Question about Realtor's Fees

CassandraNovember 7, 2013

Since prices are rising I'm thinking about putting my house on the market. Before committing to selling, however, I would like to know what the market price might be, and I don't trust sites like Zillow to be accurate. My question concerns engaging a realtor. If I do so, can I ask him/her to do the comps and set a price even though I am not committed to selling before I see that price? And if I decide at that point not to sell, how is the realtor compensated for the work?

Thanks!

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otterkill

I would look into an appraisal company your local bank uses. It doesn't matter what the real estate broker says. The banks have the last word and will only lend 80% of appraised value for a conventional mortgage. I just bought a house and it came in under appraised. I had to renegotiate with the sellers and they met me half way down to the bank appraised value. So in addition to the 20% I had to come up with the difference the bank would lend me. You might not like what the bank appraiser says, but this is the reality in today's real estate market and at least you'll know exactly where you stand.

    Bookmark   November 7, 2013 at 9:15AM
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live_wire_oak

Doing a CMA is part of a realtor's prospecting for your listing. Take a look at your local market for 3 realtors to talk to about your potential listing. I'd pick a high volume lister, an up and coming younger person, and someone who specializes in your neighborhood. You'll probably get 3 different proposals, but it will be helpful to you to see each of their viewpoints.

Then pick the realtor to list your home with who has the best marketing plan and who tells you the truth about your house. That truth may be painful to hear, such as it's not valued as much as you think, or it needs work before listing. It's much better to hear that before you list than after as a reason it's not selling. The realtor who sells your house will be compensated with the commission.

The others, well, doing prospecting and presentations is part of chasing that commission and they don't expect to always be successful doing that. Just giving them a phone call to say thank you and maybe a restaurant gift certificate would be more than expected. But, it's always good to keep on good terms with them, because they might be the ones who have a buyer for your house, and they'll remember someone who was nice to them a bunch quicker than someone who didn't even let them know they didn't get the listing.

    Bookmark   November 7, 2013 at 9:49AM
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DLM2000

A good realtor should be in touch with the reality of your local market, appraisers and lenders and price your house accordingly.

As for how to compensate if you choose not to list with them, that is the nature of their work. It's no different than asking 2 contractors to bid on work at your home and choosing one over the other (or neither) - you don't compensate them for that because it's the nature of their work.

    Bookmark   November 7, 2013 at 9:57AM
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LOTO

Most likely 20 appraisers will get you 20 different appraisal prices and so will 20 different Realtors....pricing a home is not an exact science at least in my area anyway.I wouldn't spend the money on an appraiser.

I usually do several price opinions/market analysis a week and never have charged for them. I expect that the Sellers are getting an opinion from several other Realtors and sometimes I get the listing and sometimes not...it is a service most Realtors provide for free.

    Bookmark   November 7, 2013 at 11:00AM
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Cassandra

Thanks all. Very, very helpful information!

    Bookmark   November 7, 2013 at 6:45PM
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