Author Topic: Part 2 (after the realtor interview)  (Read 4010 times)

Workinghard

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Part 2 (after the realtor interview)
« on: August 13, 2014, 05:55:47 PM »
I had three realtors that came out. For the curious, zillow puts our home at $289,685.

Realtor# 1: estimated we'd get 266k but start at 300k
Realtor# 2: 275-300k
Realtor# 3: 279
Realtor# 4: no show, maybe heard I was interviewing others from same company, going to conference, teaches real estate classes, on different boards. Probably forgot.

#1: okay, nice enough guy, but adamant on 6% and 180 days
#3: same company same policy (6% and 180 days) probably more aggressive with marketing.
Neither one left comps for me

#2: was going to be 5 min late and called, came out with son (teen). Has worked for companies but now himself, realtor wife, 21 yr old daughter, and son doing the business. I liked that his kids are involved. Plus I imagine most parents play it straight in front of their kids. He was the ONLY one that left a packet with recent sales and listings. He also does 90 days. Commission 6%, 5% if he lists/sells. He also does flat fee $2500 which can be applied to full service if we change our minds.

All three commented how immaculate it was, no clutter, resort like setting, and didn't offer much in the way of making it more sellable (other than mulch) which I knew.

The $2500 (if he doesn't sell) seems a little steep for essentially what boils down to MLS listing. He would do the paperwork. Ugh. Just thought about closing costs.

I have see some online flat fee where you pay around $400 to list in MLS and then a 3% commission if it sells. Maybe he would go that route? Any thoughts or suggestions?

Fishingmn

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Re: Part 2 (after the realtor interview)
« Reply #1 on: August 13, 2014, 07:39:25 PM »
Personally, I'd interview someone from another company.

The 2 things I think are critical to what I do are hire a professional decorator and professional photographer at my expense. Getting a house in great condition to show well and then presenting great pictures online are big differentiators.

I always have clients sign a 6 month lease but I also allow them to cancel at any time for any reason.

I charge 5.5% but do even less if they are buying a house with me too or they pay some money up front to cover my costs for the professionals I hire.

I'd recommend finding someone who hires professionals, allows you to cancel at any time, charges less and then start at $290-300k with $10k price drops every 30-45 days.

Workinghard

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Re: Part 2 (after the realtor interview)
« Reply #2 on: August 14, 2014, 03:33:20 AM »
I'll have to ask about the photographer. I didn't think about that. Our house shows extremely well. Wooded lot, swimming pool with spill over spa, split floor plan. And did I say clean? Lol.  Even one of the realtors commented about the grout lines being so clean. Every realtor has walked in and said wow and commented how nice it is. Downside no Corian or granite counters.

We're not in any rush to sell. Our timeframe is 2 to 3 years. My husband retires in 18 months, and I'll work for awhile after that. I read home prices are expected to go up next year.

I'll have to see if I can find some realtors from other companies. Thank you for the suggestions, fishingmn.

marty998

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Re: Part 2 (after the realtor interview)
« Reply #3 on: August 14, 2014, 03:59:07 AM »
6%? Holy shit. $18,000 on $300k sale! Do they really provide $18k worth of service?

Could you sell it yourself without a RE agent?

Fishingmn

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Re: Part 2 (after the realtor interview)
« Reply #4 on: August 14, 2014, 10:30:48 AM »
6%? Holy shit. $18,000 on $300k sale! Do they really provide $18k worth of service?

Could you sell it yourself without a RE agent?

Marty, keep in mind that approx. 1/2 of the commission goes to the buyer's agent. With over 90% of buyer's represented by an agent it almost requires that you pay that part of the commission even if you are selling it yourself. Otherwise, you'll be missing out on the vast majority of potential buyers.

The money left for the listing agent is then split between the broker and agent. Out of what's left the agent pays for all the selling expenses. On top of that, real estate salespeople are independent contractors so they get no benefits and ay taxes on both sides of FICA. NAR estimated that the average Realtor made low $40's I believe but it's much less once you take out all of the expenses.

After all that, I agree that 6% is high and that's why I charge less. It helps though that in my market the average payout to the buyer's agent is 2.7% instead of 3.0% as it is in some areas.

Daleth

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Re: Part 2 (after the realtor interview)
« Reply #5 on: August 14, 2014, 11:12:14 AM »
6%? Holy shit. $18,000 on $300k sale! Do they really provide $18k worth of service?

Could you sell it yourself without a RE agent?

Marty, keep in mind that approx. 1/2 of the commission goes to the buyer's agent. With over 90% of buyer's represented by an agent it almost requires that you pay that part of the commission even if you are selling it yourself. Otherwise, you'll be missing out on the vast majority of potential buyers.

The money left for the listing agent is then split between the broker and agent. Out of what's left the agent pays for all the selling expenses. On top of that, real estate salespeople are independent contractors so they get no benefits and ay taxes on both sides of FICA. NAR estimated that the average Realtor made low $40's I believe but it's much less once you take out all of the expenses.

I totally agree. I actually tend to avoid FSBO houses when looking for homes or investments, because my experience has been that most owners who are selling without a realtor are either delusional about how much their house is worth, or unwilling to participate in normal negotiations about inspections, reducing the price when specific problems are found, yada yada. Often they're unwilling to negotiate such things because they're in a bad place financially (which is why they went FSBO in the first place, hoping to save the 3% or whatever that they would've paid a seller's agent). That's certainly not always the case but it is often enough that unless the property itself is a well-priced gem, I just don't even want to waste time dealing with a FSBO property, in case the owner turns out to be like that. Even in sales with realtors owners can sometimes get irrational or difficult, but at least they have a seller's agent trying to give them some perspective and advice.

And I wouldn't sell without a realtor myself, for a couple of reasons. First, I wouldn't be surprised if buyer's agents tend to steer their clients away from FSBO properties for the same reasons I steer clear of them as a buyer. Even though financially, it makes no difference to a buyer's agent whether the seller has an agent or not. And then add to that the fact that it's harder to find FSBO properties, since they're not listed on most websites and may not even be listed where you would expect to find them--a friend of mine's parents live next door to a great house, which they tell us is FSBO and there's a for sale sign outside of it. Out of curiosity I looked for it online, but I couldn't even find it on any of the sites that supposedly list FSBO properties. If buyers can't easily FIND it, how are they going to BUY it?


Workinghard

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Re: Part 2 (after the realtor interview)
« Reply #6 on: August 14, 2014, 04:07:29 PM »
Okay, we definitely don't want to go the FSBO route. I'm thinking since it's a family home, 4BR, 3 baths we would be better waiting until spring since school has already started. What do you guys think? And what do you think about trying a flat fee broker?

DCJrMustachian

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Re: Part 2 (after the realtor interview)
« Reply #7 on: August 15, 2014, 12:51:41 AM »
Good luck finding a "flat fee broker".  In my experience, the whole real estate guild is in cahoots to weasel out their fees and 5-6%, no matter what. 

Be cautioned that the real estate agent claims to represent you, aka "sellers's agent" or the buyers.  In reality, they each represent only the deal.  If there is no deal, nobody gets paid.

FSBO is more MMM style: In-sourcing.  You can pay a flat fee for a MLS listing-only service so that you show up in all of the databases, and then pay a real estate attorney an hourly amount to handle the paperwork. 

I think in the low end of the real estate market, the 6% might come out to a reasonable transaction fee, but I don't see how selling a home in a hot market is worth astronomically more, when the level of work to list the house and negotiate a contract is nearly the same as it would be for a house in an undesirable area.

I am waiting for the internet to disrupt this industry with the ability for buyers and sellers to find each other and the idea that anyone can access database information.  Unfortunately the government regulators have helped entrench the real estate guild with an arcane patchwork of regulations and requirements.

Workinghard

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Re: Part 2 (after the realtor interview)
« Reply #8 on: August 15, 2014, 02:51:21 AM »
Way to make me waffle, DCJrMustachian! Okay, I contacted an attorney we know/trust  to see who he recommends for real estate. DIY doesn't mean we have to do the legal part. Like a poster suggested on another thread, I could also try the "make me move" thing on zillow to see what kind of response we get.

I do know most buyers do their own leg work nowadays searching the internet and using realtors to actually go see the homes. If I was looking to buy a home, that's the way I would do it.

marty998

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Re: Part 2 (after the realtor interview)
« Reply #9 on: August 15, 2014, 05:22:15 PM »
Ok I still don't understand. Why doesn't the buyer pay the buyer's agent that he/she has engaged?


Malaysia41

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Re: Part 2 (after the realtor interview)
« Reply #10 on: August 15, 2014, 05:36:44 PM »
If you have the time why not do FSBO?  We moved a lot when I was growing up and my mother sold our houses FSBO and from what she's told me she did really well. 

If you have the contact with a lawyer and don't mind doing the MLS listing yourself, and are willing to spend the time to truly understand the terms, why not?   Just because some people won't look at FSBO houses, an awful lot will - esp if you post professional photos and your house shows well and you price it right.    (sounds like you've already heard from the professionals what that price should be).

I'm thinking about our house in CA that we rent out.  I never even listed it.  I rented it through word of mouth and charged more than I was going to list it for and got it.  My point is that, even if the pool of people looking at your house is smaller than it would be going with a pro realtor, you may find a buyer willing to pay what you are asking regardless.  I only showed our house to one couple! That is a pretty small pool.  (And I'm happy with their rent).

Weedy Acres

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Re: Part 2 (after the realtor interview)
« Reply #11 on: August 15, 2014, 05:55:32 PM »
Ok I still don't understand. Why doesn't the buyer pay the buyer's agent that he/she has engaged?

Because that's the way the real estate industrial complex maintains their antiquated, overpriced system.  (4 hands in the pot?  Really?  What do the 2 involved brokers do other than lend their names and background?)  Because it's "free" to the buyer, buyers tend to use agents since they do some of the work for them and are (theoretically) advisers.  Because most buyers use agents, most agents will only show listed properties, so most sellers are forced into the system.

I think the single biggest change that could start to break up this system would be for buyers to pay their own agents.  I know I'd think twice about using an agent if I knew I was going to write them a check for $9000 at the end of it.  Then there would be a need for better information systems to connect sellers with buyers and we could leave out the antiquated, overpriced hand-dippers.

Workinghard

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Re: Part 2 (after the realtor interview)
« Reply #12 on: August 15, 2014, 06:10:32 PM »
If you have the time why not do FSBO?  We moved a lot when I was growing up and my mother sold our houses FSBO and from what she's told me she did really well. 

If you have the contact with a lawyer and don't mind doing the MLS listing yourself, and are willing to spend the time to truly understand the terms, why not?   Just because some people won't look at FSBO houses, an awful lot will - esp if you post professional photos and your house shows well and you price it right.    (sounds like you've already heard from the professionals what that price should be).


Since we do have the time, we'll give the FSBO a shot at the first of the year. As long as we have an attorney to do the legal work, I'm okay with that. Education would be good, but I'm usually brain dead after working and have been picking up a lot of OT. Next week I'll gross over $900 in OT. At least I know zillow is in the ballpark.  Today's update was 293,116. I checked on closing costs and that will be around 5k per an online calculator.


agent_clone

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Re: Part 2 (after the realtor interview)
« Reply #13 on: August 15, 2014, 06:56:38 PM »
Ok I still don't understand. Why doesn't the buyer pay the buyer's agent that he/she has engaged?

Because that's the way the real estate industrial complex maintains their antiquated, overpriced system.  (4 hands in the pot?  Really?  What do the 2 involved brokers do other than lend their names and background?)  Because it's "free" to the buyer, buyers tend to use agents since they do some of the work for them and are (theoretically) advisers.  Because most buyers use agents, most agents will only show listed properties, so most sellers are forced into the system.

I think the single biggest change that could start to break up this system would be for buyers to pay their own agents.  I know I'd think twice about using an agent if I knew I was going to write them a check for $9000 at the end of it.  Then there would be a need for better information systems to connect sellers with buyers and we could leave out the antiquated, overpriced hand-dippers.

Hmm, In Australia I think buyer's agents are pretty rare (although I could be wrong).  Traditionally houses have been advertised in the paper and in the REA windows, now most listings are online and if you get put on their lists they will send aound an email with their listings each week.  By chatting to REA who act for the various sellers they may suggest properties or know about properties that are coming up.  Personally I wouldn't want to pay for something that another person engages in that doesn't benefit me, if they want to use a buyers agent then they should pay for it (An example of something that I had to pay for that the vendor engaged in was a building and pest inspection which is mandatory prior to listing where I am).