Story Comments

taylorharris50: Totally agree. The selling agent does very little to actually get the property sold. It is nice when they take care of all the other BS but this service does not come cheap.

There is was no luck involved with my transaction. The buyer's agent was paid a full 3% commission, I paid $250 for an MLS listing, and most of the realtors showing the house had no clue that we had not hired a seller's agent.

The buyer's agent brings the buyer

The seller's agent puts you house on MLS, builds a flyer, and holds open houses to prospect for more clients.

If you think that both sides of the equation are equal than pay the seller's agent. Personally I think that paying 3% of the value of your home to someone that adds very little value to the equation is beyond crazy.

Additionally the seller's agent is incentivized to move your house as quickly as possible and not to wait for the best offer. Holding out for 10K puts a lot of money in your pocket but only adds around $150 to the agent's commission.

Realtor's hate the low cost brokers because the best way for them to stay in control and get their cut of most RE transactions is ...(Read more of this comment)to protect the MLS database. This has been the primary difference between FSBO and using an agent. If you can get on MLS without paying big bucks then you are liberated from being fleeced.(Show less of this comment)

obx4me: You are correct, you don't want to hold the property, especially in a declining market more than you need to. However, a FSBO should sell just as well as a listed property IF it is priced right. Thats the mistake sellers are making, over-pricing the property and then following the market down. I know of a home that has been on the market, with a realtor and by owner for 3 years. Foolish!

Even a BLIND squirrel can find a nut!!! You were luck to sell yours without paying any money. Were we live they have a book with over 350 FSBO's in it and there averaging about 6 sales every two weeks. The real funny thing is after the contract expires with the FSBO book they will list it with an agent and it sells in a short period of time. So if your paying $2000 per month on your mortgage and you waste 6 month's with that FSBO book looks like your down $1,2000+/- minus the $40-$50 that's going to the principle. You should rename that book Frustrated Sellers Batting Zero's

2 years ago we used a flat-rate broker to put our house on the MLS system. $250 bought us 6 months of time, a yard sign that looks more professional that a FSBO one does, phone monitoring and a few hours of support for questions related to the sale.

I can say with confidence that the entire process is easy enough (at least in TX) that anyone should be able to take this route. Paying a seller's agent is a suckers move.

That said I paid the full 3% to the buyer's agent. They bring the buyer - the listing agent does absolutely nothing of real value.

Own a computer? Have the ability to build a flyer in Word or Publisher? Have access to a Lowe's to buy a $10 key box? You get the picture.

Btw - the open house concept is designed to help the Realtor get more clients NOT to sell your house. Others have pointed out that the commission associated with pushing for a premium price is minimal. Your Realtor (assuming that you wasted money on one) only care...(Read more of this comment)s about a quick close at whatever price it takes.

In my case I closed in 4 weeks for 10K more than the 3 Realtors I interview said the house was worth. That plus the saved 3% went right to the bank...(Show less of this comment)

It would seem that perhaps the best way to provide incentive for realtor to sell at your price rather than reduce it for quick sale and commission is to offer them their standard commission if they sell at or near asking price within a given time frame...say three to four months. After that time the commission goes down a point for each month it doesn't sell! CDRH

Richard3211: You are spot on. They don't care about getting you a higher price. Its much easier and more cost effective for them if you just lower your price. Another thing to mention is the commission. The last home I sold, I had a full price realtor quote me her standard 7%. After much pleading and whinning of poverty on her part, I finally got her down to 5.5%. I finally dumped her for a guy that offered 5% if another realtor brought the buyer and 3% if he brought the buyer. He ended up finding the buyer so it only cost me 3%. I do feel they earn their money in a cold market but when the markets are hot, they are un-necessary.

Riptide is right, the realtors primary motivation is sell the house as quickly as possible (i.e. convince the owner to set a bargain price). Realtors represent themselves and no one else. An extra $10 or even 20k on a sales price is a big deal to you, but not much more commission to a Realtor. They also know the longer the house is on the market, the higher their chance of getting nothing. So a slightly reduced fee for them is still a great deal. Realtors make big bucks off volume not off of getting the best price for your house. Lower prices leads to higher volume for them. Don't trust them, they are sharks!

During the good times I had a Realtor come to my house with the office manager.
They told my that I should consider giving them 9% comission as they would work harder to market my house. I chased them.
Selling your own home can be a challenge, as the realtors get most of the serious buyers. I advertised, had open houses and I was getting tired of all the gawkers and non serious buyers, just out for Sunday afternoon entertainment.
I managed to survive all that and finally found a buyer and saved that 6%.

right on. Save the 6% (or in my case I had a Realtor that pleaded poverty at 7%) and lower the price accordingly. I chose to compensate the buying Realtor 3%.

The biggest mistake is using a realtor. Selling the home by owner allows you much more control over the sale, and it gives you a built-in 6% price cushion for negotiations.

docrealestate: Good one. Just because some document says they represent the seller does not mean realtors are totally honest or helpful to the seller. There are a lot of gray areas and lets face it, the code of ethics is not exactly something you can measure against and make a determination that you were or were not properly represented. When was they last time you heard of a realtor losing their license?

waldis1 is correct in negotiating the sales/broker fees. The same glut that has depressed prices has depressed commissions. Despite the laws, regulations and ethics real estate agents' are motivated to sell a property first and foremost, everything else is secondary. They are among the top 10 most overpaid 'professionals.'

Don't set your price too low. You can always lower it. Buyers are going to make offers 20% to 30% below your asking price. I find that realtors are trying to list houses with real low prices so they sell fast. They are not representing you they are representing themselves, trying for the comission. If I had to sell my house at a real low price I would market it myself as the comission would only do me more damage.

Great article...but you're totally WRONG, waldis1. Brokers are required by LAW to represent their client's interests. They have a FIDUCIARY responsibility, the same as a doctor or lawyer. To act otherwise puts their license in jeapordy, and why would a broker put their business at risk for one sale????? That's why home sellers should look to an established, top producing firm who has something to lose instead the cheapest they can find. And working with a REALTOR further entitles the home seller to the REALTOR CODE OF ETHICS, at this link http://www.realtor.org/MemPolWeb.nsf/pages/COde

How about failing to negotiate sales broker fees? There is nothing worse than overpaying for someone who is actually incentivized to close the deal, instead of representing your interests.