suggestions 4 selecting realtor

[lazygood4nothinbum]

things here seem to have bottomed out (for now) on single family. year over year still down but month over month might be on the rise (or it's just a blip). for last two months we advertised only with a for sale sign stuck in the front yard. sister-in-law handled (might have been a mistake, she's got dreadful retail karma). received lots of calls but no call backs. people in this area are monied and wacky. "i am the woman who is going to buy your house. you will remove the sale sign immediately."

house might have gotten $1.5mm max. back in the day. we will now price at $1.3 (in the middle of the only two other area teardowns for sale) and see what happens. i wanted to sell when the going was good but uncle and brother thought we'd take too big a hit on cap gains back then. turns out it will be about a wash, now that the basis is up but the market is down.

my experience in real estate involves only my house when i bought it 12 years ago through a past "friend" who didn't do much work and never cut me a deal so he's not getting this commission.

your suggestions on how to find & interview realtors appreciated. some things i'm wondering are: is it better to find a hungry guy or someone who has been selling in this down market? (if there is such a being.) is there some way to find out who's been doing the selling? what sort of nonsense should i watch out for? what sort of fees should i be thinking of (6% seems like a lot of cash a $1mm plus if all they just do a mls and sit back with their feet up).

of course, if anyone here wants to buy it, we have a special discount in place for forum members.

 

[REWahoo]

Lazy, here are some threads that might help:

http://early-retirement.org/forums/index.php?topic=2059.0
http://early-retirement.org/forums/index.php?topic=6193.msg110237#msg110237
http://early-retirement.org/forums/index.php?topic=7926.0

 

[lazygood4nothinbum]

thanx rewa, :::accessing::::

does anyone know if you go with a realtor if they expect to get 6% on over 1mm like they would get 6% on a 1/4 mil house?

do they really do 5 times the amount of work to sell the more expensive house?

 

[Brat]

do they really do 5 times the amount of work to sell the more expensive house?

I think it depends on the market. In my area the listing realtor goes beyond listing a home in that bracket in the MLS. The buyers are often executives/managers coming from out of state so a home gets a more expensive photo shoot and targeted advertising.

Have you considered listing it yourself on Zillow? I would love to learn what that experience was like.

 

[thefed]

chances are u can beat 6% all the way up. likely 6-7% on the first 100-150k, then only 3% on the remainder....or something like that


hungry doesnt matter...go with people who are listed as 'multi-million $$ producer 2006" or"tope 1% in region 2006" etc. usually these top performers get extra ad space from the broker

 

[cj]

Just an FYI, we once used a "top lister" and she was always too busy to answer our calls or questions. She lost one contract for us because she was playing our house against another of her listings.

Ask other people who have sold recently in your area how they liked their realtor. Then interview 2 or 3 and see how your personalities mesh. You want someone you can talk to.

Just my $.02.

CJ

 

[Rich_by_the_Bay]

According to my realtor DW, low-balling realtor commissions is more effective in sellers' markets. When it is hard to sell in general, a more established and standard commission realtor may bring more value to the table in those conditions. They'll have more cushion for marketing, advertising, networking it, etc. However bad it gets, some houses will always sell. You want yours to be one of them. It costs for a house to sit, both literally and in terms of marketability.

No facts to back that up, just street talk.

 

[Nords]

Remember the chapter in Freakonomics where the economist showed that realtors leave their own homes on the market longer and squeeze out higher prices than their clients? Maybe you want a realtor who's read that book and will understand how you want to market the house instead of the imperial "Trust me, I'm your realtor and you're an idiot" attitude.

You may also have to come up with some sort of bonus commission payment for a full-price offer. Something that'll make them stick to the negotiations for that extra $10K because they're getting a $1K bonus paid directly to them instead of "just" another $600 to the office franchise. I have no idea if it's legal but it's certainly motivating.

Having said that, I'm a big fan of FSBO. Our best buyer came through on a Wednesday night at our considerable inconvenience, walked through the house in five minutes, never said a word, and left us with a "WTF?!?" feeling. The next day she paid full-price cash and let us rent back for six months. Those California profits (without paying a commission) let us squeak into the Hawaii down payment and the rest is compounding history.

of course, if anyone here wants to buy it, we have a special discount in place for forum members.

Florida, right? Is your hurricane insurance transferable?

 

[cute fuzzy bunny]

I'm the real estate agent annoyer. Sorry in advance.

20+ years ago, you had to sell a house. Make tons of copies of flyers, fax and carry those to other realtors, show the home to other realtors, hold open houses, make lots of phone calls and do a lot of follow up. Three percent for that was a fair price.

Except for very unusual or special properties, all you need today is an MLS listing, some nice photos, maybe a virtual tour, and someone to manage the paperwork and avoid legal problems.

Thats not a lot to do for 3%.

Outfits like Help-U-Sell or similar that give you a sign, a listing and a lockbox and do the paperwork for 1-1.5% can be a good idea for a readily salable home. Going through costco or sams clubs programs can be a way to get a full service, full price realtor for less; the realtor rebates part of their commission to you after the sale...buying OR selling.

You can also negotiate a 1.5 or 2% sellers agent fee fairly easily with a regular realtor.

On the flip side you have the buyers agent. Shorting that commission will result in your house not being seen as much. I'd like to think that realtors as professionals would show their customers ALL of the homes, not just the full price commission ones, but I've tried lower and higher buyers agent fees and its like a volume control.

So unless you have a low volume, hard to sell property or something thats highly specialized, get yourself a 1.5% seller, offer 3.5% to the buyers agent, and keep your hands and feet away from the front door. If that doesnt net you a buyer within the first six weeks, increase the buyers agent fee to 4%.

200 agents trying to show and sell your property to people they're spending hours with every day and have a relationship with beats the living daylights out of one guy flipping it out on the internet and waiting for the phone to ring...

I actually found my last two homes MYSELF, finding the listings on a realtor web site. My agent didnt show them to me because they were sub 3% listings. All the agent did was pull up the listing I emailed to them, take me there and open the front door.

 

[Rich_by_the_Bay]

I wonder if there is any credible data comparing the final selling price on comparable homes listed with a full service realtor versus the bare-bones MLS listing discount brokers.

Because of access to the incoming business relocations, out-of-towners serious to buy who want the whole deal (neighborhood tours, contacts with banks, inspectors, don't know any lawyers, etc.) it is plausible that full-service brokers may be able to obtain a higher sales price.

Maybe it depends on where your house fits in to the market. I'd try it myself if I were in a lower-priced home or in an area where the market was predominantly local (versus big employer transfers, retirement development, etc.). Otherwise, might consider a full-service realtor and negotiate a bit on the commission.

 

[cute fuzzy bunny]

But Rich, arent those services being offered by the buyers agent, not the sellers agent?

(perhaps things are different in FL from MA and CA...i've never bought a house in FL)

Oh yeah, I forgot FSBO's. While I'd consider selling my house myself, I wouldnt ever buy a FSBO unless the seller was giving me a below market price to compensate for not paying the agents...which they arent going to do because that defeats the purpose of FSBO'ing their house. I dont see much of an advantage to dealing with an inexperienced seller that may have emotional attachments vs buying from an experienced, unemotional professional agent, especially when I have nothing to gain financially.

 

[lazygood4nothinbum]

I think it depends on the market. In my area the listing realtor goes beyond listing a home in that bracket in the MLS. The buyers are often executives/managers coming from out of state so a home gets a more expensive photo shoot and targeted advertising.

here most value is the land with other value carried in a new home but next to none in an older. this house was built in the 1960s which is old in florida. we only left the house standing thinking someone might need it to get a mortgage or maybe to live in if they want. it is a very nice teardown which is most likely what the buyer will do.

Have you considered listing it yourself on Zillow? I would love to learn what that experience was like.

funny. but you know experience is the best teacher so i won’t be able to learn that for you. zillow lists us at 200k less than a neighbor’s teardown which has 20 ft less waterfront and they list another neighbor with 20 ft more than us at our price. they’ve got the corner house listed at $1.2mm. it’s 7500 sf & worth $3-4mm easy. during interviewing any realtor mentioning zillow will be disqualified.

chances are u can beat 6% all the way up. likely 6-7% on the first 100-150k, then only 3% on the remainder....or something like that.
hungry doesnt matter...go with people who are listed as 'multi-million $$ producer 2006" or"tope 1% in region 2006" etc. usually these top performers get extra ad space from the broker

interesting. i was also thinking of offering 2% to the selling realtor & 3% to the buying realtor thinking maybe that might be incentive to get a buyer. how do i find out who is the top realtor in the region? & hey, what's with all the lower case letters? shift key don't work? get you fingers of my quirk.

Just an FYI, we once used a "top lister" and she was always too busy to answer our calls or questions. She lost one contract for us because she was playing our house against another of her listings.

i had the same moment of paranioa considered similar thoughts and already decided at least not to list with a realtor representing another property nearby.

According to my realtor DW, low-balling realtor commissions is more effective in sellers' markets. When it is hard to sell in general, a more established and standard commission realtor may bring more value to the table in those conditions. They'll have more cushion for marketing, advertising, networking it, etc. However bad it gets, some houses will always sell. You want yours to be one of them. It costs for a house to sit, both literally and in terms of marketability.

will consider full 6% but seems to me that even if it sells for 1.2 and even if i get someone to do 5% instead of 6%, that’s a lot of cash. guess would be dumb to argue over 12k though. now to convince myself that it would really make a difference in their performance.

You may also have to come up with some sort of bonus commission payment for a full-price offer. Something that'll make them stick to the negotiations for that extra $10K because they're getting a $1K bonus paid directly to them instead of "just" another $600 to the office franchise. I have no idea if it's legal but it's certainly motivating.

great idea. will explore further. also will read more on selling by self idea though i’m probably to lazy for that. i’d really rather have it sold and start investing the money rather than having an unknown amount of cash sit in the house longer than need be. it’s hard to plug a house into firecalc.

Florida, right? Is your hurricane insurance transferable?

everyone's a comedian. hopefully our new governor who got elected on insurance reform will do something but i'm not holding my breath. some good news on tax front though, they might make part of our homesteaded tax benefits transferable within the state so downsizing after 2008 or 2009 might be possible. even then my taxes would triple to downsize but at least they wouldn't increase by 5 or 6 times so i'll have more options down the road.

i was surprised to see that adding just $150k to firecalc in 5 years (partial proceeds from sale of my own residence) seems to make a much more significant difference on what i can withdraw today then what selling mom's house for a few hundred k less than i originally expected does to the swr when considered over a 50-year retirement. maybe i'm not plugging in numbers or understanding correctly but it seems that adding more later increases today's swr more than what taking away now decreases swr into the future.

I'm the real estate agent annoyer. Sorry in advance.

20+ years ago, you had to sell a house. Make tons of copies of flyers, fax and carry those to other realtors, show the home to other realtors, hold open houses, make lots of phone calls and do a lot of follow up. Three percent for that was a fair price....

nothing to apologize for. i was reading a similar past post of yours & i agree with this line of thinking 100%.

On the flip side you have the buyers agent. Shorting that commission will result in your house not being seen as much. I'd like to think that realtors as professionals would show their customers ALL of the homes, not just the full price commission ones, but I've tried lower and higher buyers agent fees and its like a volume control.

So unless you have a low volume, hard to sell property or something thats highly specialized, get yourself a 1.5% seller, offer 3.5% to the buyers agent, and keep your hands and feet away from the front door. If that doesnt net you a buyer within the first six weeks, increase the buyers agent fee to 4%.

this stuff is good for me to know. i’m a bad bargainer. i usually go to people i know in whatever business i’m purchasing in to get as close to wholesale as possible or i just buy retail. i never shop garage sales or swap shops. in purchasing, that middle ground throws me. hopefully i won't do too badly here. i always say if you're going to learn about finances you might as well start with the most important deal of your life.

 

[wabmester]

Good advice from a straight-shooting agent on FSBOs and discount brokers:

link

In my experience, you're tilting at windmills unless you use a full-service listing broker. You can get away with a FSBO/flat-fee-MLS if your house is very desirable and well-priced, otherwise bite the monopolistic bullet.

 

[lazygood4nothinbum]

Good advice from a straight-shooting agent on FSBOs and discount brokers:

link

In my experience, you're tilting at windmills unless you use a full-service listing broker. You can get away with a FSBO/flat-fee-MLS if your house is very desirable and well-priced, otherwise bite the monopolistic bullet.

thanx wab. in researching this i think i read your monopolistic theory in a past post and there's solid ground there. i have no doubt that if we planted the for sale by owner sign on the upswing that it would have quickly sold to a developer driving through the neighborhood. it is in a pretty amazing area. secure deepwater dockage just off the icw, minutes to inlet, short walk to beach & a great park with easy access to shopping & i-95. i last checked end november medium price holding fairly steady at about $5mm & inventory down in this zip code. but in next zip code over, which was always priced lower, prices have dropped considerably & inventory is up so i think that will hurt us.

for now i'm leaning towards using a realtor. i just have to continue informing myself and become more comfortable so i deal with them properly.

 

[Rich_by_the_Bay]

But Rich, arent those services being offered by the buyers agent, not the sellers agent?

Tours, neighborhood information, etc. yes, by the buyer's agent. But out-of-town buyers will skew toward full-service agents who will generally favor full-service listings. They don't exactly welcome the discount companies.

This is not just out of competition - the discount sellers - in general - are said to be not as well vetted, fail to disclose more stuff, and get into whacky negotiations, price their houses inappropriately, get emotional more readily, get lawyers involved early which complicates transactions, and generally conduct themselves in a high-maintenance manner compared to full-to-full where everyone knows the routines, uses the same boilerplate agreements and so on. And the full service brokers provide a level of protection if things go really bad.

Whether these observations are true, I don't really know and there must be many exceptions. I think my realtor wife agrees with the generalization, but she looks for the best house for the buyer regardless of who lists it. She's a goodguy.

 

[Sundance Kid]

What is a full-service listing broker?
Who gets the commission? The agent that listed the property, or the agent that brought a buyer?

I understand, that the agent I listed with, is expecting some type of reward. But, If he doesn't come up with a buyer and someone else does, why should the person listing the property, get his 6%? Is it split, between buyer's broker and listing agent, after the sale?

What is the best way, to protect my interest and get my property sold?

All help is appreciated!

 

[Rich_by_the_Bay]

What is a full-service listing broker?

I take it to mean an established broker charging the usual full commission in your community, who provides listing, marketing, "comps" analysis for pricing, all standard documents, addenda, clerical services, guidance in negotiation, qualification of buyers (to avoid wasting your time and energy on prospective buyers who couldn't get financing to buy it anyhow), signage, showings, open-houses when appropriate, recommendations for lenders, bankers, and all that.

The commission is split among the listing broker's office, the buyers agent and your selling agent. So, the agents typically ends up with 2% or so, less their expenses which can be fairly high.

I understand, that the agent I listed with, is expecting some type of reward. But, If he doesn't come up with a buyer and someone else does, why should the person listing the property, get his 6%? Is it split, between buyer's broker and listing agent, after the sale?

If the house does not sell during the listing agreement, the agent gets nothing. This often occurs when the seller refuses to lower the price despite being advised to do so. Seller blames it on the agent, switches to another who finally convinces seller to lower the price, house sells in a week, and agent #2 gets all the commission.

Sounds like you are inexperienced in these matters which, to my mind, is a good reason to get a highly regarded realtor to represent you. Maybe next time around you can do it yourself.

 

[Brat]

The realtor DH and I are talking to will not represent both sides on the sale. The buyer must have their own realtor. Wab gave me her name.

 

[Rich_by_the_Bay]

The realtor DH and I are talking to will not represent both sides on the sale. The buyer must have their own realtor. Wab gave me her name.

That's probably a good idea, especially for the buyer. OTOH, if an agent does have both sides, they are really motivated to sell it.

 

[Brat]

At my price point the realtor on the selling side will be well rewarded.

 

[CCdaCE]

The realtor DH and I are talking to will not represent both sides on the sale. The buyer must have their own realtor.

I thought that, in some states (most states?) that having one agent represent both parties was illegal or must be disclosed, and both parties sign something to say that they acknowledge this.

-CC

 

[cute fuzzy bunny]

Depends. Some realtors with disclosure will "double end" the deal. Not highly recommended.

As far as the full service brokerage stuff goes, I guess its all up to your comfort level. I negotiated 2% fees with both Century 21 and Prudential Realty, the two high end brokers in my area. When I tried paying 2% to the buyers agent I got very few shows. When I upped it to 3% they flew through the door.

The negotiation process was pretty simple. I called up an agent I had used previously, said I wanted to sell my house...wanted to give them a shot at it because I liked them and thought they did a good job. Said I saw the el cheapo brokers and thought they were attractive from a pricing standpoint at 1.5%. Realizing that I'm a reasonable customer that isnt going to jerk anyone around or be difficult to do business with and that its a free extra listing, would they do the job for 2%? Absolutely...but shhh...dont tell anyone!

If you just hate even the nominal negotiation, use Costco's program. Last time I checked, they gave you a couple of hundred bucks in a gift card for signing up for it, then after the sale is done the agent rebated you 1% of the sale. The agents all provided me a paragraph long biography of themselves, how many listings they'd sold, experience, etc. I had several to pick from. The only thing I had to do was give the agent a form to sign while we were doing the closing paperwork, then mail that in. Check showed up a few weeks later.

When I bought my current house, the selling agent was an el cheapo 1.5% outfit and IIRC they were offering only 2% to the buyers agent. My agent didnt show me the house, I found it myself. Fairly sure she omitted it due to the weak commission, which sucked because its obviously the house I wanted to buy. I dont think the seller was getting a lot of traffic, as they jumped on my low offer.

I didnt see many problems in the buying cycle due to the 1.5% sellers agent that were unique or different from a 3% seller. In fact, the two times I used a full 3% sellers agent I found them to be long on promises up front and short on delivery after the contract was signed.

Your mileage may vary, etc.

 

[Nords]

Oh yeah, I forgot FSBO's. While I'd consider selling my house myself, I wouldnt ever buy a FSBO unless the seller was giving me a below market price to compensate for not paying the agents...which they arent going to do because that defeats the purpose of FSBO'ing their house.

We're a realtor's worst nightmare, whether we're buying or selling, because we're demanding control freaks educated & inquisitive customers who want to get into every aspect of a transaction.

OTOH we've FSBO'd three houses over the last 18 years (two sales and two purchases) and there's a subculture of dedicated amateurs who make it worthwhile. Admittedly FSBO works best with good neighborhoods & good homes, and you may need professional help (or a realtor's good faceslap of tough-love reality) in a troubled home.

FSBOs have to wait for the right customer. Some people won't even look at a house with a pool, but other buyers can't live without one. If you're selling a house with a pool then you have to wait for the pool people and not waste your time trying to convert the non-pool buyers. Same with selliing a FSBO. Wait for the other FSBO buyers to show up, split the savings with them, or offer a 2-3% courtesy to a realtor who brings in a full-price offer. Sometimes you're dealing with fellow bargain-hunters who'll share the savings, other times you meet people who've built their own real estate empires, sometimes you run across get-rich-quick idiots.

I dont see much of an advantage to dealing with an inexperienced seller that may have emotional attachments vs buying from an experienced, unemotional professional agent, especially when I have nothing to gain financially.

Our "dream house" was being sold by the family's brother. He had just inherited a real-estate company and two teenagers from his deceased sister, who'd put the home into a trust FBO her kids. The deceased parents had a bad-realtor reputation and no other agents wanted to work with "that company". They'd already put the house on the market twice but it was so cluttered & dirty that realtors didn't even want to touch the property, let alone deal with the people. By the time we found it, everyone was crazed and they just wanted to get the heck out with whatever equity they could salvage. We obliged.

So I kinda like the inexperienced sellers, although you have to deal with a lot of crap to save the money. It helps to be emotionally unattached and ready to walk away. It helps a lot to enjoy doing this and to have spent the previous few years attending hundreds of open houses and chasing another deal or two. Fortune favors the prepared mind.

I say this as we're getting ready to buy a fridge off Craigslist from a seller who's a desperate idiot. They couldn't even tell a model number from a barcode, let alone write an effective ad or communicate over the phone. It's taken them a month to get to this point, but last night we picked our way through the remodel construction debris (we were the only ones who had flashlights) to see a brand-new unused still-wrapped beauty that we think we're going to be buying for 35 cents on the dollar. When we got ready to walk away to "go home and remeasure to make sure it'd fit", the seller admitted that they needed our deposit money for cab fare. Perhaps that affected their motivation, but I think they're ready to work with us for the rest of their selling price.

Of course I may change my opinion by the time we get back home....

 

[cute fuzzy bunny]

Well, if a fsbo seller were willing to split the savings with me, I'd consider it. Havent seen anyone around here yet willing to do that. Or obviously a unique or special property would be considered. In general though, paying full price to buy from an amateur with attachments is a tough one.

I'd have fsbo'd from my neighbor across the street who has a similar home. He told me he was going to sell it for $350, then dumped it for $320. I'd have offered him $310 or 315 cash at the time, figuring it for a good deal considering these were selling in the $350-370 range a year ago. Just as well, I gauge the prices have fallen even further in the last few months. The new owners might have lost $10-15k on the home before they even moved in.

 

[lazygood4nothinbum]

quick update: as i don't have nord's savvy in buying real estate or refrigerators, i've decided to go realtor. started making calls today. spoke so far with regional mls as well as local & state realtor boards. managed to at least eliminate one myth: there is no telling who is top producing realtor or at least no one will tell me. they either don't keep such stats or don't disclose this to the public. as to realtors advertising themselves as top producers, that depends on how they happened to manipulate their own subjective "data." so they can "legitimately" claim they are top 1% because they happened to sell the only house available on that block.

knowing part of their job is to play me, my initial approach to each realtor will be neutral in that only after they give me their take on the current market for this product in that area do i reveal whether i am buyer or seller. not that i will go with one that favors one side or the other but i'll likely side with the one whose answer seems most honest.(though, realistically, i might somewhat lean towards the more optimistic view.)

i've decided to contact realtors who seem most familiar with this product. turns out the very first one i spoke with gave me an honest enough response and happens to be currently closing on one of mom's neighbors, their only other listing in this area, which was asking $3mm.

all your responses very much appreciated. can't get enough information on this. not so easy when i only do this once or twice in my life but they do this every day for a living.