Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
Has any BP Investors used the below strategies to sell real estate? Real Estate Commission Rebates is a great way to sell property quickly.
Example: $500,000 listing
Typical way sellers think they must list their home:
3% $15,000 Listing Agent (6 mo. listing contract)
3% $15,000 Buyer Agent
$30,000 Tax Free Equity = approx. $45,000 of Gross Income
Better ways to list, sell fast and save
1% $5,000 Listing Agent (3 mo. listing contract)
3% $15,000 Buyer Agent
2% $10,000 Seller Saves (Maximum Seller Savings)
1% $5,000 Listing Agent (3 mo. listing contract
3.5% $17,500 Buyer Agent
1.5% $7,500 Seller Saves
1% $5,000 Listing Agent (3 mo. listing contract)
4% $20,000 Buyer Agent (quickest sale)
1% $5,000 Seller Saves
Fact: The vast majority of listings are sold by Buyer Agents.
Therefore, when Buyer Agents are searching a zip code and see your property is offering 3.5% - 4% vs. the standard 3%, you can imagine the increased activity this can create.
actually this idea makes a lot of sense to me as a potential seller. I’d much rather pay the lions share of the commission to the agent that does most of the work and save myself a point at the same time.
Charles Soper you might think the “lion’s share” of the work looks like it comes from the buyer’s agent, but please understand that a top-notch listing agent has a lot of skin in the game, spending their marketing dollars on getting maximum exposure for your property, investing time each day networking and getting that property in front of as many buyers and buyer’s agents as possible. We don’t just throw the line out, kick back, and wait for a nibble; and one percent would barely cover expenses, much less be adequate compensation for all the work involved with the transaction.
I wasn't under the impression the buyer bought the house, not the agent. If a buyer sees and loves a house a good agent would never share what their "commission" is in that property. I get the theory behind it, but at the end of the day I'm not sure if lower/higher buyer agent commissions actually matter.
@Sharon Powell I see your point and from my experience with I’ve seen both ends of the spectrum with agents. Some absolutely spend a small fortune on marketing to get a property noticed (and the response is usually quite noticeable) but others as you put it do just toss out a line and wait for a nibble.
I’m all about adequate pay for adequate work and have no problem incentiving hard work. Fortunately I’ve been blessed with those types of agents and haven’t had to fire one yet.
In pre Internet days, when a buyer told their agent what they were looking for and the agent decided what houses to show the buyer, sure. In the Information Age where most buyers look online for a (sometime quite long) time before even looking for an agent, no. The BUYERS are deciding what to look at. A decent buyer's agent isn't going to refuse to show properties that don't pay "enough".
Regardless of what realtors do and don’t do for a living, this is not the forum for that right? I mean we’re all here to make money or help each other make money. What we are doing is playing into this guys controversy. All he does is talk about realtors not doing anything and how they should always offer rebates. He always feels that a mortgage broker does so much more than a realtor when it’s actually the reverse, so maybe that’s why he’s so defensive.
When a buyer's agent sees 3.5% or 4% showing up in the MLS Broker Synopsis, you can bet your bottom dollar they will make every reason in the book to show that property.
It doesn't matter if it's a meth lab or a crack house, buyer's agents will come out of the woodwork trying to grab that 4% Commission! Ha
This is all done with working with listing agents who offer Real Estate Commission Rebates.
However if this is not an option for a seller, and the seller is stuck with using a listing agent that's not willing to share the commission, the listing can be restructured in the above manner.
Instead of lowering the sales price, simply increase the buyer agent commission by that amount you were planning to drop the price in the MLS.
In a seller's market, it's always a good idea to only enter into 2 to 3 month listing agreements, this way if the seller is not satisfied with the listing agents efforts, they are not stuck with a half a year dealing with someone they don't wish to do business with.
I have been using this strategy last few years without any problem selling my properties.
1% listing agent commission
2.5% buyer agent commission
Save seller 2.5% commission and seller keep bigger check in the pocket.
If you search around, many realtors post 1% listing commission on their advertisement.
I saw one of the Realtor is posting ad of 0.88% listing agent commission in my area.
Super bad advice, paired with huge generalizations about an industry that, clearly, you don't know much about. We're not hookers on a street corner. We REALTORS work very hard everyday/night/weekend/holidays/birthdays....
It sounds as though you've had one too many bad experiences with a few agents and are hell bent on shaming the entire industry into cheapening ourselves. That's too bad.
If an agent is willing to negotiate their own money away just to get your listing, how do you think they would be at negotiating YOUR money when it's time to put a deal together?
Originally posted by @Account Closed:
Everybody is money driven in this business.
When a buyer's agent sees 3.5% or 4% showing up in the MLS Broker Synopsis, you can bet your bottom dollar they will make every reason in the book to show that property.
It doesn't matter if it's a meth lab or a crack house, buyer's agents will come out of the woodwork trying to grab that 4% Commission! Ha
This is all done with working with listing agents who offer Real Estate Commission Rebates.
However if this is not an option for a seller, and the seller is stuck with using a listing agent that's not willing to share the commission, the listing can be restructured in the above manner.
Instead of lowering the sales price, simply increase the buyer agent commission by that amount you were planning to drop the price in the MLS.
In a seller's market, it's always a good idea to only enter into 2 to 3 month listing agreements, this way if the seller is not satisfied with the listing agents efforts, they are not stuck with a half a year dealing with someone they don't wish to do business with.
@Account Closed, I reject your comments and your tone is not helpful either.
These are money saving strategies to help BP Investors, same as on this link sharing very valuable info to BP Investors about LENDER to buyer / borrower REBATE, do you also have an issue with this too?
There is never going to be a one answer for all situations when it comes to the debate about commissions. Some states charge an agent to list a property on their MLS system while others do not. Some sellers markets allow 1 % listings to sell quickly while in a buyers market a listing agent may pay over 1% for marketing to get the offers to come in. As a Realtor I will never list for 1% in any market but other agents in my market do. They say they will list for 1% but that is all they do. They do not market the property, hold open houses, negotiate contracts, and refer all questions to the seller for them to handle on their own.
I now have about 3 different "business models" working in las Vegas. There is a new company call ed Open Door that markets that they will buy any house, close on the sellers timeline, pay for the moving truck for intern moves, and cover all closing costs without agents. What they do not tell you is that they pull comps to determine "fair market value" deduct for "non-standard paint or flooring" so they deduct the cost of a complete repainting, compete reflooring, and then deduct about 30% of fair value and that is the cash offer they present to sellers. Once they close then they have an in-house agent that will list and resell the house after being painted and carpets replaced. Quick easy sale without Realtors but you net around 60% of market value. Zillow is even now talking about acting as an agent for both parties in a transaction.
In Las Vegas area, yes, there are handful of Realtor list it for 1% commission. Many 1% ad are on the freeway billboards, newspapers, internet, letters from them etc.
From time to time, I receive mailing letters from different Realtor saying they can list my properties for 1%. Those agent stated on their letter that, they like my transaction volume and want to become my agent.
I have tried three of them three years ago when I traded my single family houses for other properties. They are all good.
I sold all of them smoothly three years ago.
Nowadays, in Las Vegas, many sellers pay buyer agent 2.5% commission.
We learn it from the listing Realtor.
What happened was, at the beginning, the sellers offer 6% to the listing agents, then the listing agent spilt whatever % to the buyer agent.
Later on, the sellers found that some listing agents keep 3.5% or 4% commission themselves and give (2.5% or 2%) of the 6% commission to the buyer agent.
After the sellers/Investor found out about this “fact” later on, the sellers/investors would think, “oh, the buyer agent is actually willing to accept 2.5% or 2% commission? If this is the case, why do we offer 6% at the beginning?
We can just offer 2.5% to list and 2.5% to buyer agent, total of 5%.
In Las Vegas, today, most experience sellers offer total of 5% commission, 2.5% to list and buyer agent each.
Even much more experience investors (have bought and sold many properties before like me) would use the 1% listing agent with 2.5% commission to buyer agent, total of 3.5% commission.
The seller who still pay 3% buyer commission usually are the non-experience seller who sell house maybe once or twice in their life.