Time has come to sell a piece of real estate.
We have a friend who is a realtor. In discussions with them.

Situation is property is in a small market. The market is high. Very limited inventory. Sales happening on available properties. So the realtor won't have much work to generate activity. You will ask why not just sell yourself? I would prefer not to do that.
Generally buyers are not local to the market. Most will come from surrounding areas that have grown enough to prompt leaving to relocate to smaller communities. Also out of state people looking to do the same. Primarily cash buyers.

What should we do to compensate the realtor?. 6% ain't happening. Neither is 5% is my thought. I know many area's sellers are only paying their their realtor and buyers pay theirs? What are your guys thought about realtor compensation?

In our situation we have had initial conversations with the realtor about properties value. Our family has some differing view on the value topic ranging from maximizing the sale price vs pricing too high and not getting interested buyers. That can be a touchy situation.
The pool of potential buyers are selling their properties for inflated prices so repurchasing properties in their new area of interest is going to come at a higher price as well. Thoughts about this.

One tactic I have seen on the sales side is establish a listing price and tell buyers you will accept offers for two weeks and evaluate them at that time.


I wondering about that and other strategies.

Thanks guys and gals. I appreciate the thoughts.

Realtors are hungry right now. That being said, what condition is the property in? Is it photo ready, do you live in it? What has to be done to sell it.

Also, buyer's agents will discourage clients if they can make a larger commission somewhere else. That's just life.


Currently I am seeing a lot of 5% deals in S. Florida.

A year or so ago there was a huge lawsuit against Realtor.com and MLS about the rigging of commissions. If I remember correctly the outcome is now negotiable, not just take or leave it.

When I was buying and selling a lot of properties my agent, who I worked with for over 30 years, had a deal. She would list it for 1% and the buying agent would get 3%. In most circumstances she did both and ended up getting 4%. This was in a hot market like you’re describing and was very easy money for her (and us).

I have a friend who is still in the business and in a hot market the buyer/ seller commission was low up to full price but there was a clause whereby a higher percentage would be paid on anything over list. It worked for them as well..

The bottom line is to find yourself a good agent who is more interested in moving your property than just putting it on the MLS and sitting on their ass waiting for offers to come in.

Realtors do a lot behind the scenes that the typical seller really has no idea about but the biggest part of this and what you pay for is access to the Multiple Listing Service (MLS) that the Realtors have and you don't.

Speak with a few realtors. Have them do market analysis and sales plan. Discuss strategy and commissions and whatever else with them. Your locale has customs. The agents will tell you if your thoughts re: commissions are out of line with your market. Professional valuations should hopefully quiet some of the family noise around value. Expect a range but you should get comps that will give you an idea of what’s reasonable. And keep in mind $50k more is a lot for you put not so much for the realtors commission wise.

quote:

Originally posted by PASig:
Realtors do a lot behind the scenes that the typical seller really has no idea about but the biggest part of this and what you pay for is access to the Multiple Listing Service (MLS) that the Realtors have and you don't.

There are so-called "flat fee" realtors, aka MLS brokers, who will list your property on the MLS for a couple hundred to a few thousand bucks (depends heavily on the area), but provide no other services.

So that's an option for FSBO properties to be listed on the MLS, without fully utilizing a realtor and paying them a percentage commission on the sale.

I'm selling my house in San Diego and buying something in Tennessee, for both proprieties it is working as follows:

In San Diego, I am paying 2.5% to the selling agent, Buyer is paying for their agent as part of the escrow with a caveat, if the Buyer does not have an agent and elects to use my agent's team, I will pay 1% of the sale (ie., total agent fees will be 3.5% and Buyer does not need to pay out of escrow)

In TN, the arrangement is the same except I am paying my buying agent 3%

The home is only a few years old. Move in ready. Needs nothing. In excellent condition. In a great area in the community. Nothing really comparable currently on the local market.

Thank you guys. LS1, that is good info.

quote:

A year or so ago there was a huge lawsuit against Realtor.com and MLS about the rigging of commissions. If I remember correctly the outcome is now negotiable, not just take or leave it.

Yes, it is more or less negotiable.
It depends on the individual realtor/office how low they will go. Of course, price is not the only consideration. How much will they do for you?
Like anything else, shop around before making a decision.

There is the absolute quantity of 6%. Then, there is the relative value of 6%. If your basis is $200K, and the home is now selling for $400K, your net gain of $200K would be reduced by $24K. So, you did "lose" $24K, but you gained a lot.

At the same time, you really should not pay a realtor $24K for a few hours of time. You can list on sites like zillow, redfin, etc. if I recall correctly. Online pictures, scheduling of showings, opening the home (if not on a lockbox), etc. can take some time from the realtor. I am a realtor's son, and those 6% commissions put me through private schools back in the 1970s and 1980s. But, there was obviously no other way, and the commissions were split by the listing agent and the buyers agent.

I think in this day, I would choose to state your preferred commission and see which realtor agrees with you. It is YOUR money. "I am willing to list with you for 3% of the listing price. IF the home sells for more than the listing price, the commission goes up like this...10% = another 1/2 percent...etc.

Don’t forget. Part of that 5-6% goes to buyers realtor. So unless your friend is going to work for 1/2 or 1% of sale price, which they then have to give some to the broker theg work for there’s costs involved. That being said usually they don’t do much more than help fill out paperwork. 5% of 200k sale is a lot differnt than 5% of 1 or 2million and the work is the basically the same

I sold a house in white hot California when leaving. A friend of ours of 20 years who is a full time realtor sold it for us. She did a ton of work for us and staged it etc. she also acted as a great therapist for my wife who was going into Vapor lock on gettting shit tossed and packed up for the move. We were totally out of state and relied on her to sell it at that point. Once it finally hit the market we got a solid offer in less than a week. Sold for 1mm and her commission was 50k she had to share with buyers realtor. 2% her and 3% buyer. So don’t forget the buyer realtor ain’t working for free.

Anyway. Do I feel like I overpaid ? Yes. But doing it from 2,000 miles away was not a viable option. And she is a friend so there’s that. She also sold my wife’s moms house for same deal 5% and 3% of that to buyer.

And my mother in law is elderly so there’s no way she could have done any of that herself and moving was stressful enough for her.

6% is kind of standard here, which is also a hot market, and some realtors are looking for 8% if they have a good track record.

quote:

in a hot market the buyer/ seller commission was low up to full price but there was a clause whereby a higher percentage would be paid on anything over list. It worked for them as well..

And

quote:

"I am willing to list with you for 3% of the listing price. IF the home sells for more than the listing price, the commission goes up like this...10% = another 1/2 percent...etc.

Sounds like a financial incentive to intentionally list the property for less than it's actual value in order to create a bidding war that benefits them.

Real estate agents shouldn't be in the auction business (absent a license).

I just sold my mother's house, (not actually me but I did all of the work on it making sure everything was good to go with it and made it more appealing) and it sold from the MLS in less than x2 days literally. The commission was 5%, which was better than the 6% they were charging a year or two ago and is the lesser of two evils. You can negotiate all you want but it will/can affect how much interest is pushed from realtors, sadly. I am not saying you can't or shouldn't try but it could hurt you in the end. It's a racket.

The nice thing is they do all of the vetting for all of the tire kickers, get background paperwork done, title search, etc..

Also, I would NOT recommend using any of the "sell your own home" realtors/websites as they are a scam in itself. We tried it once with "Buy Owner" and wound up paying a couple thousand dollars upfront, only to go with a real realtor afterwards. They don't list your home on the MLS, which is where you get the most traffic and we didn't get a single interest with the Buy Owner website.

I am also getting my mother in law's house ready for sale and have put a lot of hours into it myself- painting, grouting, wall texture, blinds, fans, etc.. We will have added another 28K into the house-most of which was a new roof (shingles/paper for 19k) as hers was 20+ y/o and most buyers would have a hard time insuring the home, at least in Fl.. We also did the garage floor, front entrance and porch with the polymer flake flooring which really adds curb appeal. We did the same to my mother's house and she got it all back in the end as it stood apart from other homes. I don't know your area but here there are a bunch of homes for sale and it is amazing what some people are trying to sell as most look like wrecks.

We just sold two in the past year and our realtor told us it was commonplace for seller to pay half and buyer to pay half. It could be used as a bargaining tool if needed. That may be a regional thing.

quote:

Originally posted by mark60:
We just sold two in the past year and our realtor told us it was commonplace for seller to pay half and buyer to pay half. It could be used as a bargaining tool if needed. That may be a regional thing.

That was nice. I have never heard that before in Florida. Mostly the seller covers the realtor cost but closing costs can be negotiated between the two.

Sold a house in June 2020. Listed it by owner on zillow and didn't have a lot of interest. Paid a MLS list fee of a few hundred dollars and got it listed on MLS. Eventually a realtor called who thought they would have a buy and they would show it if we paid the 3% for their efforts.

Worked ok for us, we weren't in a terrible hurry and weren't even asking a crazy price, but covid had a damper on things.

Might be worth a try.

Relatively new home in a great area--no other comps in the area.
You want a cash sale.
You want a quick sale.
You do not want to deal with the buyer.
You do not want to tie the purchase to an inspection.
The Realtor has to market the house outside of the area to obtain this result. That is where the Realtor earns the commission. An Open house is not indicated--buyer most likely will be out of state. Commission should total 5 or 6 %. You choose the buyer, let the Realtor get the offers to come in. Price it too high--no offers. Price it correctly and get a bidding war.

The prices on the housing market are at historical highs, correct? Many properties are at 2x what they were 5+ years ago. That means realtors have the potential of making 2X what they did just a few years ago. As a working class guy, that seems like an excessive pay increase and I don't think offering a lower commission is an insult if they make more money even when compared to inflation.

If you are in a glut, in a hurry, or with prices falling and you need a motivated realtor, that is different.