We can use inference as a method, tens of millions of people throughout the Free World hire real estate brokers on a percentage basis to buy and sell property, and have done so probably for centuries. It would be more difficult to "prove" that brokers are somehow overcharging given that popularity.
And real estate brokerage is a unique field, and any discussion using an analogy to another profession can be readily stopped by pointing out differences (you don't need a Master's degree, several years of internship, et cetera).
But I think that the auction business is a pretty darned good analogy. For one thing, marketing real estate is very much like having a slow-motion auction: you have an offer price, people bid, and the auction house gets a percentage of the sale.
Typically, 15-25% from the buyer, and a similar amount from the seller. So on a $300,000 "object," maybe an original Beatles' poster, say, the buyer might pay $330,000 and the seller would net $250,000.
In that context, real estate services are an absolute bargain.
How is it arrogant to say that an agent that doesn't ever have a listing or when they do its a one off or only close three deals in an entire year have an equally weighted opinion on best practices? As for Joan's comment regarding 30k commission being excessive, well having been there done that, half the time those homes don't sell or take a year to sell. So being paid a success fee only on the ones that actually close covers the business activity of all that don't close.
He wasn't rude - he simply asked a question.
He is entitled to ask a question on this forum.
You are entitled to ignore him if you find it insulting.
Someone has already offered to work with him on his terms............we are independent contractors - it's everyone's prerogative to present their own business plan.
IMO - Being rude to a consumer online really is uncalled for.
Good luck Home seller............
You claim you're losing money, I hear this from Sellers regularly, but it's as often their perspective as reality. Let's say for example that your listing price is $35,000 less than you paid, and after paying out a commission of say 5% you're down another $15,000 for a total of $50,000 and you've lived in the house the past 4 years. My question to you is where can you live in a house like yours for free? It cost you a little over $1000 a month in my hypothetical scenario and while you're focused on having lost $50,000 I say you got an exceptional deal on rent.
As a consistently top producing agent my commission rates are firm I will not work for less than 2.5% and I won't accept more than 3%. I would not have any interest in working with you.
there are a few factors involved here...how much equity does the client have left in their home?
perhaps they need to relocate for their job and need to sell their property...they may not have enough to pay both sides 3 percent. I am willing to look at their mortgage statement and the value of their home and help them with their sale if it is not feasible for them to come up with a higher commission. this does not mean I am not deserving of the full 3 percent. this does not mean I am not the best that I will not be able to market their home on the internet or in print.
most often we as agents find the buyers any ways and do a full turn, if your doing such hard work then why gripe and complain, go find the buyer and make 4% ( 3 for buyers agent 1% for listing)
I again want to reiterate that the clients come first, if they are happy with my service they will refer me a large volume of business. Some of you are associating the word discounted with "no Service" and I completely disagree, and so do my very happy clients!!
We HAVE sold homes with discount brokers before. As we all know, we ALL work for money......and, believe me, I know the old saying of 'you get what you pay for.'
Do not insult me. I am a well educated person and knows how much it cost to list a home on the MLS. I also know that in this day and age, realtors do not have to do nearly as much 'leg work' as they use to with listings. The computer and internet has changed that in a big way!
Like I previously stated, the gas and time as a sellers agent is worth a 3% commission, listing a house on the MLS, is not.
As a buyer's agent, I'm probably a bit bias to answer this question, but I only became a dedicated buyer's agent after I realized how boring and how worthless listing a property could be. The vast majority of properties sell because of the MLS listing and it's appearance on either the buyer agent's search results or the buyer's access to one of many MLS linked websites, like Trulia. DO NOT believe this myth about better listing agents because of their 'marketing mix'. This is necessary to sell extremely expensive properties, those whose real estate agents do not use Trulia, or extremely unique properties like a horse farm yoga sauna in North Dakota.
The MLS's ubiquity on the internet has made all previous marketing of mailings, flyers, open houses, hidden prospects, and 'unique marketing mixes' irrelevant.
Here's what a good listing agent can do for you: Save you the time and emotional headache of dealing with countless buyers who will require you to walk them through the house, giving them property history and neighborhood highlights. The good listing agent will list your home at a competitive price not an inflated price (which frankly, is often the error of Sellers and not agents). And hopefully, he/she will understand negotiations. But marketing....that's complete B.S. these days. All those glossy flyers and assorted miscellany do nothing. MLS. It's why we are 'REALTORS'. If the MLS didn't exist, the vast majority of realtors would leave the organization since it's the entire reason for the real estate industry (i.e. commissions inelasticity) as we know it today.
If an individual feels they can do the above, then they should pay a flat fee for the MLS service. If you want full service at a discount, then it should be like any other profession.....negotiate. People who are convinced they are worth a certain amount and no less are the equivalent of the vast majority of homesellers who refused to lower their prices in 2006,2007,2008 despite overwhelming evidence that the market was changing and are now reaping what they sowed.
Most of my seller clients today are actually listing at about 6 to 10-percent listings! YES, you read that correctly. The average is about 9-percent listing. I am able to show the entire transaction from start to finish, with goals and benchmarks and show the time on markets and other factors affecting the saleability of the home. The sale is much more than a listing contract or a 1-percent Seller Agent Fee.
If you think that is what it take to hire a good agent, good luck with that. I have done it, and you "get what you pay for" because you will spend more time on market and achieve a lower price for the home. I have had more success in pricing the homes withing the acceptable range of sales, and then negotiating the ultimate price for my seller's based on their goals. Anyone working for 1-percent is not giving you their attention or full service. And this is most likely why you have stated that the buyer agent is doing the work-- but it's not really the way things work when a Selling Agent is actually SELLING your home.
If this post answered your questions, GIVE ME A THUMBS UP!
Nate Wolf was recently named a FIVE STAR REALTOR by Charlotte Magazine. He is a top producing real estate sales broker, representing both buyers and sellers. He is a member of the National Association of Realtors, The Charlotte Regional Realtors Association and the Carolina Multiple Listing Services. He is licensed in multiple states and serves all areas of Metro Charlotte from Lake Norman to Lake Wylie and Uptown / Center City to SouthPark and Ballantyne.
charlotte mls realtor home listings
In any CE course we are not allowed to discuss commission rates when raising a question, how is a trulia message board any different? This forum is full of agents self promoting, but acting and presenting the public expert consule and not considered advertisement by NAR Debbie.
Technically NAR is cracking down on what we need to provide as to broker affiliation and address in all social media including facebook. Trulia and zillow are in that same camp. Many agents here are agents and only use first names, I guess to provide some anonymity.
Steph- Lake county Illinois is in the top ten wealthiest counties in USA, measured by average household income, 50k house analogy is a nice attempt to dis a market where you have no clue.
Auction houses charge a bunch and a half. Debbie Reynolds just auctioned off a bunch of stuff, including a dress worn by Marilyn Monroe that went for $4.6 million. I presume that there were items of more modest value . . . and my survey of auction houses tells me that if there was a $250,000 item there, the auction house would have grabbed 10-20% from the buyer and a similar amount for the seller - so the $250,000 item would cost the buyer $275,000 and netted the seller $225,000 or so.
These are tough times for everyone, but real estate brokerage services are not a public utility - you can forego them, or you can enlist them. The most important thing is that you receive value for your money.
All the best,
You asked are there agents out there that would consider taking less to list your house, the answer is Yes! Finding them may be the issue.
I started my career with Assist 2 Sell (a flat fee listing, full service company) because I didn't agree with the way real estate fees were worked. I hit the ground running and closed 47 deals my first year...did I make a lot of money? No, not by some standards but for a 1st year Realtor I was pretty darn pleased. What I did gain was about 10 years experience in 1 and you can not put a value on that kind of education.
There are those that think you de-value yourself if you take less than what another would do it for and I can appreciate where they are coming from. I don't agree but I still can appreciate it. Most agents are working for a living and that means if they give you a break when they could be working for another that will pay them more that is food off the table for their family and I am sure you can appreciate where they are coming from. What ever job you work at if the boss came in and said I want you to continue doing the same job but I am going to drop your wages by 2/3's you wouldnt be too pleased to be working there and wouldn't give it your all, would you? That is all some of the response are trying to say, they work hard and need to be compensated for it like everyone else.
I like a few others I know work with the feeling that what goes around comes around and with that in mind I have gone as far as listing a house for free because it was the right thing to do and in turn I have gotten 2 sales that I would never have gotten because of a buyer that tried to buy that house and her agent didn't follow through for her so she fired him and hired me. Karma We need to be flexable and satisfy the needs of others before ourselves, it's in our code of ethics as Realtors. Our clients come first! Now before you agents get upset I know they are not clients till they sign on the line but treating customers with compassion can turn them into clients.
As far and buyers agents deserving more, let me tell you that I spend on an averge $800 to $1000 a month advertising alone, not to mention the cost of running an office and only $300 on gas and I work with buyers and sellers. You do the math which should get paid more. If you can only afford a certain amount split if evenly and don't discount either side's investment in what they do to keep going. No matter what you may think real estate is not a cheap business to be in or stay in.
Good luck with your sale and God Bless.
Stephanie, how much or how little equity in the house has no bearing on if a seller is philosphically against the idea of paying an agent a market based commission rate, whatever that rate might be. He wants to get better terms than the last guy or next guy. Not fair to that little old lady who is not a ball breaker doing the listing presentation to conceed a commission break to those who scream the loudest. I think it is important to be consistent with one's self, if you do a listing side for 1%, you better do it for every listing. Why reward bad behaviour of those who really dont see the value of an agents service even at 1%.
Go with a flat fee brokerage, take your own pictures, schedule all showings yourself, put it on craigs list, sit your own open houses.
Rachel LaMar, J.D.
LaMar Real Estate, Inc.
I read your profile, be very cautious about CA licensing law requirements to make representations of value and expressing opinions on real estate as a real estate pro in your trulia profile, while not be a licensee. Like it's against the law to practice real estate or represent to the public that you have expertise or same knowledge as someone with a license. People get prosecuted and fined where I come from, pretty sure CA is the same.
I can appreciate your situation. It sounds like you have a financial issue and may have trouble paying top dollar for real estate services. I don't have a financial situation and I still don't want to do it! Ha, but I'm a Realtor, and a Broker and MBA at that so I'll give you a little professional advice.
We all have different rates and it us usually subject to the amount of time and expertise required. It's often perceived that our services aren't that valuable but if you poll sellers, as did NAR, the sales price obtained is higher and the # of days on market are lower when you use a Realtor. The thing of is, if you use a quality, professional, then yes, that is true. But Realtors are a dime a dozen and anybody who lost a job or retired, or can't get a job also go into this business. But are they committed to the industry? Do they spend 5+ days a week researching, attending classes, networking with other Realtors, or marketing your property? Some do, but many don't. Know that you trulia do get what you pay for. Yes, I played with "truly."
Unless you buy/sell several times a year there really isn't any way for you to know what we do exactly and why we deserve what we own. MBA hat - We have expenses involved, MLS, memberships, virtual tour, e&o insurance, the list goes on. It costs us an arm and a leg. I hear all to often how people who buy a house every year or so that they go get a license to save money. Then they get out of the business because they spend so much money and it's not worth it; so they go back to Realtors.
The "pay the buyer's agent 3%" and not the seller's agent is so ridiculous. If it's just about gas money then our education and expertise is worthless.
I have a business plan, weekly prospecting plan and seller reporting system, pay for professional photos, hold open houses, spend money on newspaper, etc. The buyer's agent doesn't do any of that! If your seller's agent doesn't do it then they aren't worth a hill of beans, not even 1%. Realtors will say they will do it, but ask for referrals. Then you will get the truth. Everybody is hungry and willing to say or do anything; use your best judgement to avoid getting less, in every way.
The Bottom line - you get what you pay for and YOU NEED a Realtor who is willing to work hard to get enough buyer traffic to get the most you can get.
Green Home Realty
I do not know what you do for a living, but I wager a guess that if your boss told you that he expected you to be as productive as always, work evenings and weekends and that he was so happy wiith you that he was going to cut your pay 75% - I dare say you would not be too keen to bust your butt for him and probably would look every which way to cut corners!
Ask each agent you interview to show you how many listings they currently have, how many they have sold, what their true average days on the market is and how many of their listings ever expired before they lost them or they relisted and sold.
This is a tough market and not the time to waste your time and money on not getting the services you deserve. This market is quite different than the previous markets you have sold in and requires someone who will work tirelessly for you and not just stick a sign in the yard and hope for the best. Best success on your sale!
You definitely sparked a mass variety of responses... I'm sure you can find someone willing to take a discounted rate, and there are many reasons an agent would be willing to do it... though I would rarely do it, I'm sure that are specific occassions where I would, if convinced that it's based on a true hardship and that the Seller didn't have any other options.
I hope you found someone to help you out... LET US KNOW!!!
In NC we have "limited service" which means that there is no legal representation (customer vs. client). I don't thing we have any official term here for full service (client representation) at any level of compensation. "Discount" here is just what higher fee agents torment lower fee agents with ( or Value Based Brokerages :) ).
enough of this! Back to the pool, wife and I are right now in Cancun, yeah! and I better get back. Swim with the dolphins this afternoon..
As for "discount brokers" like any group of Realtor's there are some stinky ones. I would rather a person list with a "discount broker" of any ilk than list with someone who "will guarantee to buy your house if it doesn't sell".
This business is structured that if you help your fellow agent you help your self. I would be happy sell a "discount brokers" listing to my buyer. Remember who we work for....our buyers and sellers. I like selling real estate and I like getting paid but It is not all about the money. For me it is all about the service....full service.
As for you publishing your rate that is a clear vilation of anti trust laws. you stating you charge 3.95% and pay a 3% co-op, and brag about keeping 0.95% in house? If you were in my market I would print your answers here and report you to the local board. Err that is called attempted price fixing. Everyone here is fishing for business leads, helll why waste time posting philosphical rants and answers to out of market questions.
By the way, I noticed you do not enhance realtor.com showcase listing package, not that expensive and worth getting long essay descriptions and message and header lines added. Not cool doing the side by side comparison with bill. Your are both in NC and pretty sure disparaging a fellow agent is a secondary offense to broadcasting your rates.
Now we are getting somewhere..
The reason the term â€œDiscount Brokerâ€ bothers me is because it is used to degrade the agent that is offering the same service but charges less in commission / fees.
Using your owns words â€œMy biggest beef with discounting is that it makes it harder for me to get the green I wantâ€
Then compete with me but do it without harmful words that is sent out to scare the general public in thinking that my service or experience is at a discount.
Here are some the scare tactics I have heard from my clients that other agents have used to try to sell against meâ€¦
â€œYou get what you pay forâ€, â€œIf your child needed a surgeon would you hire a discounted surgeonâ€, â€œIf you needed an attorney to get you off for something you did not do would you hire a discounted attorneyâ€ I could go on and onâ€¦ These phrases are used to scare the public in paying that agent a 6% fee..
It seems to me that you are doing just fine.. Remember you have sold more than me over the last 5 yearsâ€¦ But you need to remember 3 of the 5 for me was working for a builder so really I have only been doing resale in Charlotte for less than 2 years..
If you would please elaborate on this comment you made â€œWhen you discount the way you do the industry in general suffersâ€
How do you suffer? You are still getting 3% of the 3.95% if you are the buyerâ€™s agentâ€¦.
To answer your question:
â€œIf your negotiating skill set is as good as your marketing plan then you could thrive at a 6% business model. Are you a philanthropist? Is your 3.95% rate a conscious decision to "give back" to the community or merely to capture more volume?â€
I do it because I make more money doing volume and saving people money at the same time (a win win in my opinion) rather than OVER charging a smaller number of clients to make the same amount of money..
When you respond and I hope you do.. Please explain to me and all the world What is discounted about My brokerage.
PS.. Thanks for the star buck that was very nice of you.. Let me take you out for a cup, I will even drive up to your neck of the woodsâ€¦. We can discuss our different views over a cup of coffee.
PSSâ€¦ I prefer the term Value Based Brokerageâ€¦..
Buy and sell discount on the listing, senior discount or repeat client discount I get. Rebating commission on the buyer side is a good gimmick to get the listing side and receive a buy and sell for the same client. However, the practice of a cafeteria plan, start with a flat fee and then force migrate to a partial service, then force to a full service plan I have heard terrible stories. Listing agreements have teeth! Does a seller want to have the right to fire you? You bet! I have had clients that signed on with a $500 MLS input fee and got nothing but MLS, no showings cordination, nothing. When the house doesn't sell the seller moves up to a partial service in the same brokerage and if it doesnt sell go to full service model at same brokerage. Those listing agreements say one year and they mean it! If you as a seller want to change offices it is painful and expensive to buy yourself out. By the time you migrate to the "full service" plan, you are eight months into a listing period and cannot easily get out of the listing. Plus its not any cheaper as one goes up the offering, you emd up paying the same commission rate after wasting 8 months testing the market.
What do you mean by " If you can't hold up your full service fee to a client"
My Full service fee just happens to be less than 4% and not 6% thats all..
As you know with over 35 years of experience of your own,,, NOBODY can last in this business without making clients happy.. So if i did not do a GREAT job for my 3.95% fee i would be working at Lows right now..
Larry, thumbs up to you! Any agent with longevity in the business, and plans for staying in the business needs to be consistent with the community they work. Everybody knows everybody and people brag at church and the grocery store about their low mrtgage rate and how cheaply they got an agent to list their. Folks love talking about how clever they are! My point is, when you go down this path, how is it fair to that next guy or little old lady that likes you, trusts you to charge them a market based, consistent commission when a jerk clobbers you for every quarter point? How will that little old lady feel after she lists with you that another guy had to pay half she did just because she didnt put on the thumb screws. People talk about that too, and as a reputable person I dont want to be all over the board and reserve the right to take a pass on a client that reads high on the jerkometer.
The only thing that matters is results... Over the last 12 months I sold homes for a higher sales price to original list price than average and they sold faster than average while we charge a very low commission compared with many other agents. These are facts straight from the MLS. That flies in the face of some of the commenters' incorrect assumptions. I sold more homes last year than 99.5% of all agents in the region, and I did that while saving clients thousands. Yes, you can get great Full Service at a low commission... you just need to look for it.
Some commenters incorrectly assume that if you pay more, you will get more when this is completely not the truth. There are some absolutely terrible agents charging a higher commission, and there are also some very good ones, so to assume that they are all good because they charge a high commission is simply not true. Why are so many agents part-time? Why have so many agents left the business? Some of these were agents who were charging a higher commission, yet my business continues to grow year over year. I'm not giving away my commission because I'm weak, it's actually the opposite. My business model works... the results are proven...my clients are happy. Check out my blog for more comments from happy clients... http://blog.donanthonyrealty.com
Owner / Broker
Don Anthony Realty
A short seller is upside down regardless of listing commission rate and therefore unless they are being coercized by the lender due to lack of hardship, to bring money to closing its not their money. $50k under before commission or $56k after commission is kinda the same scenario. I will charge top rate to a short sale seller in anticipation of the bank cutting it half a percent. Does that make me evil? No. Does the seller care? No because often the attorney is trying to settle to a middle number to reduce the defficiency amount and get a no collateralized interest free note for ten years.
heck, I would do a listing for free if it was a true hardship, deceased soldier's wife cant afford the house kind of scenario. But most people who used their house like an ATM refi cash out every other year I have no sympathy for.
are geting deals done in this envirnment, and they deserve to be paid full value
DAVID COOPER Foreclosure and Bank REO's Specialist-Las Vegas.35 years experience For freee list
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I like your response. We may have some different opinions or conclusion but that is based on the same observation and same ethical standards.
I hope you would not mind if my writing is too sharp. I am not a good writer. Using sharp language is not a perfect idea to communicate with people but as a poor writer, I hope people can catch my points accurately.
I heard what happened in NV both Reno and Las Vegas. Shame on those bad real estate and loan sales. In CA, we have the similar problem. Consumers and real estate service providers recriminate each other.
"Why do I need an agent?" This is a common question in many sellers' & buyers' mind. Of cause those so called "agents" can give you hundreds reasons. "That is the only moment, they follow the text book!" my friend told me that as his black joke.
Here, I do not want to blame any individual real estate person no matter agent or client side. The troubles came from them but the key problem fundamentally comes from our outdated real estate system.
I like you legal sense. That is not only Trulia does, but also the Fed laws.
Fed Anti-Trust law says that it is illegal to discuss how much is charged for "any" services. Real estate licensees (not sure if unlicensed public also, if yes, that may not make a perfect sense) can not discuss commissions, flat fees, office charges, management fees, leasing fees, rental rates, or any other charges/fees as that could lead to a federal Anti-Trust investigation and possible violation. Violation of the Sherman Act is a felony punishable by a fine of up to $10 million for corporations, and a fine of up to $350,000 or 3 years imprisonment (or both) for individuals.
I do not know if that means real estate licensees should not answer this question. And I do not know if they do that one on one in priovate conversation could be an illegal way too. How about consumer to consumer?
This is my opinion, not an advice. Please see my disclaimer to make sure you fully understand my comment.
Also like this analogy...
Will you sleep with me for a million dollars? You say yes then I counter ok, how about $1,000 and you say what kind of person do you think I am? I say back we already established what kind of person you are, now we are just negotiating the price.
To set it up briefly... In NC, we now have a "Due Diligence Period" that the Buyer pays for (negotiated amount for a negotiated period of time), where they can do whatever investigation they want in preparation to purchase the property (i.e. inspections, check out the neighborhood, get financing in place, etc). If they haven't terminated the contract prior to the end of this period, the Buyers are pretty much obligated to purchase the property or will lose an additional amount of money (the Earnest Money Deposit). The Buyer's agent is a traditional agent, charging much more than I am (a Discount Real Estate Agent), while I represent the Seller. In this situation, my client had fixed all that was asked for in a less formal repair request, but the Buyer's agent was slow to get a formal repair request to us that included more items than were originally asked for. During this period, my client and I discussed the issues and appropriate responses in order to best protect their interests. When the Due Diligence Period ended and the Buyer's agent threatened to terminate the contract since we did not agree to their formal request, I responded to the threat (at 10pm last night by the way), and they are now proceeding with the sale.... Here is my client's email to me this morning....
(last name removed for privacy purposes)
From: John B
Sent: Saturday, June 11, 2011 8:01 AM
To: Don Anthony Realty
Subject: Your Representation
I can't tell you how pleased I am with your representation. Even if they would have gone the other way after your email last night, your positioning was spot on! You said exactly what needed to be said in the exact way it needed to be said.
Once we get thru all this I will be happy to give you a testimonial.
My point is this... I am proud to give my clients excellent, referral-worthy representation, while at the same time providing great advertising and charging a low amount for the service. I don't charge less because I am worth less. I charge less (and I actually make more) because it is a different volume-based business model that doesn't rely on getting your Aunt Sally and casual acquaintance from church to also be your client. There's nothing wrong with the traditional business model if you are providing a great service to them, it's just not the business model I have chosen to pursue and perfect. Yes, it's true, that there are some absolutely terrible Discount Real Estate Brokers out there, but don't lump me in with them, or with any other real estate agent who provides lousy service, regardless of the amount they charge.
By the way, I also had two of my listings close yesterday... average savings of about $7,000 each.
Owner / Broker
Don Anthony Realty
What an arrogant statement....Did you really say that, John?
So.......agents with 1 or 2 listings can't have an opinion?.....or their opinions aren't valid?
Maybe they had 10 listings that all sold in the last month........maybe they sell more homes than they list.........maybe they did a volume that far exceeds yours.....who cares!
It doesn't matter..........everyone is entitlted to have an opinion...........even you