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Asked by Margaret Reardon, East Brunswick, NJ Thu Jan 1, 2009

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17
Jeanne Feeni…, Agent, Basking Ridge, NJ
Thu Jan 1, 2009
BEST ANSWER
Hi there Margaret - Happy New Year! I'm trying to sort through just what you are after here - if you decide to sell on your own, then you can make it clear to inquiring agents whether they will cooperate. If I have a buyer interested in a property like yours, I will cooperate with you. Many agents will not, but it is my strong recommendation that you as a seller do cooperate so that you expand your potential buyer pool by cooperating with agents that are open to such an arrangement. I will work with you on this basis for 4%.

On the other hand, if you are looking for listing your home with a real estate broker - on the MLS, Realtor.com, full internet coverage (something I strongly believe in), then a 4% commission is a tougher nut to crack. Think about it - you will be shooting yourself in the foot if you offer out to the selling agent (ie, the agent who brings the buyer) a commission of anything less than 2.5% which is really the minimum commission that will attract attention. That leaves 1.5% for the listing broker and even if "you do all the work" most brokers will not agree to this rate.

On the other hand, you can get your home listed on the MLS and pop a yard sign in your property with a limited purpose arrangement. But I sense that you see the value in having your home listed with a full service brokerage or you would not be asking this question.

Bottom line is this - I am a hard working and open minded agent - reach out to me via email and we can hammer through what can and can't be done.

Best,
Jeannie Feenick
Search and connect at http://www.feenick.com
Web Reference:  http://www.feenick.com
0 votes
Donald Mituz…, Agent, Chappaqua, NY
Thu Jan 1, 2009
Hello Margaret,

Different brokers have different business models. There are some that will not take a 4% commission and others that would consider that normal. Commissions are negotiable. My suggestion is speak face to face with 3 brokers and listen to what they have to say. Keep in mind, when you ask a broker to cut their commission from 5% to 4% you are asking them to take a 20% pay cut. Would you reduce the price of your home by 20%? I think not. Also, in my opinion, any broker who will freely reduce their commission just to list your home will just as easily negotiate the price of your home down just to make a sale. If an agent can't stand up for their own commission, how are they going to stand up to other agents when trying to get you the best price for your house.

You do have the option of marketing the house yourself. If you want to get local brokers involved, you can offer a commission to any licensed agent who brings you a buyer. You will do a lot more work and you won't have nearly the exposure to potential buyers, but it can be done. Just don't shoot yourself in the foot and get less for your house in order to save the commission.

Good luck. Although prices have come down in the NY metro area, there are still buyers out there and homes that are priced correctly are selling.

Best,
Don Mituzas
PCAR 2008 Realtor of the Year
Web Reference:  http://www.nyhomeseller.com
2 votes
J R, , New York, NY
Thu Jan 1, 2009
Wow good for you Margaret, way to go! I was under the impression you hadn't even listed, since in your question you mentioned that for 4% you thought you'd barely get a yard sign! But apparently you have found a buyer and negotiated a deal between the time you asked for help earlier today and now!? You should get your license, you really know how to market! What a way to start the new year!! Congrats!
1 vote
J R, , New York, NY
Thu Jan 1, 2009
Even rockinblu knows when it's a waste of time. :)
1 vote
Gregory Bain, , Ocean County, NJ
Thu Jan 1, 2009
Margaret, Since it is soooooo easy to get a license and agents don't really do anything worth the commission they charge, why don't you go get your own license and sell your house yourself? Think of all the money you will save. Too bad Foxton is out of business and Help U Sell has filed for bankruptcy - or, maybe it does cost a lot of money to sell a house?
Web Reference:  http://GregoryBain.com
1 vote
Marc Paolella, Agent, Succasunna, NJ
Thu Jan 1, 2009
Also Margaret,

Buyers typically discount FSBO's by the amount of prevailing commissions anyway.

Example: FSBO is on the market for $400,000. Area comps have sold through Realtors for $380,000. Typical commission over the past year has been 5%. I'm a buyer. What's my offer?

The net price to the sellers who used Realtors was $361,000 ($380,000 less 5% commission).

Conclusion: I want to pay $361,000 max, so my offer would be $330,000-$340,000.

The FSBO will argue: "That offer is ridiculous, the neighbors sold for $380,000. I'll take $380,000 period, no less. See what is happening? The seller wants to be paid the 5% commission he is NOT PAYING to the Realtor.

So you can go it alone, but buyers are not dumb these days. Buyers know you are not paying a commission and will adjust their offer downward to reflect the commission savings. So you lose valuable Internet exposure and limit your pool of buyers with no reward at all. The more buyers, the better chance of selling at the highest price.

-Marc
Web Reference:  http://www.marcpaolella.com
1 vote
Margaret Rea…, , East Brunswick, NJ
Thu Jan 1, 2009
My thanks to Jeanne Feenick for a thorough answer.
After talking to my neighbor who is selling right next door, I decided to list with their agent. He already did all the work for me! Just so you have ALL the information J R, I have prepped my home, gotten a pre-approval for my next purchase from my current mortgage-holder, and now, finally, I have negotiated a deal with an agent. You know, terms, commission, that kind of stuff. First things first, silly.
So, could this be considered cyber-bullying or what? Negative stuff is so boring. So long.
0 votes
Maria Morton, Agent, Kansas City, MO
Thu Jan 1, 2009
Margaret, you have intrigued me; what did you negotiate? The sale of the house? A listing contract? I know you didn't make a kickback deal but am curious to hear what you accomplished so quickly.
0 votes
Marc Paolella, Agent, Succasunna, NJ
Thu Jan 1, 2009
Good luck on your deal Margaret and Happy New Year!

-Marc
Web Reference:  http://www.marcpaolella.com
0 votes
Margaret Rea…, , East Brunswick, NJ
Thu Jan 1, 2009
Thanks for (mostly) constructive answers. Really helped to understand and actually negotiated a deal already!
Like I said, realtors earn their keep and the smart one knew enough to read the positive in my question instead of spending an entire morning trying to think of something negative to say. Happy New Year!
0 votes
J R, , New York, NY
Thu Jan 1, 2009
Wonderful suggestion Gregory!

Marc, too, excellent point! Both the buyer and the seller will want to save the commission. The two sides can't BOTH save the same amount. :)
0 votes
Jillian Mason, Agent, Monroe, NJ
Thu Jan 1, 2009
Commissions are negotiable...bottom line. If you really want to get your home sold, call me and let's come up with a plan that's win win for both of us. I am an EB resident and work with a company that does more marketing than any others.

Jillian Mason
Orange Key Realty
Direct: 732-586-5488
E-Mail: jillian@jillianmason.com
Web Reference:  http://www.jillianmason.com
0 votes
Louann Muell…, , 60174
Thu Jan 1, 2009
Margaret,
I love your honesty, and appreciate your respect for the profession! I just wanted to share a couple statistics, and this number changes from time to time and depending on the area,,, Statistics show "homes sold with a REALTOR sell for 12-15% more" and "98% of FSBO's end up with an agent". In all my daily web research I rarely see FSBO marketing. You want to get seen by agents and their buyers, yes?

Save yourself the time and energy, hire a professional...it's a jungle out there!

I wish you the best in whatever you decide.
0 votes
Laura Gianno…, Agent, Manahawkin, NJ
Thu Jan 1, 2009
I believe what you are offering is 4% to the agent bringing someone brings a ready, willing and able buyer. There is nothing wrong with that. Be sure you understand agency law, and that any agent bringing a buyer through your property will be working for only the buyer.

Here is a link for agency law...
http://www.jerseyshoreviews.com/nj-agency-law.asp

If you want to proceed this way, I can send you a package of information that will help you get the word out to Realtors with buyers and some forms to use to be sure all parties understand the real estate relationship they and their clients have while showing your property.

Good luck, contact me if you need to! Rodeo on Margaret!

Laura Giannotta
keller Williams Atlantic Shore
609-384-6121
0 votes
J R, , New York, NY
Thu Jan 1, 2009
Lord knows realtors earn their keep, but I need some extra $$ for the next house.

~~~~~~~~~~~~~~~~


Lord knows you earn your keep, Margaret, but it's been a little slow this year, I need some extra $$ to pay my own mortgage.
0 votes
Marc Paolella, Agent, Succasunna, NJ
Thu Jan 1, 2009
Hi Margaret,

New Jersey is a "non-inducement" state. Buyers agents are not allowed to offer incentives, kickbacks, etc. in order to get your business. Loss of license is the penalty for violating this law.

On the selling end, the commission is completely negotiable. Interview several agents and pick the best value, the agent who does the most for the least.

Some agents are worthless at 7% while others are amazing at 4%. Like anything else, you have to shop!

-Marc
Web Reference:  http://www.marcpaolella.com
0 votes
Paul Howard, Agent, Cherry Hill, NJ
Thu Jan 1, 2009
Many buyer agents enter into contracts with their buyer clients. Those contracts specify a commission amount and a term for the contract (much like a listing agreement a seller may sign with their agent). In my case I generally require a 3% commission payable to my company if I have a buyer for a property. My commission is not dependent on what a seller may agree to when they 'list' their home with an agent. Also, in almost all cases my buyer client will include a provision as a condition of an offer that the seller pay my 3% commission. So, what you agree to when you list (including the amount your agent agrees to 'offer' a buyer's agent ) is not relevant. I negotiate my fee with my buyer client - not the seller or their agent. This also means if you offer me 4% - I will not take it.

Paul Howard, broker
NJHomeBuyer.com Realty
811 Church Rd Ste 111
Cherry Hill NJ 08002
856-488-8444
Follow me on Twitter: http://www.twitter.com/paulhoward
Member: National Association of Exclusive Buyer Agents
http://www.naeba.org
0 votes
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