Investor · AZ · Member since 2016 · 10 posts · 3 votes
Hello--I have a property in Phoenix East Valley that I am looking to sell, using a 1031 Exchange for property out-of-state of Arizona. Since the market is hot in the East Valley, I am thinking of using a seller's agent to sell this. I would love input as to pro's and con's of using a seller's agent vs conventional realtor? What percentage of commission can I expect to pay? Do Seller's Agents typically work with a 1031 Exchange? Thank you!
1) Pros and cons of using a seller's agent vs conventional realtor: In this market, just hire a licensed agent who you like and trust. There are some agents who like to coin themselves as sellers agents, but IMO that is only because they are too lazy to represent buyers. So just pick a good agent.
2) Percentage of commission: Industry standard is still 6%, which means 3% goes to the buyers agent and 3% goes to the sellers agent. I see a lot of sellers squeezing that number lately though, offering 2.5% to each side, or even 2% to each side. It's my opinion that offering a full commission to the agents when selling is a good plan.
3) Do agents work with a 1031 exchange: The real estate agents representing you on the sale of your Phoenix property have nothing to do with your 1031 exchange. And the real estate agent representing you on the purchase of your new out of state property doesn't have anything to do with the 1031 either. Consider those 1031 funds just your source of down payment. They just happen to be coming from a 1031 exchange account vs a savings account.
@Connie K. You could also consider a paid listing. That is where you pay a nominal fee ($300 to $500) to put your house on the MLS for buyers and buyers agents to find. You pay only the buyer's agent commission, typically 3%.
There are several things you should know and be able to do yourself to consider this:
1.What you should and are willing to do to make your property the most marketable, including repairs, upgrades and staging.
2.How to price your property
3.How to negotiate
4.How to navigate the selling process
Just put a lockbox on the house, realtors will call you. Give them the lockbox code and record their contact and when they are going. In a hot market you do not need a sign out front, nor do you have to worry too much about under-pricing as competing offers will take care of that.
@Connie K. Is this a multifamily property or a single family home or different? If it is a multifamily property I highly recommend finding an agent who specializes in this size and asset class so he or she can appropriately value the property. A buyer or seller's agent would be good for this. Then, you can also see if they have any really active investors in their pocket that want this product so that you can save on time and cost. Discounting fees to sell to an off market unrepresented buyer is common. Hope that hels!