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Real Estate commission....is it negotiable?

Real Estate commission....is it negotiable?

Old Apr 7th 2008, 6:41 am
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Default Re: Real Estate commission....is it negotiable?

Originally Posted by R I C H View Post
Happens all the time in many aspects of business though, doesn't it?

You want some information, don't want to rely on just one source, so shop around and make comparisons. There's never an intention to ultimately engage all (or perhaps any) of the potential contacts you make, so I wouldn't really worry about an ethical dilema.
Oh, I know. Given the inference of some posters that the way realtors do business, and the commission they charge, is somehow not quite on the level I was trying to be a little bit provocative.
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Old Apr 7th 2008, 8:36 am
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Default Re: Real Estate commission....is it negotiable?

Originally Posted by Ontheboatout View Post
I've been to see a brilliant house in Truro tonight that the couple want to try and sell privately first. If after three months they cannot sell they plan to list with me. In the meantime they have agreed 3% if I bring a buyer. They have posted photos if anyone is interested - PM me and I'll ask their permission to show them.

This is called Fee Agreement/Customer status that means I owe them only a duty of care, nothing else. I cannot support their interest in any way, advise them, negotiate, set a price, check out buyers credentials, find out the buyers motivation, show them actual selling prices instead of fictitious MLS listing prices etc etc.

I can see this a sensible approach that will be seen more and more - just seller beware instead of buyer beware.
Presumably his 3% deal is what any realtor bringing in a buyer would expect. My understanding is that the buyers realtor would approach the sellers and if they said no they would expect the buyer to pay. This would, I am sure, be reflected in the offer price so the seller would ultimately be paying anyway.
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Old Apr 7th 2008, 1:55 pm
  #138  
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Default Re: Real Estate commission....is it negotiable?

Originally Posted by JonboyE View Post
If you are dead set on it, I guess you can always try a FSBO first. There are some problems:

a) A house will sell quickly if it is under priced, will sell in a reasonable time if it is correctly priced, and will never sell in a million years if it is over priced. How do you know what the right market price should be? You can ask a realtor or two to give you a market appraisal, but if you have no intention of using their services it is hardly ethical.

You can guess of course, but the FSBOs I have seen have been greatly over priced. Sometimes people have an idea in their own head of what their house is "worth" that has little relation to what other people are prepared to pay for it.

b) How do you find someone who is prepared to pay for it? A realtor is not going to show it unless you are prepared to pay the selling agent's commission. Many will not on principle. You can't list it on the MLS. You only have the advertising you pay for. You might be lucky, but as 90+% of people who are buying homes will use a realtor you are showing your home to a very small selection of potential purchasers.

Say that you get an offer of 10% less that your asking price. How do you know if this is a true reflection of market price, or if you just haven't reached the people who are prepared to pay the full price?

c) How do you allocate value between buyer and seller? Many people who go the FSBO route are, how do I put this, are ... er ... "careful" with their money. If a realtor said the market value of a house is $400k and wants 5% commission, the FSBO seller doesn't list it at $380 - there would be no point. Of course, they list it at $400k or maybe a little over because either they know better than the realtor, or they want some wiggle room.

The trouble is that most buyers for FSBO properties know the score as well and there is no way they will offer anywhere near the asking price. The buyers are as "careful" as the sellers, and are looking for a bargain.

I once met a wonam who made her living by flipping houses. Her source was the FSBO listings in local newspapers. She would look for ones that seemed underpriced and then negotiate hard with the owners. She was an expert negotiator who could break the spirit of a seller by going through a house and listing all its faults in meticulous detail. As soon as she bought it at the lowest price the seller would go to she gave it a lick of paint, rented some furniture, and put it straight back on the market with full realtor service. Her target was to sell one house a month though sometimes she did better. Even after all her expenses, including real estate fees, she was earning over $200k a year.

If I haven't managed to put you off yet (and if you have plenty of time) why not try a FSBO. Let us know how you get on. And good luck with it.
a) I have read several books concerning the FSBO method, and all suggest consulting real estate agents for a valuation, and telling them of your intentions. Ethics and real estate....in the same sentence? Surely not!

b) In a very small town there's every chance that the house will sell itself.

c) Do you have evidence of this occurring? I don't think this happens every time a house is sold FSBO

I'm still in the "thinking about" stage, but after reading through this thread I'm leaning more and more towards FSBO. I think Oldbag has a very interesting suggestion: the more people who go the FSBO way, the quicker we can get realtors, or whatever they call themselves, to reduce the ridiculously high fees they charge. People Power.....I'm for that!

Just as an afterthought, I notice that outontheboat has still not told Oldbag exactly what he does to justify his 6%commission.......I'm sure we'd all love to know.
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Old Apr 7th 2008, 2:14 pm
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Default Re: Real Estate commission....is it negotiable?

we are selling our house through propertyguys.com we have paid one flat fee which is very cheap and it goes on there website we don`t pay any more fees and wouldn`t lose $10000 to the realtor. the photo`s they took where first class and the website excellent to.
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Old Apr 7th 2008, 3:08 pm
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Default Re: Real Estate commission....is it negotiable?

Originally Posted by daz and jac View Post
we are selling our house through propertyguys.com we have paid one flat fee which is very cheap and it goes on there website we don`t pay any more fees and wouldn`t lose $10000 to the realtor. the photo`s they took where first class and the website excellent to.

Hi daz and jac...............I've spent a couple of years looking at their website; is it really as good as it looks? When did you put your house on it?
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Old Apr 7th 2008, 3:14 pm
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Default Re: Real Estate commission....is it negotiable?

Wow, a thread that, in some circumstances, sticks up for lawyers - that has to be a first

The poster that is a newly qualified realtor is not doing him/herself any favours. To quote vicarious liability, contract and "duty of care" as reasons why the rates are so high is somewhat misplaced, virtually every poster subjects themselves to such laws everyday.

In Alberta, I have never known any realtor be responsible for money at closing, unless of course, one equates forwarding a cheque that has been cut from the purschaser's lawyer's trust account to the vendor's lawyer's account, as being responsible for money on closing and, normally, one lawyer simply sends it to the other lawyer via courier. Of course, this would normally be done quicker except for the fact that most lawyers, at closing, are repeatedly called by the realtor to ensure their commission cheque is available. And before any of the realtors come back with "we need to check for transfer of funds to enable us to release keys" this is always communicated by the lawyers.

It's just a shame that one obviously doesn't have to be able to spell properly to pass realtors' exams if the new realtor's posts are anything to go by
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Old Apr 7th 2008, 4:17 pm
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Default Re: Real Estate commission....is it negotiable?

Just put a call in to www.propertyguys.com
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Old Apr 7th 2008, 4:40 pm
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Default Re: Real Estate commission....is it negotiable?

Originally Posted by Almost Canadian View Post
It's just a shame that one obviously doesn't have to be able to spell properly to pass realtors' exams if the new realtor's posts are anything to go by
Judging by this forum, if getting through the immigration process relied on spelling & grammar, the waiting list would be a lot shorter.
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Old Apr 7th 2008, 4:47 pm
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Default Re: Real Estate commission....is it negotiable?

Originally Posted by Mrs Muesli View Post
a) I have read several books concerning the FSBO method, and all suggest consulting real estate agents for a valuation, and telling them of your intentions.
"Hello local realtor, I would like you to take time out of your day to research the market value of my home, then come and make a presentation to me, but I have no intention whatsoever of giving you, or any other realtor, any chance of earning some money for the work you do. Would 7.00 pm this evening suit?"

You MIGHT be lucky.

Ethics and real estate....in the same sentence? Surely not!
Quite. You could always pay for an appraisal.*

b) In a very small town there's every chance that the house will sell itself.
This may very well happen, and if it does it makes FSBO a much more realistic option.

c) Do you have evidence of this occurring? I don't think this happens every time a house is sold FSBO
Just anecdotal evidence.

In an ideal world, the seller would list their $400k house at $390k, and the buyer would pay it, so both the buyer and seller share the savings on the commission. In a pre-arranged sale this might happen. Say that I wanted to sell my house to someone in my family. I might get an appraisal done and split the commission.

In an open market sale? It is never going to happen. The seller wants the highest possible price for your house, the buyer wants the lowest. If their negotiating position is equally as strong, and their negotiating skills are matched, they may end up at this mid point by coincidence. However, that is extremely unlikely.

Selling your home is a very stressful and emotional experience, even with the support of a skilled and experienced agent. Without the support you will never know what is fair or reasonable, or if you are being taken advantage of. The woman I mentioned above is so successful because it is a business for her. Apart from her negotiating "skills" she knows that if she can't get the price she wants it is no big deal. Just go to the next one, or the next one. In contrast, the seller is making the biggest financial decision in their life, and with the stress and emotion involved it is a decision they can not make rationally.

I'm still in the "thinking about" stage, but after reading through this thread I'm leaning more and more towards FSBO. I think Oldbag has a very interesting suggestion: the more people who go the FSBO way, the quicker we can get realtors, or whatever they call themselves, to reduce the ridiculously high fees they charge. People Power.....I'm for that!

Just as an afterthought, I notice that outontheboat has still not told Oldbag exactly what he does to justify his 6%commission.......I'm sure we'd all love to know.
If you do decide on the FSBO route then I hope it goes well. For me, I intend to buy and sell several properties over the next few years. I look on the realtor's commission as a cost that is there, so I have to live with it. I like my realtor to be motivated, and nickel and diming their commission doesn't do that. I also like my realtor to be rich.


* I'm not trying to say anything about the way you do things - just playing devil's advocate.
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Old Apr 7th 2008, 4:49 pm
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Default Re: Real Estate commission....is it negotiable?

Originally Posted by Almost Canadian View Post
Wow, a thread that, in some circumstances, sticks up for lawyers - that has to be a first
Don't worry, normal service will be resumed very shortly.
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Old Apr 7th 2008, 5:32 pm
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Default Re: Real Estate commission....is it negotiable?

Originally Posted by JonboyE View Post
Don't worry, normal service will be resumed very shortly.

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Old Apr 7th 2008, 6:13 pm
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Default Re: Real Estate commission....is it negotiable?

The devil visited a lawyer's office and made him an offer. "I can arrange some things for you, " the devil said. "I'll increase your income five-fold. Your partners will love you; your clients will respect you; you'll have four months of vacation each year and live to be a hundred. All I require in return is that your wife's soul, your children's souls, and their children's souls rot in hell for eternity."

The lawyer thought for a moment. "What's the catch?" he asked.

===

The day after a verdict had been entered against his client, the lawyer rushed to the judge's chambers, demanding that the case be reopened, saying: "I have new evidence that makes a huge difference in my client's defense."

The judge asked, "What new evidence could you have?"

The lawyer replied, "My client has an extra $10,000, and I just found out about it!"

===

A client who felt his legal bill was too high asked his lawyer to itemize costs. The statement included this item:

"Was walking down the street and saw you on the other side. Walked to the corner to cross at the light, crossed the street and walked quickly to catch up with you. Got close and saw it wasn't you. -$50.00."

===

A doctor and a lawyer were attending a cocktail party when the doctor was approached by a man who asked advice on how to handle his ulcer.

The doctor mumbled some medical advice, then turned to the lawyer and asked, "How do you handle the situation when you are asked for advice during a social function?"
"Just send a bill for such advice" replied the lawyer.

On the next morning the doctor arrived at his surgery and issued the ulcer-stricken man a $50 bill. That afternoon he received a $100 bill from the lawyer.

I could go on ...

Last edited by JonboyE; Apr 7th 2008 at 6:20 pm.
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Old Apr 7th 2008, 7:33 pm
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Default Re: Real Estate commission....is it negotiable?

Originally Posted by oldbag View Post
I've checked various threads regarding real estate, but can't find a definitive answer to my question...........so advice would be appreciated.
The only two real estate agents in town have been to discuss the house and its listing price (one of the agents is the one who sold us the house a few years ago); they agree on the listing price. They also both state we should list on MLS and the commission is 5%......they have both said an exclusive listing (which neither recommends), is 4%. Neither will budge on the commission fee. Surely it is negotiable? According to some websites I've looked at this morning there is no such thing as a fixed commission rate, as they are all open to negotiation, even for an MLS listing.
Help....please.
hi,yes the commission is negotiable.....we sold 3 years ago for $488k and only paid $9K INC ALL TAXES....negotaite hard.........cheers.
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Old Apr 7th 2008, 7:41 pm
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Default Re: Real Estate commission....is it negotiable?

Originally Posted by JonboyE View Post
"Hello local realtor, I would like you to take time out of your day to research the market value of my home, then come and make a presentation to me, but I have no intention whatsoever of giving you, or any other realtor, any chance of earning some money for the work you do. Would 7.00 pm this evening suit?"

You MIGHT be lucky.




* I'm not trying to say anything about the way you do things - just playing devil's advocate.
When I called the real estate offices to arrange visits etc, I had not thought seriously about going the FSBO route, so the intention was to go through one of them. However, after thinking long and hard this weekend, and starting and reading through this thread, I am changing my mind. The agents in question do not need to do much in the way of "research" in this town as everybody knows what's sold to whom and for how much; neither of them "made a presentation", in fact the first one assumed she would get the listing simply because she sold us the house a few years ago, and thinks she's the "bigwig" in town. I am not dismissing or belittling anything either of them did, just explaining that's the way it is here.....probably not where you are.
Both agents were told right at the start that we were shopping around and looking at different options; both will be notified of the eventual decision.
That's the nature of business. Some you win, some you lose. I was in business for over 20 years, so do have some experience of the big wide world and what is a fair charge for a fair service.
Thanks for the jokes, by the way...some were mildly amusing.
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Old Apr 7th 2008, 7:41 pm
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Default Re: Real Estate commission....is it negotiable?

Originally Posted by howardk View Post
hi,yes the commission is negotiable.....we sold 3 years ago for $488k and only paid $9K INC ALL TAXES....negotaite hard.........cheers.
Thanks for that howardk....
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