I recently flipped a house in New York. The selling agent wants 9 months exclusive terms with 6% brokerage fees. I am concerned with the 9 months exclusive terms and want to change this to 3 months. What is a typical term for a selling agent? My thoughts are if she can't sell it in 3 months I need someone else, and if we only give her 3 months she will be more motivated to work on it. Let me know your thoughts. Thanks.
When they know you're not from the big apple they will try this sort of tactic. A friend of mine wanted to rent an apartment in Brooklyn and the rental agent demanded 10% or 20% of her annual rent as payment, smh. She vehemently refused and gave them the terms that she was comfortable with. The agent attempted to haggle a bit but finally caved. Stand your ground and go with the 3 months max. Like you said if they are as good as they think they'll get it done, if not someone else will....
It depends on where you are at, but everything is always negotiable. If you feel that is too long (and I would agree), tell the agent that you are not that comfortable being locked in that long, ask what recourse you have if your not satisfied w/ the service, etc. Communicate. A lot of agents want to know where you stand as well and the more you discuss, the better it will be. Also, a lot of good agents are willing to end the partnership if both parties aren't happy. How many agents did you talk to before settling with this one?
It's your house, there are plenty of them, one of you. Agent doesn't want the listing, give it to someone else
Really depends on the market, but 9 months I'd think would be laughable. 6 month listings are customary. Look at the average days on the market and give her a month beyond that. 6 months should more than cover it.
3 months is not long enough in my opinion. That gives about 6 weeks to advertise. You may negotiate a week. Then the buyer has to qualify for financing, that can run from 3 to 6 weeks depending on the loan. What is the time period for appraisals there? Are any repairs needed? Allow time for that. Are you sure title is clean and ready to close? You could be bumping the closing date at 3 months.
You're basically asking her to advertise the property and lock in one buyer and work that buyer. She will have a protected period for any buyers showing up after the listing expires, if any, but no one will be showing the property after you go under contract and no one will be looking after it expires.
I don't know the marketing time expected at the price you're asking, but if your price is too high, you can kill a property for 3 months just exposing it a price that is too high. Knowing that investors usually try for the highest price they can get, you're probably pushing it.
Your price might be why she asked for 9 months, she may know it's too high and will need to drop to get it sold. Many agents will simply take a listing to get on the board and go with the flow later as needed.
Need to price it right, you have holding costs and she has advertising costs and other expenses as well.
6 months 6%, that is customary. I would never have taken a 3 month listing. :)
Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com
Agree 100% with @Bill Gulley 6mth, 6%
thanks, I want to be fair so 6 months will do. She did say if we were not happy we can cancel the contract. I appreciate your help.
@Daniel Levine - First, a little terminology. Generally, the "selling agent" is the one who has the buyer. Since that agent is the one who is actually "selling" your house. The agent with whom you sign a listing agreement is typically referred to as the "listing agent", or maybe the "seller's agent".
Now, about the 3 month term. If your house doesn't sell it 3 months, it's not necessarily your agent's fault. It could be that you have it priced too high. That's most often the culprit.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!