Trust a real estate broker on proposed price for sale of your home? (1 Viewer)

[Otis]

Putting our house on the market. Broker came back with a price that was close to what we expected, but I think a little low given some of the garbage we have seen listed at much higher prices. Of course, it's hard to be totally objective about your own house.

I'm usually a "trust the professionals" kind of guy, but in this instance, I assume a real estate broker has the incentive to list as low as possible to get a sale done fast. Sure, they could get a few more dollars if they list higher, but they're only getting 6% (or maybe 3%) of the difference, and really it seems to me they just would like to show it a couple times and get a deal done.

Am I right in my thinking? I'd like to tell them I want to list like $50k higher than their suggestion, but I don't want to be unreasonable either.

House nerds, whatcha got? TIA

 

[shadyridr]

its your house

 

[avoiding injuries]

Bring in 2 more agents to get a better idea. Also, I thought 5% was the new norm. May want to look into that.

Let's say your house sells for $500k. That's $25k in commission (5%), split between buying and selling agent makes it $12.5 per agent, and a portion of that likely goes to their agency.

Selling the house for $50k more would likely be harder, and require more time and effort. That's an extra $47.5k for you, but only an extra $1250 for the agent. Just something to think about.

 

[Gawain]

I've heard the average agent has their house on the market for 90 days longer on average than the houses they sell for others.

RE agents aren't in it for you.

 

[Cliff Clavin]

Sell privately and pay a lawyer to handle the paperwork. Probably save you $50K.

 

[Gawain]

http://www.forsalebyowner.com

ETA: The internet is really good for leveling the information gap in a lot of shyster-related professions. Car salesmen, funeral directors and real estate agents top my list.

 

[matuski]

Having had 3 of them in my house recently.. no way in hell will I ever trust a realtor again.

House next door - 450 sqft and far fewer upgrades sold for $25k more than the agents wanted to list mine for. This was over the weekend, now all 3 want me to list it for the same price said house sold for. Screw these people.

I'm going the "by owner" route.

 

[CletiusMaximus]

I would talk to at least 2 or 3 before choosing one. If they want your business, they should prepare a market study showing the comps they found and other factors used to price your house so you understand exactly how they came up with the list price.

As an aside, generally speaking, the phrase "trust a real estate broker" provokes a gag reflex. RE "agents" do things every day that would result in disbarment in the legal profession.

 

[avoiding injuries]

Sell privately and pay a lawyer to handle the paperwork. Probably save you $50K.

I tried this. You're still going to have to pay a buyers agent 2-3% unless you really luck out and find a buyer who doesn't have representation. Then you'll have to deal with the agents who either won't show your home because it is FSBO or they will advise their buyers that dealing with a FSBO is more of a hassle than it's worth.

They know the internet is slowly changing the landscape and are doing everything to perpetuate the current system.

 

[Gator Shawn]

Sell privately and pay a lawyer to handle the paperwork. Probably save you $50K.

I tried this.You're still going to have to pay a buyers agent 2-3% unless you really luck out and find a buyer who doesn't have representation. Then you'll have to deal with the agents who either won't show your home because it is FSBO or they will advise their buyers that dealing with a FSBO is more of a hassle than it's worth.

They know the internet is slowly changing the landscape and are doing everything to perpetuate the current system.

That was my experience.

 

[CletiusMaximus]

You're still going to have to pay a buyers agent 2-3% unless you really luck out and find a buyer who doesn't have representation.

This is what they'll tell you, but its not true. If a buyer shows up with an agent, its between them how much the agent gets paid and has nothing to do with what you get for your house. Of course they'll frame it as something coming out of your net on the transaction, but its really the buyer who pays their agent, while the seller is just accepting a lower price for the house. I completely agree that agents will avoid showing your house to their clients if they know you understand their game. Most will show up and try to take the full 5-6%, then pull their client out when they realize you're not an easy mark.

 

[avoiding injuries]

You're still going to have to pay a buyers agent 2-3% unless you really luck out and find a buyer who doesn't have representation.

This is what they'll tell you, but its not true. If a buyer shows up with an agent, its between them how much the agent gets paid and has nothing to do with what you get for your house. Of course they'll frame it as something coming out of your net on the transaction, but its really the buyer who pays their agent, while the seller is just accepting a lower price for the house. I completely agree that agents will avoid showing your house to their clients if they know you understand their game. Most will show up and try to take the full 5-6%, then pull their client out when they realize your not an easy mark.

Which is why their agents either won't show them the house or will persuade them against it.

 

[avoiding injuries]

You're still going to have to pay a buyers agent 2-3% unless you really luck out and find a buyer who doesn't have representation.

This is what they'll tell you, but its not true. If a buyer shows up with an agent, its between them how much the agent gets paid and has nothing to do with what you get for your house. Of course they'll frame it as something coming out of your net on the transaction, but its really the buyer who pays their agent, while the seller is just accepting a lower price for the house. I completely agree that agents will avoid showing your house to their clients if they know you understand their game. Most will show up and try to take the full 5-6%, then pull their client out when they realize you're not an easy mark.

I didn't see your edit. I listed my house on the MLS so it would come up in agents and buyers searches. On the site, you have to enter what commission you are offering the buyers agent. They can see this up front

 

[CletiusMaximus]

You're still going to have to pay a buyers agent 2-3% unless you really luck out and find a buyer who doesn't have representation.

This is what they'll tell you, but its not true. If a buyer shows up with an agent, its between them how much the agent gets paid and has nothing to do with what you get for your house. Of course they'll frame it as something coming out of your net on the transaction, but its really the buyer who pays their agent, while the seller is just accepting a lower price for the house. I completely agree that agents will avoid showing your house to their clients if they know you understand their game. Most will show up and try to take the full 5-6%, then pull their client out when they realize you're not an easy mark.

I didn't see your edit.I listed my house on the MLS so it would come up in agents and buyers searches. On the site, you have to enter what commission you are offering the buyers agent. They can see this up front

I've seen this as well. Its really unbelievable - from a legal perspective, the notion that a buyer's "agent" is being paid by the seller makes no sense. He's supposed to be a fiduciary for the buyer, but its in his best interest and the seller's (who is "paying" his fee), to have a high price, which is directly contrary to his client's interests.

 

[avoiding injuries]

My situation was about 10 years ago. While my house was FSBO the neighbors put their house on the market through an agent for a few thousand more than mine. Very comparable.

Their house sold in 2 weeks for asking price and the people who bought it never even looked at mine. I ended up keeping mine and have rented it out for the past decade. It's still not worth what it was at the time I originally listed it. Yay

 

[Sarnoff]

I've heard the average agent has their house on the market for 90 days longer on average than the houses they sell for others.

RE agents aren't in it for you.

This was in the Freakanomics movie. Insightful stuff.

 

[Slapdash]

Upsizing or downsizing?

 

[Thorn]

Putting our house on the market. Broker came back with a price that was close to what we expected, but I think a little low given some of the garbage we have seen listed at much higher prices. Of course, it's hard to be totally objective about your own house.

I'm usually a "trust the professionals" kind of guy, but in this instance, I assume a real estate broker has the incentive to list as low as possible to get a sale done fast. Sure, they could get a few more dollars if they list higher, but they're only getting 6% (or maybe 3%) of the difference, and really it seems to me they just would like to show it a couple times and get a deal done.

Am I right in my thinking? I'd like to tell them I want to list like $50k higher than their suggestion, but I don't want to be unreasonable either.

House nerds, whatcha got? TIA

You are correct that they are typically motivated by quick sale over a smallish increase in price.

IMO, good brokers will be able to answer the question: "which houses are we competing against?" That should give you a good idea if the price is right.

 

[Thorn]

Upsizing or downsizing?

Hello - it's Otis.

 

[El Floppo]

GL Otis.

You moving back into the city?

 

[Gawain]

My situation was about 10 years ago. While my house was FSBO the neighbors put their house on the market through an agent for a few thousand more than mine. Very comparable.

Their house sold in 2 weeks for asking price and the people who bought it never even looked at mine. I ended up keeping mine and have rented it out for the past decade. It's still not worth what it was at the time I originally listed it. Yay

Internet's a lot bigger now than it once was. Zillow wasn't around in 2004. If you don't have an immediate need to sell, try FSBO for a couple months. Then if you feel you need an agent to drive business you have that option.

 

[comfortably numb]

couple of notes

-most people think their house is always worth more than what is actually worth as you know this

-you can bring in another agent, if they catch on that you have already brought someone in, they can simply aim high to make you happy, get the listing, after 2 months of no offers they talk to you about lowering your price.

-did the agent give you any local SOLD comps that justify the price?

-do you have any local SOLD (not what you see listed) comps that justify the extra 50k you want?

-some people are ok with listing their home at MV or even slightly below. This drums up interest and offers and more importantly emotionally invested buyers who now find themselves offering more on a house they normally would not.

-are the houses in your area selling well below asking? close? over?

In summary

Yes, you can tell em you want 50K more. It's your house. They will not turn you away on being 50k over.
Most importantly, base your home value on the SOLD comps, not the house 2 blocks away that has been on the market for 7 months.

 

[johnnycakes]

I spent a few hundred to get a selling price appraisal to sell my dad's house after he passed. Then I listed FSBO, agreeing to pay a buyer's agent 2.5% commission. I got the full asking price and saved the other 2.5% commission.

 

[Cliff Clavin]

My situation was about 10 years ago. While my house was FSBO the neighbors put their house on the market through an agent for a few thousand more than mine. Very comparable.

Their house sold in 2 weeks for asking price and the people who bought it never even looked at mine. I ended up keeping mine and have rented it out for the past decade. It's still not worth what it was at the time I originally listed it. Yay

Internet's a lot bigger now than it once was. Zillow wasn't around in 2004. If you don't have an immediate need to sell, try FSBO for a couple months. Then if you feel you need an agent to drive business you have that option.

And it all depends on your market. In a tough market an agent would definitely help. We sold a place in market where places were going for 10-15% above asking price. It was a breeze. Had an open house, said we'd accept offers till X day, accepted the highest bidder and had the place gone right away.

 

[Thorn]

-did the agent give you any local SOLD comps that justify the price?

-do you have any local SOLD (not what you see listed) comps that justify the extra 50k you want?

 

[Godsbrother]

When we listed our house a few years ago our realtor suggested listing it for $20k less than what I wanted but I insisted. Turned out I was right and we got our asking price and sold it two weeks after we listed it.

I don't think our agent was stupid and she did a terrific job making up brochures, showing the house, etc. I just had a better handle of the market in our township better than she did.

 

[bigbottom]

You're still going to have to pay a buyers agent 2-3% unless you really luck out and find a buyer who doesn't have representation.

This is what they'll tell you, but its not true. If a buyer shows up with an agent, its between them how much the agent gets paid and has nothing to do with what you get for your house. Of course they'll frame it as something coming out of your net on the transaction, but its really the buyer who pays their agent, while the seller is just accepting a lower price for the house. I completely agree that agents will avoid showing your house to their clients if they know you understand their game. Most will show up and try to take the full 5-6%, then pull their client out when they realize your not an easy mark.

Which is why their agents either won't show them the house or will persuade them against it.

Had a buddy try to sell his home as a FSBO. Several weeks on the market in a super high-demand area and not so much as a sniff. Finally caved and signed with an agent. The agent was on vacation, so he faxed over the contract for my buddy to sign. That afternoon, there were four offers on the house at or above asking, and the agent inked the deal that evening over dinner while still on vacation. Just crazy (and totally collusive among the agents).

 

[gianmarco]

Tired of AC in only half the house?

 

[fantasycurse42]

• Do you use Zillow and Trulia?
• If yes, have you searched those sites for comparable homes in your neighborhood? (such as property size, square footage, updated kitchen/bathrooms/flooring, landscaping, etc.)

BTW, Zillow's zestimates are garbage, so I would ignore those... You do need to find the comps though and start at 5-10% over them and work your way down. I never trust a RE agent... The best time to buy and sell according to any agent? "Right now"

 

[Dr Oadi]

• Do you use Zillow and Trulia?
• If yes, have you searched those sites for comparable homes in your neighborhood? (such as property size, square footage, updated kitchen/bathrooms/flooring, landscaping, etc.)

BTW, Zillow's zestimates are garbage, so I would ignore those... You do need to find the comps though and start at 5-10% over them and work your way down. I never trust a RE agent... The best time to buy and sell according to any agent? "Right now"

Its true now.

 

[johnnycakes]

You're still going to have to pay a buyers agent 2-3% unless you really luck out and find a buyer who doesn't have representation.

This is what they'll tell you, but its not true. If a buyer shows up with an agent, its between them how much the agent gets paid and has nothing to do with what you get for your house. Of course they'll frame it as something coming out of your net on the transaction, but its really the buyer who pays their agent, while the seller is just accepting a lower price for the house. I completely agree that agents will avoid showing your house to their clients if they know you understand their game. Most will show up and try to take the full 5-6%, then pull their client out when they realize your not an easy mark.

Which is why their agents either won't show them the house or will persuade them against it.

Had a buddy try to sell his home as a FSBO. Several weeks on the market in a super high-demand area and not so much as a sniff. Finally caved and signed with an agent. The agent was on vacation, so he faxed over the contract for my buddy to sign. That afternoon, there were four offers on the house at or above asking, and the agent inked the deal that evening over dinner while still on vacation. Just crazy (and totally collusive among the agents).

The trick with FSBO is you MUST still be sure to get an MLS listing AND you MUST offer to pay the buyer's agent his half of the commission. Then you'll get plenty of bites.

 

[fantasycurse42]

• Do you use Zillow and Trulia?
• If yes, have you searched those sites for comparable homes in your neighborhood? (such as property size, square footage, updated kitchen/bathrooms/flooring, landscaping, etc.)

BTW, Zillow's zestimates are garbage, so I would ignore those... You do need to find the comps though and start at 5-10% over them and work your way down. I never trust a RE agent... The best time to buy and sell according to any agent? "Right now"

Its true now.

Multiple bid offers over ask... Buying frenzy everywhere... Economy is booming.

Doesn't remind me of anything I can remember

 

[jon_mx]

Trust the agent. They took vows to put the interest of their clients ahead of theirs.

 

[The Commish]

Comps drive the prices, not the agents.

 

[fatguyinalittlecoat]

Remember when like two week ago Otis decided he was going to wait a year before selling his house for tax reasons? Guy just loves to throw money away.

 

[comfortably numb]

Trust the agent. They took vows to put the interest of their clients ahead of theirs.

This is true. I was even given it a secret handshake that only Realtors could use

 

[Slapdash]

Remember when like two week ago Otis decided he was going to wait a year before selling his house for tax reasons? Guy just loves to throw money away.

No

 

[jamny]

Heading to Denver?

 

[johnnycakes]

Heading to Denver?

I leave for Denver April 17... returning April 21, fwiw.

 

[cstu]

Putting our house on the market. Broker came back with a price that was close to what we expected, but I think a little low given some of the garbage we have seen listed at much higher prices. Of course, it's hard to be totally objective about your own house.

I'm usually a "trust the professionals" kind of guy, but in this instance, I assume a real estate broker has the incentive to list as low as possible to get a sale done fast. Sure, they could get a few more dollars if they list higher, but they're only getting 6% (or maybe 3%) of the difference, and really it seems to me they just would like to show it a couple times and get a deal done.

Am I right in my thinking? I'd like to tell them I want to list like $50k higher than their suggestion, but I don't want to be unreasonable either.

House nerds, whatcha got? TIA

It's in the agents best interest to list it lower but there's nothing forcing your hand to accept an offer at listing price. Many times it's better to list lower and get multiple bidders than to list to high and have to bring the price down.

Also, 50k doesn't seem like anything to get worked up either way - by you or the agent.

 

[cstu]

Comps drive the prices, not the agents.

A honest agent will sit down and show you all the comps and help you make the best decision.

 

[johnnycakes]

Comps drive the prices, not the agents.

A honest agent will sit down and show you all the comps and help you make the best decision.

oxymoron.

 

[glock]

You headed east??

 

[jon_mx]

Otis threw away over $60k in online gambling. $50k is pocket change.

 

[fantasycurse42]

Comps drive the prices, not the agents.

A honest agent will sit down and show you all the comps and help you make the best decision.

Few and far between... Wife and I went house shopping last year (although we decided to stay put where we are).

Saw a house we liked and the agent says "this will go quick, you should put a bid near ask on it"... We decided we liked living in the city and were staying put. I still followed this house. Took 6 months for a close and came in $90k under ask (almost 10%).

Agents are almost useless at this point. All the info is out there for buyers and sellers, you just need to dig a little.

 

[bigbottom]

Remember when like two week ago Otis decided he was going to wait a year before selling his house for tax reasons? Guy just loves to throw money away.

I think he wants to make an offer on the bigger house Mrs. O fell in love with. Oats is his own worst enemy. He goes on at length about how he'd like to shift to a career that, while it might pay less, provides him with less stress and more free time. And then he goes and doubles his mortgage.

 

[Zow]

No professional contacts who can refer you to someone trustworthy?

 

[cstu]

-some people are ok with listing their home at MV or even slightly below. This drums up interest and offers and more importantly emotionally invested buyers who now find themselves offering more on a house they normally would not.

Good point. Houses are emotional purchase so you want as many people as possible to see it.

 

[cstu]

Comps drive the prices, not the agents.

A honest agent will sit down and show you all the comps and help you make the best decision.

oxymoron.

I'm biased because my wife is a broker, but that's not true.

 

[The Commish]

Comps drive the prices, not the agents.

A honest agent will sit down and show you all the comps and help you make the best decision.

They can "help" but I'm not sure it's something that requires a brain trust to figure out. If you are going for as much money as possible, price at the high end of comps, if you're in it to get it done quickly, price at the bottom.