The reality is that you can find a broker who will charge you $500 flat fee to list your property, all the way to charging you a full 6%. And you usually, but not always, get what you pay for. I recently sold a 2 br/2ba condo investment in SF. I was going to use a discount broker, but in the end used the hardest working realtor I have ever seen, and I am 110% confident that she obtained a net return higher than the 'savings' from selling it on my own. Our condo set the record in our complex. That said, my family and an extensive network of colleagues have invested in real estate for 30 years, and it is reasonable in certain circumstances to ask for a double deal agreement like you've described. I've seen it done. It is more reasonable though to agree to 5% listing for the sale of your condo (2.5% to the listing broker, 2.5% to the buying broker), and then to get a 1% credit back on the purchase of your next home. Then the agent is sure to get both transactions and the possibility of earning 4.5%. It is much more common when the realtor will likely get a lot of transactions from you and/or knows that they are virtually guaranteed to get a return on all their hard work. And/or that you are otherwise a great client to work with and not just pinching pennies but driving towards a true mutually beneficial agreement and relationship.
In your specific case, I would not recommend this route. You are moving to a new city, and your SF selling broker simply won't have the expertise or the experience in Marin to provide you with the best service. Your 'savings' on the buying commission could easily be overshadowed by over paying for a home in Marin because your agent didn't have the experience to best advise you on making the right offer.
Right now with this post-subprime market, use a great SF realtor who can attract the most qualified buyers. Then ask for recommendations for the best realtor in Marin.
People don't go to their doctor and ask him to cut his fees for surgery, they don't go to the dentist and ask for a deal on a root canal, they don't go to the auto mechanic and ask for a deal on their brake job, but realtors should always cut their fees. I don't get it. Maybe I'm cranky today because we have all been evacuated around here due to the fires. Those of us who haven't lost our homes, know dozens who have- so maybe I am a nasty crank today........
Good luck on selling your home. You'll do much better by using a PROFESSIONAL realtor who can get the job done- especailly in today's market.
I guess what comes to mind are two items; Do you shop at a discourt thrift store for the most important outfit of your life? Well then why would you expect discourt thrift store prices for the most important / largest investments of your life?
Second: What type of a Realtor do you think is going to work for this amount of money? None of the large, well respected WELL INSURED Brokers would allow their Agents to agree to a 3% commision? Forget it.
This is important - hire a professional that will be happy to work hard for you and negotiate the best possible deal, protect you from future legal concerns and find you the best possibe local Realtor in Marin.
I want to give you an example of a breakdown on commission. This is an example based on 6% commission for 100,000 piece of property just for the sake of keeping it simple.
Split between agents
Listing Agents Broker 3% or 3000.00
Buyer Agents Broker 3% or 3000.00
Listing Agents Split with listing broker
65% to Agent 1950.00
35% to Broker 1050.00
Out of the 1950.00 that the agent gets, they deduct all advertising and marketing costs and pay taxes for self-employment.
They would need to put at least 500.00 back for taxes and in a 4 month period would be likely to spend 500.00 on marketing and it could be much more than that. Running an open house ad is about $50.00. How many open houses do you think you might run in 4 months of marketing.?
I hope this breakdown help you see how taking a 1.5% listing could actually cost the listing agent money. They would have no advertising or marketing budget at all! They would have nothing to invite a buyers agent to bring a buyer to the property. Good luck. Carrie
First, the commission that the listing agent will receive is not 5/6 % but normally 1/2 of that. So, you are asking the listing agent who would list for say 2.5% (1/2 of 5%) to take a 60% cut in commission to sell your home at 1.5%. Additionally, the agent has a split with the brokerage so maybe the agent will only receive gross 1.12% of the selling price before taxes and expenses.
Second, most professional real estate firms will not take a listing for 1.5% (total of 3%).
Lastly, in our market here in Southern CA, if the seller will not offer out to the buyer agent at least 3%, then most likely the property will not get shown.
Have a professional realtor explain, belly to belly, why you should pay a 6% commission and how that actually helps you acheive your goals.
Quality Service, Knowledge, Experience and getting a good or top dollar price for you properties, what is that worth to you?
Again as Annette said What type of Realtor are you looking for? As I recall those 2 to 4% commission realtors went out of business due to the over 10,000 lawsuits against them their inexperience, and lack of knowledge in this, One of the most important and valuable assets in one's life.
I can respect the fact you need to get the most value out of your home and with that in mind I might suggest that you offer top commission and if the Realtor you choose both lists and sells your property you can ask for a 1% discount that would be a fair offer as I see it.
I do you wish you all the best and hope things work out for you.
You can ask for whatever you want, and comissions (like just about everything else) are negotiable. However, you need to know that the agent cannot decide this on his//her own. It is the Broker who decides, and many firms have staunch policies against this.
It is also correct that in many cases reduced fees mean reduced services, but not always. There are firms like ours, who offer full service and lower rates. However, with as much money as there is on the line, you should be more concerned with how good your representative is. Cost should not be your primary consideration.
Lance King/Managing Broker
You need to understand that your agent receives two benefits from your listing.
The First is, of course, the possibility of making a commission, which seems pretty straightforward.
The second agent benefit is that the act of marketing your listing frequently attracts new clients for your agent. This benefit is a bit less straightforward, but can be highly profitable, even if your house never sells.
Buyers often call listing agents based yard signs, and internet ads. These are some of the best phone leads an agent can get because almost all of these buyers are just starting the buying process. If they had their own agents, these buyers would call those agents. But, because many are just starting out, they probably will not buy your home until they have seen a number of other homes, which your agent hopes to show them. If, for example, a buyer sees ten homes before making a choice, then, all else being equal, there is a one-in-ten chance the buyer will chose your home. Whether the buyer chooses your home or another, the real estate agent who works for this buyer gets the buy-side commission.
So you have to ask yourself if a low-commission agent will work harder at selling your home or obtaining buy-side commissions, which will be higher than a reduced commission you are offering. If the agent is motivated by the buy-side commissions, then actually selling your home may not get much attention.
Unfortunately, the only way you will know if any agent is really motivated to sell your home quickly is to hire the agent and see how he or she performs. If the agent spends time and money really trying to get your home sold, then you probably have found an agent who puts your best interests first. Such agents want to sell quickly because it benefits you and because longer listing periods cost more time and money, which reduces profits.
Because a seller never really knows how hard an agent will work until the house is listed, I always suggest that sellers insist on an escape clause in the contract. This should let you out of the agreement within a few days of written notice unless the agent has already accomplished his/her job of finding a buyer. (I put this clause in all my contracts.)
I hope this helps.
Prudential Real Estate of the Rockies
An agent licensed in California can sell you property anywhere in the State. What are the guarantees that you will find a property you wish to purchase or that you will qualify to purchase that property after your property has sold?
What you really need is an agent who works in your area and has a great marketing plan. That can save you money in the long run. Your property should sell quicker and at a higher price if your agent knows his/her business.
Best of luck to you!
I understand your desire of wanting to offer lower commission so that you can get what you perceived as a good deal on your transaction - at least you think you are going to save something from the get go.
I have to say that your priority is wrong by looking only at the commission.
My assumption is that what you really want is the overall maximum profit on your sale and the house that meets and exceeds you needs and wants at the best price on your purchase.
So, what you really want is a full service Realtor who can offer the best service to you from both ends:
On the sales side - help you get your condo to the tip-top condition for sale, price your home correctly, do full out marketing for your home, negotiate on your behalf, help you each step of the way during escrow process; until close of escrow
On the purchase side, help you find the right property that meets or exceeds your needs and wants (physical attributes, community, location, school, commute, recreation, environment, much more), at the right place, negotiate for the best price. Also help you inspect the house, find the red flags, negotiate again for any possible repairs, help you throughout the escrow process.
At the same time, they need to be able to advise you on how to time and carry out the sale and purchase of your properties at this stressful time.
There is so much to what we offer. The net effect for years to come can be much more than the simple percentage you are so concerned about.
My newest listing is from a seller who met me at my open house (closing next week); we chat about discount brokers and their service (he did his own research also), told me that they really liked what I do but decided theyâ€™d go with their close, close, friend who offered a discount on commission. They ended up cancelling the contract, are now with me and extremely happy with what I am doing for them. The commission was hardly brought up.
BTW, my company is located in both S.F. and Marin and, of course, I would love to help you. Maybe the first thing you should do is to interview the Realtor on what he/she can do for you before asking what they will do with the commission.
Please keep in mind that most realtors are highly trained high-minded professionals. Would you ask your doctor or any other professional to cut his/her fees? Would you cut yours?
If you allow your realtor to represent you and protect you in your next purchase, she will be paid by the seller. Yes, she will make more money, in the next 4-way split but she is working for you and deserves to be paid his/her full commission.
Best of luck with your sale and move.