can you list a full package service in your agreement? Can you make sure the discounting agent keep your highest benifit in the transaction?

Yes, even you pay 6%, many of realtors still perform like a unprofessional person without fiduciary duty but less than 6% will hurt your deal even deeper. High price may not get high quality but low price must get low quality.

Andy

I have always said (and experience has taught me) "you get what you pay for". Take that for what it is. I am not as eloquent as other answers but that is the cold hard truth. My husband flips houses - he always tries to save a buck in the beginning by going FSBO. Guess who sells his houses within weeks of listing? I do nothing for him when he's FSBO (he has even done the discount website listings). It is about marketing and commission payout and exposure. As I said before - you get what you pay for.

Jmdavis1,

Print out the blog attached to the link below and use it for reference, and simply choose the biggest bang for the buck. Good luck.

http://www.trulia.com/blog/rockinblu/2008/12/i_ve_got_my_fin…

JM
Most people think that if they can find a Realtor that can save them money on commission, then at the end of the escrow they will have more money in their pocket.

First, commissions are negotiable by law.

Second, I monitor MLS statistics on three classes of brokers:
MLS Entry Only, Discount, and Full Service. Consistently over the past two years the following results are true:
1. Listings taken by MLS Entry Only or Discount Brokers FAIL to sell more frequently.
2. When they do sell, they average about 2.8% LESS in list price versus sales price.
3. When the do sell, they take longer to sell.

So in a down market, if you really need to move (meaning you do not have another option), you really need to find the best agent in your area to max your profit.

Another interesting statistic is that in most areas about 20% of the listings sold sell CLOSEST to asking price. For example, in my area, last quarter listings that sold within the first 30 days averaged 99.7% of asking price. That means that 80% of the listings take longer to sell and sell for less. At 120 Days on Market they sell for 92.7% of asking price...and that is AFTER some price reductions.

So you real task is to identify whether the Realtor you hire is in the 20%, or the 80%. If 80% of listings are not marketed correctly, not priced correctly, and sell for much less than asking....and these are from Realtors.....what are the odds that the Realtor you interview is in the 20%?

About one in five.

If you like I would be happy to refer you to a Realtor, tops in your market, that you can interview. I strongly suggest that you interview a couple, then compare their proposals.

Good luck.

I reccommend that you consider interviewing several agents...including full service and discounted brokerage firms. It is important to do your homework when you are the seller in clearly a buyers market. Your home is one of many up against...new construction, short sales, foreclosures, and other sellers with all types of motivation to sell their homes too. The bigger question is why do you want to sell your home with a discounted commission? Is there a reason that you need to save that money and are you going about it in the best possible way? Nothing against discounted firms...there is a need for all types of service. I just believe that the consumer is not aware that typically discounted commission means discounted service. So I ask you...which service are you willing to forego in order to save money...negotiation, marketing, representation, or consumer awareness! That is not always the case but you truly need to be sure of which services are going to go away with a discounted commission if any or all. In this market you owe it to yourself to have every advantage to get your home sold as quickly as possible at the highest price attainable. So make sure you look at all your options before settling on an agent just because he or she discounts their commission. You might consider amount of properties sold, their record, what do their clients say about them, what are they willing to do for the commission they receive and how is it justified. These are just some of the many things you might consider.
p.s.
Would you be okay receiving care from a discounted dentist?
I wish you the best of luck in selling your home.

I would recommend checking out the options at TheHassleFreeListing.com. It explains options for different commission structures.