Real Estate Agents.

[Super T.I.B]

I've put this on my local board, I'm putting it here to get some words of wisdom  from my American friends. 

I'm confused...

My house has been on teh market for a week and a half. Have had one open house and a few groups have come back & looked at the house again. Have had an offer but I feel that it's not enough, around $30K less than what we have listed it for sale for. The first offer was $4k less than the next offer they gave and they said that offer was the highest they could go.   They have the finance & are ready to buy.

The agent is saying it's a reasonable offer and asked us to consider it & then get back to him. We said no, we are not budging, we are really after x amount which is still $20K off the listed price. Now he is saying, "Geez I don't know, I will put that to them but I don't think they will take it" He is thinking that they will go cold & back off from the sale. We are having another open house this Saturday and hoping we will get something out of that.

Now, my question is, is it better for an agent to sell quickly at a lower price than to keep it on his books (paying for advertising, inspections etc) than to wait for a better price. The thing is, we've had one! offer & he wants to sell it. Get stuffed I reckon, we are paying you the big bucks, sell it for what we want for it!


Thoughts? Anyone been through this recently?

So, I don't know if it works the same in the states. I am paying 2.2% commission so he is getting a fair chunk of change for a house worth $450K. 

I reckon he is playing me and the person who wants to buy, whereas I should be the one he is looking after.

Thoughts?

[IZ]

My wife was a realtor for several years.   After reading your post..I have a lot of of feedback for you..you're probably not going to like it though. 

[herm]

Super TIB said--
I'm confused...

My house has been on teh market for a week and a half. Have had one open house and a few groups have come back & looked at the house again. Have had an offer but I feel that it's not enough, around $30K less than what we have listed it for sale for. The first offer was $4k less than the next offer they gave and they said that offer was the highest they could go.   They have the finance & are ready to buy.

The agent is saying it's a reasonable offer and asked us to consider it & then get back to him. We said no, we are not budging, we are really after x amount which is still $20K off the listed price. Now he is saying, "Geez I don't know, I will put that to them but I don't think they will take it" He is thinking that they will go cold & back off from the sale. We are having another open house this Saturday and hoping we will get something out of that.

Now, my question is, is it better for an agent to sell quickly at a lower price than to keep it on his books (paying for advertising, inspections etc) than to wait for a better price. The thing is, we've had one! offer & he wants to sell it. Get stuffed I reckon, we are paying you the big bucks, sell it for what we want for it!


Thoughts? Anyone been through this recently?

the market sucks. unless you are having a fire sale, dont expect to move the place fast.
i have been trying to sell a very nice house for over 8 months. 5 acres, custom built, less than 10 years old. 
i, like you, was offended by an early low offer (about 20k less than listed) and told the buyer to pound sand.
today i have a contract on the house with a shitload of contingencies, for almost 100k less than originally listed.
i am crossing my fingers that the deal goes through 
i thank god or whatever pagan you choose that i am not in over my head on the place.

FWIW, realtors dont pay for inspections, unless you have some special deal. also, 2.2% is a low commission. typically, it is closer to 6%. this amount gets split by the agents that bring the deal to a close (50:50)

if you are not upside down on the place, and you can pick up and move on for less..............

make the beast with two backs! make the beast with two backs! make the beast with two backs! make the beast with two backs!

[Bun-bun]

Your realtor should be able to show you some comps in your area to give you a better idea of what your property is actually worth vs. what you think it's worth.
Normal commission is 3% to the buyers agent, and 3% to the listing agent. That said, a number of agents are reducing their commissions in order to get business.
It makes no difference to the agent how quickly it sells, with the following exceptions:
1 The quicker it settles, the quicker he gets paid.
2 The longer a house is on the market, the less interest it will generally receive.
3 Your contract with the agent is for a specific period of time (Usually 90 days) and if it doesn't sell, you can pull the listing and give it to another agent, which means that all of his/her work has been for free.

General rule of thumb: if you get an offer that is within 10% of your asking price, take it. You can recoup some of it possibly by making it an as-is sale, or writing the contract minus household appliances( Sell 'em at a yard sale if you don't want to keep 'em for the next house.).
Once a contract is accepted, then the negotiating really begins. The inspection will reveal some problems(It always does.), and the buyers can use this to negotiate the price down "for repairs".

[somegirl]

Don't forget you can make a counter offer.  You could counter for a higher price and offer to pay some of their closing costs out of that.

[Super T.I.B]

My wife was a realtor for several years.   After reading your post..I have a lot of of feedback for you..you're probably not going to like it though. 

Hit me. 


Ok, so the agents commission is 2.2% while in the states & Canada I hear is around 6/7%. I think why it is low compared to stateside is because everything is built into the commission over there. Whereas here, I have to find someone to do legals etc etc. Plus the market here is way overpriced. I could buy a good sized house there for what I'm paying for a shack here. First home buyers over here get $17K as well, I don't.

The market maybe a little different from here (NSW) to the states, we don't release alot of land for sale so the prices of existing house/land packages have skyrocketed over the last 10/20 years. If large tracts of land are released, existing house prices tumble and mortgagees will start murdering there bankers/ politicians. And new release lots are so far away from the CBD, where most people are employed, they have to travel at least 2 hours to get to work. I'm moving further away from the CBD as I can get a transfer closer to home and my wife is a teacher so she would be able to find work closer to our new home. We are buying a cheaper house, but it's a better newer house. It's further away from the CBD, that's why it's cheaper.

I think I will hang tight & see how I go. If you have anything else, keep it coming, I'm interested how it works over there. 

[il d00d]

As far as I can tell, real estate agents exist to lubricate the process of buying or selling a home, not to get the best price for their client.   I say this without prejudice - I am sure the good ones work on your behalf, but they might consider working on your behalf getting you a lower price than you want.  I think I got my money's worth out of my agent for knowing what to look for in a new house - what was working/broken, quality of materials, etc.  Negotiation of price seemed to be an area where the agents I dealt with feared to tread - they tended to defer to comps, what they broadly thought demand looked like in the market.

But, I would not be a bit surprised if there was a lot of off the record negotiations between the buyer and seller agents.  If there are, there is incentive for both of them to figure out the easiest , shortest (and again, not the most advantageous) way to close the deal.  I think it happened when I bought my house, and our real estate agent was a family friend.  I am not sure I will go that route again, it got a bit too familiar...

Some math to consider:
2.2% of 450k = $9900
2.2% of 430k = $9240

Is it worth the extra $660 for the agent to hold off for the highest possible price, to show the house for the next 90 days?  Probably not - not when a >$9k paycheck is coming their way no matter what.
But, giving them the benefit of the doubt, they may be responding to what they see in the market - when few people are buying or selling a house, getting within 10% of your asking price may be rare, especially so soon after you have listed the house.

[cbartlett419]

make the beast with two backs!!!!!  I've got the same thing going on, accept in my zip there are +20 houses for sale and 3 pending sales. The house has shown a dozen times and we have not had a single offer, make the beast with two backs man, I'd be thrilled if someone made an offer within %10 of the list price, I'd just love a make the beast with two backsing offer. (from someone with pre-approval if I can be picky) 

[Bun-bun]

I bought my house 5 years ago for just under $100k.
3 years ago, it was worth $235k, between the market and the improvements I made to the property.
I'm currently looking into buying a foreclosure house on the next block over from me. Slightly less s/f, but was remodeled 2 years ago, a complete gut and remodel, everything is new.
The bank is asking $139k,
I've offered $115k. They'll probably counter, and we'll settle @ $120k.
That's the market here.



If I had to sell or refinance(God help me, NO!), The agent would use that sale as a comp, and my property value would drop like a rock.

[minnesotamonster]

I'm a realtor in Minnesota. Like previously stated, your 2.2 commission is low. It's usually around 6 % where I work. Your realtor SHOULD be trying to get YOU the highest price for your property, but, it is also his job to sell your house. A lot of people get offers right away after they list their house, which are usually "low" offers in the eyes of the sellers, since their house is newly on the market, and they will hold out for a better price. This CAN happen, but, more often than not, your house will get lost with all the other houses on the market and will no longer have that new appeal to it. Then, later down the road you will get even lower offers, and be wishing you took one of your earlier ones instead of now negotiating on an offer that is much less than your previous one.

Again, you are not in the states, nor my market, so this may not even be remotely true to your area. This is just what I've seen locally.

I would definately recommend making a counter offer and see if the buyers will move, more often than not they will, but some are out there just to find a steal and will walk away if they can't get a super low price.

IMO, your realtor is just trying to sell your house for you. He should not be worrying about the money aspect of it.  Also, think about all the mortgage payments you'll be making in the months to come if you turn down an offer that was a little lower than you wanted, and end up leaving the home on the market for six more months or longer. That could ad up to thousands of dollars, that you could of just sold the house for cheaper. 

Something to think about.

Edit:// Good luck BTW !!

[JTMOTO]

I am an agent in Austin TX, and every market is a little different but in my experience the first offer is generally one of the best you will get.  I have been in your situation... and not accepted the offer, and then 4 months later accept an offer even less. I think you should have listed it for more if you are not willing to take 10% less at that price range.  Keep in mind that rates rose last week, and as they do people are going to offer even less to keep their payments the same. 

[JEFF_H]

how big of a hurry are you in?
our house was on the market for 50 days with an open house every weekend and showings during the week
(this was march 07 so the market was a little different, it had just started to slow)
that was a pretty quick sell

the offer we accpeted was 10k off and splitting closing costs.
the first offer was 50k off and they wanted us to 'hold it' for 6 months while they sold their house and moved from the east coast 

[herm]

how big of a hurry are you in?
our house was on the market for 50 days with an open house every weekend and showings during the week
(this was march 07 so the market was a little different, it had just started to slow)
that was a pretty quick sell

the offer we accpeted was 10k off and splitting closing costs.
the first offer was 50k off and they wanted us to 'hold it' for 6 months while they sold their house and moved from the east coast 

my place has been on the market since last may.
the contract i have right now is for 55k off, and one of the contingencies is that they sell their house.
i do have a right of first refusal clause in the event that a better offer comes in,... but right now i am just hoping this deal goes through in the next month or so.

[MendoDave]

In my zip almost nothing is selling. Houses are sitting for 9 months & longer. Some houses just come off the market because they wont sell.

[angler]

As far as I can tell, real estate agents exist to lubricate the process of buying or selling a home, not to get the best price for their client.  
.........
Some math to consider:
2.2% of 450k = $9900
2.2% of 430k = $9240
..........
Is it worth the extra $660 for the agent to hold off for the highest possible price, to show the house for the next 90 days?  Probably not - not when a >$9k paycheck is coming their way no matter what.

Classic principal/agent problem. It is not worth their time to work for another 30 days or whatever to earn that little bit extra for them that means quite a bit more for you.  I think this was covered in great detail in the book "Freakonomics."  That said, some markets in the US will continue to soften.....

I will never use an agent to sell my house.  I have also been a licensed real estate agent in a previous career and work from home, so when I put my house on the market this year, I have the ability to handle it myself.  I plan to ask the high side of what the comps say and stick to my guns.  I've seen two friends in the last year let themselves get talked into a lower advertised price only to have the sale go at full price in under a week. In my book that says the property was priced too low.  Worked great for the agent however    I also live in DC where the market, while softer than 2 years ago, is still pretty robust inside the beltway.