 Posted 3/27/2007 2:42:29 PM
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| I received a letter today from a realtor offering to sale my home for 5%. He also said that I could tack on the 5% to the price of the home and that he guaranteed it's sell. Is it wise to raise the price of a home if and when you turn the home over to a realtor? I worry that I would turn it over to this realtor, raise the price, and then all the people that put in offers will be the ones that saw it at 5% less and offer that. Then I still pay the 5% and make that much less than if I had continued on my own. My margin for profit is not very wide.
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Posted 3/28/2007 8:38:31 AM
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Anyone that would buy your house at the current price would have already made an offer. It makes no sense to wait for an agent involvement, and price increase to take action. An agent can give your home more exposure therefore expanding the market to more potential buyers. Choosing to sell yourself or listing should be based on how important your time is. Do you want to spend your time showing the house, dealing with ads, calls, etc..? or do you have more important things to do? Is the commission being negotiated worth your time? Your "Marging for profit" can be based also on your time. Just food for thought.
Bo Villacis
Real Estate Professional
WWW.Bovillacis.com
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Posted 3/28/2007 10:39:34 AM
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Hi George,
If you received a letter, it sounds pretty boilerplate and he's on a fishing expedition. I also don't trust anyone who make a 'guarantee that it will sell'. You have to ask, 'at what price?'
The other thing is that he says he'll sell if for 5%. What about the buyer's agent commission? That usually runs about 3% so all told, you're now paying an 8% commission where most commissions in the country run at 6%.
You'd be much better off placing your home on the MLS where you'll attract a lot more buyers and you determine the buyer's agent commission, or interviewing three full service agents to sell your home and negotiating the commission.
You can learn more about our MLS program by clicking on the 'Flat Fee MLS' link at the top of the page beneath the tabs, or checking our agent program where the agents will negotiate their commission:
http://www.owners.com/Services/RequestSellerAgent.aspx?loc=PP
Best of luck to you.
FSBO Guru
Owners.com
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Posted 4/2/2007 7:43:49 PM
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| The realtor was offering to sell the house for a total of 5%. He specified that was the total realty fee with full MLS. My question is, is it wise to raise the price of a house when you decide to go with a realtor after trying to sell it by yourself? If I have been trying to sell it at $200,000 by myself and now go to a realtor, would adding the 5% or $10,000 to the price be a good thing to do?
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Posted 4/3/2007 12:54:31 PM
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That's a very good question. It may be possible that the agent can reach a larger range of buyers, therefore opening the market for your home, and increasing the posibility of a higher price point. If increasing the price is a concern, along with paying a 5% commission, consider this hypothetical situation. Suppose you list at 200k with a 5% Commission (10K). This will gross you 190K, which is 10K below what you hoped to get selling it by yourself, however it is 190K more than what you got on your own, because the house didn't sell. Just a different way to look at the same situation.
Bo Villacis
Real Estate Professional
WWW.Bovillacis.com
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Posted 4/3/2007 5:14:56 PM
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Never tack on a commission to the price of your home. A commission is a fee usually paid at closing. Never pay a Broker fee up front! You'll most likely never see it ot them again. The fee shouldn't be included in the price of your home. When doing your listing agreement exclude any intrested parties. The state of Missouri likes to call it a Listing Agreement not a contract. A contract is the legally binding agreement between a seller and a buyer when a final is agreed upon.
IF YOU DON'T UNDERSTAND AN AGREEMENT OR A CONTRACT CONSULT A LAWYER.
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Posted 4/4/2007 10:57:31 AM
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George,
The price of a house is what the market will bear, regardless of who sells it. While the agent may feel that because of his expertise and marketing clout he can get more for it than you can, it's unlikely that buyers will pay 5 percent more just because an agent is pushing it.
You should determine the true value of your home by doing a CMA (comparative market analysis) which aims to give you market price. If it turns out that based on the CMA you need to raise your price, do so. If your home wasn't on the MLS, then it's not "in the system" and most buyers and agents won't know what the previous "by owner" asking price was. The only downside is that a few agents whom you talked with may know and may comment on it to buyers, who might be put off by a price increase. If based on the CMA your price is "right on," then raising it to cover the commission will only make it more difficult to sell.
By the way, according to a leading real estate magazine, the average commission nationwide is between 4 and 5 percent.
Good Luck!
Bob Irwin
Author, "For Sale By Owner Kit"
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Posted 4/9/2007 6:50:11 PM
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I agree with the other poster who suggested that you get a CMA done. This way you will know what price your home will bring on an open market. You will have a reasonable price that won't be out of line with other sellers in your area. If the realtor was suggesting a 5% commission, he was probably including the buyer agent's commission in that figure (perhaps splitting it 3% and 2%). Also, you do need to speak to at least 3 agents and ask specific questions about exactly what they are going to do for you besides sticking a sign in your yard and putting your home on the MLS. I have been frustrated by the number of posts on this site describing horrible, lazy real estate agents. Please don't let the actions of a few disparage the reputation of the entire industry. If you want to sell your home on your own and you are okay with dealing with the phone calls, the showings, the legal paperwork, the negotiating that can take up a lot of time, then I say MORE POWER TO YOU! However, if you would rather do something else with your valuable time, then hire a realtor. The majority of us really do work hard for our clients and we provide a great service that, yes, you have to pay for just like any other service. I have known many FSBOs (some in my own family) who do choose to do it alone and only pay a flat fee for, perhaps, consulting with a realtor or assistance with the paperwork. Everything is negotiable! Anyway, Good Luck to you (I really mean it!)
Beverly Lutz
Broker/REALTOR
RE/MAX Elite Associates
Charlotte, NC
(704) 491-8220
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Posted 4/10/2007 6:13:26 AM
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| Thanks for all the suggestions and best wishes. I had gotten three CMA's before starting this process and the price I am asking is $15,000 less than the high CMA. It is $8000 less than the medium. One realtor gave me such a low CMA, however, that I don't include that in my figuring. He was one of those that used all the wrong comparisons and seemed to believe that my wife and I did no homework to begin with. His high figure was $45,000 lower than the high figure we had received from another realtor. We aren't trying to make the realtor fee for ourselves. We are actually giving the prospective buyer the benefit, but it seems that many buyers use realtors because they don't think it costs them anything to do so.
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Posted 4/10/2007 8:10:38 AM
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I believe buyers use Real State Agents because they require more support than just submitting an offer for your house. As a Real Estate agent I find myself educating, clarifying, suggesting to all buyers I work with about current market trends, proccesses, paper work, etc. not to mention showing properties other than yours. Somebody has to open the doors, and my suspicion is real estate attorneys don't like leaving their offices to show houses. Most importantly, I keep my clients out of court, making sure all the paper work is properly handled, and they get the representation they deserve. I know this is not rocket science or brain surgery, however we are talking about thousands of dollars, and a rather large decision people must make. Buyers owe it to themselves to get a second opinion, and proper representation.
Bo Villacis
Real Estate Professional
WWW.Bovillacis.com
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