Commissions expected?

[BradTaylor]

Do Realtors deliberately ignore listings that only offer a fixed commission? In such a tight economy I would think a realtor would take anything he or she could get.

Love to hear your thoughts?

 

[RedlineBrett]

QUOTE (BradTaylor @ Nov 16 2010, 04:19 PM) Do Realtors deliberately ignore listings that only offer a fixed commission? In such a tight economy I would think a realtor would take anything he or she could get.

Love to hear your thoughts?


The bad realtors are more likely to be desperate and will not show the property because they`d rather sell their client something where they will make more money.

The good realtors won`t be desperate and just pass the costs onto their buyers and treat the reduced fee like a property that doesn`t include appliances or has a roof that needs work... like a defect you can`t see when walking through the property or have to read the fine print to find out about.

 

[ChrisDavies]

To add to what Brett said, Realtors aren`t allowed to completely ignore them, but it`s human nature that a listing offering substantially less will get fewer buyers looking at it.

I wasn`t completely sure from your initial post if you`re asking from the perspective of a seller seeking a realtor, or from the perspective of a realtor picking listings to show.

 

[BradTaylor]

QUOTE (RedlineBrett @ Nov 16 2010, 04:46 PM) The bad realtors are more likely to be desperate and will not show the property because they`d rather sell their client something where they will make more money.

The good realtors won`t be desperate and just pass the costs onto their buyers and treat the reduced fee like a property that doesn`t include appliances or has a roof that needs work... like a defect you can`t see when walking through the property or have to read the fine print to find out about.


Pass the cost on? If a seller was asking $400,000.00 for a property & the buyer agreed to that, how does the cost get passed on to the buyer?

Commissions are separate.

 

[BradTaylor]

QUOTE (ChrisDavies @ Nov 16 2010, 04:51 PM) To add to what Brett said, Realtors aren`t allowed to completely ignore them, but it`s human nature that a listing offering substantially less will get fewer buyers looking at it.

I wasn`t completely sure from your initial post if you`re asking from the perspective of a seller seeking a realtor, or from the perspective of a realtor picking listings to show.


A sellers perspective.

 

[RedlineBrett]

QUOTE (BradTaylor @ Nov 16 2010, 04:52 PM) Pass the cost on? If a seller was asking $400,000.00 for a property & the buyer agreed to that, how does the cost get passed on to the buyer?

Commissions are separate.


A buyer brokerage agreement signed between the buyers agent and the buyer. Seller has nothing to do with it.

For the sake of simplicity if I as an agent agreed to a flat rate of 10,000 to sell a house and you the seller were offering 6000 my buyer would have to pay 404k for the house. They look at your price tag and add on 4k same as they would if they had to buy a washer/dryer because you were taking yours with you... but they were in the property when they walked through it.

Or.. what is more common is the buyer/buyer agent negotiating the fee into the sale. So maybe your list price was 404k and the buyer/buyer`s agent negotiated 4k off the price. Well they`d just write the deal at 404k and put the regular fee in and have the seller pay it so the buyer doesn`t go out of pocket.

Takes a good buyer agent to do either though... and bad buyers agents just won`t show it or will paint the seller to be cheap and unmotivated if their client asks.

 

[markl]

Brett has given you some pretty good insights. I actually had a client who I told the commissions were only $2k on a $250k property but I thought it suited her needs and even if we couldn`t negotiate that I didn`t mind as I knew she was going to buy a number of properties so it would work itself out in the end.

She is a paid a fee for her services as a Lawyer and she didn`t put in an offer specifically because of what the seller was offering to a buyer`s agent. She did buy another property a week later and the first property is still on the market.

Just a little insight

 

[gwasser]

QUOTE (BradTaylor @ Nov 16 2010, 04:19 PM) Do Realtors deliberately ignore listings that only offer a fixed commission? In such a tight economy I would think a realtor would take anything he or she could get.

Love to hear your thoughts?

A Realtor is supposed to act in the best interest of his/her client and commissions shouldn`t be an issue. This is by law.
Having said that, Realtors are human. Hence it is in the best interest of all that you have a Buyer-Brokerage agreement that spells out the rules each side plays by.

If you buy a place that offers insufficient or no commissions to the buyer`s Realtor one would expected that this is discounted in the asking price (it often isn`t). However, to ensure that the Realtor doesn`t bypass the property (in a moment of human weakness) the Buyer-Brokerage agreement allows for the buyer to pay his/her Realtor a commission instead. This commission is negotiated in the contract; often as a maximum commission (3.5% on the first $100,000 and 1.5% on the remainder of the sale price) minus any commission paid by the seller).

 

[BradTaylor]

The reason I`m asking is because my place is listed with a discounted realtor that offers a flat fee of $3000.00 to the buyer`s realtor. I`ve been doing my best to spread the word about my place and have been emailing other realtors about an upcoming open house. A couple of the realtors replied back with rather rude responses. Below is one of the responses.

QUOTE Thank you for contacting us about your open house. I am assuming you are doing it yourself given your commission rate of $3000 to the buyer`s realtor rather than $6873.50? Good Luck with your open house.

I got this response from more then one realtor, haha. I was getting the feeling that they weren`t impressed and were basically giving me the message that I won`t be seeing any potential buyers from them.

 

[housingrental]

In Ontario - I appreciate it is different in Alberta - 2.5% commission to buyer agent seemed to be standard for a long time - Over the last few years I`ve noticed many listings are between 2% and 2.5% being offered - What is everyone`s thoughts on this?

Do you think it impacts the saleability of the house if 2% is offered instead of 2.5%?

 

[RedlineBrett]

QUOTE (housingrental @ Nov 17 2010, 09:26 AM) Do you think it impacts the saleability of the house if 2% is offered instead of 2.5%?

I think $0.01 less than full pop will be enough to upset realtors.

It`s not the saleability of a particular property... it`s that the buyer side of real estate is a completely different sales cycle than listing. When I meet with a buyer they have no idea what house they want. They need to see places and get educated and it is different for every client. Good realtors are selling your house before it even gets on the market. You offer a reduced buyer commish and you are saying that you think the job they have been doing with their client isn`t as important as the other 99% of sellers do... so yes you are going to tick them off.

 

[BradTaylor]

QUOTE (RedlineBrett @ Nov 17 2010, 10:42 AM) I think $0.01 less than full pop will be enough to upset realtors.

It`s not the saleability of a particular property... it`s that the buyer side of real estate is a completely different sales cycle than listing. When I meet with a buyer they have no idea what house they want. They need to see places and get educated and it is different for every client. Good realtors are selling your house before it even gets on the market. You offer a reduced buyer commish and you are saying that you think the job they have been doing with their client isn`t as important as the other 99% of sellers do... so yes you are going to tick them off.


What age bracket do you find are hiring realtors to find them a home? When I was looking for a place I never even considered hiring a realtor to look for me. I simply went onto the MLS and researched myself. When I found a place I was interested in I would call the realtor listing the place.

 

[CalvinPeters]

as an investor first, I have very many times tried to self-market and reduce commisions to sell my "investments" and maximize returns. It was like talking to a wall, not much response back. I found that if I was to market to MLS, and offer a BONUS commision on TOP of a full commision, the amount of showings on my properties went up considerably. I am sure that is just a co-incidence, (it is, right?!!) but the math works, so I sometimes use it.

I have also found from (painfull) experience that you can chase a market down a loooooong ways trying to save a couple thousand bucks on the ask price...better to be the lowest asking price in the market and get an actual sale in a short period of time. trying so save a couple grand on commisions has personally cost me far more money and time than I want to put in writing on this thread!

I used to think the realtor was the bad guy...but hey, if you cant beat em!

 

[RedlineBrett]

QUOTE (BradTaylor @ Nov 17 2010, 10:50 AM) What age bracket do you find are hiring realtors to find them a home? When I was looking for a place I never even considered hiring a realtor to look for me. I simply went onto the MLS and researched myself. When I found a place I was interested in I would call the realtor listing the place.

All demographics use realtors to buy. The vast majority of listings sold on MLS are sold in single agency - meaning there is one agent for the buyer and one agent for the seller. The only people that don`t use a realtor to buy are those that don`t know how buyer`s agents are usually paid. Did you know at the time that it was the selling brokerage that was going to compensate your realtor, not you?

The reason most buyers use an agent is all the stuff they get for free. Taking the approach you describe would require you to call each realtor and work around their schedules to get them to show you the property, where if you had a buyer agent working for you they can set up the showings and you don`t have to have the listing realtor or seller present. You also have one point of contact for questions, comparable sales, help with the contract, conditions, due dilligence etc. Otherwise you are doing all this work yourself or have the seller`s agent feeding you information and who do you think they`re looking out for?

Also, when you use an agent to buy they usually cut you a break when you go to list your house

 

[BradTaylor]

QUOTE (CalvinPeters @ Nov 17 2010, 11:10 AM) as an investor first, I have very many times tried to self-market and reduce commisions to sell my "investments" and maximize returns. It was like talking to a wall, not much response back. I found that if I was to market to MLS, and offer a BONUS commision on TOP of a full commision, the amount of showings on my properties went up considerably. I am sure that is just a co-incidence, (it is, right?!!) but the math works, so I sometimes use it.

I have also found from (painfull) experience that you can chase a market down a loooooong ways trying to save a couple thousand bucks on the ask price...better to be the lowest asking price in the market and get an actual sale in a short period of time. trying so save a couple grand on commisions has personally cost me far more money and time than I want to put in writing on this thread!

I used to think the realtor was the bad guy...but hey, if you cant beat em!


I think you nailed it! Based on your experience its obvious that other realtors chose to ignore your properties to persue more profitable deals.

 

[housingrental]

Thanks Brett - Anyone else have any perspective on my post?

 

[DaveRhydderch]

QUOTE (RedlineBrett @ Nov 17 2010, 11:26 AM) All demographics use realtors to buy. The vast majority of listings sold on MLS are sold in single agency - meaning there is one agent for the buyer and one agent for the seller. The only people that don`t use a realtor to buy are those that don`t know how buyer`s agents are usually paid. Did you know at the time that it was the selling brokerage that was going to compensate your realtor, not you?

The reason most buyers use an agent is all the stuff they get for free. Taking the approach you describe would require you to call each realtor and work around their schedules to get them to show you the property, where if you had a buyer agent working for you they can set up the showings and you don`t have to have the listing realtor or seller present. You also have one point of contact for questions, comparable sales, help with the contract, conditions, due dilligence etc. Otherwise you are doing all this work yourself or have the seller`s agent feeding you information and who do you think they`re looking out for?

Also, when you use an agent to buy they usually cut you a break when you go to list your house

I`m so glad to have Brett around answering all these questions. Gives our (Realtor) perspective in a balanced and fair view.

 

[fumbrunner]

QUOTE (BradTaylor @ Nov 17 2010, 10:22 AM) The reason I`m asking is because my place is listed with a discounted realtor that offers a flat fee of $3000.00 to the buyer`s realtor. I`ve been doing my best to spread the word about my place and have been emailing other realtors about an upcoming open house. A couple of the realtors replied back with rather rude responses. Below is one of the responses.



I got this response from more then one realtor, haha. I was getting the feeling that they weren`t impressed and were basically giving me the message that I won`t be seeing any potential buyers from them.



.

Up the asking price and increase the commission to the buyer`s agent. Problem solved

 

[markl]

QUOTE (housingrental @ Nov 17 2010, 11:26 AM) In Ontario - I appreciate it is different in Alberta - 2.5% commission to buyer agent seemed to be standard for a long time - Over the last few years I`ve noticed many listings are between 2% and 2.5% being offered - What is everyone`s thoughts on this?

Do you think it impacts the saleability of the house if 2% is offered instead of 2.5%?


Adam here is the question you have 10 properties under management in which you get 10% of gross rents for property management. A client phones you up and tells you your going to do it for 8%. What do you do?

I am with Brett on this I would rather knock my sales commission down and offer the full rate or even a little higher than average to get the deal sold quickly.

Brad if your working with a discount brokerage would you not be getting a discount on the sell side? Or did you pay a flat fee to list and thus the agent has no incentive whatsoever to actually see the property sold?

Regards,

 

[bizaro86]

QUOTE (BradTaylor @ Nov 17 2010, 10:50 AM) What age bracket do you find are hiring realtors to find them a home? When I was looking for a place I never even considered hiring a realtor to look for me. I simply went onto the MLS and researched myself. When I found a place I was interested in I would call the realtor listing the place.


I`m a pretty independent kind of guy, and this is what I did for my first place. It was a huge PITA, and I wouldn`t bother doing it again. Inevitably I would call realtors, leave a voicemail, get called back, and they wouldn`t be able to show it to me for a couple of days. And they all wanted to ask a bunch of qualifying questions, and to find out whether I wanted them to represent me as a buyer`s agent. It took forever. I ended up buying a place privately (comfree), and it was easier than dealing with selling realtor`s individually.

Now I email or text my realtor a list of MLS numbers, schedule some of her time, and we go.

Michael