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alexis5555

Realtors, learn something.

alexis5555
9 years ago

Prior to listing my house flat fee I spoke with a few realtors. Told them I wanted to sell quickly and would price the house aggressively and I offered them a 4% commission. Each said no way. I told them, talk to your broker. Each one said no way ,I'm not even going to ask my broker, he would never go for it in a million years.. I said, in that case I will list flat fee. They were like, eh, so what, who cares. Well, I listed it 30K below fair market, essentially devaluing every comp in the town. Taking all I would have paid them off the listing price and making every other house in town look overpriced.

Comments (37)

  • redcurls
    9 years ago
    last modified: 9 years ago

    Has it sold?

  • SaltiDawg
    9 years ago
    last modified: 9 years ago

    Well, he sure showed 'em.

  • stolenidentity
    9 years ago
    last modified: 9 years ago

    so what, who cares. LOL!

  • weedyacres
    9 years ago
    last modified: 9 years ago

    Sounds like a union mentality: everyone agrees not to budge from the agreed-upon (high) price, thinking that will preserve their system, and as a result lose market share to people who DO respond to market forces.

    The invisible hand is an irresistible force.

  • alexis5555
    Original Author
    9 years ago
    last modified: 9 years ago

    Its been on market less than a week, it will sell and it will sell faster than if I had a "full fee" broker.

  • SaltiDawg
    9 years ago
    last modified: 9 years ago

    Drop the price another $50K and it'll likely sell even faster... that'll fix 'em.

  • greg_2010
    9 years ago
    last modified: 9 years ago

    So, it's a million dollar home and you priced it 30K lower and you think that that will make a huge impact on the market?!?

    Are you willing to pay a buyer's agent if they bring you a buyer?
    Or was that 30k just the seller's agent cut? Then it's a 2 million dollar house?!?

    This post was edited by greg_2010 on Fri, Sep 26, 14 at 11:13

  • Linda
    9 years ago
    last modified: 9 years ago

    This is the most ridiculous post I have seen on garden web to date.

  • greg_2010
    9 years ago
    last modified: 9 years ago

    I contacted a handyman and offered to pay him half of his usual rate to build a shed for me. He rejected my offer so I built it myself!! That'll show him!!
    :)

  • sylviatexas1
    9 years ago
    last modified: 9 years ago

    It seems to me that people who sell their homes FSBO don't typically reduce the price by the amount that they would have paid a real estate professional.

    They price it at least as high as the Realtor advises & plan to pocket the money themselves, only to find that their buyers want to pocket that same money, or they price it higher than recommended, telling themselves that the Realtor wanted to price it low so it would sell more quickly.

    in which case it gets stale on the market.

  • Mmmbeeer
    9 years ago
    last modified: 9 years ago

    Sylviatexas said: It seems to me that people who sell their homes FSBO don't typically reduce the price by the amount that they would have paid a real estate professional.
    They price it at least as high as the Realtor advises & plan to pocket the money themselves, only to find that their buyers want to pocket that same money, or they price it higher than recommended, telling themselves that the Realtor wanted to price it low so it would sell more quickly.
    in which case it gets stale on the market

    Truer word were never spoken. We sold all three of our homes FSBO by offering our home at an obvious discount when shown against our comps. We agreed upon what we thought was fair market value for our home, and basically subtracted whatever amount we would have paid to a Realtor. It's been our experience that when buyers see you are passing on the savings, they tend to come to the understanding that the seller is not in competition with them, other potential buyers are. That strategy tended to attract multiple bidders who drove the price up and facilitated very quick sales. As opposed to using the strategy of pricing high and having potential buyers see that you intend to keep the entire amount saved from hiring a Realtor to yourself.

  • azmom
    9 years ago
    last modified: 9 years ago

    "It seems to me that people who sell their homes FSBO don't typically reduce the price by the amount that they would have paid a real estate professional.

    They price it at least as high as the Realtor advises & plan to pocket the money themselves, only to find that their buyers want to pocket that same money, or they price it higher than recommended, telling themselves that the Realtor wanted to price it low so it would sell more quickly. in which case it gets stale on the market".

    I thought a house is sold at market value, with or without realtor fee. Realtor fee is paid for a service, it does not increase the value of a house. Some sellers are capable of selling a house themselves. They do not "pocket" the money, instead, they do not "spend" money on an unneeded service.

    We FSBO our previous house. We priced it at market asking price, and sold it rather quickly at a price a little higher than similar houses sold in the same neighborhood by realtors.

  • christopherh
    9 years ago
    last modified: 9 years ago

    I wonder if the OP would be willing to go to work Monday and agree with his boss that he will do the same work for 33% less money.

  • weedyacres
    9 years ago
    last modified: 9 years ago

    A pay cut beats a job loss in my book.

  • allen456
    9 years ago
    last modified: 9 years ago

    When a house sells and the price becomes public record, there is no way to know if a commission was paid or not.

    And contrary to public opinion, the buyer always pays the commission. Sure, the commission is deducted from the sellers proceeds on the closing statement. But, it is the buyer who brings those proceeds to the closing.

  • SaltiDawg
    9 years ago
    last modified: 9 years ago

    "And contrary to public opinion, the buyer always pays the commission."

    Nope. If you agree to pay say $200K for a home, you have no idea what the arrangement might be between the seller and the agent. Nor do you know what other expenses that the seller included in his decision to sell at that $200K.

    If you re suggesting that if there was no agent fee that you could have paid less, that is not necessarily correct.

    The seller likely pays numerous fees in order to consummate the sale, and he may well have considered them all in order to arrive at an acceptable selling price, but make no mistake the seller pays them all.

    This post was edited by saltidawg on Sat, Sep 27, 14 at 10:01

  • christopherh
    9 years ago
    last modified: 9 years ago

    I think I understand what Allen456 means.

    It's like the fact than no business "pays" taxes, they are always passed along to the consumer in the price of the goods.

    Many times a seller will tell the realtor he needs to net $246,831 from the sale. So with a 6% commission and other fees, the house must sell for a minimum of $262,587.

  • ncrealestateguy
    9 years ago
    last modified: 9 years ago

    I would have skipped on this listing too. Something you have to consider is that at 4%, the listing agent would offer half of this to the buyers agent. Offering 2.0% in my MLS would hurt my reputation. Here, I have not seen anything lower than 2.5%, and most are at 3.0%. If I offered the buyer's agent 3.0%, that leaves me with 1.0% for a seller that has issues with me right from the start. Instead of putting up with that, I would opt to let this one go and try like heck to find a buyer for the place and earn 3.0%.

  • PRO
    Joseph Corlett, LLC
    9 years ago
    last modified: 9 years ago

    Realtors, if you'd really like to learn something, don't take listings from customers with over priced homes. Why? Because potential buyers will look up homes right down the street and buy them.

    My wife and I got a cold call from a young couple. They came over that day and made us an offer the next. They had made my overpriced neighbor an offer and he wouldn't budge. (He was asking 469K and the house appraised at 405K.)

    When you list a home, at least introduce yourself to the homeowners on the street. Or bring buyers to me for free.

  • ryseryse_2004
    9 years ago
    last modified: 9 years ago

    Don't understand why anyone would want to pay 6% for a Realtor to sell their home when we now have Zillow which is free! Also, Craig's List is great as long as you update every week so it doesn't end up on the bottom in a large market.

    If you can take great pictures (and who can't with cell phones and tablets) you can sell your house without a Realtor's cost.

    BTW, when a house sells, it doesn't state whether or not a commission was paid --- just the sold price. Selling your own home in a difficult market makes it more negotiable.

    .

  • gyr_falcon
    9 years ago
    last modified: 9 years ago

    lol @ "If you can take great pictures (and who can't with cell phones and tablets)..."

    There is overwhelming proof on the MLS that your statement isn't true! I don't even consider those things true cameras--their core purpose is something else. Even using proper equipment doesn't guarantee good photographs; the person using it should know proper lighting and composition techniques.

  • C Marlin
    9 years ago
    last modified: 9 years ago

    I don't understand the title of this thread...

    Realtors already know homeowner's needn't hire a realtor to sell their house, they also know they can determine the commission they will accept.
    I think the OP should learn Realtors can also refuse a listing.
    who cares...

  • lascatx
    9 years ago
    last modified: 9 years ago

    To the OP, hope you or yours don't run into the negatives of FSBO. I had a home I was trying to sell myself to avoid having to go to closing with cash I didn't really have. I had a group posing as buyers and a realtor come and case the place, then return when I was away and clean me out of nearly everything of value -- and some total crap too (I still laugh at the boat anchor of a computer they took). Even so, I was luckier than the realtor in Arkansas who wasn't heard from after she went to show a house. Her body has been found. Or flip that and buyers could not want to see a home FSBO if the get creeped out by having the buyer there, following them around, worrying about whether the person is a psycho. There are good security reasons for using agents.

    Avoiding those problems, there is still not having the advise in marketing the property to your best advantage, networking to get the best showings and response. screening qualified buyers, negotiating a contract, getting through inspections, dealing with the title company and getting through closing. And that's assuming buyers don't see your lower priced home as a desperate seller they can lowball or avoid the house altogether because it must need work or be hiding something. Maybe a realtor wouldn't take the listing at an average price -- why not? Others will avoid your house because their agent won't show it or because they don't want to deal directly with a seller -- too much potential for confrontation as well as not knowing if they can trust you without anyone in their corner. Most people get emotional about selling and buying homes, so having agents can keep thing rational and get the deal done when the parties themselves would walk away in spite (as it sounds like you may be prone to doing). You are looking only at your pocket and don't value other's time or efforts. Why should a buyer trust you? Why would an agent want to work for you?

    That's my perspective as another homeowner and potential buyer. The realtors have already pointed out that the 2% cut has to come somewhere, and it's likely to get you less in showings from potential agents. If your agent were to take the hit, they can't afford to market the property or invest much time in networking it for you. (You do realize your listing broker gets half and the agent typically half of that, out of which they pay the advertising and promotional costs as well as their staff -- whether it takes a week or six months to sell your home?)

    BTW, $30k is 6% of $500k, not a million. Still, that's only $30K to a cash buyer with no agent and all other factors being equal. A buyer with an 80% loan might pay $100-150 more a month. Yeah, it's every month, but they may only be in the house a few years and it's a small price for greater security when buying and in what they are buying. Plus, if they have an agent, would you take another $15k hit or want them to come up with that cash out of pocket? And if you don't get that fast, easy sale, how do you reposition yourself at a higher price when you list with an agent? Why would a buyer want your home at a higher price than where it was a month ago? We are also going into the traditionally slower part of the market - when you would seem to want everything working in your favor. Are you in a position where not selling until April is okay? And by then, your listing is so stale you will be hard pressed to get lookers with or without agents.

    It may not be so simple as "take that."

  • greg_2010
    9 years ago
    last modified: 9 years ago

    lascatx,
    He was only offering 4%, not 6%.

    So $30k is 4% of $750k (with nothing for the buyer's agent)
    Or $30k is 2% of $1.5 mil (if he's offering 2% to buyer's agent)
    Or $30k is 1% of $3 mil (with 3% going to buyer's agent)

    Who knows what the actual situation was. I doubt we'll hear back. After all, he's probably busy packing since his house is such a steal! :)

    I didn't actually do the math when I initially posted. I just guesstimated. And maybe he did mean that the 30k is 6%.

  • lascatx
    9 years ago
    last modified: 9 years ago

    I agree. It's not clear what the $30K was based on. I took it as 6%, but it could have been 4%, the flat fee he offered or whatever.

    And the thought that a single sale, much less a FSBO would devalue everything else in town? FSBO's are always taken with a grain of salt as comps and no one sale of any sort is going to set a marketplace.

  • SaltiDawg
    9 years ago
    last modified: 9 years ago

    "And the thought that a single sale, much less a FSBO would devalue everything else in town?..."

    What I am seeing in my neighborhood is three homes in Pre-forclosure within a block of my home with dramatically reduced Zillow estimates of their value. (They are all owner-occupied and not listed For Sale.)

    My home is not for sale, but I have to wonder if part of the valuation assigned my home by Zillow, etc, is influenced by these depressed valuations.

    This post was edited by saltidawg on Wed, Oct 1, 14 at 16:04

  • sylviatexas1
    9 years ago
    last modified: 9 years ago

    don't know if it is or not, but if the houses are sold as foreclosures for a greatly discounted price, see if you can get your tax appraisal district to reduce your assessed value accordingly!

  • greg_2010
    9 years ago
    last modified: 9 years ago

    My home is not for sale, but I have to wonder if part of the valuation assigned my home by Zillow, etc, is influenced by these depressed valuations.

    I'd look at it another way. Multiple foreclosures would be the result of the market going down instead of the cause of the market going down. Otherwise the owners would have just sold their home.
    One foreclosure could just be an irresponsible owner. Multiple foreclosures indicate something else.

  • ncrealestateguy
    9 years ago
    last modified: 9 years ago

    Good one Greg.

  • SaltiDawg
    9 years ago
    last modified: 9 years ago

    Cause and effect can be difficult to sort out.

    Of the three Pre-foreclosures, not one was or is for sale and the owners have no intention of selling.

    The valuation of my home means nothing to us unless we attempt to sell. The decreased valuation of those three homes do not make their mortgages more difficult to pay each month.

    The Zillow valuation for my home is nearly back to its 2006 valuation... has no effect on me as I have no plan to sell.

    Just curious if the Zillow algorithm was reducing my valuation due to those three homes

    I guess I'll never know.

    This post was edited by saltidawg on Fri, Oct 3, 14 at 8:51

  • greg_2010
    9 years ago
    last modified: 9 years ago

    Of the three Pre-foreclosures, not one was or is for sale and the owners have no intention of selling.
    Because the market has gone down and they owe more than their house is worth. If they could sell their houses, they would. If they could pay what they owe, they wouldn't be in pre-foreclosure in the first place.

    The decreased valuation of those three homes do not make their mortgages more difficult to pay each month.
    No it doesn't. But if someone starts to have trouble paying their mortgage, they would sell their house and downsize if they could. It doesn't make sense to go into foreclosure if you can either (1) pay your monthly mortgage commitment or (2) sell your house.

  • SaltiDawg
    9 years ago
    last modified: 9 years ago

    Er, OK.

    The houses have been in Pre-forclosure for over three years... seems they periodically make a mortgage payment.

    As I said, "I guess I'll never know."

  • ncrealestateguy
    9 years ago
    last modified: 9 years ago

    Salti...
    I responded to your smart-alek remark that was directed to me for no good reason. Apparently, you went back and edited your original remarks. And apparently GW deleted my post. Which was professional, on topic and non emotional.
    GW... in the future, if you decide to edit my responses, please send me a PM explaining your reasons.

  • alexis5555
    Original Author
    9 years ago
    last modified: 9 years ago

    LMAO, yes, I'm busy packing. since, someone asked me "did it sell" 24 hours after I listed, and as anyone in RE should know, it's not sold until escrow closes. So, actually, we are in contract (I have a backup offer) to close beginning of Next week. Yes, I subtracted what I would have paid a realtor from the asking price, looking for a quick sale I also subtracted my carrying costs for the winter. Average DOM in my zip for sold homes is 180+ days.
    Oh, and sorry I put it 30k belove comps asking price not selling, it was very hard to price as no really comparable homes had sold in the past year when I was pricing it. There was one house that went under contract that was similar to mine in age/square footage/looks, I only knew the price it went pending when I priced my house. I priced my house 10k less than their asking when it went pending. Turned out I sold for same amount.
    As for realtors not wanting to show my property, it's the buyers who decide what they want to see, maybe a few realtors passed on showing my house. Yea, so what.

    This post was edited by alexis5555 on Fri, Oct 31, 14 at 3:21

  • alexis5555
    Original Author
    9 years ago
    last modified: 9 years ago

    So, based on the selling price of my house, and using the other house that closed as comp, we did not really effect any drop. However there's a whole bunch of houses right now looking very over priced.. And I'm really glad they turned me down.

    This post was edited by alexis5555 on Fri, Oct 31, 14 at 3:42

  • Linda
    9 years ago
    last modified: 9 years ago

    There was one house that went under contract that was similar to mine in age/square footage/looks, I only knew the price it went pending when I priced my house. I priced my house 10k less than their asking when it went pending. Turned out I sold for same amount.

    Then you are not 30k under current market value. YOU SOLD for market value.

    GLAD YOU LEARNED SOMETHING! :)

    And just for the record, "had you sold for 30k under market value, which you did not, it doesnt make the other homes look overpriced, it makes YOU look like you were desperate to sell. ONE HOME does not create market value.

    So in the end, you wanted realtors to take a 4% listing, 30k over priced. Every last one of them did the right thing. Glad it worked out for all of you!

    This post was edited by linda117 on Fri, Oct 31, 14 at 8:54