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Home Seller, Home Seller in Atlanta, GA

Is it better to lower your house price or raise the buyer agent commission?

Asked by Home Seller, Atlanta, GA Sun May 3, 2009

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32
What gets the most looks? A lower price is seen all over the place - agent commission boosts are seen only by agents. And if it's overpriced it still won't sell or appraise.

Even better - price it accurately and you might not need to "drop" it.

Hank
3 votes Thank Flag Link Sun May 3, 2009
Might be hard to believe, but most of the good agents out here really are trying to look after the best interest of their Buyers. That means getting the property that fits their needs best, at the best condition, price and terms. We definitely will be more price conscious in our search vs looking for the home with the best commission. Don't get me wrong, I would not turn down a commission bonus but that is not what drives me in helping my client find the perfect home for their needs. We appreciate all the extra incentives even more in this economy.

One other thing...so many Buyers are doing their own searches on the internet that a lot of what we show them are properties they found themselves. They don't see the agent commission on the online marketing of the property so they would not even know if you offered more commission...but they will definitely see if you lower the price. Many may also have their favorite areas set up on auto seaerches by their agent. Most of these searches will send an alert out when the price changes. None that I know of send out an alert if the commission changes.

LOWER THE PRICE. LOWER THE PRICE. LOWER THE PRICE!!!

Or, as Hank stated, price it right to begin with and you will sell it faster and net more overall the majority of the time. Now is the time. This little pop in the market will probably fade pretty quickly as we get back into the fall "back to school" season. Take advantage of it while you can.

Best of Luck
Deryk Harper
Associate Broker
Keller Williams Realty North Atlanta
Managing Broker
Key Locations Property Management LLC
770-722-6922
2 votes Thank Flag Link Sun May 3, 2009
The buyer chooses the house based on price not the agents commission, so I would say lower the price.
2 votes Thank Flag Link Sun May 3, 2009
Definitely address the price. We have seen all kinds of incentives to the agent tried during the downturn in Florida. Luxury cars, trips, bonuses etc.... the bottom line is no matter how hard the agent pushes, the buyers are still focused on value. And, many buyers are looking at searches in the MLS, so they know if there is something else that looks similar, priced for less. They want to see the best priced listings.

I also have a few blogs on my Trulia profile that may be of use to you when considering values on homes.

All the Best,

Jim Sweat, ABR, CRS, GRI, CDPE, e-PRO, ILHM
Realtor
Sandals Realty http://www.ExplainShortSales.com
941-306-7384
Team@JimSweat.com
Web Reference: http://www.JimSweat.com
1 vote Thank Flag Link Fri Nov 18, 2011
As a buyer, I am looking for the best bang for my buck. I have so far put a bid on two properties. The first one was a 1926 house that require a gut renovation. I did my research on cost of renovations, paid for a walk through inspection PRIOR to my bid, and made a budget reflective of what was necessary to bring that house up to the comps in the neighborhood. To my regret the sellers disagreed. I moved on and found the same exact floor plan in a house built in the same year in the same neighborhood that had been totally renovated at the list price that equaled the final cost of the budget for the home on which I had previous placed a bid . I suprised family, friends and my realtor when I insisted on a bid at list price. Remember you not competing for buyers as much as you are competing with the other sellers for the buyer.

My advice is to go through your home and view it as a informed buyer would view it. Maybe pretend to be a buyer in your neighborhood and see what other homes are offering. Then price your home accordingly. THEN most importantly, stage it accordingly. I will tell you that nothing but nothing ended my interest than the smell of pet urine in one house, the illegal electrical panel in another, the DIY special that left me in fear of what was behind the walls or busy homeowners that left the clutter stuffed to each and every corner. If you are too busy to clean the house, then what is that to say about the maintances required on a home?

For us contemplating the purchase of a home now with the forecast for further decline in the value of property, we are looking for as much value as we can get so we can sustain the forecast decline. I offered the best value for the property I could afford. If you disagree, there is another house in the neighborhood that is calling for me to look at it. It is very sad, but it is reality.

As to the buyer's agent's commission, the house on which I place my bid is a short sale. My last instruction to my agent prior to him presenting the offer was that if anyone hinted of decreasing his commission he is scuttle the deal. He worked very hard for it and I will NOT see him cheated. A good buyer will take care of his agent.
Tim Honeycutt, soon to be northern NJ.
1 vote Thank Flag Link Sun May 3, 2009
without any question, or any doubt... lower the price.

agents do not purchase your home... i've never had a buyer purchase a home due to my recommendation, or so that I could be paid more (either through commission or bonus)

buyers buy homes if they fit their needs. period.
1 vote Thank Flag Link Sun May 3, 2009
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Why not increase your odds and do both?
1 vote Thank Flag Link Sun May 3, 2009
Lower the price. A higher buyers agent commission is not going to make your home a better value to the buyers:) And if the buyers are not accepting the price then the agent nevers has the opportunity to collect the bonus.
Web Reference: http://www.HomesByLorie.com
1 vote Thank Flag Link Sun May 3, 2009
What everyone else has said, lower the price. In addition to their sound reasoning, you could be opening a real can of worms by trying to bribe agents to bring unsuspecting buyers to a house that really doesn't meet their criteria. You might end up with an agent who is successful enough in the hard sell initially, only to have it blow up before closing, costing you valuable market time.
1 vote Thank Flag Link Sun May 3, 2009
Nothing new here, lower the price of the house. If it isn't priced correctly, it won't sell. Buyers aren't going to see what the agents commission is anyway and it shouldn't determine the price of the house. Lots of luck to you!
1 vote Thank Flag Link Sun May 3, 2009
Lower the price. Buyers are price conscious and, as prviously noted, Buyers determine the property they want to acquire after properties have been identified and shown to them by an agent. Asking price is one of the factors Buyers look at when evaluating whether or not to make an offer. Lower the price.
1 vote Thank Flag Link Sun May 3, 2009
Hello Home Seller,

First of all, I wish you much success in selling your home. I believe the two most important factors in selling your home in todays market are:

* Price value relationship of your home and neighborhood

* The condition of your home

Buyer's in todays market want these factors with any home they are considering along with the right floor plan, neighborhood , location, schools etc. My vote hands down give the value back to the potential buyer.

Best Regards,

Rick Payne
Keller Williams
1 vote Thank Flag Link Sun May 3, 2009
Without a doubt lower your price. Every single home presently for sale could be under contract in the next thirty days for a price. If you home hasn't sold, there's truly only one reason, "It's the Price." Lower it and don't waste time lowering it by a couple of thousand lower it by 5% or moreif you want to get it sold, otherwise you're simply chasing the market down.
0 votes Thank Flag Link Wed Jan 11, 2012
Did any of you recent posters notice this question will be three years old in May? :)
0 votes Thank Flag Link Thu Jan 5, 2012
Its better to lower the price or offer a seller agent bonus commision of $1,000.
0 votes Thank Flag Link Thu Jan 5, 2012
Lower the house price. Period. Finding a buyer is dependent on the price.
0 votes Thank Flag Link Thu Jan 5, 2012
You should definitely leave the buyer agent commission the way it is. A lower price is better for many reasons. For one, if your home is overpriced; a lower price will breath new life into the listing. Also; it could open up doors to new crop of buyers who may have not been looking within your prior price range. And make sure your home is priced strategically. And by that I mean priced at a point where its priced right and it comes up as close as possible to possible buyers search. With buyers being more tech savvy and searching online for homes the right price placement could mean a lot!

Tyler Willis
Keller Williams Realty Intown Atlanta
621 North Ave. NE, Suite C50- Atlanta, GA 30308
(678)656-5524
0 votes Thank Flag Link Fri Dec 9, 2011
Lower the price of the home. The buyer agent is supposed to be working in the best interest of the buyer, not the commission. If your home is a match for the buyer they will decide to write an offer, not the agent. Another option is to offer to buy down the buyers rate. That will save them more money than lowering your price. But the price tag is often what most look at ignoring the rate they will pay...a mistake made by many. Good luck with the sale of your home.
0 votes Thank Flag Link Tue Dec 6, 2011
Absolutely lower the price! This will increase the visibility of your home as it will appear in more searches on internet sites by both agents and the public. If a buyer's agent is truly promoting the interests of their client, a better value and price for the client should far outweigh a higher real estate commission.
0 votes Thank Flag Link Tue Dec 6, 2011
You may find success with both. You might try to up the commission at your current price for a limited time.. if that does not get the result, then lower the price while reverting to the previous commission.
0 votes Thank Flag Link Sat Nov 19, 2011
2011-2012 UPDATE: Lower the price. Incentives are not working. Buyers looking at price and comparing to what they can get in a foreclosure. Warning - foreclosures have been painted, have new carpet etc so cosmetics have to be taken care of also.
Web Reference: http://englishteam.com
0 votes Thank Flag Link Fri Nov 18, 2011
The biggest issue is that when a person gets to this question, they are already behind the eight ball and money has been lost; a house needs to be priced right to begin with!

My experience tells me that you need to find where your house is weak and plug that hole.

Common areas of weakness:
1) cosmetically undesirable
2) structurally inadequate (needs too many repairs)
3) list price may be off (remember that market value changes over time)
4) marketing may be inadequate
5) the commission (usually not a weakness, but can be a strength in the right circumstances)

So if a strong and accurate CMA indicates a fair asking price and your home is "move in ready," then evaluate the marketing. You'll know where you stand with your marketing by how much response you've gotten. If you haven't gotten at least 3 to 4 lookers per week, then marketing is at least one weakness you face. But the number one thing you can do to sell your home (assuming the marketing, price and condition are in line) is to make it really stand out to your potential buyers! This can be done fairly inexpensively.

As far as adjusting the commission goes, this is something that ideally should have been done right to start with. It has a more limited effect once the house has been on the market If you are considering this, try refreshing the home's appearance first. It may be more money out of your pocket today, but it's actually much (MUCH) less than the cost of your home not selling for a long time; just think of all the additional mortgage payments, taxes and reduced selling price.

Overall, my advice would be to hit the house as hard as possible with a makeover, possibly adjust the price (but not too much below what a CMA indicates) and, if it seems best to you, you could throw another 1/2 or 1% on the selling ending of the commission. There's no such thing as "average" or "standard" commission, but I can say that your home's odds of selling increase with the commission... BUT you simply must make sure all the other factors are in line first and use a commission increase as something of a last resort.
0 votes Thank Flag Link Tue May 5, 2009
If I were your agent, the first thing I would do is look at the whole picture. What you're offering the selling agent, what the price is and what seller concessions your offering. If commission offered is good, seller concessions are good, I would suggest you LOWER the PRICE.

My best suggestion is to talk to your agent....

Good Luck!
Sherri Orendorf, GRI
Century 21 Alliance Realty
0 votes Thank Flag Link Mon May 4, 2009
Lower the price!

Attract agents to show your home by offering a agent bonus of $500-$1,000 with a contract by a specific date. This will create a sense of urgency and It's a set $ amount that you can budget for.
0 votes Thank Flag Link Mon May 4, 2009
Lower the price until it is truly competitive with the comparables and offer max seller concessions! I posted this answer to a question very similar to yours: Buyers in this market don't just want a home, they want a deal. You need to be priced very competitively (don't lie to yourself) and you need to offer incentives before you just keep lowering and lowering your price and contributing to declining value in your neighborhood. ARE YOU OFFERING MAX SELLER CONCESSIONS? Some people may love your home but not neccessarily the striped wallpaper in every room or the white cabinets so offer something to entice them like 10K buyers allowance for upgrades and 5k towards closings costs. Things like that go a long way vs. just lowering 15k in price. Sure, their payment would be around a 100 a month lower with a reduction that big but you cant take a lower mortgage note to Home Depot for those countertops you want. =)
0 votes Thank Flag Link Mon May 4, 2009
Are you represented by real estate? That is a strategic question you should be discussing with your agent. It would be inappropriate for me to offer real estate advice to you if you engaged in an agency relationship with another agent. If you were to ask me what I would do if I was your agent, I would say, do both! Lower your price and raise your commission. That is, if you are serious about selling. It doesn't have to be one or the other. If it does, lower your price. Agent don't get to decide which house their buyer falls in love with or which one on which they decide to place an offer. Sometimes, agents even give those bonuses or increased commissions back to the buyer just to avoid the appearance of steering a client in a direction that might benefit them. If you want to get aggressive, do both! You will always get more bang for your buck by lowering your price than trying to buy a sale from an agent....but my best advice would be to hire an agent. No matter what price or commission you have, without the proper and aggressive marketing tools to expose your home and market it to the greatest number of people you will need an agent. You just don't have the tools to get that exposure on your own. Call me today if you are seeking an agent to help you with this question and more!

Sincerely,
David Brower, Assistant Manager/Realtor
Crye-Leike Realtors
678-982-9600
david@davidwbrower.com
Web Reference: http://davidwbrower.com
0 votes Thank Flag Link Mon May 4, 2009
Lower the price. No need to increase commission....



Sean Dawes
Long and Foster Real Estate Inc.
Web Reference: http://www.SeanDawes.com
0 votes Thank Flag Link Sun May 3, 2009
you're better off lowering the price of the house. altimately an agent is after larger commission but every agent knows that house priced right will sell much quicker and will eventially get the best price and we all know that time is money...
0 votes Thank Flag Link Sun May 3, 2009
Lower the price. .......................................
0 votes Thank Flag Link Sun May 3, 2009
Home Seller,

What is your agent advising?

If they are advising anything different than the consensus found in these answers, then what planet are they from?

Buyer's agents, in this market, are glad to attend a closing. Pay them 3.5%, or a minimum of 3.0% of the sales price as a fair commission.

If you do not get your price right, then you join the 90% of sellers who fail to sell at their initial list price.

Sounds like you are already in that club. Just don't be in the 70% club - the 70% of sellers who fail to sell at all during their listing period.
0 votes Thank Flag Link Sun May 3, 2009
Hank Miller's answer hit the nail on the head for you.
Web Reference: http://lantierrealty.com
0 votes Thank Flag Link Sun May 3, 2009
So long as the commission you are offering to the buyers agent is competitive, then you should lower the price. If you were not offering a competitive commission (I seriously saw someone offering $3 once - and when I called the listing agent - as I thought it was a typo - he assured me it was $3), then I would say raise the commission to be competitive. In the case of the $3 commission, when I told my client that IF they liked the house, they'd be paying my commission, they said skip it.
0 votes Thank Flag Link Sun May 3, 2009
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