If I was going to sell in this market, I would do FSBO and offer 2.5% to buyer broker. Or, I would hire a realtor and add the commission to what I expect to sell for.
OT: For sale by owner ?
- Thread starter Plum Street
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anon_0k9zlfz6lz9oy
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Youre free to do as you please but youd net more money listing traditionally with a top agent in your area. Factually speaking
Corporate America.
BTW, you are far too defensive. I was trying to understand exactly why 5% was the “standard” because I was once told that it was driven by the umbrella brokers like Weichert along with the NAR. Which I guess is not true. OK by me. Anyway, I’d be more impressed if you told me that you charge something like 8% because you get your clients X% over comps in the area. Why should a superstar broker stop at 5%. Or 6%. Heck, go for 10%.
I’m sure that’s the case in some markets. Like I said before, I’ve sold with and without a broker before. The funniest is trying to get a broker to tell you their opinion of value. I eliminated the brokers that ask what do you think it’s worth. LOL
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anon_0k9zlfz6lz9oy
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Easiest way is show a seller 4 comps, 2 better, 2 worse. Ask them if they had to pick 2 better and 2 worse which and why. Then show prices they sold for. List price is between #2 and #3. They pick their price as if they were the buyer, broker and bank and dont even realize they did
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anon_0k9zlfz6lz9oy
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Next issue. Setting aside the commission debate, why don’t realtors adopt the law firm model and put the umbrella brokers like Weichert out to pasture. I have never once used an agent because he/she was affiliated with one broker or another. Weichert, CB, KW - I could care less. I always used someone local that I trusted and knew.
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anon_0k9zlfz6lz9oy
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I dont think youd find a single realtor who would disagree with you. Owners list with agents, not companies. Ultimately you have to hang your license somewhere though. Some brokerages do provide better training than others tho so you usually know with X brokerage your more likely to get a high quality agent.
I have considered opening a brokerage that is a very simplistic model. 80/20 split to agents and $12,000 annual cap. Aka, as soon as we make $12K off their deals their 80/20 goes to 100% until their anniversary date where that then resets. Id provide super high quality training and have a volume model. And the agent would have full autonomy to do whatever they want. Charge 1% or charge 10%, i frankly wouldnt care
If it was that easy, RUAldo would be right about his assumptions. Personally, I think realtors are more important to buyers then sellers. Especially if someone is moving to a new area. For sellers, it’s just time and hassle.
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anon_0k9zlfz6lz9oy
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Realtors are definitely more valuable to buyers than sellers. They are still valuable to sellers tho and ultimately net them more money.
Dang- some people are awful free with other peoples living. You want the man to be happy with 1/5 of his current value. And, expect he will always just select the houses that will move at full price in 24 hours. This is getting stupid now.
Why don’t you cut your salary at the same rate. You should be ok…
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anon_0k9zlfz6lz9oy
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It is almost as if he is expressing that you should get paid more for doing a ****** job and having to house sit for two months versus doing a great job, get above ask and selling it with multiple bids within four days
Bottom line, nobody needs a realtor for selling a house, it's just a time and hassle thing. You can get on the MLS and offer buying agents 2.5%.
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anon_0k9zlfz6lz9oy
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Agreed. Anyone can sell a house fsbo, totally agree. However, the stats show that youre leaving a ton of money on the table. Youre “saving” 2.5% only to lose 14.5%
the concept is that easier jobs should costs less. Would you pay a plumber the same for installing a dishwasher vs a boiler? It is a free market. The majority of the market isn’t ready FSBO.
Just playing devils advocate, if the seller has a good idea what his house is worth - comps , similar sales …let’s say the pretty much exact house next door sold for 500k . He would have to be an idiot to lose 14.5% on the sale going FBSO
Losing 14.5% by not having an agent is a crock of ****. LOL!
It is very easy to assess value for most houses. If you have any concerns, pay for a formal appraisal. Problem solved. Still way, way, way, way cheaper than a realtor.
If I believed I could make a $7,500 commission for doing little to no work because the house will sell itself in less than 24 hours = sign me up! That has nothing to do with your value. And it’s not a pay cut because if you looked at it in terms of how much you would make vs. hours spent you would see it was likely a lucrative opportunity. In other words, if it was $7,500 and you spent 10 hours on the deal - pretty sure most folks think $750 p/hr for hand-holding and doing some leg work is pretty good.
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anon_0k9zlfz6lz9oy
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You are correct, it is a free market. Commission is fully negotiable.
Which scenario would you prefer
1) your house is listed for $700K and within 4 days your agent gets you 8 bids, gets the buyer to waive appraisal and inspection contingency and winning bid is $760K and you pay 5%
2) your same house is listed for $750K (because you want more money than agent has suggested listing for) it sits for 2 months, agent has open houses every weekend and shows it 4-5 times per week and it sells for $705K after having to go through a price reduction and you pay 4%.
3) you list FSBO at $700K offering 2.5% to buyers agent. Buyers agent comes through, offers $700K on good terms and you pay 2.5% commission
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anon_0k9zlfz6lz9oy
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Haha well, welcome to Kovats Real Estate School. We have classes starting every Monday except 12/27. I encourage you to sign up and give it a shot. KovatsSchool.com
Come on now…let’s not be silly. You, as an agent, know the second you walk into certain houses whether it will sell quick if priced right, especially in the current real estate market. Don’t pretend like there is some big mystery here. Great houses at FMV in certain price ranges are gone in a matter of hours right now and many don’t even make it to the broader market. I’ll take $7,500 for a lay-up that takes me one try instead of say $10K for a half-court shot that takes me 50 tries.
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anon_0k9zlfz6lz9oy
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Its really not lol. Im a realtor and every house i look to buy personally myself, i exclusively look for fsbo’s. Why? I can bend them over and rob the house basically. The data backs this up. The stats actually show the difference is 26% however in 2018 i compiled numbers in my markets on what I deemed to be comparable FSBO’s vs agent listed homes and found it to be more like 17%. https://listwithclever.com/real-estate-blog/fsbo-statistics/
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anon_0k9zlfz6lz9oy
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anon_0k9zlfz6lz9oy
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So why dont you start a company that does this?
I think you are missing a point I’ve made several times. There are certain houses that sell themselves and require no open houses, little marketing, etc. (I.e., the “lay-up”). There are certain houses that have characteristics making them extremely hard to sell (I.e., the “half-court shot”). If the only way I could get the “lay-up” was to shave my commission it seems like a no-brainer. Less hours spent = more money on a p/hr basis. I’d always take $7,500 for 10 hours of work over $10K for 25 hours of work, or $0 if the owner went elsewhere.
The problem with this type of aggregate data is that you need to back out the stupid people who try to sell themselves just because they are cheap and don't put in the work.
Do that and then we can compare.
So- let's say in the current market, this is true. It isn't but let's say it is...You do realize there are other times during a long career where houses will just sit even if they are perfect.
I think a few of you guys need to take some business classes as well. You are banking on it always being a hot market.
And there is NO realtor that is going to just be able to get every house that will turn in 48 hours at full price. It just doesn't happen and.....the f-ing competition for those houses is fierce.
And if it is so damn easy- I think a couple of you should take KYK's course and you have a job waiting at Skoolies- and you have the easiest job in the world and just making a quick 7500 every day or two.
I already offered him a job. He is a corporate monkey though. It's tough to leave that when you sit on Zoom 5 days a week doing nothing.
You keep thinking the job is done once a contract is signed. I am seriously starting to wonder if you ever actually bought/sold a house yourself. Like I call you once, we speak for 5 minutes and you say sure, you can sell my house. Then I open the door, people walk in and hand me a signed contract and I leave. That's basically your interpretation lol
That would be like 80-90% of FSBOs. I bought a FSBO 3 years ago for 80 cents on the dollar because they didn't want to use a realtor. Saved 25k commission and lost 75k equity.The problem with this type of aggregate data is that you need to back out the stupid people who try to sell themselves just because they are cheap and don't put in the work.
Do that and then we can compare.
Unless you are talking about a market like 2008 or MAJOR downturn (which would be no secret to buyers/sellers) this scenario does not exist. A perfect house (good house + good location + good price point) in Northern NJ will sell itself. A perfect house will never “sit” absent extraordinary circumstances.
We aren’t banking on it always being a hot market. We are mainly talking about this now because it has been, and continues to be, a hot market. This thread would be completely different, including my comments, if it was 2008-2009.
Not sure this comment is necessary since many of us are “corporate monkeys”, and I’m not even anti-agent. I’m in tech so digital transformation and driving efficiency is a guiding principle. For some reason, I find it interesting that the real estate industry has not truly evolved like other industries. FWIW, I have a professional degree and my job is such that a beautician or landscaper, with no meaningful underlying education, can’t take a test and within the blink of an eye start handling six and seven figure transactions.
If it's in a cookie cutter neighborhood where all the houses are identical for the most part (I'm talking condos, townhomes) then yes it's easy but FSBOs price their properties wrong all the time. The longer your house sits on the market, the worst it becomes because too many people think there is an underlying problem when the real problem was it wasn't priced appropriately.
Would you say the FSBO folks overprice ??
I think the take away form this thread is I would only sell without a realtor if I had a buyer ready to go (that wasn’t using a realtor) and I knew the value of the home pretty close. Otherwise pay the realtor since you’re gonna have to pay 2.5 percent anyway.
So the wifey and I went to a new construction open house in Chatham. The listing agent was there and said their listing fee is 1% instead of 2.5% and he said if we purchased the house we saw and listed our current home with his agency they would give $5,000 towards our closing.
So fee compression is coming!
So fee compression is coming!
Chatham. The house was $1.85M- busy road and an unexceptional home. That house would have been $1.4M 2 years ago.