Real Estate Commissions

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desertsun
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Real Estate Commissions

Post by desertsun »

I am looking to sell my home in White Rock and was wondering what kind of deal (discounted commission/fixed price commission) one can get in today's market or is it essentially full price commission.
Austin
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Re: Real Estate Commissions

Post by Austin »

I'd go full price commissions if your house is worth over 500K. You'll want to go full buyer agent commission regardless to attract buyers (trust me, bad buyer agent commissions put your house in no mans land) and a good sales agent can easily get their 1.5% or whatever it is on a 500K house. (that % drops as your house gets more expensive, btw)

Rather than focusing on getting a cut in the commission, focus all your energy on getting a talented, aggressive realtor who just positively falls in love with your house and thinks it's worth the moon (ie, 5-10% more than any other realtor). Make sure they have a track record of selling at quoted prices and not just over promising. If you're worried about them over promising, a short contract timeline will work fine to light a fire under their ass.

Make sure you find out how much energy and effort they are going to marketing your house. If they plan on virtual tours, websites, etc, they're good to go. Not because those things will necessarily sell your house (they will, trust me) but also because they really must believe your house is worth it.

Avoid realtors who want to price 'sharply'. That's code for stay the **** away from my house. (unless you're particularly desperate to sell, of course)

Make sure you see at least 3 realtors and have them quote your home after coming by and looking at it. Choosing them is pretty trivial .. just look around at the signs around your area. If you're feeling brave, throw one underdog into the mix.

This whole getting a cut in commission really only makes sense on bare land, properties worth < 200K, etc, where the commission really eats into the profits.

Also, be ware that when you see realtors you're revealing your hand to people who may be potentially representing buyers if you don't go with them. An opportunity to market your property but also a chance to tip your hand as to what price you might sell at.
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jesse1
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Re: Real Estate Commissions

Post by jesse1 »

Also remember that "full commissions" are negotiable after the contract is signed. Try refusing to budge on a $4K BID/ASK gap and see what happens. Just tell your Realtor "Do what it takes." (That's double-secret language for "Eat the shortfall." Don't tell anyone else though...)

Impossible you say? I've seen it done.
Austin
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Re: Real Estate Commissions

Post by Austin »

Actually, that has happened whenever I have bought (getting realtor to eat commission) because I've always double ended when I bought (gone straight to realtor).

However .. as a seller, I generally recommend against double ending it. Your seller agent probably isn't getting you the best deal as he see dollar signs. Maybe warn him up front that if he double ends it you'll ask him to eat a good portion of the commission to keep him out of that particular cookie jar.

And, to be honest, as a buyer .. I sometimes think back and wish I had a more objective buyer agent on my side. Those are supremely hard to come by though.
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silverman
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Re: Real Estate Commissions

Post by silverman »

Austin wrote:focus all your energy on getting a talented, aggressive realtor who just positively falls in love with your house and thinks it's worth the moon (ie, 5-10% more than any other realtor).
Bad advice... real bad. Some realtors will tell you what you want to hear to get the listing and then they'll try to convince you to lower the price so it sells. Unless the house is priced competitively, it may not sell... reagardless of what your listing agent does...
Make sure you see at least 3 realtors
Now that's a very good advice. Talk to people... it's free... make sure you are dealing with an honest person.

And NEVER cut the buyers agent commission!
Austin
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Re: Real Estate Commissions

Post by Austin »

silverman wrote: Bad advice... real bad. Some realtors will tell you what you want to hear to get the listing and then they'll try to convince you to lower the price so it sells. Unless the house is priced competitively, it may not sell... reagardless of what your listing agent does...
This is exactly the line a realtor will try to feed you. Avoid such realtors like the plague. They're interested in one thing and one thing only - selling your house and collecting their commission - they don't care less about getting the highest price possible.

Only YOU know how desperately you want to sell. You want the best price possible and you want a realtor who can get you that price.

If you have to sell and you're one a deadline and you'll accept less than the highest price possible, than sure, price sharply. Find the realtor who'll price you sharply. (which is exactly what I said in my post and which silverman glossed over)

But you know what? I expect my realtors work super hard for their money. And I push them super hard to get that extra 5%.

A good realtor can go to the wall and get you that 5%. That's why they're the good realtors.

I also avoid selling when I desperately have to. That's the surest way to lose money on any deal.
Last edited by Austin on Tue Apr 05, 2011 5:17 pm, edited 1 time in total.
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Re: Real Estate Commissions

Post by Austin »

Silverman, it's realtors like you which make for a good case to skip realtors and go straight to the MLS without a seller agent.
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Re: Real Estate Commissions

Post by Austin »

Bad advice... real bad. Some realtors will tell you what you want to hear to get the listing and then they'll try to convince you to lower the price so it sells. Unless the house is priced competitively, it may not sell... reagardless of what your listing agent does...
also, if you bothered reading what I wrote, I suggested reducing the contract time if you had reasons to believe your realtor would over promise. Also, ask for an extensive marketing plan -- no realtor in his right mind is going to invest a lot in a listing and over promise, at least not one who is profitable.

I have seen too many realtors just give up the ghost too easily in order to get their commission. They call that 'pricing sharply'.

You want to find a realtor who will be a good advocate for your property. Someone who believes in it and understands its unique value proposition. And someone who's willing to pitch it as best as they can and has put some skin in the game.
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silverman
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Re: Real Estate Commissions

Post by silverman »

Austin wrote:Silverman, it's realtors like you which make for a good case to skip realtors and go straight to the MLS without a seller agent.
Can you elaborate on this one?
Some buyers may need a buyers agent (what you call seller agent) some buyers don't.
In some cases it makes sense to go to the MLS without a buyers agent... all depends on how knowledgeable and experienced the buyer is.
I expect my realtors work super hard for their money. And I push them super hard to get that extra 5%.
You can push all you want. And you can dream about the extra 5% all you want... If the listing is overpriced, it won't sell, period.
Every buyer has access to all the listings (well 99.9% of them) on MLS. The MLS does the marketing. In the pre-internet, pre-ms.ca days yes the the realtor had to do a lot of marketing, but now... hello Austin.. it's price, access to property and buyers agent commission that sells listings. Welcome to the... Internet days.
Last edited by silverman on Tue Apr 05, 2011 5:52 pm, edited 1 time in total.
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Re: Real Estate Commissions

Post by Austin »

It's realtors who think you have to price sharply is the only way to sell a listing. Those realtors make me doubt the profession in its entirety.

Yeah, if I must do or die sell, price sharply indeed. But what about if you have some leeway? What if you'd like to sell, but you have to some time to risk it and let the market move upwards and past your list price.

Sometimes you want a realtor who will get you something above the do or die price. The sharp price.

Sometimes, you want a little extra for handing over your commission.
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MikeStewartRealtor
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Re: Real Estate Commissions

Post by MikeStewartRealtor »

When interviewing try grinding the Realtors on their commission. Only hire the Realtor who refuses to cut his commission or negotiates in a way that results in them getting their full commission.

The Realtor who can negotiate their full paycheque is the one you want representing you in a negotiation on the sale of your home.
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Thompson
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Re: Real Estate Commissions

Post by Thompson »

silverman wrote:
I expect my realtors work super hard for their money. And I push them super hard to get that extra 5%.
You can push all you want. And you can dream about the extra 5% all you want... If the listing is overpriced, it won't sell, period.
Exactly. Good realtor should work hard for you to get the top dollar that the market possibly can provide, but not for any "extra". If you don't priced sharp, you waste everybody's time, smart realtor will walk away from you.

I doubt Austin is an experienced seller.
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Thompson
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Re: Real Estate Commissions

Post by Thompson »

MikeStewartRealtor wrote:When interviewing try grinding the Realtors on their commission. Only hire the Realtor who refuses to cut his commission or negotiates in a way that results in them getting their full commission.

The Realtor who can negotiate their full paycheque is the one you want representing you in a negotiation on the sale of your home.
I hear you. a hot realtor don't need a cheap and difficult seller. :mrgreen:
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silverman
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Re: Real Estate Commissions

Post by silverman »

MikeStewartRealtor wrote:The Realtor who can negotiate their full paycheque is the one you want representing you in a negotiation on the sale of your home.
Sorry Mike, with all due respect... this is a tired line that realtors have been using to justify their commission.
MikeStewartRealtor
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Re: Real Estate Commissions

Post by MikeStewartRealtor »

LOL! No, you want to hire a Realtor who is a good negotiator. Someone who gives it all away up front when getting hired, ain't going to do much better when the offers come in...
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