Selling My Home & Real Estate Commissions

Upstate NY · Member since 2024 · 72 posts · 85 votes

I'll be putting my home up for sale within the next several months. I have no desire to pay anywhere near 6% commission.

I'd love to hear some suggestions on what my options are?

Thanks in advance

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Chris SeveneyBusiness Member

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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

@Ben M.

I am not an agent. But one of the things I learned at a very young age, was in business, always deal with professionals who have the most experience where experience is needed. This is just my opinion, and others can disagree, but when I am buying or selling the most expensive purchase I have made in my life, my preferences is to use an expert

Now, as mentioned, not all agents are equal, but if you do find a very good one, they are well worth the commission

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Paul Azad
Member since 2024 · 162 posts · 232 votes
2y
sell it yourself, FSBO, hire attorney to help with paperwork, list on FSBO website, they often have fixed fee packages. have one price if buyer has no agent and another price 3% higher if they do have one so they are paying for their own agent, like in other countries
if market is good agent is not of much help, if market really bad agent is not of much help, Also act like every real estate agent does, in every academic residential RE study does with their own properties versus their fiducial clients, and list the property for more and list it for longer than they recommend to their clients.
Spring is best time to sell, I had 13 offers on my last home in first 48 hrs, and saved >100k, why give away your hard earned equity that you took the risk on?
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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
2y
Sell it yourself and pay zero. About 10% of home sales the seller does not hire an agent. Although about 80% of those who attempt to FSBO (For Sale By Owner) are unsuccessful and end up hiring an agent after a failed attempt.
Hire an agent that charges an amount different from 6%. Agents run the gamut on what they charge from very cheap to very expensive.
One flaw in the system though is it is often hard to tell easily the difference between a very inexperienced or bad agent, and a rockstar agent. In many cases you get what you pay for...but not with agents, as pricing tends to group in a narrow range.
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OP
Upstate NY · Member since 2024 · 72 posts · 85 votes
2y
A few follow-up questions:
1. How does a FSBO handle an open house?
2. Besides the FSBO website, are there any other sites that can help educate me and provide me with needed documents?

3. Can a FSBO place their house on MLS?
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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
2y
Quote from @Account Closed:

1. The majority of sellers make more AFTER paying for REALTOR fees. You can try selling it on your own, but it will likely sell for less, take longer, and be more difficult.
2. If you think you are capable of doing what a REALTOR does, you've never experienced a difficult transaction. A good REALTOR is worth every penny, particularly when something goes wrong.
3. If all you want is exposure, you can hire an MLS-only agent for a small fee and they will enter your listing in the MLS where it's seen by all the agents, it gets published to all the websites, etc.
4. Another option is to shop around. I'm sure you can find a REALTOR that will offer you a discount.
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y
@Ben M.
I am not an agent. But one of the things I learned at a very young age, was in business, always deal with professionals who have the most experience where experience is needed. This is just my opinion, and others can disagree, but when I am buying or selling the most expensive purchase I have made in my life, my preferences is to use an expert
Now, as mentioned, not all agents are equal, but if you do find a very good one, they are well worth the commission
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Chris Ayars
Real Estate Agent · VA · Member since 2024 · 54 posts · 43 votes
2y
Reality check! Even the CEOs of FSBO websites have used real estate agents after failing to sell on their own and gained more from the sale - even after paying their REALTOR®. Look it up.
If you want to sell FSBO, you should not expect to get as much money for the property. Do you pay more for a used car from a private party or at a car lot?
Keep in mind, if you sell FSBO, you are responsible for every aspect and dollar spent trying to find a buyer. If you hire a REALTOR®, the responsibility is theirs including the marketing and promotion finances. They do not get paid until a successful transaction is completed.
The "6%" you are talking about usually gets split between your agent's broker and the broker whose agent brings you a buyer as an incentive for the buyer to purchase your property (because they owe a commission too and may not be able to afford your property if they have to pay it themselves). Everything is negotiable UNTIL you sign that legal document - even what and how you pay the person doing the work of marketing your property.
Consider cost vs. reward before you think, "I don't want to pay a commission." It may be worth paying that commission in the long run.
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David M.
Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
2y
@Account Closed
Doing a FSBO is a catch-22 issue, and your follow up question just proves it.
When doing a FSBO, YOU are now the agent. The whole transaction is on YOU. So, would you rather figure this out on the fly what appears to be a one-off transaction? Or, just pay the realtor to to do their job?
The general sales pitch / story is that listed properties get a higher price. you can consider a sale pitch.. but just remember one usually has better advertising through the MLS, also better access/availability unless you have time to field all the phone calls and arrange showings.
There are some discount brokerages where you pay flat fee for a listing on the MLS. That's all they provide.
Are you selling in NY? Its an attorney state so the attorney has to draft the contract. Be careful about putting anything in writing as that might get you into a contract --- I think. I understand its all verbal until you get to the attorney or something --- I've only transacted in NJ.
as mentioned, if you have a super smooth transaction, it looks like the agent didn't do anything. Well, you might have had a super smooth transction because the agent handled the transaction very well.. Also, if you have a poor transaction, a good agent will be able to help youthrough it.
FSBO tend to not fetch the best price since both sides are looking to save money. The seller thinks they can get the "market price" and pockets the 5%-6% while the buyer thinks they can reduce the price by 5%-6%. Negotiations tend to go poorly since neither side is experienced, or I've seen come out "from a poor direction."
The best are the owners that ask agents questions about how to sell their property.. Or during the transaction they run into a problem or issue, and go asking agents what to do. Of course, the owners don't offer to compensate the agents in anyway...
Not sure what is the "fsbo website" but whatever you learn better be State specific, if not your portion of the state. For example, in NJ some parts customarily use attorneys and some parts don't.
Oh, and nothing says it has to be 6%. That's definitely the highest I've ever heard of, but not very often obtained...
Sorry to be a downer. But, if you don't know how to do advertise, sell, and do the homesale transaction --- you don't know how to do it. Even realtors learn about the transaction on the job... Its all sales, then some "transactional stuff" that Title, closing agent, and maybe attorney handles.
Good luck.
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Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
2y
Alternative is to use an Auction company . You set a reserve ( the least you will take ) House is sold AS IS , And the buyer pays all the fees . There is no apprasial , inspections are day of sale , and settlement is 30 days .
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OP
Upstate NY · Member since 2024 · 72 posts · 85 votes
2y
About 22 years ago I worked part-time as an agent
I took early retirement, I have nothing but time
I already an attorney

"There are some discount brokerages where you pay flat fee for a listing on the MLS. That's all they provide." - TOTALLY NOT TRUE
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OP
Upstate NY · Member since 2024 · 72 posts · 85 votes
2y
I had a full-time job and wanted to learn about real estate before buying my own home. I figured the best way to do so was to become an agent. I hooked up with a broker, took the course, and got licensed. I made some money, but it was not for me. My weekends are too valuable and I rather spend time with my family instead of showing houses. Also, cold calling is not my thing. I hate it when folks call me, so I have no desire to call anyone.

As for FSBO, I already have a real estate attorney and I have found a flat-fee company that will help me.

They do the paperwork. It includes professional photos, a yard sign, a comparative property analysis (CMA) and a personal home overview to go over what should be done/fixed/updated to maximize our home sale.

1 Year Listing

A listing on MLSLI.com, HGAR.com, OneKey MLS, Realtor.com, Zillow, Trulia, and other partner and other real estate agent websites

36 photos uploaded to the MLS

Free changes (price, open house, description, photos)

All legal disclosures and paperwork provided

Free MLS flyers, open house flyer & sign in sheets

Receive all buyer leads

Local Broker help by Email

Weekly Listing Stats for your property

Showing time Scheduling (if wanted)

Electronic Lockbox

Phone call questions and help with anything you need during the selling process

They negotiate your offers for you professionally

They verify all buyers pre-approvals and/or proof of funds

They fill out and send all required paperwork to the attorneys to get contracts going

They handle all home inspections and potential issues

They deal with the appraiser and provide comparable sale information so your house appraises for the contract price

They confirm the commitment of buyers mortgage

They help deal with any legal issues from the town if there are any

They handle the walk through and any issues that might arise

They attend the closing (if there is no scheduling conflict)

I make the appointments and show your own house

Cost: 1/2% with a minimum of $2500

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Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
2y
Looks like you've got you ducks in a row! Go for it.

You may still want to offer a buyers agent comission. Any normal buyer with pre-approval will work with an agent, they would be stupid not to. If not you'll get a bunch of people with no credit asking you to seller finance, etc

On average you will sell for less than when you list it with a top agent. We know this from statistics. You might be able to beat the average, but the odds are against you.

FSBO is a little like selling a brand new watch at a garage sale. Even if you have the receipt and the box is still wrapped, you will not get full price. It's human psychology.

We live in a day and age where new & better quickly replace old and expensive: like Uber replaced taxi. FSBO has been around forever, so have discount brokers. The reason they don't become mainstream is they are not worth it.

You also have legal exposure, even more, because you used to be licensed and should know better.

Also consider State law, I can't speak to NY. We close about 100-140 deals in Milwaukee every year and I would not attempt to FSBO my house. I do not even represent myself when I buy an investment property, I have an agent from my team represent me. Its just not wise, I have seen too much.

But that's just me.
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OP
Upstate NY · Member since 2024 · 72 posts · 85 votes
2y
What would you suggest ne a fair Buyer's Agent number?
I do have a real estate attorney
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David M.
Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
2y
Quote from @Account Closed:

About 22 years ago I worked part-time as an agent
I took early retirement, I have nothing but time
I already an attorney

"There are some discount brokerages where you pay flat fee for a listing on the MLS. That's all they provide." - TOTALLY NOT TRUE

@Account Closed Oh, then sounds like you are good to go... Then go ahead and handle the listing and transaction yourself. Hopefully, you can find a good buyer that doesn't have an agent or willing to go at it without an agent.
Take care.
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Account Closed
OP
Upstate NY · Member since 2024 · 72 posts · 85 votes
2y
3/15/24
Home sellers would no longer be forced to pay up to 6 percent commission to agents under a settlement that experts say will drive down prices.
American homeowners could see a significant drop in the cost of selling their homes after a real estate trade group agreed to a landmark deal that will eliminate a bedrock of the industry, the 6 percent sales commission.

The National Association of Realtors, a powerful organization that has set the guidelines for home sales for decades, has agreed to settle a series of lawsuits by paying $418 million in damages and by eliminating its rules on commissions. Legal counsel for N.A.R. approved the agreement early Friday morning, and The New York Times obtained a copy of the signed document.

The deal, which lawyers anticipate will be filed within weeks and still needs a federal court’s approval, would end a multitude of legal claims from home sellers who argued that the rules forced them to pay excessive fees. Representatives for N.A.R. were not immediately available for comment.
https://www.nytimes.com/2024/03/15/realestate/national-association-realtors-commission-settlement.html?unlocked_article_code=1.c00.ma4T.9e_c8UHRTNQ1&smid=url-share

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Alan AsriantsBusiness Member
Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
2y
Representing yourself on a extremely large transaction could be like shooting yourself in the foot.
You will be emotionally involved and might make a decision that can cost you way more than an agent.
As someone mentioned here: This is likely one of the largest transaction of your life. You already have so many questions, and don't even know what to offer a buyer's agent. I'm sure people will help you, but if your questions are as basic as this, then you really are undervaluing experience.
Don't get me wrong, there are a lot of duds out there. But that's every profession ever.
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OP
Upstate NY · Member since 2024 · 72 posts · 85 votes
2y
IMHO, a real estate agent's commission should not exceed 3%. Period.

If my house sells for $600,000, a 6% commission gives the agent $36,000. Never gonna happen. Even if FSBO folks make a mistake, I doubt very highly it will be anywhere near that amount of money.
With regards to a Buyer's Agent, very few buyers where I live use a Buyer's Agent. And if they did, I'll offer them 1% and be done with it. They get $6000 for walking a buyer through my house and doing some paperwork. My real estate attorney will handle all the legal documents, and my bank, and work with the agent to finalize the deal. If I were a Buyer's agent, and someone gave me a deal like that, I would be making money hand over fist every month.
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OP
Upstate NY · Member since 2024 · 72 posts · 85 votes
2y

This is what realtors and the industry want the homeowner to believe. As if they are this mystical entity that can foresee what you will see your home for.

The owner makes the final determination on what to price their house at, not the agent. The agent will give you comps for your area, and make a suggestion, but the final decision is yours.

Remember that.
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Alan AsriantsBusiness Member
Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
2y
Quote from @Account Closed:

This is what realtors and the industry want the homeowner to believe. As if they are this mystical entity that can foresee what you will see your home for.

The owner makes the final determination on what to price their house at, not the agent. The agent will give you comps for your area, and make a suggestion, but the final decision is yours.

Remember that.

we never argue this point for sellers. In fact I always let my sellers know that it is their decision
There is never a gun to your head. You don't have to offer 6% commission. You can offer 4% for everything. Whether or not the agent accepts that commission is up to them. At some point it is not worth someone's time.
If I had a seller who wanted to list their house at $800k, but the house is worth closer to $600k, I would likely walk away.
You can list your house for whatever price you want, but just because you listed the home for that price doesn't mean its worth it. List price and sales price are two very different things.
Usually I find that FSBO's are way overpriced.
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OP
Upstate NY · Member since 2024 · 72 posts · 85 votes
2y
Quote from @Marcus Auerbach:

Looks like you've got you ducks in a row! Go for it.

You may still want to offer a buyers agent comission. Any normal buyer with pre-approval will work with an agent, they would be stupid not to. If not you'll get a bunch of people with no credit asking you to seller finance, etc

On average you will sell for less than when you list it with a top agent. We know this from statistics. You might be able to beat the average, but the odds are against you.

FSBO is a little like selling a brand new watch at a garage sale. Even if you have the receipt and the box is still wrapped, you will not get full price. It's human psychology.

We live in a day and age where new & better quickly replace old and expensive: like Uber replaced taxi. FSBO has been around forever, so have discount brokers. The reason they don't become mainstream is they are not worth it.

You also have legal exposure, even more, because you used to be licensed and should know better.

Also consider State law, I can't speak to NY. We close about 100-140 deals in Milwaukee every year and I would not attempt to FSBO my house. I do not even represent myself when I buy an investment property, I have an agent from my team represent me. Its just not wise, I have seen too much.

But that's just me.

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OP
Upstate NY · Member since 2024 · 72 posts · 85 votes
2y
During my 35 business career, I negotiated millions and millions in contracts. I have no problem negotiating the sale of my own home. As far as not getting top dollar for it. I totally disagree. I already mapped out the comps in my area, and even went to see several of them to see how they compare with mine. So I have a pretty solid handle on what my house is worth, and the range that I should list it at.
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OP
Upstate NY · Member since 2024 · 72 posts · 85 votes
2y
Quote from @Alan Asriants:

Quote from @Account Closed:

This is what realtors and the industry want the homeowner to believe. As if they are this mystical entity that can foresee what you will see your home for.

The owner makes the final determination on what to price their house at, not the agent. The agent will give you comps for your area, and make a suggestion, but the final decision is yours.

Remember that.

we never argue this point for sellers. In fact I always let my sellers know that it is their decision
There is never a gun to your head. You don't have to offer 6% commission. You can offer 4% for everything. Whether or not the agent accepts that commission is up to them. At some point it is not worth someone's time.
If I had a seller who wanted to list their house at $800k, but the house is worth closer to $600k, I would likely walk away.
You can list your house for whatever price you want, but just because you listed the home for that price doesn't mean its worth it. List price and sales price are two very different things.
Usually I find that FSBO's are way overpriced.
600K to 800K is a HUGE swing. If someone said that to me, I'd walk as well. I was talking more in the $30-50K range. We all know that you ask and list high, and negotiate downward. Many of the homes in my area were listed at X, and in this market, the majority sold at that number, some even higher. But being the pessimist that I am, reality steps in and that $30-50K bump that a Seller adds to the listing price, is the room that I can use to negotiate with a Buyer (if need be). I am realistic if anything.
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Jonathan Bock
Accountant · Bryn Mawr, PA · Member since 2023 · 409 posts · 321 votes
2y
@Account Closed
It's a local game for example, in my market list lower and sell higher is very common especially in the higher end market. So actually the reverse of your mindset; we negotiate upward. Every micro market has peculiarities and if your listing price is packed and that is common for your market do what you think is best.
Obviously, you have your mind made up and find pleasure in the process so best wishes on your sale and good luck!
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OP
Upstate NY · Member since 2024 · 72 posts · 85 votes
2y
Quote from @Jonathan Bock:

@Account Closed
It's a local game for example, in my market list lower and sell higher is very common especially in the higher end market. So actually the reverse of your mindset; we negotiate upward. Every micro market has peculiarities and if your listing price is packed and that is common for your market do what you think is best.
Obviously, you have your mind made up and find pleasure in the process so best wishes on your sale and good luck!

Now, here is my question...

I am using a flat-fee agency, which will charge me 1/2% with a minimum of $2500. No problem with this at all. Now, if a Buyer's agent comes in, has a few buyers, and one agrees to buy the house, I assume the agent would want a commission from me; which is only fair. If I am reading things correctly, a fair commission to the agent would be 1-2%. Correct?

My example would be a house selling for $550K.

1/2% commission to the flat fee agent = $2750
1% commission to Buyer's agent = $5500 -or-
2% commission to the Buyer's agent = $11,000

Total Commission = $8250 - $13,750

I think this makes sense and is completely fair. What do you think?
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Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
2y
Quote from @Account Closed:

During my 35 business career, I negotiated millions and millions in contracts. I have no problem negotiating the sale of my own home. As far as not getting top dollar for it. I totally disagree. I already mapped out the comps in my area, and even went to see several of them to see how they compare with mine. So I have a pretty solid handle on what my house is worth, and the range that I should list it at.

You are probably better prepared than most and I wish you best of luck. In my opinion an agent who does less than 20 deals a year would not be qualified enough to sell my house for me, because they don't have their finger enough on the pulse of the market. To be fair, plenty of part time agents with a low skill set are selling plenty of homes.
I am sure you are a great negotiator, but you that is a skill that does not translate into this market. You won't be sitting on a table with someone to duke it out. Its things like nowing how many shoings should translate into an offer and how to leverage that into competitive things. Doing lots of transactions is the only way to know.
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Upstate NY · Member since 2024 · 72 posts · 85 votes
2y
I wouldn't call myself a great negotiator. Over a 35+ year career, I negotiated hundreds of deals. But a real estate deal, as you know, is quite different than what I used to do. Albeit, all negotiations have similar qualities - both parties want the best deal, and if both go into the negotiation with an open mind and the same goal - to close the deal - the odds are good that the deal will be made.
The agent I am leaning towards has been in this market for about 5-7 years. He has stellar reviews. I've spoken with past clients directly, all have nothing but positive things to say
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