How do you know if you can trust your Realtor?

Question

it's not that I don't trust my Realtor, but his suggestions to me for selling my house quick is to increase the 6% to 8% so Buyer's agent etc will move quicker trying to sell it. I need an opinion if I should lower my sale price 5,000 and half of closing. The closing cost is a whopping 17,000 and half I would pay. Does that sound right? I sure thought closing cost would not be more than 10,000. My house has been on the market 6 weeks now and only had 2 showings. I am in this all by myself and have no eduation at all with the agent and real estate. any answers would be appreciated. Thanks, Janet

Answer 1

First, six weeks is not that long for your house to be on the market. As a former Realtor I think these are drastic steps to take so early. Do not go more then 6%. If you want to add a incentive later on, then maybe consider a thousand dollar bonus to the buyers agent. You will get a fair shake on the closing costs because this is colculated by the closing attorney and he does'nt care about either agent, he just has to follow the law or risk his livelyhood and licence to practice. It sounds to me like your agent is not doing his job and wants you to increase the commission so he gets 4% as opposed to 3%. Don't be afraid to fire him if you are not satisfied.

Answer 2

Sounds as if you have a money grubber for an agent. When he or she asks for 8% to get a buyer's agent more interested, counter by telling him to offer a 2/4 split. At 8% he'd get more $$$ for doing little.

You can't know what the closing costs will be until you have a signed P&S agreement on the table since closing costs are a matter of negotiation between the parties. A good chunk of the closing costs will be based upon the sale price so it's not possible to say if $17k is high, low, or just about right as you didn't tell us what the listing price is.

Answer 3

What an agent does is that he gets 8% and offers 4% of that 8% to the buyer's agent. So your agent gets 4% and the buyer's agent gets 4%. If I were you, try to negotiate a 5% (or 6%) commission where your agent gets 1% and the rest goes to the buyer's agent. If he wants to get 5% then let him earn it by finding a buyer himself. I also like Bostonian's idea of the 6% where your agent gets 2% and 4% goes to the buyer's agent.

In regards to closing cost, I suggest you offer to pay up to 2% of the sales price towards the buyer's closing cost. So if your home sells for 500k, then offer to pay up to 10k in closing. This will attract home buyers and is a better alternative than lowering the asking price.

Between offering the buyer's agent more commission and offering to pay the buyer's closing cost, you will have a better chance of selling your home than the normal market. I have sold homes this way even though my home was listed more than the competition. Never underestimate the greed of real estate agents.

Good Luck

Answer 4

You can't. Really. I have dealt with 3 groups of Realtors in the past 2 years as I have a condo that I rent and I bought a house last year. The difference between them is amazing. Get references! If someone is pressuring you and it doesn't feel right - go with your gut! We caved to pressure from our Realtor that was supposed to rent our condo and they did nothing but remind us that we were obligated to them and that if we switched to any other option, we owned them money. They were awful, nasty people.
On the other hand, another Realtor found a renter for us even though she was not going to get a commission. She did it to make her client happy. And guess what. I will ALWAYS trust this person and will always highly recommend her.
Take the time to ask questions, get good recommendations and only work with those that get high ratings. Realtors are not bad. They are people. Sometimes people are really crappy and will do anything to get at your money. There is an alternative but it takes a little more work to find someone who will look out for your best interest.

Answer 5

He isn't unlike most of us out here, trying anything and everything to make sales. It's tough. I've been at this for almost 20 years, and price reductions, higher commissions, and give aways hasn't produce the buyers for my listings.

While his suggestion about the commission may have some validity in your area, it hasn't had an effect here. Also keep in mind we are suppose to show any and all properties that fit the criteria of the buyer. Most of us aren't looking at the payout of commission.

As for closing costs, they're normally in the 1-2% range of the sales price.

Good Luck!

Answer 6

I know the feeling...we just sold a home. Ours was listed for over 10 months with many realtors. Let me suggest you keep it at 6%....I agree, the realtors right now are money hungry but in actuality if you go from 6-8% the agent himself isn't going to benefit much after its all split up. You can offer a selling bonus to the "agent who sells" your home(the buyers agent)...say an extra $1000....that way they get the whole incentive. they wont have to split between real estate companies and agents (buying, selling. listing)...you wouldn't believe how many times the commision is split. Also 1/2 the closing is a bit extreme....we gave nothing to our buyers toward the closing but did drop our price and additional 5,000 to cover some of the costs. You might offer to pay for the title insurance or something like that, but to pay 1/2 their closing costs?? What if they cannot qualify for a loan unless they have to pay 4 points (each point is 1% of the price), why should you have to pay that? Realtors will do anything for a sale, don't forget that ...it costs them NOTHING to give away your money....if they want to make a sale so badly why don't they offer any money back from their comission!
If a buyer needs money for closing they do what is called concessions.......thats when they say they pay more than what they did for your home and they get money back from the mortgage company. For example you want $100,000 for your home but they tell their mortgage company they are paying $110,000...you get your asking price of 100,000 and they get 10,000 toward their closing...in other words they are financing their closing too.
Did you get a CMA (certified market apprasail)? If you haven't I suggest you do ...it's a very accurate way to price your home. Call another realtor, not the one you are listed with. They usually do it for free. A CMA is a comparison of what homes in your neighborhood sold, how much they sold for ...etc.
By the way, we were listed with 5-6 realtors and didn't get 1/2 the response that we did with forsalebyowner.com. That's the way we sold our home. If I had to do it again...It would be hard for me to trust any realtor. I know its alot to swallow but familarize yourself with all aspects of selling your home so you are not taken advantage of!
Email me if you have any more questions.
Good Luck!!

In reply to your email:
You can still sign with a realtor...just request an open listing. That way you can list with 10 realtors and/or sell the house on your own without paying a comission. He will try to talk you out of an open listing saying you will not go on MLS but if you list with for sale by owner you will get MLS exposure. I would reduce the price the $5000 but not offer any closing costs..it will leave you more room for negotiation. If you offer closing costs you won't be able to drop the price of your house. People like to think they got money off your asking price. Plus if you sell yourself you are saving lots of $$$ in comissions and also will have more negotiation room. 6 weeks is not a long time to have your home on the market....may I ask where the home is?
Just some more info...we sold by owner then hired an attorney to draw up the contracts, paperwork and hold the escrow.....the total cost $600....a lot less than a realtors comission! And the attorney will walk you right thru your closing...it's been really easy (alot easier than I thought).
Again if you have any questions email me.

Janine

Answer 7

I wouldn't raise the commission on his end (did he mention he gets half of that increase?), and I agree that if you are motivated that offering a buyer's agent bonus is a more efficient way to go.

The closing costs sound high, depending on your price. Ask the title company for a break down of the closing costs. In my area, buyers bear the majority of the closing costs, unless it is negotiated in the contract that the seller is going to contribute to the closing costs.

Two showings in 6 weeks isn't too bad, there are sure alot of worse sceanrios out there.

Good luck.

Answer 8

Janet that's a chance you have to take...

One, I once thought was the most trusted they could come was a crook...he was working his way into places to get them to lower prices so the Man he worked for could buy at the end.
This is only a example...they are good and bad in every bunch.

Answer 9

Wow I understand your worries I have a similar situation and I'm telling you this whole selling a house thing might as well be on Chinese because is hard.. I would consult another real state person for a second opinion..that is what I'm getting ready to do... hope this help. good luck.

Answer 10

You can ALWAYS trust the realtor--to do what is in his best interests. That may not be in your best interests however. Find an advisor upon whom you can rely. In my humble opinion, that's not a good thing to do.