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Seller, Home Seller in Northshore, Houston,...

Please, Please, Please - I mean no disrespect but could someone please tell me what a realtor can do for me

Asked by Seller, Northshore, Houston, TX Thu Nov 22, 2007

as a home seller that I can not do for myself. I'm really trying to wrap my mind around this 5-6% commission vs. $349 listing price at entryonly.com . What am I missing here?

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Deborah: I do formally RETRACT my statement regarding "all realtors boycotting FSBOs). It was incorrect of me to generalize in that way, you are correct in asking that I not lump you or other well meaning realtors into that statement. Thank you for your candor, I may just call you directly about how to evaluate one realtor vs. another in terms of how to chose the best realtor for our situation. From your ability to remain neutral and engage in discussion - I wish you worked in Massachusetts:) Regards
3 votes Thank Flag Link Sat Nov 24, 2007
Seller- As a non-professional, I avoid FSBO homes when I look. It makes me uneasy to think of buying from a private seller who doesn't have all of the information that they need. Many FSBOs don't even want the buyer to be represented by a Realtor and that is a big turnoff. We're talking about hundreds of thousands of dollars here and I'm not going to gamble that kind of money. I'll rely on a professional to help me. I'm pretty sure that FSBO's lose a lot of potential buyers for these same reasons.

I don't have a problem with a Realtor getting such a large payment because I know that they're working extremely hard. Just be careful who you chose. This site is great because you can see which Realtors are knowledgeable by the way that they answer the questions.

Personally, I wouldn't think of buying or selling without a Realtor because the legal and financial risk is to great to try to make uneducated choices. The balance is that you don't just blindly trust anyone with such a big investment - do your own research and stay informed.
2 votes Thank Flag Link Sat Nov 24, 2007
Deborah....I enjoy reading your answers and can see that your probably one of the best on this site to answer any Realestate question posed. Only advise I have is to shorten up the answers a bit.....they tend to go on.


Keep up the great work and Answers!
2 votes Thank Flag Link Sat Nov 24, 2007
In the last year, I sold a house using an agent the typical way, standard 6% split between the listing and buyer's agent, which on a $300K house comes out to $9K each. I watched very closely what the agent did for me, and I have to say that it didn't seem like very much to justify that kind of a commision. MLS listing, some flyers, some little tips on how to paint the place and spruce it up.......good stuff, but definately nothing that I couldn't have done myself.

So when I wanted to sell my rental a couple of months later, I went the FSBO route. My house sold FASTER going the FSBO route, and I wound up saving at least $6K. I was able to give the buyer a little extra in closing costs because I wasn't paying the commision.

What astonished me though, was the angry and defensive reactions that I got from some real estate folks who I've talked to since. I got alot of comments about being "cheap", and heard "you get what you pay for" with a certain bitterness that was shocking. You get what you pay for, indeed....I basically paid myself $6K.

Interestingly, I got EXACTLY the same reaction when I mentioned to a jewler that I had bought my fiance's diamond on-line. So I got a BIGGER diamond for a LOWER price, and somehow that's a BAD thing?

I think that it is a reaction to the fact that the days of inflated commisions are coming to an end, and the internet is the catalyst which is bringing this change about. It is changing the way cars, jewelry, housing, and all sorts of consumer goods are advertised and sold. And for those of us who are willing to do a little of the research and work ourselves, there are big savings to be had.
2 votes Thank Flag Link Sat Nov 24, 2007
Hi Confused,

Your position of wanting to walk away w/ as much as possible in your pocket is and should be your goal. And, yes, 25K is a lot of money. I don't blame anyone for wanting to know that the investment in a Realtor fee is going to bring them value. You are saying that you will hire a Realtor for full service if it makes sense. At least that is what I thought I heard/read.

Your question is where and how do you find this stellar Realtor; or even a few to choose from. First, I will say that the mere fact that a Realtor has a lot of listings is not a guarantee that the Realtor will work hard for you. Sometimes a hungrier agent, especially one w/ a great coach/manger or mentor, will work harder for you and in the right direction.

If you don't come up w/ the names of a few prospective Realtors by referral through friends and neighbors, make your own longer list of 'possible' agents. Google you area and see what names appear for real estate. Go through lisitngs sites such as Trulia, Realtor.com, etc. and find agents who have listings similar to yours. Look at how the Realtor handled that listing. On a site like Realtor.com, all agent listings are auto loaded from the MLS (with rare exception.) Some agents go in and customize the presentation, including yellow banners, additoinal full length text, etc. Go on to CraigsList and find which agents are listing properties there for sale. Check out a few of the sites that have fewer listings.

There are several educational forums and designations for agents. Those that pursue these are often quite serious about their commitment to real estate. In my prior post, I suggested you go on the http://www.CRS.com. It's simply one source to begin your search.

When you are hiring a Realtor, you are in effect, hiring a temporay employee to handle a sales and mangement task. Applying the same methods that a recruiter might use to find a suitable candidate, do some reserach to come up with a list. Call the individuals on this list and have a phone conversation w/ them. Realize that this will have the more aggressvie/assertive ones contacting you back over and over again in the quest for an appt. During your initial phone conversations, simply explain that you will invite 3 or perhaps even 4 Realtors to come look at your home and prepare a CMA and marketing proposal. However, your only purpose in the phone conversation is to get an idea of why they are good sellers' agents. Ask them to explain if they are full service, and briefly explain how they handle full service marketing.

If I received a call like this, I would tell the seller that I wouldnt' know my recommendations for their specific property without looking at the property. I would also explain that my company and I have the ability to do virtual tours, videos, floor plans, single property sites, and that we actively post and ck for accuracy on 30 plus websites. I may or may not recommend a virtual tour for your property, but we certainly have the ability to create good ones, and know how to expose them by including the links for the tours, distributing CD's. etc. I would offer to email you links to Single Property Sites and Virtual Tours.

I am not in your area, and this is not a solicitation for your lisitng. I simply provided the above for an example. From a phone discussion, you should be able to narrow your list to a 3; and if you find several excellent ones, perhaps 4 Realtors to meet in person.

Hope this helps.

I did read your comment about not talking about how the commission is divided up. Also, I read your comment about "have to come out of the transaction with enough $$." And, here are my comments on these.

Sellers often do not know that the Realtor is only getting a portion of that pie. Many times, consumers think that the Realtor has that 25K to work with, and it isn't so. Realtors aren't meaning to whine or complain when they explain that. Realtors want you to know, so you don't have unrealistic expectations based on false assumptions.

Your other comment about "have to come out of the transaction with enough $$." The very best Realtor who gives it 120% can't make your property worth more than it is. That Realtor can get the best for you that your property is going to get in any given market, and protect, advise, and stand by you. But, the best REaltor in the world can't force a market to perform differently than the market is. If any of us figured that out, we'd be worldwide instant legends. :-) Perhaps what you are hoping to achieve is closely aligned to what the market will bring you. Best to you, you do sound like a nice person.

Deborah
2 votes Thank Flag Link Fri Nov 23, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
I'll begin by asking you what you can do to get your home sold, yourself? Read the different threads here, there are many describing what we do as realtors. To pick out one thing, we have a network of people (other agents) who have buyers. Do you?
2 votes Thank Flag Link Fri Nov 23, 2007
HI Ed,
I do agree with you that for some property owners, they can sell on their own and do it well. What I also know is that I have spoken w/ a good handful of sellers who completed their transaction and think they did well when, in fact, the buyer got a great deal at the seller expense. There are a lot of stories of, "I saved X in commisison." Sometimes the savings was more than offset by the losses that the seller absorbed, and yet the seller does not even know it. When I have seen this happen, there is no sense in me rubbing their face in it; it's done. I simply say nothing.

I am not saying that the above applies to you. I am saying that it is often more dangerous to think one knows what they are doing.

I had a seller call me the other day and explain his plan for sellling and buying. On both sides, he is clearly setting himself up for a savvy buyer or Buyer Agent to gain a tremendous advantage. The fact is, he has no idea. The more he boasted to me about his plans; the more I realized he was really not prepared. The more he spoke, the more he boasted about how much he knew.

On some Trulia post once, I read a RE Pro respond to a FSBO that he was the type she could eat for lunch. While I would never say that, or think in those exact terms, I do take my responsibiity seriously to get the best deal for my buyer. While I will be fair to a FSBO in my dealings, I will also not be thier representative, and will be working in the best interest for my buyer.

I have also represented my last 4 out of 5 sellers in multiple offer scenarios. Those resulted purely and completely from stirring up prior buyer visits about current interest or possible offer coming in. In these instances......every one......we drove the seller price UP as a result. This is something that only a third party can effect.

Bottom line......

1) A FSBO who thinks they know what they are doing, but does not, is vulnerable to selling for less $$ and weaker terms, purely because an attitude of thinking they know will get in their own way.

2) A FSBO does not ever know if they would have sold for higher or better had they used a Realtor and had aggressive and full market exposure. The landing of a contract does not mean that that a better contract was not out there. I have been in this biz too long to know how many times a property sold for more than expected,.....even in this market!

3) Saving of "X" commission is irrelevant if offset by loss.

4) How does one measure liability and risk? I wouldn't be without car insurance, floor insurance, hurricane insurance, umbrella insurance, E&O insurance, and I wouldn't go without having an attorney on retainer for my company. For many sellers, their home is their single largest financial asset. If I counted how many $$$ I spent on insurance, attorney review of documents, account reveiws/advice, attorney advice over the last 10 years, those $$$$ would be off the map. I would pay them again, even though I never got any "benefit" because minimizing the liability risk was well worth it. I could list 20 examples of things an attorney would not know about to advise a client becase the attonrey did not go to the property. An attny can only advise when he/she knows of any issue. There are many times a Realtor's visit to a property, or knowledge of an area is the trigger to questions and disclsoures that protect a seller.

5) Yes, there are times when a seller can sell successfully on their own and do it well. In most cases, most sellers are far better off w/ representation.

Deborah
1 vote Thank Flag Link Sun Nov 25, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
Seller,
I have put off answering this question several times and keep coming back to it. It looks like there has been a lot of activity to your question. Most of it seems to be really good. I want to address the FSBO perception. I got my start in the business working with FSBO's when it was a seller's market. There are so many sellers that have great success in selling on their own. There are others who think they are doing everything right, and can't seem to get the job done. In frustration they will call a realtor to list their property.
I set an appt to see every FSBO that is available in my area. Most of them are willing to show their property and work with an agent. You would be surprised about the ones who will not work with an agent and are down right rude when you call. This will turn many agents off and they will quit calling FSBO's. I want to see these FSBO's for 2 reasons.
1) If I am working with a buyer, you are right, they do ask about the FSBO's. I want to be the agent that knows my whole market. I want to be able to spit out details on the home they ask about. ie. it has 3 bedrooms, brick pavers in the kitchen, wood floors in the dens, etc.
2) I want to establish a relationship with the seller. If they should decide to list with an agent, all I want is to be able to interview for the position.
There are a lot of agents that have great reputation with FSBO's. There are a lot of FSBO's that use their time as FSBO to see who the agents are that are willing to work. They get to ask about their marketing plans etc, and the agents come to them. Not a bad idea from that aspect.
1 vote Thank Flag Link Sat Nov 24, 2007
Sylvia: Thank you for your lengthy and thoughtful answers as well, if we find we need to go the FSBO - I certainly expect to offer a buyer broker commission (3% or more). I would welcome a buyer in whatever form they come. I've already had agents through when they saw the listing expire to see if it would work for their client. These previews never amounted to anything but I was happy to show them because my goal is to get the house sold. I've interviewed TONS of realors and the presentations are essentially the same.
1 vote Thank Flag Link Sat Nov 24, 2007
Deborah: I continue to mean no disrespect with my questions. I am only trying to get educated. Healthy debate does not mean disrespect or that I am trying to be argumentative. I am a very nice person:) Remember in an earlier post, I said that I have 3 small children, no time for a FSBO but I want to make the right decision. I do not intend to make that decision blindly so I've challenged this group to answer my questions that is all. I consider myself cautious and financially conservative. My husband and I have credit scores north of 800 each - we got there by making very calculated decisions about where we spend our money and never extending ourselves beyond out means. With the birth of our newest, we have found it desireable to consider selling our house. We have found a house that we would like to buy but need to sell ours first. Now all that being said, we have to get enough money to put the next house in reach. If you have children (or know someone who does) you can imagine how daunting a task it will be to move a family that consists of 3 children under the age of 5 - I want to do this ONCE, so I'm planning to do it right.

We had our house listed with an agent for 6 months. This agent was a "yes" agent for sure. She was family so I HAD to use her. I will incur family drama far beyond what you can imagine if I list with someone else, so I want to make sure the decision is worth if from both the financial and drama standpoint that will come along with it.

I apologize if I have offended anyone - but check William's post - he brought up boycotts NOT ME. I have heard this as Urban legend and it seemed to me that William was confirming it with his "if you don't want to be boycotted" message. Your profession has a general perception problem. I spent 6 years as lead recruiter for the largest law firm in Boston - perception is reality.
1 vote Thank Flag Link Sat Nov 24, 2007
Hi Keith,

Thought I'd share this here too. Based on your stats:

For a home that lists for 400K:

Limited service = $380,800 (95.2 list price) - $11424 (3% buyers commission) = $369,375 net
MLS Only = $391,600 (97.9% list price) - $11748 (3% buyers commission) = $379,852 net
Full Service = $389,200 (97.3% list price) - $23352 (6% buyers + sellers commission) = $365,848 net

If you look at it this way, best net profit (money in my pocket) goes to the MLS only and limited service! An average of $15K more with MLS only! Full service puts the least amt in my pocket based on your numbers!

...

Confused - to answer your question - what you're missing is that you will need to do all the advertising, marketing, media, open houses, etc. etc that a realtor would normally do. You need a deep understanding of the process, the time to learn & prepare marketing materials & field calls & arrange showings & set up advertisements. Good realtors really do alot of work - if you don't know what needs to be done (and don't care to find out) ... if you won't do the work or don't have the time to invest ... if you want to sell quickly ... if you don't can't deal with your home being boycotted because you're a FSBO ... then you need to hire a good realtor and pay the commission - especially in this market!
1 vote Thank Flag Link Fri Nov 23, 2007
Confused,

I just read your post and I will apologize to you. My comment wasn't meant to be a personal attack or assumption to you and how you would treat a Realtor. It was a general statement made because most posters on this excellent site, post questions like yours only to enter into endless and useless debates over the most insignificant of things. You've got some excellent answers posted here by the other Realtors and you will do well by listening to them.

I guess in the end, my point to ANYONE posting about this subject is... don't become MONEY BLINDED. If it is ALL about the money to you...then it's going to be alot harder to believe that an agent's job is worth every penny. But if you are a seller whom believes in the power of relationships and leverage... you will be the happiest seller ever once you've found a fantastic agent.

Hope that clears up my first "generally rude" post.
Web Reference: http://www.exposedhomes.com
1 vote Thank Flag Link Fri Nov 23, 2007
Ok, so I truly do appreciate all the advice. How then do I find that amazing agent who is going to earn every penny of the sizable commission (close to 25,000.00). It is hard for a soon-to-be seller to find info on the success rate of individual realtors. I have 3 small children so I really WANT to be convinced that a realtor is the best course of action for my family - I do not want to sell on my own but I also have to come out of the transaction with enough $$ to get into what we want to get into. It is in the end a numbers game and my objective is to walk away with as much $$ in my pocket as possible.

Please no responses about how that commision gets carved up and you only get a few thousand dollars...that is the business and presumbably you knew that when you got into it.

Please, I do respect the thoughtful answers. What is not helpful (and frankly perpetuated the image of realtors that you don't want) is posts which refer to me as "ridiculously argumentative" or "crazy".
1 vote Thank Flag Link Fri Nov 23, 2007
Confused:
I appreciate your comment, "no disrespect" because I feel that Realtors tend to be far more defensive than educating. There are a multitude of reasons why and many of them have been debated here on Trulia. Search FSBO, discount, flat rate, etc and read the hundreds of posts. For me, what I have learned over the past several months as a FSBO debating with the professionals here include:

1) Networking. A FSBO can promote to agents, but they do not have the relationship with them. A Realtor can use their networking past to find you a buyer sooner. That not only includes working with other Realtors but also their past clients. i.e. "Congrat's Sally on the birth of your twins. I bet you are ready to move to a bigger house since I sold you yours 5 years ago? I just saw this house that I thought would be perfect for you."

2) Objectivity. A couple of enlightening threads here included, "can a homeowner be present at showings?" and "should a Realtor represent himself for his own home?" Sorry but Trulia's search capabilities are still very weak, otherwise I would try and find the links for you. But to summarize, a flat rate listing usually means that the homeowner is present and representing himself, not a good scenario.

3) Interpreting the data. There is so much information available these days, that a homeowner can gather data and learn the ropes quite quickly and knowledgeably. The problem lies in the fact that they can't pick up the nuances and lessons learned through years of experience. As you said, "maybe I have just not come across that "go-getter" yet." Unfortunately, I think that is where us FSBOs have the problem trying to "wrap my mind around this 5-6% commission vs. $349." Paying an exceptional Realtor 5-7% is well worth the money for everything they do and all the experience they bring to the table. But a lazy, lousy agent is just like what Brian said, "You get what you pay for." You haven't paid them anything and your home doesn't get sold. At least with the $349 listing, you know exactly what you are getting for your money. You are getting your home listed in the MLS for $349 and that is it!

So Confused, what you need to do, is find out exactly what you are getting for your x% of commission. Make sure you know what the marketing plan is, the agent's experience and network, negotiating and customer service skills. Every agent is going to bring something different to the table. Find the one who is worth their weight in gold so that after you pay them their commission, you feel so obligated that they saved you so much more money that you beg everyone you know to use that agent too.

I really like this post a few minutes ago where Lorie stated, "The National Association of Realtors predicts that 40% of agents will not renew their licenses next year." This seller sounds like the $349 may have been worth more than the 7% commission. http://www.trulia.com/voices/Home_Selling/Is_the_realtor_res…

But then you have this seller who went with the discount agency and had their difficulties too:
http://www.trulia.com/voices/Home_Selling/Please_give_me_you…
and there are many others.

My question, "When NOT to use a Realtor" was more along the reverse psychology and I think the answers have a different tone than the usual, "Should I go FSBO or agent?" Take a look:
http://www.trulia.com/voices/Home_Selling/When_should_a_home…

Good luck,
Ruth
1 vote Thank Flag Link Fri Nov 23, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
I got in this thread late, but i wanted to emphasise that a Realtor is likely to bring a buyer for your home, even if you sell it FSBO. The listing agent should have the skills to get you comprehensive internet exposure, consult on staging your home for the market and pricing it right. Since your listing agent will be marketing to Realtors, they are more likely to show your house. Given 2 equal properties, one listed and one a FSBO, an agent is usually more likely to show the listed property. To agents, FSBOs mean doing all the seller side work + representing a buyer, or twice the work for the compensation they receive.
1 vote Thank Flag Link Fri Nov 23, 2007
Hi Confused,
I certainly understand your confusion. Before I became a Realtor, I had no idea what really went on behind the scenes. I also became frustrated in my search for a good Realtor and was disappointed that a stellar agent was a challenge to find. ]

Today, I can tell you that I know many stellar Realtors, and yes, there is a bit of dead wood in between. :-( There are some excelent choices out there for representation that will make a difference in the result of your transaction.

When you hire a Realtor, you are hiring for marketing, secruing a contract, and representation through the closing that protects your position and best interest. You will rely upon your Realtor for receiving data, and more importantly, interpretation of the market (that comes with time and mileage), and advice, Marketing goes way beyond simply placing a listing in MLS.

I would sugget that you find 3 Realtors and ask them to provide you thier proposals on how they would market and repsresnt you. If you do not have 3 Realtors in mind; check http://www.crs.com. The Realtors here will have achieved advanced education and a volume of transactions. While I wouldn't limit your search to only CRS Realtors, it is a good place to source potential Realtors.
1 vote Thank Flag Link Fri Nov 23, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
Brian: Thank you for taking the time to respond - maybe I have just not come across that "go-getter" yet.
1 vote Thank Flag Link Thu Nov 22, 2007
As in everything, you get what you pay for. So many people have the misconception that REALTORS simply place a home on the multiple listing service and just let it works its magic. While service fees vary from office to office and market to market, you'll find differing service levels at different prices. For example, my fee includes a healthy listing marketing plan, full representation, tireless networking of the home, quantitative and qualitative analysis, liabillity risks, contract to close and a ton of other things that I'm getting too sleepy to list. It's amazing the number of home that are sold via relationships and marketing outside of the listing alone.

Ultimately, I understand your confusion on the matter. I kinda understood it all when I had a professional designer execute my wedding reception. I honestly could have had friends place flowers, lights and decorations and no one would have been the wiser. When the pro came in, I saw what he did and realized that every dime was worth it. In fact, I felt he deserved more...I felt guilty.

Ask around, find out reputations, and just interview a few to see what you find.
1 vote Thank Flag Link Thu Nov 22, 2007
Agents respond to this question with horror stories and scare tactics, and what they fail to mention is that all the scenarios they mention could and do happen with an agent involved.
0 votes Thank Flag Link Sun Jun 13, 2010
Ed, I commend you on your efforts. Yes, for some people this is a very good way to go. It does and can be a great way for many people. I have many friends that have done this on their own with great success. I have also seen many that have turned out badly. I knew one couple that completed the transaction, moved their stuff in and then, backed out of the deal after they were in the home 3 days. Why did they move cancel the deal. There was dirt around the vents, you know dust that blows out and gets on the walls because the intake filter needs to be changed. They claimed there was something wrong with the house that the sellers did not disclose. The seller did not put up a fight. They let them move out and started the process all over again. It took them 4 days to move out. The sellers now had a vacant house to sell and were paying somewhere else!

For every nightmare, there is a happy ending. I am glad you had a happy ending!
0 votes Thank Flag Link Sun Nov 25, 2007
Ed I never say never, and if it worked for you, I believe you. Of course, I have no idea what year you sold your house, what the market conditions were (how many homes were on the market), or where you live. Or for that part, if you really DID net more because you saved a commission. For my own part, after buying from a FSBO years ago, and hearing some of the stories from people I know who have bought FSBO, I would personally rather not deal directly with the ego attached to the house. Having been an agent for a long time and seeing the adversarial relationship that can develop between a buyer and seller (with both of them OBLIVIOUS to what they sound like to the other), I think it's best to have an arms length transaction.
0 votes Thank Flag Link Sun Nov 25, 2007
The question really is whether or not the services that the realtor provides worth the commission that they get. I think that the answer is undoubtedly "yes" in many cases for many people. Some people are not capable of doing market research, educating themselves on policies/procedures, and are not available to show their homes off. I think that it is definately true that these folks need a realtor and that it is definately worth it to them.

However, in my case, it wasn't worth it, and I was successful in selling my house in a timely manner for the money that I wanted to get for it. I did the bare-bones internet listing in a market that was pretty slow at the time.

Is there any "Real Estate Pro" out there who will agree that it MIGHT make sense to sell your house this way? Or that it is at least sometimes a good option, given the big savings to the seller? After all, it worked for me, right?
0 votes Thank Flag Link Sun Nov 25, 2007
You need to read the book Freakonomics were this question addressed. It is an interesting book on many topics but in terms of real estate the thesis is basically people use real estate agents out of fear--fear that the house will not sell or fear that it will not be priced correctly. In the age of the internet, however, the knowledge gap between what an agent can offer and what you can find on your own has shrunk that in many cases it simply does not make any economic sense to use a real estate. Anyone can search for homes online without an agent.
~~~~~~~~~~~~~~~~
Is that all you think is involved? A web search?
0 votes Thank Flag Link Sat Nov 24, 2007
I will tell you first of all I am a realtor who has been in the business for about 14 years. What sellers do not realize is that when you go with a lower commission, like the one you mentioned for $349 listing price is "you get what you pay for". A good agent who knows the business will take the stress out of selling.... Making sure your needs are taking care of .... preparing a market analysis of the homes in your area, getting more exposure of your house advertised in local papers, the internet and in the mls system, which is where the percentage of showings come from. Once you are listed in the mls system and most buyers are already working with an agent, they are then sent to their email automatically your new listing... The agent will then be with you from beginning to end, even when the offer comes in, there is alot involved. Which people do not realize. When you go with a lower commission, they are probabely only offering a certain amount of advertising (limited) and you will have to set up all the appointments, be there to hold your own open houses and etc. So I guess, it depends how much you want to be involved personally and how much time you have. People do not realize how hard Realtors work and how much you need to know, because every deal is different. The bottom line, is it worth to take a chance with your biggest investment, not really knowing the ins and outs and the real estate terminolgy, etc.
0 votes Thank Flag Link Sat Nov 24, 2007
You need to read the book Freakonomics were this question addressed. It is an interesting book on many topics but in terms of real estate the thesis is basically people use real estate agents out of fear--fear that the house will not sell or fear that it will not be priced correctly. In the age of the internet, however, the knowledge gap between what an agent can offer and what you can find on your own has shrunk that in many cases it simply does not make any economic sense to use a real estate. Anyone can search for homes online without an agent. Anyone can on now list a home in the MLS with an agent. Anyone can search for comparable properties or use site to compute fair market value.

You are not alone is questioning why a seller should pay 6% given this environment. Things are definitely changing--you can go with ziprealty and get 20% of the seller commission back or list yourself in the MLS online directly and keep all of the seller commission. The bottom line (and the book addresses this in several ways) is that people respond to incentives and for real estate price is king in terms of driving sales. There is also a discussion of how the interests of a real estate agent and the seller are not necessarily the same and to be mindful of that in terms of evaluating offers. It is a must read.
0 votes Thank Flag Link Sat Nov 24, 2007
Just don't stop with the advice Deborah!

;)

Hey, I'm new to this great site and I just posed a question ( Don't ask me where!) but I would love to hear your input.

Carl
0 votes Thank Flag Link Sat Nov 24, 2007
Thanks Carl, and you are right on your comment. If I re-read and edited, it would probably be better. I so often just type and never read what I wrote. The good news....it is straight from my head, heart and hands. The bad news....could be better organized and shorter. Thanks for your comments. :-) Deborah
0 votes Thank Flag Link Sat Nov 24, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
2 years ago I would agree with you since all you had to do was put a for sell sign printed on a paper plate out front and you would have 50 offers...today...whole new ball game!

So, how many foreclosures in your neighborhood? A Realtor would be able to tell you.....

Signed,
Fellow Buyer/Sellor
0 votes Thank Flag Link Sat Nov 24, 2007
Hi Seller:

Thank you for your nice note, I really appreciate that!!!

I am like Deborah, I refrain from asking or doing business with my own family just because they are the family. I also feel that if your family member is truly looking out for your best benefit, he/she should understand why you want to hire the best qualified Realtor for one of the most important financial transactions in your life - let the best win. .

By the way - my personal opinion - there is a reason why Deborah is the Top Voice on Trulia. She impressed me a long time ago. I saw another Thread asking how we choose the Realtors to refer to, Deborah will be my top choice for her area.

You are in good hands.

Sylvia
0 votes Thank Flag Link Sat Nov 24, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA
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Thanks!!!!!!!!! :-) Deborah
0 votes Thank Flag Link Sat Nov 24, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
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Hi Seller,
I had to list a family propery located out of state. A family member was a Realtor. I did not list w/ that family member. I interviewed 4 Realtors, and chose the best one. Since that transaction, I have referred that Realtor 4x. I do know it is very hard and awkward to list w/ someone outside of family. However, this is an important transaction and you should hire based upon talent, skill, commitment, and willingness to work hard. BTW, I have a personal inside track to high level recruitment of executive staff and I apply the same criteria to hiring Realtors as is applied to screenig process for permanent executive jobs. I have no direct referrals for you, but I am certainly willing to talk w/ you about this further. Feel free to contact me at anytime. My reasons have nothing to do w/ personal gain. It is only reflective of my little part that I do to try to raise the bar on the perception of Realtors.

Regards
Deborah
0 votes Thank Flag Link Sat Nov 24, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
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Hi Seller (and William, too.)

Seller......Yes, I still think you are a nice person who is simply trying to make sense of the options. I sense that you are willing to pay a Realtor for professional services and have high (and probably reasonable) expectiations. In your initial post, you indicated that you meant no disrespect. It was the post where you said...."I was waiting for someone to finally admit it - you all do in fact "boycott" FSBOs"

I don't think you are being argumentative, but I asked you to reconsider that statement. All Realtors do not boycott FSBOs.

Yes, I fully agree w/ you that there is definitely a perception problem with our profession. I have said it a number of times in life, and a number of times on this forum. I am saddened by that. Before I entered this industry, I didn't know how many really great Realtors there are. And, today, I can find them beause I have an inside track. I don't write the rules, but if I did, our industry would have far fewer Realors with substantially higher entry requirements, and substantially higher requirements to maintain an active license or membership. So, I really do understand your frustrations. And, I don't criticize you for having them. I do ask that you not make a statement that all Realtors boycott FSBOs, because it isn't true.

William, I read your posts and think you have already figured out that I was directing this to Seller. And, again, I still think Seller is a nice person simply looking for the best answer. I am not taking Seller comments or yours as "Realtor Bashing", but rather discussion. Discussion is good. Realtor bashing is bad. FSBO bashing is bad. Options are good. Understanding benefits and drawbacks, risks and rewards is gained through education and discussion.

Best Regards,
Deborah
0 votes Thank Flag Link Sat Nov 24, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
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Deborah - sorry, I read back over the thread and you weren't talking to me - JR got my handle messed up. Sorry!
0 votes Thank Flag Link Sat Nov 24, 2007
Seller - I'm not a realtor! And not all realtors boycott FSBOs (many realtors on Trulia seem happy to work with FSBOs ... but many also know or know of realtors who boycott or haze FSBOs. if you FSBO, you need to be prepared to handle it.

Deborah - read back over the thread, you have your handles mixed up (I did the really long post.) I didn't say all realtors boycott FSBOs - I mentioned that it is a consideration that you need to take into account if you FSBO. Some realtors do boycott FSBOs and this has been covered alot in other posts ... boycotting is real and needs to be a consideration if you FSBO, especially in this market!

Mark - that's a terrible cut-and-paste job dude!

Everyone else - IT WASN'T ME !!! Pls read back over the thread - you got the quotes mixed up! Stop beating me up !
0 votes Thank Flag Link Sat Nov 24, 2007
William wrote:
BEST ANSWER
William - I was waiting for someone to finally admit it - you all do in fact "boycott" FSBOs. What if your buyer sees a FSBO sign and asks you about it - what do you do, just pretend it does not exist or do you actively trash talk it?
~~~~~~~~~~~~~~
William, don't let your prejudice for a particular profession get the best ofyou. I have a FSBO right across the street from one of my listings, it's the best sales tool I have. My listing is 475,000 and the FSBO started out at 725,000, but has "readjusted" his price to 629,000. It's a very nice house, not a lot nicer than mylisting, and the man is very nice, too. He just "has to get". I tell everyone who comes to my listing "I'm sure you're wondering about the house across the street. It's a very nice home, I can show it to you if you want, it's $629,000...." it usually goes no farther than that unless they ask me why that house is 629 and mine is 475. What do you suggest I tell them then, WIlliam? He "has to get"' because he owes? He's saving 6%? What?
0 votes Thank Flag Link Sat Nov 24, 2007
Ed wrote
In the last year, I sold a house using an agent the typical way, standard 6% split between the listing and buyer's agent, which on a $300K house comes out to $9K each. I watched very closely what the agent did for me, and I have to say that it didn't seem like very much to justify that kind of a commision. MLS listing, some flyers, some little tips on how to paint the place and spruce it up.......good stuff, but definately nothing that I couldn't have done myself
~~~~~~~~~~~~~~~~~~~~
Ed, you have no idea what went on behind the scenes, the campaigning we do for you house with other agents, making sure it gets spoken about every chance we get, scheduling showings--especially for sellers who insist agent be there, or no lockbox, negotiations, contract writing, and the back and forth done between buyer, seller, attorneys, agents... you just see what is on the surface. If your agent made it look easy it's because you had a good agent. And your house did SELL, didn't it?
0 votes Thank Flag Link Sat Nov 24, 2007
Briefly,

I was trained to never let an opportunity pass u by. If a buyer wants to see a FSBO, I make contact and offer a buy-side commission, which most FSBO's are accutely aware of and agreeable to.

As to: "days of inflated commisions are coming to an end, and the internet is the catalyst " . . . you are seriously mistaken for two reasons (1) the market has produced sellers willing to RAISE the commission to get their homes sold and (2) survey after survey has showed that while 80% of buyers use the internet to begin their search, the marjority still use an agent to facilitate the sale.

Finally, with all the counterfeiting on the internet, you better get that diamond checked out!
0 votes Thank Flag Link Sat Nov 24, 2007
Hi,

I beg to differ w/ you. And, I hope that you will reconsider your post accusing all Realtors of "boycotting FSBO's" FSBO's actually get quite a few calls from Realtors who have buyer clients and I have seen quite a few post here and speak to that fact. Some FSBO's are quite receptive to Buyer Agent calls, while others are not.

When there is a large inventory of mulitple listed properties that meet the buyer needs, a FSBO can, indeed, be easily overlooked. That is not a matter of boycotting, but simply a matter of looking first at the properties that are owned by sellers who definitely want Buyer Agents to bring their clients.

If a Buyer requests info about a FSBO, most all Realtors will reach out on behalf of their buyer client.

When I have a buyer agency agreement with a buyer, I will actively source potential properties for that buyer by contacting expired listings, FSBO's and using network contacts for potential properties that might be available.

I preveiously posted that you seemed like a nice person. I found this latest post of yours to be an incorrect assumption and would sincerely appreciate an effort on your part to retract a blanket assumption that casts a negative on all Realtors.

I have never trashed a FSBO and can firmly attest that many other Realtors carry the same positon as myself. If you have been led to believe that all REaltors trash FSBOs, you have been misled. I would suggest that you evaluate the source of such information and question their credibility; since I can quite confidently guarantee you such is untrue.

Deborah

Deborah
0 votes Thank Flag Link Fri Nov 23, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
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Hello Seller:

I hope you did not see my boycotting FSBOs in my answer. Note that my answer actually says you should expect to pay at least 2.5% to 3% for your home as most likely a Realtor will bring a buyer to your home.

My job for my client is to find the best home for them. I actually will call FSBOs if I have the house is right for them, but a lot of FSBOs will say - principals only, agents do not call - that's when I refrain from calling them.

I think you will see most of the Realtors will try to find the best homes for their clients. We do get a bit weary when the seller is not represented and will ask you to sign something because we do not want to assume the liability for you just because we bring a buyer to you. I hope you don't blame us for being cautions that way.

And to be honest, being polite will only be good for our business - I actually have houses that don't work out for my clients but the owner eventually asked me to represent them and I did not actively pursue that.

Sylvia
0 votes Thank Flag Link Fri Nov 23, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA
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William - I was waiting for someone to finally admit it - you all do in fact "boycott" FSBOs. What if your buyer sees a FSBO sign and asks you about it - what do you do, just pretend it does not exist or do you actively trash talk it?
0 votes Thank Flag Link Fri Nov 23, 2007
Confused,
I just answered another question like yours. I do not blame for asking. So I think you need the facts.
Bear in mind this for my area. Yours might be different:
In the market areas I serve we currently have 3,200 active listings. We have over 3,000 active Realtors in the area. We sold 265 homes in October.
For the year 2007 so far, we have these additional stats related to your post:
MLS only Sold 25 homes. 22 listings expired.
Limited service Sold 16, 17 listings expired.
Full service sold 4,203 and 3,280 expired

List Price vs. Sale Price Ratio
MLS only 97.9%.
Limited service 95.2%
Subtotal 96.5
Full service 97.3
Days on Market
MLS only 122
Limited service 105
Full service 83

So summarize my findings, bear in mind that the MLS stats also conclusively show that homes that sell in the first 30 days have the best List Price to Sale Price ratio. The longer a home sits on the market, the less the seller will net.

So you have a couple of options:
If you have plenty of time, list with an MLS ONLY, bear in mind about have the time the listing won't sell
If you have plenty of money, go with limited service, over half the time the listing will not sell.
If you want the best net profit, in the shortest time, use a full service Realtor.

Good luck!
0 votes Thank Flag Link Fri Nov 23, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
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Hi Confused:

I have seen quite a few good answers from various Realtors to address your concerns. A full service, reputable Realtors does provide you with much more benefits than the commission dictates.

Even though you asked us not to mention the split of the commission, the one thing I want to point out is that what you will save is not the 5-6%, but 1/2 of that, because 'most likely' a Realtor will bring a buyer whether it's on a discount site or full service site. So you might want to think about maximum of 2.5% -3% saving if all things are equal.

Do not underestimate the marking, networking, professional advise, negotiation skills, knowledge base, experience level of the Realtor you will be working with. Some of those are not translable by pure figure. For each month earlier you can sell your house, it allows you to save the proceeds in the bank and draw interest from that; it also allows you to get your idea house much quicker (I see that you will be doing a purchase contingent upon sale of your home).

Your contingent offer will also be looked upon more favorably by the seller of your dream home (knowing how slow the market might be in different places, I would be hesitant to take my house off the market for somebody who is using a discount broker (or like Entryonly - loading onto certain online site only service). With the lending problems, I will be doubly worried about whether the sale of your house will close, with an inexperienced seller and limited service broker.

But all this is not going to change your mind if you can't look pass that pure number. I think if you are willing to find the best option for your sale and the purchase of your home, you do need to invest the time to find three good referrals, and interview them. It puzzles me why you would not want to do that. Interviewing agents do not shut you out from doing it yourself in the end if after talking to them, you really think you will do better.

Again, if I was you and when I call them; I will not first ask - what's your commission rate, and will you discount that? I will say, I got your name through a referral, and I heard that you are an excellent Realtor. I am interested in selling my house, will you come and give me a listing presentation and show me what you can do for me?

You need a Realtor who understands local market, tailors his/her marketing plan to your local area, has great network in the area, and somebody you meet, ,talk to, and feel that you can trust; that's when you can really make this work for you and get the most benefit out of the sale of your home.

But it is your house to sell, your home to purchase; if you are not willing to take that first step, we can only say so much as an outsider trying to look out for your best interest.

Best,
Sylvia
0 votes Thank Flag Link Fri Nov 23, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA
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Confused... I do not blame you for being confused. There is so much offered from flat fee like your entryonly.com to 7% with many options inbetween. I understand your need and desire to save money so let me see if I can shed some light for you.

There is a reason why flat fee companies have not taken over the marketplace. Statistic from our MLS shows us that these flat fee companies sell fewer homes than those listed represented by an agent and they sell for less than those represented by an agent so your desire to save money is not experienced and your frustration with doing it yourself is. Additionally, the frustration will go on longer because the homes that do sell with the flat fee companies take longer to sell than those represented. My opinion...These flat fee companies are laughing all the way to the bank. They get your money upfront with no guarantees and no help to you. A Realtor does not get paid until the results are in and you have closed.

Ruthless had some great points. She also quoted me from earlier. The National Association of Realtors predicts that 40% of agents will not renew their licenses next year. I feel this is the case because many agents have not adjusted to this market and quite honestly do not know how to help sellers sell their home in this market. Our industry just like the mortgage industry will get a good cleaning. With this being said, make sure that you are interviewing agents that are currently doing business and currently getting results. I have seen many agents this year drop in rankings because they are no longer producing. You need an agent that is producing results now because that tells you they have what it takes to survive and get your home sold. They will be well worth their fee.
0 votes Thank Flag Link Fri Nov 23, 2007
Confused,
You are missing what realtors do. It is so much more than just putting a listing in the mls. Our chief jobs for the seller are marketing and negotiation. We do the research to determine price, develop and impliment a marketing plan that should include alot more than just putting it in the mls, deal with potential buyers and their agents, protect your interests and give negotiation advice when an offer comes in, and take care of all of the details from contract to closing to make sure it is a sucessful transaction. In addition to all of the work your realtor does for you, the statistics show your chances of getting your home sold in a timely manner improve dramatically by using a realtor.
0 votes Thank Flag Link Fri Nov 23, 2007
Confused
I almost opted not to post, you've had a lot of information to digest. I do not know your market. If I were talking with you here is what we would cover:
1. Your situation. Where are your moving, why, when do you need to be there? I want to know how you could lose? If the market going up? going down? Where you are moving: going up or down? In most cases their are hidden costs that the average home owner is unaware.
2. What you need to net out of the sale. In most cases my experience has been that I can show a seller that I actually save them more than the amount of my comission in the marketing and negotiating process. My goal is the same as yours, so help you get the most net profit. You are concerned about the commission, I am concerned with protecting the other 90% Plus percent.
3. 90% of the time another Realtor brings the buyer that purchases your home, so you do not want to ignore them, right?
4. 90% of the time, the listing agent does not bring the buyer, so you really need to market to other Realtors. As a person selling on their own, you are not able to do so effectively. Of course, you could use an MLS only (limited service) broker. You'll be paying the buyer's agent their side, plus the fee to the MLS only broker, plus doing all your own marketing.

Question - who represents YOUR interests. You pay a flat fee to a MLS only broker, who advises you on how to get your home sold "for the highest net profit"? Not the MLS only broker. They never set foot in your house, and in most cases, do not know the market.

So, truthfully, you are a seller without professional representation. As I said initally, I don't know your situation. Usually time is money. Just as an example, you seem to think that 30 days is really not important. Would it have mattered on September 1, 2001? How about on September 1, 2007? The truth is, no one knows the future. No one foresaw the mortgage market hiccup coming, at least not the way and the severity it came.

I am dealing with clients now that, because they "did it on their own" saw their home's value drop 10-25%, even 35% below their expectations. Again, maybe you have money to lose. Most of my clients do not. I do not advise on trying it yourself unless you are prepared to pay the price.
0 votes Thank Flag Link Fri Nov 23, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
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