You will be frustrated with your stubborn sellers and dithering buyers.
You will see how the listing agent can make or break a deal.
You will see how a great listing agent does all the background legwork before the house hits the market.
You will see why nobody stages a $200,000 house. (Hint:$$$)
You will see why an open house is an important part of marketing.
You will see why there are agents who list and agents who buy and what the crucial differences are.
You will see why price is so crucial in today's market.
You will see why $500K + buyers are just as or MORE DIFFICULT to get to closing than sub-$200K buyers.
You will see why FSBO sellers don't sell their homes for 6% less w/o a realtor, even if they should.
You will see why Bob from NC has been trying to sell his house for 2 years without succcess but feels qualified to give advice. Well, maybe not that last one.
For your $30,000, you ARE guaranteed a buyer. You WILL NOT pay that commission without one!
You see in this economy and in this very difficult Real Estate Market in most areas if not all in the country,
everybody struggles.... As we are in a buyers market, i.e. there are way more properties available for sale, than there are available and ready and willing buyers, it is not a good market for sellers, but buyers on the other hand, can negotiate heavily, and they can cherry pick from a large array of different homes, the best for them at the lowest possible price..... This is nothing any Realtor can change!
Now the Realtor may be of assistance to you, in preparing your home, its curb appeal better, so that it will show better on the internet and all other websites and in brochures, your Realtor may be able to stage your home better or hire a professional stager if need be.....i.e. move around furniture, or even remove furniture, do small repairs and paint a wall here and there to modernize the look of your home.... all that said, we of course do not know what your home looks like these are just general suggestions....
You cannot change the style of home, its lot size or location, and you need to compare very honestly your home to others on the market (are they similar but priced much lower?????) or look at homes in your current price range, to see are they larger, newer, more modern, better updated, better curb appeal, finished basements etc. etc. You may go with your current Realtor and view a few homes so that you get a better feeling for what the buying public can select from....
6 months on the market in this economy is not really a very long time, although I am not particularly familiar with the Madison market place, your Realtor though should be....
When you are thinking about reducing the Realtor's commission, look at the amount and is that amount
taken off your current asking price actually going to make a huge difference? 1 % on 500,000 $ is 5000 $
Do you believe that a buyer will buy your house if you reduce the price by 5000 $.....
Buyers who can afford 500 K potentially can afford 550 K, so then it comes to how does your home compete with the others, and will the others either newer, or bigger or whatever sell before yours!
I do not quite understand why your lender is not working with you but since we do not know what your current interest rate on your loan is, it is hard for us to make recommendations and what are your intentions once you get to sell your home..... you will rent or do you want to buy a smaller place?
To answer your question, real estate commissions in general are negotiable, but as with everything in life, you GET WHAT YOU PAY FOR, sounds like a cliche, but that is what it is in most cases. Remember also, if you are in a bad place, so are the Realtors, as in this market, paying ALL their expenses out of their own pockets, but now their listed homes are much longer on the market (more time and effort, more financial expenses for marketing, open houses, fliers etc. etc. than ever BEfore and they share in the total commission only = in most cases the commission total is split 4 ways, one part is split between the agent who brings the buyer and his/her brokerage company, and other part is split between your listing agent and his/her brokerage company, and then the taxes come off, all the expenses come off for each side --- so it sounds like a lot for you for the 4 and sometime 5 parties involved (if there is a referral fee involved) it is
not huge, especially when calculated on a per hour fee!
I hope this helps you just understand it a little better.... But I think what you should do, obviously you selected your current Realtor for a reason.... and you trust him or her, so sit down and see what can be done
a) as far as your lender is concerned, can your monthly payment be reduced? And is this financially an option
b) Discuss with your Realtor, what can be done to your home, to improve its chances to be looked at and
receive an offer, other than reducing the asking price (remember once a buyer comes in they still want to
negotiate on the asking price! and your Realtor can give you an idea where that % stands in your price range and area)
c) And at that time discuss with your current Realtor, if a reduction in commission is possible and if
there are other properties on the market with lower commissions offered to the buying side.
I hope this all helps you a bit.
I feel for you and know these are difficult times....
Hopefully your husband will find a job soon and you that way buy yourselves more time.
Good Luck and all the BEST to both of you
Edith YourRealtor4Life and Chicago Northshore Connection
Working always in the very BEST interest of her clients
Web Reference: http://tinyurl.com/MeetEdith
I can only assume your Listing Agent offered you suggestions regarding the smoke smell. This isn't his first listing with the problem and his advice is one of the things you pay him for. Take it.
You wondered about Open Houses and what the real value is. Again, I assume your Listing Agent suggested it but it sounds like you declined to take him up on it. What is the worst thing that can happen? You are out of your house for 2 hours on a Sunday afternoon? Make him work for his commission. Houses get sold for all kinds of crazy reasons and among them is people happened to stop by an Open House, fell in love with the ballet room or the wet bar or the 3-season porch or the office and ended up buying the house.
Your words: "With the recession and housing market like it is..." Did your Realtor suggest you list the house at a lower price? Because with the recession and the housing market like it is, price is crucial. Did you take that advice or did you say something like "let's try it at the higher price, they can always make an offer". Here is the bad news: there have been plenty of sales in Blackhawk since your house was listed. And Hawk's Landing. And Stonefield. And so on...Price matters. Again, take the advice, even if it hurts.
Commissions work because nobody gets paid until there is a closed sale. Your Listing Agent is doing everything he can to get the house sold, let him do the job you hired him for. The FSBO people and the Flat Fee people, they don't care, they have no skin in the game. They get their money up front and come by to pick up the sign a few months later.
See if the Attorney has some ideas of how to get rid of the smoke smell. Ask him to come over on Sunday and talk to any qualified buyers that drop by, it will take a bite out of his afternoon but he can charge you by the hour.
While it may be overly optimistic, what if you had priced your home where you are today back in June, held an Open House where someone mentioned the smoke smell then followed up to get rid of it that week. You might not be 2 months behind on your payment because you already closed.
Winning teams have good coaches. Good coaches give good advice. Good players take it.
Passing the Broker's exam does not make you a Realtor in anything but title. You do nothing more than post pics and text online, something an 8th Grader could do handily.
I don't know why you want to know who I am so badly, my name is irrelevant to the discussion.
We may have some common ground: There are too many Realtors. Many of them don't do enough to justify their commission. That said, the ones who do the most business are able to do so through referrals from satisfied clients and a proven ability to get deals done, tough ones and the rare but occasional easy one. How is that not a 'truly open market'? There is no conspiracy to gouge homeowners. You act as though you are some iconoclast out to save our citizens from these greedy useless Realtors. But you use the MLS and the rest of the licensed Realtors to prop up your woefully inadequate 'representation' that costs about what it is worth: ZERO. Popular as FSBO and Flat Fee is, the majority of property is still sold by Realtors. And, for those transactions where there is just one, they are doing a lot more work than if there is an actual Listing Agent AND a Buyer's Agent. Your statement then regarding 2% for Seller Representation, plus 3% for Buyer's Agents computes to 5%.
The Freakonomics (2005) guys and their assertion that Realtors don't add any value and therefore are dinosaurs destined for the same trash heap as travel agents doesn't seem to be coming to fruition. Why is it that when people can't get their house sold on their own, they inevitably turn to a Realtor and usually a household name with years of experience. You have no idea how many of those turqoise FSBOMadison signs are tucked into the back corner of houses listed for sale with a Realtor.
I am not here trying to drum up business, just freely express my opinion(s). It is what is called " a forum".
Due to FSBO popularity here there are also a lot of local real estate attorneys who specialize in handling FSBO transactions. They all charge less than $1000 and generally have a deeper understanding of real estate law than your typical real estate agent.
You're at the higher end of the market and that's pretty tough right now, but when push comes to shove in this bad market price is everything. A full price agent is going to be a huge disadvantage!
I'd like to remind people who are awestruck by the size of commissions that in the sales industry, compensation is usually percentage-based. There are some sales reps that receive a salary or a draw against commissions, and you might just find that a broker might be willing to compromise their fee for a guarantee - for example, perhaps 1% up front, and another 1% at closing. Just an example.
Real estate commissions are actually lower than in many other sectors. The auction field, for example - when you go to sell that $150,000 objet d'art at a leading auction house, they'll take 20-25% from you, and tack on a 15-25% "buyer's premium; the buyer pays $180,000 and you net $120,000. 33%.
That's simply the way it is. Now, of course, there are flat-fee brokerages, but the co-brokerage does need to be attractive to co-brokers, otherwise, some of them will simply refuse to co-broker.
All the best,
Anyway, I am a big fan of agents helping sellers (struggling or otherwise) with fees, and especially rebates for buyers when buying a home. Sorry if I struck a nerve with someone with the short sale idea, but if you're a seller who is 2 months behind and need to get out of the 3200 pmt, options are limited. It's likely the lender isn't helping due to there not being sufficient income.
Understand that agents typically aren't magicians and there is no buyer factory they can order a $500k buyer from. Think car salesmen and your home is on the lot (the MLS). Sometimes the more they get paid, the more likely they will hustle when a buyer comes on the lot. The better priced the home (car) the faster it will sell.
Keep in mind the seller typically has two things they control: Time and Price. You want your price, it might take more time. You want to sell quick, you may have to price it better.
Homes are definitely selling! I know an agent that has sold over 500 homes this year, and I know many agents that have each sold over 50.
How do they justify charging $12,000 commission for one listing and $30,000 on another one? It should not be based on how much your home sells for. The Broker Company that the Realtor works for should look ahead to the future and realize that people have become very savvy buyers & sellers and if enough people would say no to the "old" tradition of commissions based on the price, then people would not feel ripped off in paying so much money to sell their homes. I think this recession has taught a lot of homeowners that buying and selling homes is a whole new ballgame now. usually people purchasing the "luxury" homes are experienced home buyers, so being one myself, I would not pass up an opportunity to view a "For Sale By Owner" listing and going through a Realtor would not deter me. If you advertise the FSBO as reduced 6% in lieu of Realtor fees, savvy buyers would recognize a bargain when they see one.
Now, can anyone explain how I get better Realtor services because my home cost more? What should I get extra for my $30,000 commission? Should I be 'GUARANTEED" a BUYER?
This recession should teach all of us some lessons on the value of our money and how important customer service is going to be going forward!
Realtor fees, a realtor lists a $200k home @ 6% and a $1M home at the same 6%. In dollars, that's FIVE times the amount for the $1M home. Does the realtor work five times as hard to sell it? If so ask how? If they do, they're short changing the $200k owner. Either case is not fair. Advertising space , at least by a large firm, has already been purchased way in advance of listing your particular property so that does not come into play as some agents may allude to. I only agree to a set fee on luxury property with "percs" ,if it is sold quickly, or or at a predetermined price, of course other than the asking price, you offer a bonus for the great work. And don't be shy about that bonus, if they achieve it, it's well worth it and if they don't, no harm.
In luxury homes no one can "sell" your house. Buyers in these price ranges know what they want. They look at houses in the area, themselves, checking pricing, themselves, do drive bys, themselves, and when they want to look at a particular property they will call the agent they are working with or the listing agent, an look at the house and yeah or nay on it ,themselves. They'll use the agent to place offers and not much more.
An 80-20 percent statistic was mentioned in one response, but the info that went with that stat was incorrect or I misunderstood the answer completely. What it is, is that 80% of listings are NOT sold by the listing agent. That's why everybody wants to list your house. Someone else will sell it and they will get a commission. Now they may sell other agents listings also and that's ok it is just how it works. If they had a buyer for your house you would not be talking about listing contracts but sales contracts.
So what does this mean? First just get with a reputable agency in your area who you are comfortable with. Do a SHORT term contract and see how it goes. At the end of that contract you can reup or decide on someone else. DO NOT fall for the "we need to list it longer than that". Don't they have any faith in themselves to sell it right away? How can you have faith in them?
And lastly, you need to get with your accountant / financial advisor to determine EXACTLY where you are financially. The real estate is the big hang up, but you need a more defined plan on what to do if the situation comes crashing down. And the agents are not qualified, nor should they be, in that side of your finances.
Best of luck,
The Old Cranky One
We are in our late 60's and have lost all our retirement, etc. We need what little bit of equity we have left in our home. We are paying more for the Realtor fees than we are going to come out with ourselves. HELP!
Bottom line: real estate commissions are too high!
And, surprise, I am a realtor. I know that buyer agents work their tails off. I think they should be fairly compensated. But as things currently stand there are way too many agents and commissions are way too high.
I find it very difficult to argue with someone who doesn't have the courage to put his or her name to their convictions.
Janice, you have a credit score of 849 and you can't refinance into a more manageable mortgage? I assume you must have consulted with other lenders when your current lender rebuffed you, right?
From you have said, y ou shuld not be considering bankrupcy. Just call a reputable real estate agent. (or call several) and discuss your situation. Find someone who you are comfortable with, get is listed and get it sold and move on with your life.
Sincerely, Donna Hermsen & Dan O'Brien
I have had listings like that and we always work it out at the end!
Best of Luck!
Mildred valentin, Realtor
Debby Homestead Realty Inc http://www.debbyrealtor.com
In the state of New Jersey, where I practice real estate, all fees are negotiable. I would assume that is true throughout the country as to practice otherwise, would be a violation of restraint of trade. That being said, in my opinion, it is more important to find out what the realtor's services will be-where they will be exposing your hoime on, what their track record is. The bottom line is what you will wind up with in your pocket after all expenses and many times the cheapest route may prove costly in the end.
Janice, though there may be some truth in the "pro's" comment, again that IS NOT a decision a real estate agent should be making for you as they are NOT qualified to make decisions on your FINANCIAL situation. That should be done by a "Professional" in that area.
God these people are worse than ambulance chasers. Offer some usable input for the people in need of advice instead of throughing up your hands and saying give it away. Heck, I can do that. Next thing you'll offer up is,"lower the price". Takes years of experience and knowledge to do that.
What you need is a CDPE who can get you a short sale and get you out before they do a foreclosure and it is to late. Just because the bank will not work with you, does not mean when presented with the right facts and forms a cdpe will not be able to get you a short sale or deed in lieu. The second mortgage makes it a little harder but it still could be done.
For more information and a cdpeoin your are go to http://www.cdpe.com
assoc broker c21 Signature Realty
saginaw mi 48603
Absolutely, but allow me to suggest that instead of focusing how much a realtor is going to charge you, focus on WHAT the realtor is going to do for you...
Sure, if you get a flat fee listing or hire a realtor at 4% you may not get the results you are looking for (sell fast and for top dollar), but just because you hire a realtor at 6% it doesn't mean they will do much of a better job either...
Here are some things you should look for:
- Efficient and effective real estate teams
Most realtors operate independently and handle all tasks involved with selling a home. A team hires people to handle tasks like admin, customer service, marketing, etc., allowing the agent to focus on what they should be doing... selling your home...
- Automated marketing
If your realtor has a number on your house that goes directly to him or the office, it will be inefficient. A well structured pre-recorded message will give potential buyers all information needed to compel them to schedule a viewing. This does many things, but the one important to you is that it qualifies buyers before they step foot in your door. Second, multiple buyers can call at once and they can call even if it's 10 pm or 5 am... try getting a realtor to answer their phones at that time...
- Home Buying Systems
Buyers buy on emotion. If they like your house, they'll forget about the 'foreclosures' and unrealistic prices. Top producers are aware of this and offer buyers free lists of bank foreclosures knowing that once they are out looking at houses, the buyer will pull the trigger on the one they like even if it's priced at or above market value.
- Guarantee programs
Being that you are in the half million price range, the buyers you are after are more than likely either relocating or trading up to a larger home. There are realtors who offer trade up programs or offer some sort of performance guarantee...
These are just a few off the top of my head...
More than likely they won't come down in commission, but their service is usually worth way more than what you are paying...
I guess when you don't put your name on your words it's really easy to criticize others and compare them to eighth graders. But really, who's behaving like an eighth grader?
Are you a coward?
Yes, realtors do negotiate their commissions in and around the Dane county area. Seriously, there are some fabulous realtors in this town you just have to connect with the right one for you. You need to find someone that is experienced working with distressed applications and looks beyond the here and now of your application. They need to work as a team member with you, your lender and others trying to help you get this home sold. Because you are in the $500,000 to $600,000 range the buyer pool is much smaller and any buyer most likely would not purchase in that range unless they have the current home they live in sold or under contract. Few buyers will be willing to take on a home purchase risk right now.
You should be considering a professional - full time realtor that looks at options other than the typical... For Example, what about a buy-down application for the buyers, what type of internet exposure do you have . . . is your home staged and priced to sell? Have you connected with local businesses, the down-town community or professionals that can afford your application? Your best realtors look at all avenues to help encourage the timeline of a successful closing. Just putting your home on the MLS and praying it will sell no longer works in this economy . . . yes, some sellers get lucky but not so much in your price range.
Arrange to meet with the successful, full-time realtors in town and see what they have to say. You do have options and your house will sell.
Donna Birschbach - #1 sales volume 2009
The Birschbach Team
Madison, WI 53719
"Tons of FSBO sales" w/o opting for Flat Fee? Sure, there are some. And "tons" of those Sellers are ill-equipped to handle the transaction. First hand experience with some of the very people you have 'empowered' has shown that they don't correctly fill out or make the Real Estate Condition Report available in a timely fashion. They sign the necessary legal documents in the wrong place. They incorrectly describe features and hide behind the 'verify if crucial' disclaimer. They don't handle multiple offers correctly, don't handle "bump" situations correctly, don't adhere to deadlines, have no idea how long it takes to obtain financing, or inspect a house or what constitutes and actual defect and what to do about it. The sale is not reported to the MLS complicating appraisals for other sales. FSBOMadison does not show how long a property has been on the market nor does it show if any price reductions have been made along the way. Right now your 'cloud' shows a house on Keating as drawing a lot of attention. It is not readily apparent that that house was on the market last Spring for significantly less money, didn't sell then and how long it has been on the market this time. The other people who claim they are 'fair and balanced' aren't either.
You can't know how much Realtors do unless you are one. You are not. The number of under-priced FSBO houses does not match the number of over-priced houses. The number of houses that start out on FSBO and end up being sold by Realtors is not disclosed.
No attorney in their right mind would take on the problem cases on a flat fee basis. Flat Fees should only be for those cases that NEED NOTHING. Unfortunately, the players don't recognize they are problem children until much later, when it is too late.
What is your agenda?
Yes the market is different now and adding flat fee services is a reflection of that. But there are still tons of FSBO sales and less than a quarter of FSBO Madison sellers opt for flat fee because they don't need it.
We never suggest hiring an attorney by the hour. There are many that charge $500 to $800 turnkey. How much does your typical listing agent cost?
What's misleading about FSBO Madison's traffic stats?
Why do you hide behind "Laud" an "other/just looking" when you're obviously a "professional" with an agenda? Who are you?
I had some contact with a bankruptcy attorney several years ago, Kenneth J. Doran, who impressed me as an honest person. You might want to Google him.
The New York Times article you refer to is not even yesterdays news. Or last year. Or the year before.
Things are different now and the fact that you have morphed FSBOMadison into a Flat Fee operation is proof. Apparently so many of those "FSBO" people were getting their deals done by Realtors it only made sense to go to the MLS. The hand that feeds you...
Carefully avoid the statistic about how many 'pure FSBO' deals there as opposed to how many Realtor/FSBO deals there are. Many, many Flat Fee/FSBO sellers are so woefully uninformed that the Buyer's Agents earn their 3% and more. From basic disclosures to proper handling of the forms, these Sellers create work and problems; hiring an Attorney by the hour is no subsitute for a Realtor.
Tout the stat about how many hits your site gets and compare that to the MLS. Even cursory examination would reveal that to misleading. There are some people for whom selling their property themselves makes sense both in terms of competence and money. This is not one of those cases.
Why is it that some states Realtor fees average 4%? With the recession, I would think that Realtor companies would want as much of the business as possible. I am sure the Realtors are having money problems as well as the sellers that are losing all their equity in their homes because of the housing market. We are also competing with the relocation people that their companies end up buying their homes and selling them way under market price, as well as the short sales and foreclosures. If 90% of buyers find homes on the internet, then all the Open houses, newspaper ads, etc. are not nearly as effective as having good pictures on all the MLS websites. For a 2% reduction in the fee, which would amount to $12,000 for me, the owner, I would be willing to take my chances. I have read on your blogs that 90% of homes sold aren't not by sold by the listing agent. For someone in our situation, $36,000 on Realtor fees is a huge deal!
Does the recession not effect Realtors too?
You will have a much better chance of negotiating fees with an Independent Broker. If you use the large companies such as C21 or Coldwell they have less room to lower their fees. The Francise companies have a higher marketing costs because they spend more on TV and newspaper ads. As we all know newspaper ads don't sell houses. Today the internet alows your home to be everywhere as long as it is listed in the MLS. If you want to use an Broker to sell your home Google discount brokers in your area and compare prices and services by calling some of the Brokers in your area.
One of the answers already suggested a short sale if you have no equity left. The HAFA progam even gives you money to move out when you complete the short sale.
Chad Basinger, REALTOR®, CPA, CFP®
Feel free to call me at 608-235-0431 or email me at firstname.lastname@example.org. I hope to talk to you soon, Judy Braund, Keller Williams Realty
You can ask a realtor to negotiate their commission or you can try to sell on your own but in your situation, I would not recommend either. Remeber the old saying, "you get what you pay for"? It is VERY TRUE when it comes to real estate. These days the real estate market is so complicated and you need a full time, full service real estate professional to assist you. If an agent cuts their commission they will need to cut their service and you need everything an agent has, to get your home sold quickly. It sounds like you could use some legal advice also and an agent can give you some direction as to professionals who can help you.
To list on your own is never a good idea. The paper work alone can be staggering not to mention having strangers coming into your home without a real estate professional can be an unsafe situation.
Please give us a call if you would like to discuss your situation or if you would like to have a free market analysis on your home.. (608-770-1140)
Donna Hermsen & Dan O'Brien
Please check out the attached link from my website for more info about short sales.
Hope this helps!
Jen Stauter, Stark Company, Realtors
If you're in Madison and you haven't tried FSBO Madison http://(www.fsbomadison.com) you really should. The site gets a gaudy amount of traffic. If you want to list in the MLS we do that, too, and your total commission would be less than 4% easily.
"By owner" and flat fee MLS are both very popular in Madison. Google around a bit, you'll see.
Is that who you want to handle this extraordinarily important sale for you? Would it make more sense to hire the best, most experienced, successful Realtor who will get the job done rather than try to save you some small portion of your expenses?
20 Per Cent of the Realtors sell 80 Per Cent of the houses You can pick from the 20 or you can pick from the 80.
Sounds to me like you might be better off taking some straightforward, no-holds-barred advice from someone who can get you where you absolutely must be: sold.
Why get someone who can't even negotiate their paycheck good enough to keep you from taking a third of their income before they even start?
The math works like this: The average listing commission in Blackhawk is 6%. Split 50/50 between the Listing Agent and the Buyer Agent. Even the flat fee listers do that and so do the vast majority of the FSBO sellers. So figure that 3% is inevitable. So what you are really asking is "How can I hire a listing agent for less than 3%?
What would be enough? 2%? 1%? The good ones don't need to cut their commission and the rest don't matter. This will be the biggest sale of your life and you want to cut corners? HUH?
You have a short sale just waiting to happen. You definitely DON'T WANT someone who doesn't clearly know exactly what they are doing to handle this transaction. Too much risk, too much work to handle your problem and not get paid enough.
Just listing your house isn't enough. You need help. Competent, experienced, no nonsense help.