Pretty much like everyone else in the soft economy, real estate agents are taking a pay cut and that’s giving sellers some bargaining power.A recent Consumer Reports survey of more than 9,000 home owners, found that among 46 percent of those who, from 2004 to 2007 sold or attempted to sell their home for sale and attempted to negotiate the commission, 71 percent succeeded, often netting a 3 to 4 per percent sales commission for the effort.
The deals didn’t come from discount brokers or reduced service outfits, but traditional brokers including Century 21, Coldwell Banker, Prudential, Keller Williams, RE/MAX and other companies, as well as independent company agents. RE/MAX agents were most likely to lower commissions, followed by independent agents, but none of the companies were far behind the leaders.
Just as buyers are strapped for cash and credit, sellers’ real estate agents are likewise willing to find some financial middle ground and, when it comes to the 6 percent commission, that’s about a 3 percent commission.
This price break is no raw deal. Home sellers who netted a commission discount also enjoyed the same kind of satisfaction enjoyed by those paying full price, Consumer Reports said.
Service satisfaction scores that home sellers gave all the companies revealed “no statistically meaningful difference among the rated companies” the study found. Among one of the “most surprising” findings, the lower commission “rarely had any effect on the sales price,” Consumer Reports found.
Remarkably, something else did: 82 percent of those who sold with the help of a real estate agent received $5,000 less, on average, than their original asking price. However, virtually everyone of the 17 percent who sold their homes without an agent (called “FSBOs” for “for sale by owner“) said they received about what they originally asked.
The majority, 54 percent of sellers not seeking a discount are missing out on fat extra cash that could help with move-up costs, foot the bill for concessions to lure buyers off the fence or finance a vacation around the world.
On a $250,000 home, a 6 percent commission amounts to $15,000. At three percent, that’s only $7,5000. The extra $7,500 is a lot more economic stimulus than the federal government provided earlier this year in tax rebates. On a $500,000 home, a price not uncommon in high-cost housing areas, you are talking a sweet $15,000 savings — or five $3,000 a month mortgage payments!
And here’s the deal. Because real estate listing marketing services appear to be uniform across all real estate companies, according to the study’s consumer satisfaction scores, you can take your sweet time ferreting out a top-notch real estate agent. Concentrate not on which company to choose, but on referrals to specific agents from family, friends, co-workers and others you trust who’ve recently enjoyed satisfactory service.
A lower commission rarely had any effect on the sales price.”
To make the reduced commission deal fly fastest and highest?
• Negotiate from a position of power. Let your agent set the price. If you’ve been professional about choosing a professional, he or she will be dead on with the price. Agents are more apt to give you a discount if you follow their lead.
• Roll up your sleeves. Pitch in as you would with a discount broker in a hot market. Host your own open house, for example and give the agent some time off. Just refer unanswered questions, bids and tough questions to the agent. Likewise, if you are selling to a family member, friend or renter and don’t need the agent’s marketing expertise, a discount is typically a no-brainer.
• Sell in the off season. Winter in the Northeast. Pre-back-to-school doldrums in the West. Put your home up for sale when fewer sellers are making the move and you’ll get your agent’s attention in terms of lowering the commission.
• Get your house in order. Consider spending some of that commission break on a professional stager and make it easy on your real estate agent who will have to work harder on a distressed, disorderly short sale, auction or foreclosure property. Curb appeal gets shoppers inside. A spiffed up interior keeps them there.
• Go to the top. Get your discount from the broker, rather than his or her real estate agent. The broker is the boss. He or she has the power to pull strings, negotiate his or her cut with the agent and get you want you want and the agent a viable listing.
Only approximately 2% of all listings nationwide are sold by the listing agent. When you list your house with ShiftRealty.ca we will try our best to sell it ourselves, but more importantly, we will simply get it sold.
Colleagues in my firm or real estate agents who are affiliated with a cooperating broker may sell our listings. This is why we work hard to maintain a reputation for being very professional and easy to work with. We make the homes we list as easy as possible for other real estate agents to preview or show to buyers.
When you select a real estate agent to market your property, you are hiring them not only for their list of prospective buyers, but for their ability to tap the lists of other people in the business. We constantly lobby among our competition, asking if they have seen our listings, getting feedback and urging them to add our listings to the short lists that they show when they have a prospective buyer. For mississauga real estate there are various agents who can help sell your home for sale.
Negotiations for a home for sale can be affected by emotional factors. For example, it is easy to be offended by someone who is making an offer on your property. Even if the buyers love your house, they are trying to negotiate the best possible price and terms. They probably will not let you know how much they want your home until they have negotiated a purchase agreement.
Buyers almost never write offers that please the sellers entirely. Offers and counter offers may be traded back and forth over days or weeks. Terms of the sale will be discussed and deadlines will be set. When there is finally a meeting of the minds, both sides may feel relieved but exhausted by the process. One of a real estate agent’s most important jobs is to act as the intermediary during such negotiations. With your agents knowledge of financing, negotiation procedures, and the tax laws affecting real estate sales, agents come up with creative solutions to the challenges that may arise.
