Listing house
- Thread starter jyeh74
- Start date
homer_simpson
Well-known member
irvineboy said:
Maybe you can refer her to IrvineRealtor or USC.. I'm not sure their rates but I would think they would be pretty competitive.
If not, I heard RedFin is pretty low cost?
sgip
Well-known member
Ask for less than standard commissions and you get a less than standard realtor. Take a look at the "one cell phone photo" listings you see on line. Is that kind of service level really going to get buyers attention?
Let's say they're selling for $600,000 - roughly the median home price. You'll need to spend $500 on a stager and another $500 for quality photographs, perhaps $500 for real gardening, and another $500 for painting. That kind of work done on the property often yields a good $5k-$10k in price, but is costing the listing Realtor quite a bit of their 2% commission. Remember, from there the Realtor net's out other expenses - signs, travel, etc.
Net, net, at a 4.5% listing, you're getting a realtor willing to work for less than 1.0% or so, not the 2.0% gross. Don't expect much in service or negotiation skills then from an agent who offers the lowest price.
Don't pay Nordstrom prices for Dollar Store service. No one wants that, but when trying to press your expenses down to the bottom of the barrel, what kind of agent are you going to scrape up?
My .02c
Let's say they're selling for $600,000 - roughly the median home price. You'll need to spend $500 on a stager and another $500 for quality photographs, perhaps $500 for real gardening, and another $500 for painting. That kind of work done on the property often yields a good $5k-$10k in price, but is costing the listing Realtor quite a bit of their 2% commission. Remember, from there the Realtor net's out other expenses - signs, travel, etc.
Net, net, at a 4.5% listing, you're getting a realtor willing to work for less than 1.0% or so, not the 2.0% gross. Don't expect much in service or negotiation skills then from an agent who offers the lowest price.
Don't pay Nordstrom prices for Dollar Store service. No one wants that, but when trying to press your expenses down to the bottom of the barrel, what kind of agent are you going to scrape up?
My .02c
paperboyNC
New member
irvineboy said:
4% means 2.5% for buyer's agent and 1.5% for seller's agent? If she really wants to save money maybe she can offer a seller's agent a flat fee whether the home sells or not? Realtors will also work for less if you are asking for less money since it's a guaranteed sale.
sgip
Well-known member
Sales aren't guaranteed. There are non-sales related items that come up all the time from Short Sale, Easement, Property Tax, HOA liens, property condition issues like termites... the list is endless.
On the one hand, planting a sign in the ground and taking one cell phone picture could result in 100 offers, even as the market enters a quiet phase.
On the other hand, when there's a boundary line dispute or an old HOA infraction that won't get waived, are you going to get the kind of service and experience you need to unravel these issues from an "order taker realtor?"
On the one hand, planting a sign in the ground and taking one cell phone picture could result in 100 offers, even as the market enters a quiet phase.
On the other hand, when there's a boundary line dispute or an old HOA infraction that won't get waived, are you going to get the kind of service and experience you need to unravel these issues from an "order taker realtor?"
irvinehomeowner
Well-known member
@irvineboy:
Have your friend interview the realtors on this forum.
I recommend IrvineRealtor and if you've seen his listings you will know why. People I know who have used him can vouch too (some are members of TI).
Have your friend interview the realtors on this forum.
I recommend IrvineRealtor and if you've seen his listings you will know why. People I know who have used him can vouch too (some are members of TI).
usctrojancpa
Well-known member
I'm going to have take a different position than the majority of folks in this thread (as well as most all realtors) and here is why. Let's say you have a realtor in the Inland Empire like Corona and a realtor in Irvine where the listing agent makes a 2.5% commission on the listing side (assume no double dipping). As we all know, home prices in Irvine are about double what they are in Corona. So the agent in Irvine gets paid double only because the price of the home is double versus the Corona counterpart and not because they are doing twice the work or a way better job. The Corona agent will have similar expenses to their Irvine counterpart (including broker split if they work at a large chain). So how is that fair to both the seller of the Irvine home and the listing agent of the Corona home? Guess what, it's not.
Even though I am a firm believer that you get what you pay for, it doesn't always mean that you get more or better service by paying more. The reality is that the compensation structure that agents are paid is an old dinosaur just like a cassette player or an 8-track that needs to be revisited and revised to align the interests of the agents closer to those of their clients. I've seen more agents that I can count who have collected a 2.5% listing commission that put no time, effort, marketing, etc into a property so just because you are paying an undiscounted commission doesn't mean you are going to get good service. If an agent tells you that they are above working for anything less than a 5% commission, then it's time to start talking to other agents. In my opinion, most high priced area agents are overpaid for what they do but hey that's just my opinion.
I've actually been using a variable based commission structure for my sellers clients with good success. They were surprised that any agent would even come up with that kind of out-of-the-box idea. Basically the way it works is that myself and the seller come up with an estimated price that we think the home will sell for and at that price the discounted base commission % for the listing commission is established. If I obtain a higher sales price than the amount we agreed on, the listing agent commission increases. If I sell the home for a lower amount, the listing agent commission decreases. That's my way of better aligning my incentives (to make a higher commission) with that of my clients (higher sales price).
Even though I am a firm believer that you get what you pay for, it doesn't always mean that you get more or better service by paying more. The reality is that the compensation structure that agents are paid is an old dinosaur just like a cassette player or an 8-track that needs to be revisited and revised to align the interests of the agents closer to those of their clients. I've seen more agents that I can count who have collected a 2.5% listing commission that put no time, effort, marketing, etc into a property so just because you are paying an undiscounted commission doesn't mean you are going to get good service. If an agent tells you that they are above working for anything less than a 5% commission, then it's time to start talking to other agents. In my opinion, most high priced area agents are overpaid for what they do but hey that's just my opinion.
I've actually been using a variable based commission structure for my sellers clients with good success. They were surprised that any agent would even come up with that kind of out-of-the-box idea. Basically the way it works is that myself and the seller come up with an estimated price that we think the home will sell for and at that price the discounted base commission % for the listing commission is established. If I obtain a higher sales price than the amount we agreed on, the listing agent commission increases. If I sell the home for a lower amount, the listing agent commission decreases. That's my way of better aligning my incentives (to make a higher commission) with that of my clients (higher sales price).
usctrojancpa
Well-known member
I think that sellers should have the right to be able to negotiate their commission and not just get "stuck" with paying what the perceptive norm of 5-6%. Just like RedFin has empowered both buyers and sellers and opened up that realtor blackbox known as MLS to the public. There's no one right answer on what various sellers should pay to sell their home (homes at different price points need different marketing strategies) but it's time that the commission structure changes to something more progressive. I'm just trying to come up with something fair and reasonable for myself and my clients. As my grandfather used to tell me...."the greedy can lose out twice."bones said:
irvinehomeowner
Well-known member
It's simple, a good agent will be flexible and give you options.
If not, move on.
If not, move on.
usctrojancpa
Well-known member
+1 Very well put.irvinehomeowner said:
woodburyowner
Well-known member
I feel the % commission structure is a very outdated compensation model that needs to be revised. I definitely would not consider negotiating this % as trying to nickel and dime an agent (look at the actual $ amount payout). I agree with USCTrojanCPA's example of the house in Corona vs. Irvine. Same amount of work, huge different in compensation for the agent.
There is A LOT of room to work with and it's not so black and white that an agent who takes less commission is going to be worse than an agent who takes a higher commission. There are many hungry agents out there that will bust their ass at a good rate to get you as a client.
There is A LOT of room to work with and it's not so black and white that an agent who takes less commission is going to be worse than an agent who takes a higher commission. There are many hungry agents out there that will bust their ass at a good rate to get you as a client.
irvinehomeowner
Well-known member
I'm not an agent but no commission is paid until the house sells.blocks said:
usctrojancpa
Well-known member
The selling agent does not get any commission if the home does not close escrow and does not get reimbursed for their marketing expenses related to the listing.blocks said:
sgip
Well-known member
Another side piece to the "Full Commission" realtor: Many of the high cost name brand realtors out there have an initial meeting, but then transition you to one of their team members to handle the real work. These team member agents tend to be new and untested.
Many of the move up, second purchase clients I've encountered who go through some of my Realtor contacts for their current purchase tend to do so because of their experience with the high cost brand name agents.
It's unfortunately true that you don't always get what you are paying for when shelling out 5-6% for someone you often see advertising on shopping carts or weekly mailers dropped on your doorstep.
My .02c
Many of the move up, second purchase clients I've encountered who go through some of my Realtor contacts for their current purchase tend to do so because of their experience with the high cost brand name agents.
It's unfortunately true that you don't always get what you are paying for when shelling out 5-6% for someone you often see advertising on shopping carts or weekly mailers dropped on your doorstep.
My .02c