Should I pay a real estate agent 6% to sell my house?

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JuniorBH
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Re: Should I pay a real estate agent 6% to sell my house?

Post by JuniorBH »

We used Redfin last year. I've forgotten the specifics, but I believe it was 3.5% on the house we sold and then we got either 0.5% or 1% back because we also used them for the house we bought.

From my standpoint, I don't have the time/expertise to do a FSBO so I didn't mind paying someone to handle it and it was nice to have an "expert" as a sounding board on pricing/negotiation, etc.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by pizzy »

willthrill81 wrote: Wed Feb 23, 2022 12:21 pm
pizzy wrote: Wed Feb 23, 2022 12:14 pm
willthrill81 wrote: Wed Feb 23, 2022 12:13 pm
pizzy wrote: Wed Feb 23, 2022 12:09 pm
willthrill81 wrote: Wed Feb 23, 2022 10:46 am

No, they were independent (i.e., no buyer's agent).

My DW has often told me about potential buyers posting on local social media, asking whether someone is willing to sell their home. At least around here, it's not hard at all to find independent buyers.
How many offers did you get on that house?

Nowadays, in many parts of the country, 30+ offers is common. Emotions cause people to overpay. Escalation clauses are common.
It was 8 years ago, and the local market was strong at the time, but we took the first offer because it was very attractive.
8 years is too long. 6 months ago isn't even good anymore. The past month's status quo is all the matters in many markets these days.
I don't know what you're getting at. But in today's market, there's no flipping way that I would use a RE agent. We could put a sign in our front yard and have multiple offers in a week.
And yet FSBO listings are at all time lows.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by willthrill81 »

pizzy wrote: Wed Feb 23, 2022 12:52 pm
willthrill81 wrote: Wed Feb 23, 2022 12:21 pm
pizzy wrote: Wed Feb 23, 2022 12:14 pm
willthrill81 wrote: Wed Feb 23, 2022 12:13 pm
pizzy wrote: Wed Feb 23, 2022 12:09 pm

How many offers did you get on that house?

Nowadays, in many parts of the country, 30+ offers is common. Emotions cause people to overpay. Escalation clauses are common.
It was 8 years ago, and the local market was strong at the time, but we took the first offer because it was very attractive.
8 years is too long. 6 months ago isn't even good anymore. The past month's status quo is all the matters in many markets these days.
I don't know what you're getting at. But in today's market, there's no flipping way that I would use a RE agent. We could put a sign in our front yard and have multiple offers in a week.
And yet FSBO listings are at all time lows.
Eh, that doesn't impact what I would do in the slightest. Most Americans are terrible with money management.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Bud »

I agree with the For Sale By Owner (FSBO). You can pay a real estate attorney to walk you through the process or a paralegal specializing in real estate. This will cost you, at most, 1% of the sale price, probably much less.

As a lay person, I have bought and sold houses and undeveloped real estate many times without a realtor. Do your homework and you can save yourself the realtor fee.

All the best.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by pizzy »

Bud wrote: Wed Feb 23, 2022 12:58 pm I agree with the For Sale By Owner (FSBO). You can pay a real estate attorney to walk you through the process or a paralegal specializing in real estate. This will cost you, at most, 1% of the sale price, probably much less.

As a lay person, I have bought and sold houses and undeveloped real estate many times without a realtor. Do your homework and you can save yourself the realtor fee.

All the best.
We are seeing 30-50 offers on homes after 1-2 days on the market. I just don't think the FSBO people are experiencing this now or ever.

For a basic transaction in a normal environment, sure, it probably doesn't make much difference. I just don't think many people that haven't been entrenched in our current environment last 6-9 months can fully appreciate what is going on these days.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by willthrill81 »

pizzy wrote: Wed Feb 23, 2022 1:16 pm
Bud wrote: Wed Feb 23, 2022 12:58 pm I agree with the For Sale By Owner (FSBO). You can pay a real estate attorney to walk you through the process or a paralegal specializing in real estate. This will cost you, at most, 1% of the sale price, probably much less.

As a lay person, I have bought and sold houses and undeveloped real estate many times without a realtor. Do your homework and you can save yourself the realtor fee.

All the best.
We are seeing 30-50 offers on homes after 1-2 days on the market. I just don't think the FSBO people are experiencing this now or ever.
The question is not how many offers over what time frame. Rather, the pertinent question is how much one leaves the transaction with. A 6% headwind is pretty significant.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by pizzy »

willthrill81 wrote: Wed Feb 23, 2022 1:24 pm
pizzy wrote: Wed Feb 23, 2022 1:16 pm
Bud wrote: Wed Feb 23, 2022 12:58 pm I agree with the For Sale By Owner (FSBO). You can pay a real estate attorney to walk you through the process or a paralegal specializing in real estate. This will cost you, at most, 1% of the sale price, probably much less.

As a lay person, I have bought and sold houses and undeveloped real estate many times without a realtor. Do your homework and you can save yourself the realtor fee.

All the best.
We are seeing 30-50 offers on homes after 1-2 days on the market. I just don't think the FSBO people are experiencing this now or ever.
The question is not how many offers over what time frame. Rather, the pertinent question is how much one leaves the transaction with. A 6% headwind is pretty significant.
Which is where realtors come in. They talk to each other, a lot. They get a feeling of where one needs to be to get their client the house, whether their client is willing to go that high is a different story. It's turned into to more of an auction with the list price being the starting bid so to speak. Good buyers agents are able to get bits and pieces of info from the seller agent in order to strengthen their one and only offer. Negotiating is gone.

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JoeRetire
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Re: Should I pay a real estate agent 6% to sell my house?

Post by JoeRetire »

miamivice wrote: Wed Feb 23, 2022 9:12 am I cannot fathom in my mind why I would pay $100,000 to a sales industry to sell my house, if I felt I had a choice.
Do you have a choice? Can you sell it by yourself? Do you know someone who will sell it for free?

Most people pay for services that they cannot or will not do by themselves. For many years, I did my landscaping myself. Now I pay someone to do it. I still wash my own car rather than pay a carwash. I always do my own taxes rather than paying for someone else to do them for me.

Choices.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by alfaspider »

pizzy wrote: Wed Feb 23, 2022 12:04 pm
alfaspider wrote: Wed Feb 23, 2022 9:17 am
pizzy wrote: Wed Feb 23, 2022 9:15 am

List it for 6% more than the number you'd be happy with. Solves both problems.
No it doesn't. The house is going to go for what the market will bear. Listing it for 6% more doesn't mean you get 6% more.
I think you'd be surprised how much the listing price influences the offers.
Sure, but overpricing a house doesn't help. It needs to be priced correctly for the market. Otherwise, everyone would list for double what a house is worth.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Bud »

pizzy wrote: Wed Feb 23, 2022 1:16 pm
Bud wrote: Wed Feb 23, 2022 12:58 pm I agree with the For Sale By Owner (FSBO). You can pay a real estate attorney to walk you through the process or a paralegal specializing in real estate. This will cost you, at most, 1% of the sale price, probably much less.

As a lay person, I have bought and sold houses and undeveloped real estate many times without a realtor. Do your homework and you can save yourself the realtor fee.

All the best.
We are seeing 30-50 offers on homes after 1-2 days on the market. I just don't think the FSBO people are experiencing this now or ever.

For a basic transaction in a normal environment, sure, it probably doesn't make much difference. I just don't think many people that haven't been entrenched in our current environment last 6-9 months can fully appreciate what is going on these days.
FSBO does not demean the value of realtors just like doing your own taxes, doing your own landscaping, doing your own auto repair or home repairs would demean the comparable professions. It is a risk/reward proposition - Is it worth the time and energy to sell my own house?

All the best.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Bronco Billy »

I have been seeing this advertizment on TV. A person might check them out.. look good at BBB.
https://idealagent.com/
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Re: Should I pay a real estate agent 6% to sell my house?

Post by willthrill81 »

alfaspider wrote: Wed Feb 23, 2022 1:54 pm
pizzy wrote: Wed Feb 23, 2022 12:04 pm
alfaspider wrote: Wed Feb 23, 2022 9:17 am
pizzy wrote: Wed Feb 23, 2022 9:15 am

List it for 6% more than the number you'd be happy with. Solves both problems.
No it doesn't. The house is going to go for what the market will bear. Listing it for 6% more doesn't mean you get 6% more.
I think you'd be surprised how much the listing price influences the offers.
Sure, but overpricing a house doesn't help. It needs to be priced correctly for the market. Otherwise, everyone would list for double what a house is worth.
Indeed. If agents are so great at pricing homes, then why did I see so many listed homes with 'Price Reduced' prior to the last couple of years?
Last edited by willthrill81 on Wed Feb 23, 2022 3:10 pm, edited 1 time in total.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Maverick3320 »

pizzy wrote: Wed Feb 23, 2022 12:04 pm
alfaspider wrote: Wed Feb 23, 2022 9:17 am
pizzy wrote: Wed Feb 23, 2022 9:15 am

List it for 6% more than the number you'd be happy with. Solves both problems.
No it doesn't. The house is going to go for what the market will bear. Listing it for 6% more doesn't mean you get 6% more.
I think you'd be surprised how much the listing price influences the offers.
Then in theory, your happiness level would have also been 6% higher to start with.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by HornedToad »

miamivice wrote: Wed Feb 23, 2022 9:12 am I'm looking at selling our house. It is worth approximately $1.6 million dollars.

If I hire a real estate agent at standard 6% commission, I will pay $96,000 commission (!) total to the real estate industry in order for them to sell my house. As we know on Bogleheads, real estate agents actually don't do much value added work with selling a house but are rather salespeople that facilitate the transaction. I suppose I can try to negotiate commission down, but even at 3% it is still a huge $50,000 sum of money.

I cannot fathom in my mind why I would pay $100,000 to a sales industry to sell my house, if I felt I had a choice.

I'm concerned going For Sale Buy Owner will make it look like I'm cheap and therefore people expect to buy the house for less than market value. I don't want to do that. I want to sell the house for maximum value.

Are there reasonable alternatives that I should consider that would allow me to avoid paying $100,000 to an agent to do very little work?
Plenty of agents will do it for 4% total in a hot market. Offer 1.5% for sellers agent and 2.5% for buyers agent.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Maverick3320 »

pizzy wrote: Wed Feb 23, 2022 1:34 pm
willthrill81 wrote: Wed Feb 23, 2022 1:24 pm
pizzy wrote: Wed Feb 23, 2022 1:16 pm
Bud wrote: Wed Feb 23, 2022 12:58 pm I agree with the For Sale By Owner (FSBO). You can pay a real estate attorney to walk you through the process or a paralegal specializing in real estate. This will cost you, at most, 1% of the sale price, probably much less.

As a lay person, I have bought and sold houses and undeveloped real estate many times without a realtor. Do your homework and you can save yourself the realtor fee.

All the best.
We are seeing 30-50 offers on homes after 1-2 days on the market. I just don't think the FSBO people are experiencing this now or ever.
The question is not how many offers over what time frame. Rather, the pertinent question is how much one leaves the transaction with. A 6% headwind is pretty significant.
Which is where realtors come in. They talk to each other, a lot. They get a feeling of where one needs to be to get their client the house, whether their client is willing to go that high is a different story. It's turned into to more of an auction with the list price being the starting bid so to speak. Good buyers agents are able to get bits and pieces of info from the seller agent in order to strengthen their one and only offer. Negotiating is gone.

"Highest and best due Monday 8pm."
"They talk to each other, a lot"

That's exactly what a lot of people don't want. The realtor has every incentive to disclose my "best price" to the other realtor.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by willthrill81 »

Maverick3320 wrote: Wed Feb 23, 2022 3:02 pmThe realtor has every incentive to disclose my "best price" to the other realtor.
Correct. Which do you think your agent is more concerned about, squeezing out a 1% higher purchase price for you, or getting the home sold ASAP so s/he can collect the fee?
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Re: Should I pay a real estate agent 6% to sell my house?

Post by jgman »

Every Realtor Ive had just wants to sell the property and doesn't care about getting max price for the seller. I would therefore try to negotiate a 4% commission.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Basis »

miamivice wrote: Wed Feb 23, 2022 9:12 am I'm looking at selling our house. It is worth approximately $1.6 million dollars.

If I hire a real estate agent at standard 6% commission, I will pay $96,000 commission (!) total to the real estate industry in order for them to sell my house. As we know on Bogleheads, real estate agents actually don't do much value added work with selling a house but are rather salespeople that facilitate the transaction. I suppose I can try to negotiate commission down, but even at 3% it is still a huge $50,000 sum of money.

I cannot fathom in my mind why I would pay $100,000 to a sales industry to sell my house, if I felt I had a choice.

I'm concerned going For Sale Buy Owner will make it look like I'm cheap and therefore people expect to buy the house for less than market value. I don't want to do that. I want to sell the house for maximum value.

Are there reasonable alternatives that I should consider that would allow me to avoid paying $100,000 to an agent to do very little work?
Split the difference between for sale by owner and a standard 6% commission.

Seek out an agent who will sell your house for 3 or 4% commission.

My guess is you’ll find one.
You see what you know.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by miamivice »

I think overall, folks on this thread are focusing on the percentage and not the total cost of the transaction.

For our house, 6% is $96,000. 3% is $48,000. 1% is $16,000. I believe these fees simply cover the real estate agent - all closing costs are above an beyond that.

It shouldn't cost anywhere close to any of these amounts to close on a house. Say someone charged $100/hr for their services in a house sale. They might spend 50 hours on the sale, which means they should be getting paid about $5,000. Not $48,000. And $100/hr for the type of work that an agent does is a pretty good hourly rate.

With the amount of online data about homes, agents no longer drive you from house to house. People find open houses and buy those. Or they give their agent a list of homes and those homes are viewed and offers made. The number of hours an agent puts into a sale must be way down compared to 10 years ago.

It's just unfathomable that no company has upended this market to dramatically decrease the cost of selling a house.

I am interested in paying someone on a time and materials basis to sell my house, with a cap. Sadly, I probably won't find someone like that.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by pizzy »

miamivice wrote: Wed Feb 23, 2022 4:28 pm I think overall, folks on this thread are focusing on the percentage and not the total cost of the transaction.

For our house, 6% is $96,000. 3% is $48,000. 1% is $16,000. I believe these fees simply cover the real estate agent - all closing costs are above an beyond that.

It shouldn't cost anywhere close to any of these amounts to close on a house. Say someone charged $100/hr for their services in a house sale. They might spend 50 hours on the sale, which means they should be getting paid about $5,000. Not $48,000. And $100/hr for the type of work that an agent does is a pretty good hourly rate.

With the amount of online data about homes, agents no longer drive you from house to house. People find open houses and buy those. Or they give their agent a list of homes and those homes are viewed and offers made. The number of hours an agent puts into a sale must be way down compared to 10 years ago.

It's just unfathomable that no company has upended this market to dramatically decrease the cost of selling a house.

I am interested in paying someone on a time and materials basis to sell my house, with a cap. Sadly, I probably won't find someone like that.
If RE commissions went to flat fee, no one would deal with expensive houses. You are looking for someone who would approach a $300,000 sale the same way they would approach a $2,000,000 sale. In what sales industry does that happen? You have to incentivize as you move up the price ladder which basing commissions on a % does.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by willthrill81 »

pizzy wrote: Wed Feb 23, 2022 4:35 pm
miamivice wrote: Wed Feb 23, 2022 4:28 pm I think overall, folks on this thread are focusing on the percentage and not the total cost of the transaction.

For our house, 6% is $96,000. 3% is $48,000. 1% is $16,000. I believe these fees simply cover the real estate agent - all closing costs are above an beyond that.

It shouldn't cost anywhere close to any of these amounts to close on a house. Say someone charged $100/hr for their services in a house sale. They might spend 50 hours on the sale, which means they should be getting paid about $5,000. Not $48,000. And $100/hr for the type of work that an agent does is a pretty good hourly rate.

With the amount of online data about homes, agents no longer drive you from house to house. People find open houses and buy those. Or they give their agent a list of homes and those homes are viewed and offers made. The number of hours an agent puts into a sale must be way down compared to 10 years ago.

It's just unfathomable that no company has upended this market to dramatically decrease the cost of selling a house.

I am interested in paying someone on a time and materials basis to sell my house, with a cap. Sadly, I probably won't find someone like that.
If RE commissions went to flat fee, no one would deal with expensive houses. You are looking for someone who would approach a $300,000 sale the same way they would approach a $2,000,000 sale. In what sales industry does that happen? You have to incentivize as you move up the price ladder which basing commissions on a % does.
And it's precisely for that reason that most financial advisors want to work under an AUM model and not for a flat fee, and that's also precisely why AUM advisors are so frowned upon here because of the tremendous impact it creates on one's wealth.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by JoeRetire »

miamivice wrote: Wed Feb 23, 2022 4:28 pm It shouldn't cost anywhere close to any of these amounts to close on a house.

I am interested in paying someone on a time and materials basis to sell my house, with a cap. Sadly, I probably won't find someone like that.
If you really want to pay less, then try to find someone who will accept less. Make a flat cash offer to a few agents. If you want to pay an hourly wage, then offer that. Or sell it yourself, since you don't seem to think it takes a lot of knowledge/effort/connections. Try Craigslist, Facebook, or other social media. Or just post a sign on your house.

If you are just railing against "the way things are" then I understand, but have no suggestions to offer.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Dottie57 »

willthrill81 wrote: Wed Feb 23, 2022 12:21 pm
pizzy wrote: Wed Feb 23, 2022 12:14 pm
willthrill81 wrote: Wed Feb 23, 2022 12:13 pm
pizzy wrote: Wed Feb 23, 2022 12:09 pm
willthrill81 wrote: Wed Feb 23, 2022 10:46 am

No, they were independent (i.e., no buyer's agent).

My DW has often told me about potential buyers posting on local social media, asking whether someone is willing to sell their home. At least around here, it's not hard at all to find independent buyers.
How many offers did you get on that house?

Nowadays, in many parts of the country, 30+ offers is common. Emotions cause people to overpay. Escalation clauses are common.
It was 8 years ago, and the local market was strong at the time, but we took the first offer because it was very attractive.
8 years is too long. 6 months ago isn't even good anymore. The past month's status quo is all the matters in many markets these days.
I don't know what you're getting at. But in today's market, there's no flipping way that I would use a RE agent. We could put a sign in our front yard and have multiple offers in a week.
Your house needs to show well, have great pictures and be on realtor sites. People want a description - number of bedrooms, sq dt, size of garage etc. i’ve been watching real estate and seen mis-priced homes sit around months in fast selling areas.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by femmefire »

No. We've have bought and sold several times in the seven years as we move around for my spouse's career. We've worked with one broker and three Redfin agents and they have been significantly better than regular commission, and highly recommended, agents. The whole buying and selling process was smooth and our houses sold for more than we thought we would get. While searching for houses, we used Zillow and Redfin to find what was available. Agents have had zero influence on which houses to look at or buy. For us, buying has been the much lengthier process since supply has been low and we've lost multiple listings due to bidding wars. A smart agent would offload a buyer even at a lower commission rather than waiting around for a high commission sale.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by srt7 »

drk wrote: Wed Feb 23, 2022 9:25 am
miamivice wrote: Wed Feb 23, 2022 9:12 am I suppose I can try to negotiate commission down, but even at 3% it is still a huge $50,000 sum of money.
[...]
Are there reasonable alternatives that I should consider that would allow me to avoid paying $100,000 to an agent to do very little work?
Honestly, who cares if it's a big chunk of money? You're thinking about a different question than the important one: do you expect to net more money from the sale with an agent or without one?
This here is the only question to ask yourself, OP.

To answer your original question ... yes, a good realtor is absolutely worth the 6% given they can sell the house for well above listing price even before it hits the market OR get your house in to a bidding war with prices so high that it would make you forget the commission. But just like in any profession only the top 10% can work this kind of magic.

Sorry to be blunt but based on the judge-y tone of your post though I'd highly recommend you try FSBO. If it works, then great! If not at least you'll be convinced that the realtor "earned" their keep.

(Not a realtor or in anyway affiliated with anyone who is one)
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Re: Should I pay a real estate agent 6% to sell my house?

Post by willthrill81 »

Dottie57 wrote: Wed Feb 23, 2022 4:47 pm
willthrill81 wrote: Wed Feb 23, 2022 12:21 pm
pizzy wrote: Wed Feb 23, 2022 12:14 pm
willthrill81 wrote: Wed Feb 23, 2022 12:13 pm
pizzy wrote: Wed Feb 23, 2022 12:09 pm

How many offers did you get on that house?

Nowadays, in many parts of the country, 30+ offers is common. Emotions cause people to overpay. Escalation clauses are common.
It was 8 years ago, and the local market was strong at the time, but we took the first offer because it was very attractive.
8 years is too long. 6 months ago isn't even good anymore. The past month's status quo is all the matters in many markets these days.
I don't know what you're getting at. But in today's market, there's no flipping way that I would use a RE agent. We could put a sign in our front yard and have multiple offers in a week.
Your house needs to show well, have great pictures and be on realtor sites. People want a description - number of bedrooms, sq dt, size of garage etc. i’ve been watching real estate and seen mis-priced homes sit around months in fast selling areas.
I was being a little hyperbolic but only a little. If we wanted to sell our house right now, we would take pictures ourselves just like we did for our prior two homes, pay a flat-fee to get on the MLS, and have a title company take care of the legal work.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by randomguy »

Dottie57 wrote: Wed Feb 23, 2022 4:47 pm Your house needs to show well, have great pictures and be on realtor sites. People want a description - number of bedrooms, sq dt, size of garage etc. i’ve been watching real estate and seen mis-priced homes sit around months in fast selling areas.
Isn't the question always how many of the buyers are going to go without hand holding? It is easy to cut out the selling agent but without buyers agents how many people will see your house and what will they pay? If the buyer wants the hand holding, someone has to pay for it....

People have been complaining about real estate fees for decades. So far nobody has really disrupted the market. My take away is that it much harder than we think.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by pizzy »

willthrill81 wrote: Wed Feb 23, 2022 4:37 pm
pizzy wrote: Wed Feb 23, 2022 4:35 pm
miamivice wrote: Wed Feb 23, 2022 4:28 pm I think overall, folks on this thread are focusing on the percentage and not the total cost of the transaction.

For our house, 6% is $96,000. 3% is $48,000. 1% is $16,000. I believe these fees simply cover the real estate agent - all closing costs are above an beyond that.

It shouldn't cost anywhere close to any of these amounts to close on a house. Say someone charged $100/hr for their services in a house sale. They might spend 50 hours on the sale, which means they should be getting paid about $5,000. Not $48,000. And $100/hr for the type of work that an agent does is a pretty good hourly rate.

With the amount of online data about homes, agents no longer drive you from house to house. People find open houses and buy those. Or they give their agent a list of homes and those homes are viewed and offers made. The number of hours an agent puts into a sale must be way down compared to 10 years ago.

It's just unfathomable that no company has upended this market to dramatically decrease the cost of selling a house.

I am interested in paying someone on a time and materials basis to sell my house, with a cap. Sadly, I probably won't find someone like that.
If RE commissions went to flat fee, no one would deal with expensive houses. You are looking for someone who would approach a $300,000 sale the same way they would approach a $2,000,000 sale. In what sales industry does that happen? You have to incentivize as you move up the price ladder which basing commissions on a % does.
And it's precisely for that reason that most financial advisors want to work under an AUM model and not for a flat fee, and that's also precisely why AUM advisors are so frowned upon here because of the tremendous impact it creates on one's wealth.
Why would someone with a $3,000,000 house/portfolio want the same level of service as someone with a $300,000 house/portfolio?

Why would someone with a $300,000 house/portfolio expect the same level of service as someone with a $3,000,000 house/portfolio?

That's what flat fee does.

It brings the service down to the level of the lower sale amount.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by randomguy »

pizzy wrote: Wed Feb 23, 2022 5:03 pm

Why would someone with a $3,000,000 house/portfolio want the same level of service as someone with a $300,000 house/portfolio?

Why would someone with a $300,000 house/portfolio expect the same level of service as someone with a $3,000,000 house/portfolio?

That's what flat fee does.

It brings the service down to the level of the lower sale amount.
By the same token, why would a person with a 3 million dollar house want 10x the service? What not 2 or 3? Do the buyers really need to be driven around in a 300k car instead of a 30k? Wouldn't a 90k one be enough?:) In these HCOL it isn't like 2-3m houses are some crazy outliers with niche buyers. They are what the dual income upper middle class is buying. They aren't expecting a different levels of service...
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Re: Should I pay a real estate agent 6% to sell my house?

Post by barberakb »

Shop around and find a realtor that will work for a set amount of $.

Your house is worth a lot. I would not pay 6%.

Some realtors will work for a set amount. Say $25,000 or whatever.

Maybe find a realtor that is a broker as well.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Zipster »

sureshoe wrote: Wed Feb 23, 2022 11:57 am You will need to pay a buying agent 3% to be listed in the MLS.
This is not true (at least in our market). We sold our house as a FSBO where we were paired with a realtor in order to do an MLS listing and we were able to chose the amount (I think we could even go with 0%) that would go to the buyer’s agent. He recommended 2.5% minimum but we went with 2% and sold the house for what we were wanting.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by vested1 »

I am willing to pay a good agent 6% because they will get a good price for the house. I consider a good price to be more than I was hoping to get. That keeps expectations in line with reality. The problem is you won't know if you have hired a good agent until the transaction is completed, and then it's too late. We've paid 5% to a great and honest agent and 6% to a worthless dishonest agent.

- Unless a buyer or seller's agent owns their own brokerage they have to split their commission with the company they work for.
- Buyer's agents aren't serving their customers out of the goodness of their heart and won't show your house to their clients if they can make more money on a different transaction, and why should they?
- Most agents solicit their clients to refer them to other clients. When an agent refers a client to another agent on a house they aren't involved with they get a portion of the commission. This happened on our latest two transactions, which reduced the commission for both our agents when we were both buying and selling.
- A good agent will have contacts in the business that will greatly facilitate the sale of your home and bypass the various pitfalls with financing, inspections, and appraisals. Our best agent had contacts in all three categories and used them to our advantage. A good agent will also let you know what you need to fix and what you can ignore on inspections. A good agent will know contractors who will give you a break on fixing things identified in the inspection.

I've had success working out deals with agents for either a lower percentage commission or a higher sales price. I promised a great agent who never took less than 6% to take 5% with the incentive to list two properties, which she accepted although she was the top agent in the county for many years. We made a killing on the sale of that house. I offered an incentive to a different agent that if the house sold for x amount over my expectations that I would convey something I owned to her at no cost at closing, (a golf cart which was conveyed to us at no cost when we bought the house). That worked out as she refused to lower the price below that benchmark, one which greatly surpassed my expectations.

One thing I would never agree to is to allow my seller's agent to represent the buyer also. The temptation to short change one or the other of their clients is too strong in that situation. An agent should be your advocate, and no one else's.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Xrayman69 »

sureshoe wrote: Wed Feb 23, 2022 11:57 am This has been beaten to death on these forums.

I would absolutely not pay an agent more than a 1% commission to list my house. I'd prefer flat fee.

You will need to pay a buying agent 3% to be listed in the MLS.

Not listing in MLS and doing pure FSBO will hurt your sale price unless you're in an absolute wacky market with people lined up.
Curious that MLS is off limits unless there is a buyers agent getting involved. I assumed that there were methods in which private sellers could get the property listed on an MLS service. I had assumed FSBO provided the paperwork and resources to help sellers get the property listed and thus viewable on things such as Redfin and Zillow for the World Wide Web to have visibility
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Re: Should I pay a real estate agent 6% to sell my house?

Post by michaeljc70 »

miamivice wrote: Wed Feb 23, 2022 9:12 am I'm looking at selling our house. It is worth approximately $1.6 million dollars.

If I hire a real estate agent at standard 6% commission, I will pay $96,000 commission (!) total to the real estate industry in order for them to sell my house. As we know on Bogleheads, real estate agents actually don't do much value added work with selling a house but are rather salespeople that facilitate the transaction. I suppose I can try to negotiate commission down, but even at 3% it is still a huge $50,000 sum of money.

I cannot fathom in my mind why I would pay $100,000 to a sales industry to sell my house, if I felt I had a choice.

I'm concerned going For Sale Buy Owner will make it look like I'm cheap and therefore people expect to buy the house for less than market value. I don't want to do that. I want to sell the house for maximum value.

Are there reasonable alternatives that I should consider that would allow me to avoid paying $100,000 to an agent to do very little work?
Then sell it yourself. Do you have the time and availability to advertise the house, show it at any normal hour, answer phone calls at any hour, etc? Are you going to ask prospective buyers for pre-approval letters and screen them? Are you prepared for people to waste your time just because they want to be nosy? There are people whose hobby is to look on Zillow or whatever site and go see houses with no intention of ever buying them.

A good agent will also tell you things you can/should do so the house shows better. Much of that is common sense...but escapes a lot of people.

Having sold 4 places ""myself" the chances of you paying no commission are probably small. I paid 1/2 of the commission by doing the showings myself but I had to pay the buyers agent 2.5% and paid a small amount to list the property in the MLS. 5% is customary where I live for selling a house. I worked from home and had the flexibility to do showings.

Without your property in MLS where I live you have little chance of selling a property. Also, yes you can throw a sign up or put it on some website, but if 1000 people see it vs. 10,000 via the MLS, are you going to get as high of a price with much less viability? Are you really saving money?
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Normchad »

I last bought a house in 2010. The people I bought it from would have made a lot more money if they had used a realtor.

I am actually a fan of realtors. (This statement even surprises me). Sometimes it pays to use a professional.

A lot can change though. And I am honestly intrigued by the idea of doing it without a realtor.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by michaeljc70 »

Normchad wrote: Thu Feb 24, 2022 8:38 am I last bought a house in 2010. The people I bought it from would have made a lot more money if they had used a realtor.

I am actually a fan of realtors. (This statement even surprises me). Sometimes it pays to use a professional.

A lot can change though. And I am honestly intrigued by the idea of doing it without a realtor.
As I said above I did a hybrid approach (showed myself, realtor's brought buyers)...it is hard to go against a cartel. Many companies have tried to break the MLS but it hasn't really worked.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Dave55 »

michaeljc70 wrote: Thu Feb 24, 2022 8:30 am
miamivice wrote: Wed Feb 23, 2022 9:12 am I'm looking at selling our house. It is worth approximately $1.6 million dollars.

If I hire a real estate agent at standard 6% commission, I will pay $96,000 commission (!) total to the real estate industry in order for them to sell my house. As we know on Bogleheads, real estate agents actually don't do much value added work with selling a house but are rather salespeople that facilitate the transaction. I suppose I can try to negotiate commission down, but even at 3% it is still a huge $50,000 sum of money.

I cannot fathom in my mind why I would pay $100,000 to a sales industry to sell my house, if I felt I had a choice.

I'm concerned going For Sale Buy Owner will make it look like I'm cheap and therefore people expect to buy the house for less than market value. I don't want to do that. I want to sell the house for maximum value.

Are there reasonable alternatives that I should consider that would allow me to avoid paying $100,000 to an agent to do very little work?
Then sell it yourself. Do you have the time and availability to advertise the house, show it at any normal hour, answer phone calls at any hour, etc? Are you going to ask prospective buyers for pre-approval letters and screen them? Are you prepared for people to waste your time just because they want to be nosy? There are people whose hobby is to look on Zillow or whatever site and go see houses with no intention of ever buying them.

A good agent will also tell you things you can/should do so the house shows better. Much of that is common sense...but escapes a lot of people.

Having sold 4 places ""myself" the chances of you paying no commission are probably small. I paid 1/2 of the commission by doing the showings myself but I had to pay the buyers agent 2.5% and paid a small amount to list the property in the MLS. 5% is customary where I live for selling a house. I worked from home and had the flexibility to do showings.

Without your property in MLS where I live you have little chance of selling a property. Also, yes you can throw a sign up or put it on some website, but if 1000 people see it vs. 10,000 via the MLS, are you going to get as high of a price with much less viability? Are you really saving money?
^^Great points and advice.
Having sold 5 homes on MLS in the past 30 years, I would use an agent. One other point is most home buyers work with agents, so if you are not on MLS, you are missing lots of potential buyers.

Dave
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Re: Should I pay a real estate agent 6% to sell my house?

Post by michaeljc70 »

Dave55 wrote: Thu Feb 24, 2022 8:50 am
michaeljc70 wrote: Thu Feb 24, 2022 8:30 am
miamivice wrote: Wed Feb 23, 2022 9:12 am I'm looking at selling our house. It is worth approximately $1.6 million dollars.

If I hire a real estate agent at standard 6% commission, I will pay $96,000 commission (!) total to the real estate industry in order for them to sell my house. As we know on Bogleheads, real estate agents actually don't do much value added work with selling a house but are rather salespeople that facilitate the transaction. I suppose I can try to negotiate commission down, but even at 3% it is still a huge $50,000 sum of money.

I cannot fathom in my mind why I would pay $100,000 to a sales industry to sell my house, if I felt I had a choice.

I'm concerned going For Sale Buy Owner will make it look like I'm cheap and therefore people expect to buy the house for less than market value. I don't want to do that. I want to sell the house for maximum value.

Are there reasonable alternatives that I should consider that would allow me to avoid paying $100,000 to an agent to do very little work?
Then sell it yourself. Do you have the time and availability to advertise the house, show it at any normal hour, answer phone calls at any hour, etc? Are you going to ask prospective buyers for pre-approval letters and screen them? Are you prepared for people to waste your time just because they want to be nosy? There are people whose hobby is to look on Zillow or whatever site and go see houses with no intention of ever buying them.

A good agent will also tell you things you can/should do so the house shows better. Much of that is common sense...but escapes a lot of people.

Having sold 4 places ""myself" the chances of you paying no commission are probably small. I paid 1/2 of the commission by doing the showings myself but I had to pay the buyers agent 2.5% and paid a small amount to list the property in the MLS. 5% is customary where I live for selling a house. I worked from home and had the flexibility to do showings.

Without your property in MLS where I live you have little chance of selling a property. Also, yes you can throw a sign up or put it on some website, but if 1000 people see it vs. 10,000 via the MLS, are you going to get as high of a price with much less viability? Are you really saving money?
^^Great points and advice.
Having sold 5 homes on MLS in the past 30 years, I would use an agent. One other point is most home buyers work with agents, so if you are not on MLS, you are missing lots of potential buyers.

Dave
Yes....and if you have people contacting you for showings that don't have agents...I would discount the seriousness of them as a buyer. Some people are perpetual lookers.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by Dave55 »

michaeljc70 wrote: Thu Feb 24, 2022 8:54 am
Dave55 wrote: Thu Feb 24, 2022 8:50 am
michaeljc70 wrote: Thu Feb 24, 2022 8:30 am
miamivice wrote: Wed Feb 23, 2022 9:12 am I'm looking at selling our house. It is worth approximately $1.6 million dollars.

If I hire a real estate agent at standard 6% commission, I will pay $96,000 commission (!) total to the real estate industry in order for them to sell my house. As we know on Bogleheads, real estate agents actually don't do much value added work with selling a house but are rather salespeople that facilitate the transaction. I suppose I can try to negotiate commission down, but even at 3% it is still a huge $50,000 sum of money.

I cannot fathom in my mind why I would pay $100,000 to a sales industry to sell my house, if I felt I had a choice.

I'm concerned going For Sale Buy Owner will make it look like I'm cheap and therefore people expect to buy the house for less than market value. I don't want to do that. I want to sell the house for maximum value.

Are there reasonable alternatives that I should consider that would allow me to avoid paying $100,000 to an agent to do very little work?
Then sell it yourself. Do you have the time and availability to advertise the house, show it at any normal hour, answer phone calls at any hour, etc? Are you going to ask prospective buyers for pre-approval letters and screen them? Are you prepared for people to waste your time just because they want to be nosy? There are people whose hobby is to look on Zillow or whatever site and go see houses with no intention of ever buying them.

A good agent will also tell you things you can/should do so the house shows better. Much of that is common sense...but escapes a lot of people.

Having sold 4 places ""myself" the chances of you paying no commission are probably small. I paid 1/2 of the commission by doing the showings myself but I had to pay the buyers agent 2.5% and paid a small amount to list the property in the MLS. 5% is customary where I live for selling a house. I worked from home and had the flexibility to do showings.

Without your property in MLS where I live you have little chance of selling a property. Also, yes you can throw a sign up or put it on some website, but if 1000 people see it vs. 10,000 via the MLS, are you going to get as high of a price with much less viability? Are you really saving money?
^^Great points and advice.
Having sold 5 homes on MLS in the past 30 years, I would use an agent. One other point is most home buyers work with agents, so if you are not on MLS, you are missing lots of potential buyers.

Dave
Yes....and if you have people contacting you for showings that don't have agents...I would discount the seriousness of them as a buyer. Some people are perpetual lookers.
They call them: "lookie Loo's"...look for entertainment......

Dave
"Reality always wins, your only job is to get in touch with it." Wilfred Bion
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Re: Should I pay a real estate agent 6% to sell my house?

Post by danaht »

bluebolt wrote: Wed Feb 23, 2022 9:15 am Shop around. It's market dependent, but some folks like Redfin charge 1% for the sell side plus seller agent commission of 2-3%.

ETA: Looks like it's 1.5% or 1% if you sell and buy with them.
Redfin agents can be very good - but keep in mind that it is my understanding that the agents themselves don't get a commission for the sale of your home (it goes to Redfin instead). This means that they may act more like a neutral third party rather someone who wants to get the most money for your home. There are several web sites that will shop for well known real estate brokerage firms that will only charge a 1% sellers commission (google these). I am using one at the moment - and so far the experience has been good. So you can plan for a total fee of 3.5% - something like 1% seller - and 2.5% buyer.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by willthrill81 »

michaeljc70 wrote: Thu Feb 24, 2022 8:54 am Yes....and if you have people contacting you for showings that don't have agents...I would discount the seriousness of them as a buyer. Some people are perpetual lookers.
That makes no sense. We bought our last two homes without an agent.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by michaeljc70 »

willthrill81 wrote: Thu Feb 24, 2022 9:30 am
michaeljc70 wrote: Thu Feb 24, 2022 8:54 am Yes....and if you have people contacting you for showings that don't have agents...I would discount the seriousness of them as a buyer. Some people are perpetual lookers.
That makes no sense. We bought our last two homes without an agent.
The buyer's agent costs you nothing. Of course it makes sense because 90% of people do use agents. That doesn't mean there aren't exceptions. When anything else is 90/10 I take note.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by SethJane42 »

That 6% we paid the realtor garnered us 10% over asking price. Came out with a 54% profit overall.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by willthrill81 »

michaeljc70 wrote: Thu Feb 24, 2022 9:34 am
willthrill81 wrote: Thu Feb 24, 2022 9:30 am
michaeljc70 wrote: Thu Feb 24, 2022 8:54 am Yes....and if you have people contacting you for showings that don't have agents...I would discount the seriousness of them as a buyer. Some people are perpetual lookers.
That makes no sense. We bought our last two homes without an agent.
The buyer's agent costs you nothing. Of course it makes sense because 90% of people do use agents. That doesn't mean there aren't exceptions. When anything else is 90/10 I take note.
Not all buyers have agents, so ignoring them wholesale is what doesn't make sense to me. I don't know that 90% of buyers use agents. None of my family members who purchased in the last several years used a buyer's agent.

I wouldn't use a buyer's agent because they are unlikely to show FSBO homes for obvious reasons.
Last edited by willthrill81 on Thu Feb 24, 2022 9:39 am, edited 1 time in total.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by bluebolt »

SethJane42 wrote: Thu Feb 24, 2022 9:37 am That 6% we paid the realtor garnered us 10% over asking price. Came out with a 54% profit overall.
The 0% I paid an agent got me 10% over asking.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by bluebolt »

michaeljc70 wrote: Thu Feb 24, 2022 9:34 am
willthrill81 wrote: Thu Feb 24, 2022 9:30 am
michaeljc70 wrote: Thu Feb 24, 2022 8:54 am Yes....and if you have people contacting you for showings that don't have agents...I would discount the seriousness of them as a buyer. Some people are perpetual lookers.
That makes no sense. We bought our last two homes without an agent.
The buyer's agent costs you nothing. Of course it makes sense because 90% of people do use agents. That doesn't mean there aren't exceptions. When anything else is 90/10 I take note.
In most cases the buyer's agent costs you nothing. But if a seller is comparing bids where some have an agent to pay and some don't, the latter is more competitive given the same offer amount.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by michaeljc70 »

willthrill81 wrote: Thu Feb 24, 2022 9:39 am
michaeljc70 wrote: Thu Feb 24, 2022 9:34 am
willthrill81 wrote: Thu Feb 24, 2022 9:30 am
michaeljc70 wrote: Thu Feb 24, 2022 8:54 am Yes....and if you have people contacting you for showings that don't have agents...I would discount the seriousness of them as a buyer. Some people are perpetual lookers.
That makes no sense. We bought our last two homes without an agent.
The buyer's agent costs you nothing. Of course it makes sense because 90% of people do use agents. That doesn't mean there aren't exceptions. When anything else is 90/10 I take note.
Not all buyers have agents, so ignoring them wholesale is what doesn't make sense to me.

I wouldn't use a buyer's agent because they are unlikely to show FSBO homes for obvious reasons.
I didn't say to ignore them...I said to discount their seriousness. That can mean asking more questions like "how long have you been looking?" or "have you seen many homes?" or "are you pre-approved for a mortgage?"
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Re: Should I pay a real estate agent 6% to sell my house?

Post by willthrill81 »

michaeljc70 wrote: Thu Feb 24, 2022 9:42 am
willthrill81 wrote: Thu Feb 24, 2022 9:39 am
michaeljc70 wrote: Thu Feb 24, 2022 9:34 am
willthrill81 wrote: Thu Feb 24, 2022 9:30 am
michaeljc70 wrote: Thu Feb 24, 2022 8:54 am Yes....and if you have people contacting you for showings that don't have agents...I would discount the seriousness of them as a buyer. Some people are perpetual lookers.
That makes no sense. We bought our last two homes without an agent.
The buyer's agent costs you nothing. Of course it makes sense because 90% of people do use agents. That doesn't mean there aren't exceptions. When anything else is 90/10 I take note.
Not all buyers have agents, so ignoring them wholesale is what doesn't make sense to me.

I wouldn't use a buyer's agent because they are unlikely to show FSBO homes for obvious reasons.
I didn't say to ignore them...I said to discount their seriousness. That can mean asking more questions like "how long have you been looking?" or "have you seen many homes?" or "are you pre-approved for a mortgage?"
Gotcha. That makes sense.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by michaeljc70 »

bluebolt wrote: Thu Feb 24, 2022 9:40 am
michaeljc70 wrote: Thu Feb 24, 2022 9:34 am
willthrill81 wrote: Thu Feb 24, 2022 9:30 am
michaeljc70 wrote: Thu Feb 24, 2022 8:54 am Yes....and if you have people contacting you for showings that don't have agents...I would discount the seriousness of them as a buyer. Some people are perpetual lookers.
That makes no sense. We bought our last two homes without an agent.
The buyer's agent costs you nothing. Of course it makes sense because 90% of people do use agents. That doesn't mean there aren't exceptions. When anything else is 90/10 I take note.
In most cases the buyer's agent costs you nothing. But if a seller is comparing bids where some have an agent to pay and some don't, the latter is more competitive given the same offer amount.
People often think that....but it isn't usually true. The seller's agent gets all the commission if there is no buyer's agent in just about any contract. Sometimes the seller's agent might kick some money back..but they have no obligation to do so. That usually happens when they cannot quite close the deal...say they are $2k apart and the agent says they will kick it in.

Now, if it is FSBO then that is a different situation.
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Re: Should I pay a real estate agent 6% to sell my house?

Post by miamivice »

Thanks all.

I just did a Google search and found one agent that work on a flat fee basis for $22,000 which is way better than $96,000. I think I will try the flat fee rather than commission approach.

I honestly do not think that an expensive house is more work to buy/sell than a less expensive house. Rather, the more time consuming homes are older homes, homes on land, homes on septic, homes in poor condition. The sales price has little to do with the complexity of sale and thus real estate should not be on commission.
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