Use an agent to sell lots?

Question

I've been working on subdividing 5 lots in a country neighborhood that I've created. I am ready to sell but still not sure if I want to try and sell them FSBO or just go with a realtor. If I do choose the realtor route, is the standard 6-7 percent commission fee different (lower) for multiple deals? If I sell each lot for $165,000 that is a potentially hefty amount to pay the real estate agent...to the tune of $57,000! Is it normal to negotiate a commission down to 3-4% or would that be insulting? I've dumped  a TON of money into this subdivision all ready and don't want to see my profits go down the drain but also have little experience doing FSBO. Thoughts please!

Russell Brazil · Answer

Not sure where in the country you are, but Id expect to pay a higher commission than that due to the low price points as well as the need for a land specialist.

Daniel Martinez · Answer

We usually self-list on flat fee listing and then offer 3%-5% if an agent can bring a buyer, but we don't list using them. They are usually useless in most cases. We find all of our buyers pretty quickly, would love to see if we could dispo these land deals for you.

Jonathan Minerick · Answer

@Christine Hull Consider doing a flat fee MLS listing (~$150), which saves you the cost of the listing agent, and retaining a transaction coordinator (~$450, many are licensed agents) who will make sure you get all the correct paperwork done. It's very easy and will save you a ton of money.

The other added benefit is that for most flat fee MLS listings, if the buyer comes to you direct you will owe nothing for the buyer agent commission. The transaction coordinator can handle the paperwork for both of you. Total cost to sell all 5 lots could be as low as $2,750 instead of paying $57,000 using a traditional agent.

Feel free to reach out if you have questions.

Jacob St. Martin · Answer

Hello Christine, I would say that generally speaking a good realtor should get you more than 6% more than you would get just listing it FSBO unless you have really good connections. I personally don't like to negotiate with my agents for this reason: the relationship. If your agent sees a killer property come across their desk who are they going to call first, you? or the person who didn't haggle them down on their commission and sent them a small gift with a hand written note after the sale. If you don't plan to work with this person or this area again maybe it is worth it but I still think the relationship is worth more than a percent or two of commission.

Rachel Kokosenski · Answer

Christine,

Hi. All realtor commissions are negotiable. It doesn't say what area you are in, but I'd recommend looking up "vacant land" in your city and see which realtor names pop up most often. Then, contact them to discuss your property. I'd recommend interviewing 2-3 of them so you can see how they respond to the commission question. Just be sure it is spelled out on the listing contract before it goes "live" on the MLS.

Going with a realtor can be beneficial as it will expose your listing to more people via the MLS, the agent may already know someone who might be a great buyer, and the agent can field the "showing" calls and handle all the other elements of the sale. Good luck!

Trevor Naumann · Answer

As a Realtor i am biased, but in my opinion, the industry sets up for-sale-by-owners (FSBOs) for failure. Marketing for FSBOs online is poor. On Zillow, you have to change the preset preferences to even see FSBO listings, and most people looking in those settings are Realtors looking to find FSBOs to poach, wholesalers, and desperate buyers who think they can get a bargain because they are dealing with a regular person rather than a Realtor. FSBOs are not in the MLS, so they do not automatically appear on major websites. It's a tough road.

That said, there are a few options to consider:

• Use a flat fee broker to at least get the benefit of advertising in the correct channels.
• 
• Negotiate a lower commission with an agent. Don't go too low, as it may affect their performance. A good agent should get a faster turnover time due to correct pricing, effective advertising, and availability to "sell".
• 
• Pay full price to a good agent. This incentivizes them to perform their best, creating a win-win situation.

Keep in mind that most Realtors may not put in much effort, so choose carefully and thoroughly interview multiple agents. If they seem unaware of anything beyond their sales pitch, they may not be a good choice. Ideally, you would want a land specialist, but they may not accept a low commission. If you feel comfortable with the FSBO process, try a flat rate broker for the correct advertising channels and paperwork. Be as unbiased as possible with your comparative market analysis and pricing. Good Luck

Eliott Elias · Answer

If the demand is good list it yourself, otherwise use a realtor. The commission you pay is worth it if you hire the right person.

Use an agent to sell lots?

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