Help me with the basics - hiring agent to sell our house and asking for discounted commission

[Anonymous]

We are putting our house on the market and will be hiring an agent. We'd really like to negotiate a lower commission to go to the agent, as we live in a popular neighborhood where houses move really quickly. We don't expect the agent will have to work super hard (I know he/she will still work hard, of course!) Our house should sell for over $700k. Is it possible to negotiate down the commission to the seller? What strategies or talking points would you suggest?

Am I correct in the following assumptions? Typically, about 6% of the sales price of the home will go towards commission - about 3% to buyer's agent and 3% to seller's agent. I assume that what we'd be trying to negotiate down is the standard 3% to go to the seller's agent. What is reasonable? Should we try to get this down to 1.5%, 2% or 2.5%?

Thank you for any tips.

[Anonymous]

Real estate agents are such a ripoff, particularly for an educated seller. If I were you I would use something like Redfin

[Anonymous]

Anonymous wrote:Real estate agents are such a ripoff, particularly for an educated seller. If I were you I would use something like Redfin

Thanks. We had considered this, but just feel that we may not have the time (new baby, etc.) If you use Redfin, is it correct to say that it is essentially for sale by owner but you are using Redfin to list it and advertise? Does Redfin provide additional services, and about how much would it be to use their listing services? Thanks again.

[Anonymous]

If it were me, I would just be completely up front. Contact the perspective agent(s) in writing and say we have a house worth about [$xx] and we would like to put it on the market in [month]. We are looking to work with an agent who is willing to represent us for a seller's commission of [xx%]. If you are interested in working with us, please contact us.

(I would probably offer 2.5%. I doubt that you will get a good quality agent for less. Maybe 2%, but frankly they are going to worry that you are going to just nickel & dime the whole deal, and they probably won't respond.)

[Anonymous]

In traditional listing, I have seen rates as low as 4%. Seller gets 3%, Buyer gets 1%.

But you can get 3% if you don't mind doing the selling/marketing yourself and still get on the listing (MLS). You pay about $500 and sign up with an independent broker like Fairfax Realtor. This will guarantee that you will get on MLS websites like Weichert, Long & Foster, etc. The 3% goes to the buyer's agent. Otherwise there is no incentive for them to show your house. Get a good real estate lawyer to help with the contract.

[Anonymous]

Anonymous wrote:We are putting our house on the market and will be hiring an agent. We'd really like to negotiate a lower commission to go to the agent, as we live in a popular neighborhood where houses move really quickly. We don't expect the agent will have to work super hard (I know he/she will still work hard, of course!) Our house should sell for over $700k. Is it possible to negotiate down the commission to the seller? What strategies or talking points would you suggest?

Am I correct in the following assumptions? Typically, about 6% of the sales price of the home will go towards commission - about 3% to buyer's agent and 3% to seller's agent. I assume that what we'd be trying to negotiate down is the standard 3% to go to the seller's agent. What is reasonable? Should we try to get this down to 1.5%, 2% or 2.5%?

Thank you for any tips.

You really have to look at the commission as an insurance policy in case the sh** hits the fan. It's true that for that price in a popular area, you are going to have a lot of interested buyers, but any number of things could come up that could ruin a contract. You might, for example, have a problem with the house you weren't aware of (mold, termites, structural issues). You could have a buyer who wants to back out at the last minute. You could find a buyer with great financials, but who wants a rent back. Etc., etc. (All of the above have happened to friends of mine buying in upper NW, DC.)

If you need to sell the house because you have already bought one, or are moving out of the area, find an experienced realtor--even at full commission--"just in case."

And no, I am not a realtor.

[Anonymous]

I'd recommend Redfin to sell your house. We did and it worked out fine. I did contact a local "well known" neighborhood agent and offered to list my house with her at a reduced commission, but she declined. It sold in a week - her loss.

[Anonymous]

At the bottom of the market in 2009, we used realtor to list our condo in Arlington. My wife did all the 'staging', everything b/c we used to watch a lot of H and G tv. The Realtor just listed the place. It was under contract in 1 day, with 7 offers. Remember, this was the 'bottom' of the market. With that said, we had been looking for a place to buy for upwards of 7 months, and using the same realtor to show us places. He never actually said 'I have a great place for you to see' because my wife and I were so proactive, and as soon as we'd see a listing on sawbuck(it had just come out), we'd be on him to show us the house that evening. He ventured to reston, vienna, d.c., arlington, falls church, and mclean, whenever we wanted him to. In the end, we found a house in mclean, and he was our buyers agent. As a courtesy, he discounted the selling commission to 1.5% by giving us the other 1.5% towards our closing, because he was getting a commission on the house we were buying as well. He did all this without us even asking him for a discount.

Again, he got two listings at the bottom of the market, so I think he was hurting a bit financially. But regardless, what I'd do is ask your friends about an agent that they used that's honest, and see if you can manage a 2 for 1 deal or something like that.

[Anonymous]

Hmmmm, if you sell for $700K, 6% = $42,000, 5% = $35,000....i too hate realtors. HATE 'EM! That being said, trying to sell on your own creates issues: time constraints, you need to worry about every single person entering your home, which in general you don't w a realtor. Try and structure the sale as follows: if house sells between 700K and 750K, they get 4% Between 750K and 800K, 6%...all they can do is say no.

[Anonymous]

Ask them to list out all of their expenses. And SHOP AROUND.

* Do they cover staging, or is that an additional cost? (It can be $3000 or more to do it yourself)

* How do they market your home? How many open houses?

* I found almost every agent was willing to go for 5%. A few were willing to also go lower if they brought in the buyer.

There aren't a lot of houses to sell. Be honest, be straight with them. In our case, we need the money; we're not just being tightwads for no reason. Then again, doesn't everyone need the money?

[Anonymous]

Thanks! These are all great tips. I'm going to continue researching and thinking about the different options. It is tempting to sell it on our own but I just worry we don't have the time for it right now. I hate to give away that much money!!!

[Anonymous]

Anonymous wrote:Real estate agents are such a ripoff, particularly for an educated seller. If I were you I would use something like Redfin

You're entitled to that opinion but I think it's simplistic and misguided.

For the OP, you're rightfully concerned about your cost. But also consider things from the agent's perspective:

6% on $700,000 is $42,000. Your agent gets 1/2 of 1/2, or about $10,500 under this scenario.

At 5%, the agent gets 1/2 of $14,000 or about $7,000. So, that single percentage point represents a 33 percent reduction in his or her compensation for listing the house.

If you're right and s/he hardly has to lift a finger, it's nothing to sneeze at, but if the deal is any way complicated or requires more extensive marketing, it will not motivate the agent to do more.

[Anonymous]

Anonymous wrote:I'd recommend Redfin to sell your house. We did and it worked out fine. I did contact a local "well known" neighborhood agent and offered to list my house with her at a reduced commission, but she declined. It sold in a week - her loss.

Please tell me about your experience selling with Redfin. I live in a popular neighborhood with "low inventory" and a desirable house, so I'm sure my house will sell quickly. But Redfin is usually used for buying houses, not selling. I've never seen a Redfin for sale sign in my neighborhood.

One thing that worries me: I've gotten a real sense of hostility toward Redfin from real estate agents in my area. I worry that if I list with Redfin, the local real estate agents won't show my house! Was that your experience??

We're buying with Redfin, and we saved thousands! So worth it! But, Redfin doesn't have a lot of listings, so doesn't have those "inside the office" listings that are so desirable they sell before listing. I found out about the house we are buying by driving through the neighborhood. I happened to notice a man putting up a For Sale sign, called, saw the house, and made an offer. If I'd waited for the house to appear on the Redfin website, five other people would have seen it and made offers ahead of me.

Anyway, please tell me about your Redfin selling experience, PP. We're actually thinking of going with a local broker who has a lot of clients, and will probably sell our house before listing.

TIA!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'd recommend Redfin to sell your house. We did and it worked out fine. I did contact a local "well known" neighborhood agent and offered to list my house with her at a reduced commission, but she declined. It sold in a week - her loss.

Please tell me about your experience selling with Redfin. I live in a popular neighborhood with "low inventory" and a desirable house, so I'm sure my house will sell quickly. But Redfin is usually used for buying houses, not selling. I've never seen a Redfin for sale sign in my neighborhood.

One thing that worries me: I've gotten a real sense of hostility toward Redfin from real estate agents in my area. I worry that if I list with Redfin, the local real estate agents won't show my house! Was that your experience??

We're buying with Redfin, and we saved thousands! So worth it! But, Redfin doesn't have a lot of listings, so doesn't have those "inside the office" listings that are so desirable they sell before listing. I found out about the house we are buying by driving through the neighborhood. I happened to notice a man putting up a For Sale sign, called, saw the house, and made an offer. If I'd waited for the house to appear on the Redfin website, five other people would have seen it and made offers ahead of me.

Anyway, please tell me about your Redfin selling experience, PP. We're actually thinking of going with a local broker who has a lot of clients, and will probably sell our house before listing.

TIA!

I thjought the seller pays all the commissions on a house, so as a buyer, why are you paying anything?

[Anonymous]

Find a good group not affiliatd with some big shop that takes a cut.

Though I would second using Redfin. I honestly don't know why people who live in highly liquid neighborhoods like AU Park, etc use a realtor. Nothing to worry about, except losing tens of thousands to an agent who fear-mongered you into handing over a large commission for hardly any work!