My home is partially under water & I really can't imagine forking out $40K in commission. It's almost a crime to collect that amt of

Asked by Trulia415, 94134 Tue Nov 30, 2010

$. Any advice?

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35
Mack McCoy, Agent, Seattle, WA
Tue Nov 30, 2010
- This kind of attitude and kindness from inside is what sets you apart from everyone else.

Which doesn't really help you very much.

- At a time like this, I'd rather reduce my commission rate and have more clients, than 2 clients that pay me the 3%.

That's your opinion, which doesn't make you right. At a time like this, I might prefer not to have unsalable listings at any commission rate, rather than take one at a discount. Less than 3% of nothing is still nothing.

T415, you're a FSBO candidate if there ever was one. You don't see the value in paying the best brokers their going rate, you shouldn't hire them. You can hire the inferior at a lower rate, but, why bother?

Daniel's right. Go FSBO and let it be.
3 votes
The Medford…, Agent, Fremont, CA
Tue Nov 30, 2010
Trulia415:

I think Michael is onto something …

Let’s say you own a property that you work in AND live in – a work loft or a house very much like mine. One day it catches on fire – you certainly didn’t do anything to deserve the fire, but there it is. Your home AND business going up in smoke. The place you sleep AND the place you generate your income. And to add injury to insult, a fireman shows up and starts pouring water on your property, damaging it even more.

Then you suddenly realize … you are paying the taxes that pay the fireman … and since your business is going up in smoke, you may no longer have any income to pay your taxes, BUT, the tax man is going to get his money out of you anyways. In the meantime, the fireman is continuing to hose down your home. And you are continuing to pay him.

So … you decide to go over the fireman and try to negotiate his salary down. After all, you are loosing your home, why shouldn’t the fireman cut his wages to help cover your losses? When he starts rolling up his hoses, you realize this might not be a good idea …

And then you see that there is a policeman directing traffic – why not ask him to cut his salary for you as well?

Not going to happen.

So … why is there this expectation it should happen with Realtors? And where did this idea come from that this is a part time job? I’d LOVE to work normal hours … but that’s not going to happen either.

Your accountant and attorney will not reduce their rates if your file for bankruptcy.
As Mack pointed out, an auction house is not going to reduce their rates to help bail you out.

So why should Realtors be the ones to bail out homeowners who, for whatever reason, are now under water? PG&E won’t be reducing their rates to help keep your lights on. Prices on everything else are going up as well. Repairs. Building materials. While home values are going down. We’ve ALL suffered losses in the recent market collapse: over 3,000 Realtors left the business in Alameda County last year because they couldn’t make a go of it in the “new economy”. My house dipped in value just like everyone else’s and I lost a ton of equity as well. We’re all in this together. So if you are going to ask Realtors to take a hit to bail you out, let’s get everyone involved. And let’s make the percentages the same across the board for everyone. Since we have been asked to take a hit of 1% off the normal 6%, let’s ask everyone to reduce their income by 17%. Want to reduce our rates to 4%? Now everyone needs to take a 33% hit.

Doesn’t sound very realistic to me.
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3 votes
Pacita Dimac…, Agent, Oakland, CA
Tue Nov 30, 2010
Here's a link to For Sale By Owner site for sellers http://fsbo.com/Sellers.aspx

They said these ar FSBO.com's latest Home Index Results:

•Average days on market: 95 ---- during which time you should be ready to show your property at the time that's convenient to the buyer --- if you're at work, tough.....make arrangements for someone else to show the house for you. Otherwise, are you only available to show on weekends and after hours?

•Average amount saved on real estate commission: $8,002 --- oh, goody! How much is YOUR time worth if you take time off to show the property? Factor in your time during the selling and contract process.

•Properties sold for 96% of list price --- of course, this depends on how much you list it for --- how much you think it's worth compared to how much a buyer is willing to pay for it. List it lower than market value, and you may be able to sell quicker

FSBO.com Listing Packages Start at a One Time Fee of only $69.95! Please enter your zip/postal code to see all of prices and packages.

And here's a link to their real estate contract and other packages. http://fsbo.com/Sellers/RealEstateContracts.aspx

Make sure you study them carefully. Further, make sure you know what the requirements are to conduct a real estate transaction in San Francisco --- such as any required work to comply with government requirements? Natural Hazards Disclosures? Property city and county transfer taxes? What kinds of disclosures are you required to provide to your buyers.

By the way, make sure you have some kind of insurance to protect yourself against clams of misrepresentation. etc.

Consider hiring a lawyer to make sure you write up the contract correctly.

Wishing you the best of luck and happy holidays!
3 votes
Mack McCoy, Agent, Seattle, WA
Wed Dec 1, 2010
T415, who "deserves" to pay a professional less for services rendered, and who "deserves" to pay them more?

Sales, for the most part, is a commission-based compensation field. Your stockbroker / financial planner charges you based on the size of your account; we've already touched on auction houses who can rake in 30%-45% per item; do you tip 20% at a burger joint but 10% at Perbacco?

T415, I, for one, don't want you to pay commissions for services that you do not value. I don't.

Oh, I found out today that one of our local piano dealers - they make more money when they sell a $35,000 grand than when they sell a $7500 used baby g. Who knew?

Life is short, T415. Don't use a professional real estate agent, go FSBO. You'll be happier, and so will they! Unless you go with Michael, that is!
2 votes
Sheyenne Sch…, Agent, Torrance, CA
Sun Dec 5, 2010
HI! If your home is "partially or totally underwater" then you're in a short sale situation. And, there is NO commission to pay a realtor at all. When doing a short sale, the bank(your lender) pays realtor commission, title, escrow, termite, repairs, etc....YOU PAY ZERO. If someone tries to charge you a fee....RUN! I do tons of short sales and have a new one now in Lomita where we are only short a couple thousand dollars on the 2nd...this will be a breeze. Homeowner gets to stay in townhome til sold without paying their mortgage, taxes, etc. and gets to walk away from their debt(allowed by the bank). If this is your primary residence, you will not owe taxes on the deficit amount, it is not income. I have a blog that helps answer questions. http://www.torranceshortsales.info You don't need to live in Torrance. Call me if you need help or have questions.
310-429-4170
Sheyenne Schultz
Real Estate Network Group
2601 Airport Drive #120
Torrance, Ca 90505
shy@shysells.com
Web Reference:  http://www.shysells.com
1 vote
Mountaineer, Home Buyer, above the clouds
Sat Dec 4, 2010
t415,

i have done transactions both fsbo and with realtors. i sold a house fsbo and listed it a bit cheaper than comps, but came out ahead factoring in commissions. doing the transaction paperwork wasnt hard at all, especially if you are good at internet research. we did use escrow, title, etc just like a regular transaction.

it seems like a requirement to purchase a house via realtor though. there just arent enough fsbo properties out there, and many that are listed are not realistically priced. as someone commented below 95% of listings are via mls. unfortunately that's where we needed to look. during that transaction i felt our agent simply printed up the standard forms and i ended up doing the rest. i dealt with financing, title, escrow, etc and simply had the agent opening the door for inspections etc.

if i were you i'd probably fsbo first and see how it goes...
1 vote
Jed Lane, Agent, Petaluma, CA
Tue Nov 30, 2010
Everyone has the right to sell their property themselves and all brokerage fees are negotiable. Your thinking that it's "almost a crime" though is way out in left field. If you don’t want to pay to have a professional work with you to preparing the property to its best advantage, market the property to get the best exposure to the market, deal with all the legal intricacies of disclosures, mandated actions and the contract then save the money and do it yourself.
If you have the knowledge to do all that we do and we don’t bring value to the transaction you don’t need us but it isn’t “almost criminal” for anyone to market their skills and make money doing what they are good at.
Before closing let me also mention the negotiations that can occur in real estate transactions. 40K is small when compared to the size of reductions that can be done through skillful negotiation.
1 vote
Oggi Kashi, Agent, San Francisco, CA
Tue Nov 30, 2010
Most listings are taken at 5% commission nowadays . Half will go to the selling side that brings the offer and closes the deal. The listing half can be negotiated in many different ways. It's to no one's advantage for a listing to sit on the market for too long. Statistics show, the longer a home sits, the lower the final sale price and the higher the final sales costs will be. Please see this blog entry on home pricing:

http://www.trulia.com/blog/oggikashi/2010/11/how_home_pricin…

Your listing agent is not just there to advertise and hold open houses. Your agent is there to protect you before, during escrow and after the close. To represent your side. To negotiate the best price and terms on your behalf. One mistake can lead to falling out of escrow or worse, having to deal with legal problems later on. Having the right professional on your side can make a huge difference in the outcome.

Oggi Kashi
Paragon Real Estate Group dre1844627
1160 Battery St, San Francisco, CA 94111
Web Reference:  http://www.oggikashi.com/
1 vote
Jeanne Feeni…, Agent, Basking Ridge, NJ
Tue Nov 30, 2010
Hi there, as Mack points out you can try to sell on your own, or add some exposure with limited service company that will get you on the MLS - this would assume that you will be cooperating with agents, otherwise no reason to advertise there as it is primarily a resource to agents - so that's half of the commission there. I find that when you really drill through the time and effort that you'll need to put into this and then reflect on the savings if you handle it on your own, the margin narrows quickly.

If you don't cooperate with agents, then you can avoid commission altogether. But in the process you will narrow the scope of those you reach, and with less exposure, you will likely take longer and sell for less.

But many sellers try to sell on their own, and so however you proceed, I wish you the very best of luck!
Jeanne Feenick
Unwavering Commitment to Service
Web Reference:  http://www.feenick.com
1 vote
Pacita Dimac…, Agent, Oakland, CA
Tue Nov 30, 2010
Do you want/need to sell? If you're underwater, are you saying that you are behind on your payments, that your house is worth less than what you owe?

If you qualify for a short sale hardship, perhaps you should think of selling as a short sale. In many cases, the lenders will pay the cost of selling commissions, back taxes, insurance so YOU WON'T HAVE TO.

On the downside -- you will walk away with nothing from the proceeds of he sale
On the upside -- you will walk away with your credit slightly bruised by the short sale but not devastated by a foreclosure

I list and sell a lot of short sales, and I can tell you it's not a cakewalk. I do it to help my sellers in distress and to help buyers who want to get a good deal.

Famliarize yourself with the amount of work that realtors do to make a short sale work during the MONTHS it will take to get a short sale approved, or how buyers' and seller's agents are compensated for the work. Know that commissions, although negotiated, are also dictated by the short sale lender, So even if the listing agent will list the property for say, 6% (which the short sale negotiators may demand to be reduced to 4-5% during the short sale negotiation), that commission is SPLIT 4 WAYS: between the listing agent and his broker, and between the buyer's agent and his broker.

Put it another way: use your own salary as a baseline, compute how much you are paid by the hour, then apply that to the many hours the realtor spends on your listing. Add the costs of marketing and MLS fees, etc. Remember that a realtor is only paid once you close escrow. If your short sale isn't approved, and you are foreclosed instead, that realtor worked for nothing . THAT is the real crime: to work for nothing.
1 vote
David, Other Pro, San Diego, CA
Wed Jun 11, 2014
If you're looking to sell your property and can't afford the commission I certainly understand. I work with a lot of helpless homeowners that are victims and are in the same situation. They need all the help they can get. The fact that still remains is, what is the best strategy? IN most cases I can provide some out of the box solutions that will not only help, but turn your sour situation into a positive outcome.

Here is a quick example: Client had home worth 200K, had a loan on it for 195K. After they had to pay commission and sell at a slight discount in a semi slow market what was he going to do? The answer may surprise you.... without going into details, we managed to sell the home in 10 days, for above market price, and put 8K into the clients pocket. These are real solutions, that help homeowner.... It's all about presentation and packaging.

Please free to drop me a line and I would be more than happy to help. I know I am about 2 years late in my answer. But the reality is there are a lot of people in your similar situation. I am more than happy to help. Helping people with Real Problems, while providing them with Real Solutions is my specialty. Call me today. (858) 412-5433. Thanks, Dave
0 votes
J Mario Preza, Agent, Burlingame, CA
Thu Jan 9, 2014
Hmmm, it is a tough nut to crack, particularly because being underwater doesn't alter too much of what is happening all around you. If you don't need to sell, keep waiting until the market turns around -- eventually in the 94134 area of San Francisco, the prices will rebound, and handsomely, I might add. However, if selling is what you've considered because of your circumstances, and given that this was a few years ago, it's probably a safe bet that you fixed the problem by now. This notwithstanding, the question is still pertinent because there are hundreds, if not thousands of homeowners facing the same situation.

Short sales make it so that the seller walks away without further obligation(s) to the lender(s), and in some cases with an incentive to move if you qualify. But, if paying a full commission is what you want to try to avoid, "full commissions" ARE NEGOTIABLE, and if you want an agent to share in "YOUR" loss, some just might.
0 votes
Gerry McLoug…, , Naples, FL
Sat Aug 17, 2013
Hello, sorry to hear about your trouble. You might need the exposure to get the maximum price.
Check out my fsbo tips. I have a network of really good agents if you need a free referral. Best Wishes, Gerry
http://www.youtube.com/watch?v=AAOVoR7LFvY&sns=em
0 votes
Alexander Gr…, Agent, San Jose, CA
Thu Aug 15, 2013
I was just looking through old post and I noticed yours. If you were not able to refinance at the time of the post, I can certainly help you out now. You can call me at 408-352-5147 or email me at AGreer@themortgageoutlet.com. You can check us out at http://www.TheMortgageOutlet.com. I will look at your situation and present you with some options.

Alex Greer
NMLS #1056079
0 votes
Jed Lane, Agent, Petaluma, CA
Sun Dec 5, 2010
T415 says 'I really appreciate all the agents out there who have the buyers in mind and not just looking at the commission that ends up in their pocket"

An agent legally should never look at a transacation as a commission. That is the exact nature of self-serving that runs counter to our fiducuiary duty that is the basis of our license.

We do not have to work for free but if we work with a client we must put their needs ahead of ours. If any member of the public experiences a transaction where the agent places their pay above the well being of the clients the agent should be reported to the State licensing board.
0 votes
Dorene Slavi…, Agent, Torrance, CA
Sat Dec 4, 2010
Dear Trulia415,

Well I hate to be cheated too, or to use a professional I don't like or trust. But that doesn't mean there are not professional and honest Realtors out there who will do an excellent job for you.

Short Sales are complicated and you will need someone who knows their way around the banks and all the paperwork involved.

If you feel you can do this on your own, there is no law that says you can't. Please do educate yourself, you might find out in the long run you will save money using someone who knows what they are doing.
best of luck to you
Web Reference:  http://www.doreneslavitz.com
0 votes
John Walin, Agent, Libertyville, IL
Sat Dec 4, 2010
Here's my 2 cents...
In a good market sellers think all they need is a sign in the yard and buyers will flock to the house and the listing agent did "nothing" to sell it. in a challenging market, a seller thinks if it only comes down to price, why not lower it enough to where you do not need an agent to do anything. Your failed assumption is that the house will sell for the same amount regardless of listing agent activities. Any buyer coming in to a FSBO will want to go 50/50 on the projected commission savings. So take away half right there. Also if you do go FSBO, plan on paying buyer agent 2.5-3% PLUS you as a seller go unrepresented in the negotiation! Under License law we have a fiduciary duty to put our clients interests ahead of our own and provide due care in the best interests of our client. That can cost you money too. My job as a listing agent is to find the person that likes your home the most and is willing to pay the most for it. That comes down to maximum exposure to the buying public and realtor community.

Last point, if you are projecting being under water at closing and needing to bring cash to close, that is tough! God bless you for being HONEST enough not to try to get the bank to cover your shortage. I hate it when a seller thinks the bank should bail them out when the seller has the money but prefers to walk from the difficiency. Banks are cracking down and now it is harder to "play" poor and get shortage waived.
0 votes
Mudar Humaim…, Agent, NY,
Fri Dec 3, 2010
The advantage of hiring an agent is to sell quicker since your property will be posted on a database all brokers share. FSBO works too, but what I've been told by many sellers is that they don't like to deal with buyers directly & they prefer a buffer in the form of an agent. As well as not knowing how to proceed with the transaction once a buyer is located. My advise is to negotiate the commission with an agent, I.e: if the're dual agent the comm is less since they didn't have to split it with another bkr. Where are you listing your property? Are you getting any interest?
0 votes
Trulia415, Home Seller, 94134
Wed Dec 1, 2010
Please let me clarify that when I say "crime" of course I don't literally mean that. My friend just paid almost three thousand dollars to paint two room. Wow when I heard that I was very upset. I felt she got cheated.

No I don't want to feel like I got cheated. There was another house that I bought where I knew the only way to get that house was to use the seller agent. I really didn't like that creep, but I knew he was greedy too. In the end I got the house and he walked away with both seller & buyer commission at $48K gross (of course I know the brokerage gets a cut, etc.) Wow I really didn't feel he did anything for me except to basically scare the seller into selling to me. People like that absolutely do not deserve that type of commission.

Edith K - Appreciate your detailed explanation. I know that referrals cost money. But all I am saying is that in cases where let's say the house does sell in a reasonable amount of time or that you didn't need to pay another person for referring the client to you, don't you think the client should receive a break. I guess what I am trying to say is that it is frustrating that the commission rate are fairly standard across the board when certain people really deserve it while other absolutely do not.

Michael M - Thanks for the offer extended. Will keep you in mind.
0 votes
Edith Karoli…, Agent, Winnetka, IL
Wed Dec 1, 2010
I think you got a lot of answers already, and let me just address your way of expressing yourself concerning the Realtor's commission % / amount! You call it almost a crime!!!

Well, not really.... remember that in this market Realtors work much longer and much harder, i.e. much more time and expenses involved and remember also that Realtors expenses all come out of their own pockets, it is a business a service business, which includes insurances, office expenses, phone, marketing and advertising costs, cameras, multiple listing services, expenses for websites and so much more! And furthermore, you look at the total amount, but realize that that amount is shared by at least 4 parties and sometimes 5 (in cases of referrals), but at least the total amount is shared with the Realtor who brings the buyer, and his / her brokerage company, the other part is shared with your listing agent and his/her brokerage company, and each one of course pays taxes on that amount, once they deduct all their individual expenses, there needs to be some money left, otherwise they would be in the business of providing free services..... They also list homes, that do not sell, or the sellers decide not to sell anymore, so all those expenses also need to be covered, it's a business after all....

Just thought I explain that a little, because it is important for you to see how that part of your closing costs, the commission gets distributed, and heavily reduced after deduction of all expenses involved in the marketing of a home, and being a Realtor and taxes paid....

Hopefully you now have a little bit better understanding for the commission, and you still have the choice not to hire an experienced Realtor and to sell your home by owner!

Good luck to you!
Edith YourRelator4Life & Chicago Connection
Working always in the very BEST interest of her clients
EdithSellsHomes@gmail.com
0 votes
Oggi Kashi, Agent, San Francisco, CA
Tue Nov 30, 2010
Trulia415,

In a "hot" market, sales are usually quicker and easier. It would make sense to charge less because less time is spent by the agent/broker and there are more transactions.

This market is anything but "hot". Sales are much harder to close and take considerably longer. It might makes sense for realtors to start charging higher rates now. Since they have not done so, that shows they are working harder and making less - like you.
Web Reference:  http://www.oggikashi.com/
0 votes
Trulia415, Home Seller, 94134
Tue Nov 30, 2010
Well actually, my salary has had a temporary decrease to be more aligned with the way the company is performing. And actually my contractor is charging less because I can't pay him that much anymore and he realistic and realizes that he he doesn't give me a discount, I won't be able to hire him. Also I had to reduce my rental price by 25% to get a tenant.

Everyone is working harder and getting less. So as a real estate agent, are you telling me you rather sit stale for an entire year and stick to your 6% and have no customers? Seems naive to stay that stubborn. If I were an agent, I would be realistic with the tough times. At a time like this, I'd rather reduce my commission rate and have more clients, than 2 clients that pay me the 3%.

I know there are good quality people out there but I just need to find them. Just to give you an example, my loan broker (who I've referred to any and everyone who has ever asked me) has done loans and re-finances for my me multiple times and for my family and friends. She absolutely doesn't charge a single penny and even pays for the appraisal report. I absolutely love her. Her English is horrible but she gets the job done. She is like the Walmart of loans. She still makes money but she doesn't "gauge" profits. This is the needle in the haystack that I am looking for.

It's clearly a buyer's market out there. I'm not selling a house in the Marina or Presido so I really doubt there is much room for negotiation.
0 votes
Trulia415, Home Seller, 94134
Tue Nov 30, 2010
Pacita - No need to write something so threatening. I know CPAs exist, lawyers exist, and a whole slue of specialties out there. Nobody needs to live in fear. This type of presentation doesn't gain brownie points.

I was once so touch by an agent/broker/loan agent. I found a private buyer but needed someone to conduct the logistics transaction (write up the offer, set up escrow, etc). I told him that I will pay him something for doing the paper work. But he didn't want anything. He said, just have your agreed upon price between the buyer and I will write it up for you. I have referred so many acquaintance to him since.

I really appreciate all the agents out there who have the buyers in mind and not just looking at the commission that ends up in their pocket. This kind of attitude and kindness from inside is what sets you apart from everyone else. I keep asking around for recommendations, but this stage in my life, my friends are just starting to buy and no one has sold yet. Wish me luck in finding an good agent or if I do take the path to sell.
0 votes
Michael Russ…, , 75006
Tue Nov 30, 2010
Most people realize that when they eventually sell a property there will be costs involved. As a seller you will have closing costs coming from many potential sources: survey, title policy, title company, any taxes, and realty fees if an agent is utilized. Perhaps the government should subsidize sellers closing costs on top of all the other unneccessary government expenses there are. Not.
0 votes
Nenita Dasal…, , Santa Clara, CA
Tue Nov 30, 2010
Ok Mr Homeowner, I read your response to all the answers/responses from real estate agents and here is my comments to your response. Holding open houses once a week, advertising and waiting for offers is not the only responsibility of an agent that represents you if you decide to hire one. It is a lot more involved than you think, all the disclosures, working with the buyers, especially if the buyer is securing for a loan, your agent will be constantly working with the buyer's agent to make sure that the loan process if moving within the specified time allowed, all the legalities that comes with the purchase contract and a lot more. You mentioned that 6% commission is not justified, I will tell you this, 6% commission is not enough considering all the responsibilities that the realtor put in their shoulders everytime they represent a buyer or a seller. If you disagree, you are free to do what you want to do. You have all the right not to hire any realtor. Please don't hire one simply because to you, what they charge is not justified. We do not want you to be miserable, we want you to be happy.
0 votes
Rob Regan &…, Agent, San Francisco, CA
Tue Nov 30, 2010
I get where you are coming from. To have lost money, and to have to pay someone to help you realize that loss is no fun. But if it really was so easy then you could do it on your own. In fact, maybe you should try. The bottom line is that it is a LOT more work than you realize. And if you do it on your own, and end up negotiating with a skilled negotiator and a buyer motivated by the deal, you'll probably pay a lot more than $40k for the lesson.

There are so many things that can go wrong. So many headaches and pitfalls. I know $40k seems like a lot. Actually I know it is a lot. But you get what you pay for. My suggestion is to interview a few agents - be honest about your disbelief in their value. And just maybe you'll find someone who is worth it.
Web Reference:  http://www.SFisHOME.com
0 votes
Daniel, , Baton Rouge, LA
Tue Nov 30, 2010
your home is underwater, paying a realtor commission puts you under deeper

Gotta FSBO my friend
0 votes
J Mario Preza, Agent, Burlingame, CA
Tue Nov 30, 2010
Again, commissions are negotiable, that includes what you may want to do on your own and who you want to provide piece-meal services. I know of a few companies that will "help" you in that fashion, but, as they say, you get what you pay for. On the other hand, you mention a quick sale, a strategy to accomplish that may go against what you're hoping to accomplish. If what you want is a quick sale, the fewest problems, and most money, you must price the house aggressively, and, you also have to make it attractive and marketable. Is the house vacant? Is it easy to show? Is it rented? there are many potential issues, but you did not provide all the particulars. Oh, and you also have brokerages that will do 1/2 of what you listed on your response, and some of them actually work, and well.
0 votes
Michael Young, Agent, San Francisco, CA
Tue Nov 30, 2010
If all you need is for someone to hold open houses and wait for offers, you can list the house yourself or just pay someone by the hour and save a ton of money. It sounds as though you also want to market it yourself, as well as negotiate with the buyers, take the legal responsibility of the contracts, etc.

If 40K is 6% commission, then your sales price is around 667K. You can list the house yourself and offer to pay the buyer's agent 2.5%, which would only be 16K.

If you do not want to pay a buyer's broker commission, then you are left to find a buyer who is not represented by an agent...good luck with that.

You can find a listing broker who will list your house however you wish to be represented. Do keep in mind that the experienced agents know how to market your home for a quick sale, top dollar, while limiting your legal liability. Once clients, who have little or no experience in any type of sales, start telling me how to sell a house, I know it's going to be a long road to finding a good buyer.
0 votes
Mack McCoy, Agent, Seattle, WA
Tue Nov 30, 2010
Sure, T415, but what does an auction house do? They set up some chairs, put out some canapes, give everybody a paddle, and bang a gavel every few minutes!

Brokerage is not a public utility, and homeowners do not have a constitutional right to professional brokerage services. If you do not see the value, then by all means, do not avail yourself of the service. And if you do elect to contract with professional brokers, be sure that you do so in a way that provides actual value to you.
0 votes
Trulia415, Home Seller, 94134
Tue Nov 30, 2010
Thanks all for the responses.

Sorry, maybe I used the wrong terminology. My house is not "under water." I am one of the few who plopped 20% down (borrowing from family) and I keep paying the bank. So I am current so sadly the bank doesn't want to do any modification until I default. I am just saying that paying $40k commission will really set me back, hence why I am so reluctant to let go of the property. And also I am making a statement that it doesn't make much sense to me that an agent can bank $40k in a sales transaction. Not trying to say anything negative about the profession, but it's sort of a part time job. You advertise the place (most likely I'd like to have my say in the marketing), you hold open house once a week, and then you wait for the offers. Can that really justify a full 6% commission (I know it's half for each side)?

Curios, can terms be negotiated so that if the house sells quicker (verse sitting the in market for a year), that I pay less?
0 votes
Mack McCoy, Agent, Seattle, WA
Tue Nov 30, 2010
You think that's bad, T415, you should see what auction houses charge for selling a $1.3M piece - they'll take 15-25% from the sales price, and grab another 10-15% as a "buyer premium."

But, good news, T415, you don't have to pay any commissions. You may not get professional brokerage services, but they're not required, they're simply a service.

All the best,
0 votes
Oggi Kashi, Agent, San Francisco, CA
Tue Nov 30, 2010
Trulia415

I don't understand your comment. Is your home under water or not? I don't believe you can be "partially" under water. Are you trying to say that after paying the commission your net will be negative?

Commissions, like most things in real estate, are negotiable. There are other options available.

Oggi Kashi
Paragon Real Estate Group dre1844627
Web Reference:  http://www.oggikashi.com/
0 votes
J Mario Preza, Agent, Burlingame, CA
Tue Nov 30, 2010
First of all, commissions are negotiable, by law, so, $40,000 doesn't suit you? Negotiate. If you can't negotiate with the agent you're now talking to, find another who will. Second of all, this amount seems high even if you figure out a payment that might carry this price in your area, at this time. Most houses, even in San Francisco, are selling for much less than they were at the height of the market. If you're hoping to get upwards of $600,000 for your "Portola" home, it either has to be a big house, a duplex or something that is relatively new. A small row house in that area command a much lower price than that. If your house is underwater, it means you owe more than it is worth. That scenario leaves you with a weakened bargaining position, as this is a factor to take into consideration if you're serious about selling your house. If you need further help evaluating this situation, send me a note and I'll see what I can suggest/do. Take care.

J. Mario Preza, CRB
home4less@hotmail.com
DRE 00668667
415.850.4361
0 votes
Michael Young, Agent, San Francisco, CA
Tue Nov 30, 2010
If you are upside down, are you willing to wait until the market turns around in your area? If not, or you simply don't want to, other than selling, you can try to negotiate a new loan with your lender. You will need to prove that you have a financial need though, not simply because you owe more than the house is worth.

But if selling is your choice, then selling yourself is always an option. Even though 90% of all properties offered as for-sale-by-owner eventually get listed by a brokerage, in your case it would be worth the chance and effort.

Another option would be a short-sale, where the bank takes the loss AND pays the brokerage commission. One of our firm's specializations is in short-sales. It would be a good idea to speak with your tax pro about this as well.
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