Author Topic: Changing Realtors?  (Read 2988 times)

katstache92

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Changing Realtors?
« on: April 22, 2015, 09:36:30 AM »
I am almost ready to list my former home.  I have been kind of working with an agent, the same agent I worked with to purchase my current home.

Currently there is a verbal agreement over the percentage for her work.  This was made when I said, woah, I noticed you had 7% down in the initial paperwork you gave me, what's up with that, isn't it 6%?  Her response was that she is being pressured to up the percentage.  Over the phone, we agreed that 5.5% would be the cost if we could sell it without listing it (I had an interested party at the time but that fell through since apparently the condo isn't FHA eligible anymore.)  Or a 6.5% fee if we had to list the unit.

Looking at some of the threads on here, it looks like 6.5% is not the new normal.

Now, I haven't signed anything yet, but I have had the agent over to the property.  She has looked at a comp and pulled together her estimate on a target listing and sale price.  She also emailed the formerly interested party and her agent as well as trying to find alternate financing for low down payment buyers.  This seems like an awful lot of work to me, but what do I know.

My question is, how wrong is it to shop around for another agent that will charge me less?  Is it morally wrong to find someone else when we have a verbal agreement?  The idea does not make me feel good but neither does the idea of an extra 0.5% (probably about $425.)  I'm having trouble with the "it's not in writing, just ditch her," line of thought since I have worked with her before, she was referred to me by a co-worker, and she might have been doing additional work that she normally wouldn't without a signed contract since we have a verbal agreement.  Maybe I just lose the $425 and chalk it up to a learning experience?

Any advice/thoughts would be appreciated!

GizmoTX

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Re: Changing Realtors?
« Reply #1 on: April 22, 2015, 10:06:56 AM »
You want a realtor who is knowledgeable & successful in marketing homes in your price range & area.

You should talk to more than one realtor to choose who you will contract with, & I don't think you are currently obligated to your buyer realtor. They each should view your property & present why each should have your business. 6% is still the norm, usually split between buyer & seller realtors. I am more interested in a realtor's track record & unique capabilities than trying to get a reduced rate. Realtors are not identical or interchangeable. What you might save on the commission rate could be lost in carrying costs if a sale doesn't happen for a really long time.

katstache92

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Re: Changing Realtors?
« Reply #2 on: April 22, 2015, 10:09:52 AM »
Thanks Gizmo, that's a really good point.

This realtor is not very familiar with this area.  She works in an entirely different part of the city and that is her main focus.  Which is another strong reason to consider someone who knows this area better.

zephyr911

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Re: Changing Realtors?
« Reply #3 on: April 22, 2015, 10:20:40 AM »
I'm in the business myself (side job). I don't like the sound of this situation.

There *is* no "normal", let alone a "new normal". There is, in most places, something you might call "typical", and there's what you agree on.

In my state, it is illegal to establish a market rate for commission, or to tell a customer or client that there is a going rate. We typically charge a total of 5-6%, but that is set by mutual agreement between client and agent, and I have never been pressed by my broker to charge more.

While it is legal for a brokerage to encourage higher commissions, it is greedy and shortsighted, and I would not appreciate it as an agent or as a client. If they're not making enough money, they should focus on improving customer service, not charging more for the same old shit.

You say you're uncomfortable with walking away because of the time invested to date, even though you legally could; I suggest you directly state your concerns over this bait-and-switch, emphasizing the importance of expectation management and keeping to your original agreement. Something like, "I've thought about this, and I understand that you're under pressure to increase your rate. For this transaction, since I've been working in good faith based on an informal agreement, I am not comfortable with increasing the rate after the fact. I would be happy to proceed based on our initial agreement and hope you agree this is both fair and worthwhile."

See what they say. In most markets, competent agents are easy to find and easy to replace (it's happened to me when I didn't meet expectations), and getting the agreed-upon commission for a job should be more than enough to satisfy them.

waffle

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Re: Changing Realtors?
« Reply #4 on: April 22, 2015, 10:24:55 AM »
Here in Denver there is a company that does a flat fee listing. I've never used them, but will definitely look into it when I get ready to sell my house. You might look into a similar realtor in your area.

WDR

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Re: Changing Realtors?
« Reply #5 on: April 22, 2015, 11:57:27 AM »
Good to see another person from Pittsburgh on here.....

+1 to having an honest conversation to lower the commission or simply select another agent if it makes you feel better having a more knowledgeable agent for the area. 

However, I highly recommend a flat fee listing if you are willing to do the work and comfortable dealing with negotiations.

I used Simple Choice Realty and was happy with their service and will 100% use them again when selling.  They service many counties in Pennsylvania.

This was my experience and two cents (take it for what you will):

- You pay them approx 350 or so to get your house listed on local MLS listing/realtor.com/trulia/zillow.
- There is setup so you take all the pictures and do the write-up that you see on realtor.com.  They have a good web interface.
-They have all the forms online to fill out such as disclosures, lead paint, etc.
-You define how much you are willing to pay the buyers agent whom is buying your house.  They recommend 2.5-3%.  Essentially cutting out the seller agent.


I will say that this service is simply a way to get your house listed and you are the one that deals with the realtors.  When they want to see your house they call the number you listed or email you (Doesn't a selling realtor call you anyway to check to show the house so I didn't find that part difficult).

I bought a door lock at home depot for $25 and put a key.  You personally deal with the agent to negotiate, but I didn't find that difficult (some might).  Have a few comps that have sold in the area in the last 6 months and you are good to go.

Some might say you are taking on the risk, but I've found the buyers contract is a canned one that all local real estate companies use so I wasn't concerned.  Just your typical:  If rates spike past X I can bail, if inspection fails I can bail, etc. 

If you have concerns showing the place in terms of handling logistics one thing I didn't do, but would do next time is setup a google calendar and make the realtors select a time via the calendar. This way you have their name/number and can dictate times that work for your family.  Clearly being open and flexible helps sell your house.  This might help with back and forth calls during work hours as well.

Best of Luck!

katstache92

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Re: Changing Realtors?
« Reply #6 on: April 22, 2015, 01:44:36 PM »
Thanks for the encouragement all!  I emailed her and mentioned that I was seeing 6% as the typical going rate and asked what new service or offering was being added to explain the increased rate.  She responded quickly and said she would be okay with 6%!  I guess I was being overly wimpy.

zephyr - I added the emphasis about the "new normal." The conversation took place a few months ago so I don't remember the exact wording.  I might have just put that spin on it myself as I've been thinking about it.

waffle - thanks for the recommendation!  I had not heard of this option before.

Hi Pug!  It is nice to see other Pittsburghers on here!  I am not sure I'm ready for that kind of approach, it makes me anxious.  However, I will be soaking up all the information I can as I go through the selling process for the first time.  After this, if/when I move again I'll definitely look into the flat fee listing.  The house is actually empty (well almost empty, I'm still trying to get rid of an oak table if you know anyone who needs one) so I don't have to worry about scheduling at all.  This is a very intriguing option for the future, thanks!

ShoulderThingThatGoesUp

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Re: Changing Realtors?
« Reply #7 on: April 22, 2015, 01:54:02 PM »
When we sold our house in suburban Philadelphia, we used the listing agent that had sold the most houses like ours nearby. She did an excellent job.

Bobberth

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Re: Changing Realtors?
« Reply #8 on: April 22, 2015, 02:18:26 PM »
If 0.5% is $425.  That puts your house at about $85k correct?  I have seen some short sales & foreclosures listed at "X% or $Y, whichever is higher".  Is it possible that with your price point there is a minimum commission they charge?  How typical is an $85k property where you live?  If it's less than average they may charge a higher % to cover set expenses.  My buying agent charges me a minimum of $1k commission as the most expensive rental I've purchased is $48k so far.  As crazy as it sounds to pay a buying agent, it's totally worth it to me for her expertise. 

pl28

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Re: Changing Realtors?
« Reply #9 on: April 22, 2015, 08:57:16 PM »
If your realtor is charging 6.5%, how is she splitting her commission between herself and the buyer agent? Like most posters here, I would speak with another agent to see what their take is on how much they charge and ask for reference from previous clients.

If you do decide to change, I don't think that will be a problem, just be honest with her and tell her the reason.

On a personal note, when I list my home, I listed with a flat fee agent. He help me list my home on MLS for $500 and then charge for 1/3% at closing. We handle our own Open house and it was quite a experience. If you of more DIY, you might want to consider, it was not too much work since it was a seller's market at my area.

Good luck

katstache92

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Re: Changing Realtors?
« Reply #10 on: April 23, 2015, 06:05:49 AM »
Shoulder - her lack of expertise in the area does make me nervous.  Although her original list/sale estimate does seem to be in line with zillow - not that it means a whole lot.  Unfortunately I am the first unit to sell in ~3 years so it seems like there is some uncertainty about pricing.

Bob - yes, hoping it will sell for $85k - but haven't received the final market analysis yet.  I think it could be worth more, but that is based on similar units in other neighborhoods, so it's possible it's worth less because of the neighborhood (although technically I am across the border and am in a "good" neighborhood.)  From the way I remember her talking about the increase it was based on pressure from the company she works for rather than the low price of the unit, but I can see the reasoning behind it.  She knows I'm a numbers person, so I think if that were the case and she had explained it that way I would have been more on board with the increase.

28 - I'll definitely look into that next time, I think I could handle it, but I'm nervous about the prospect.  I think this time I'll stick with a realtor and consider the flat fee option in the future.

Thanks all!

arebelspy

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Re: Changing Realtors?
« Reply #11 on: April 23, 2015, 08:13:12 AM »
Seems scummy to me. I'd be looking for someone else just on principle alone.
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