As home prices have risen, so have broker commissions. Thus, many home sellers are deciding to go the do-it-yourself route. There’s an informative article on CNN with some tips for those who want to avoid spending thousands of dollars unnecessarily.
The big question is of course whether the commission savings are higher than the savings one might get my having a broker fight hard for a good price, if they in fact do that. Needless to say, selling your own home would be a lot of work if you wanted to do it right.
Instead of selling a home, I’m selling books online (most of which readers here will not be interested). I’m up to almost $100 in sales after Amazon fees.
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12:39 am (reply)
The brokers aren’t going to fight that hard for a good price. Sale prices for real estate agents’ own properties exceed the sale prices for clients’ properties by 3%. (_Freakonomics_ said this, so it must be true. ;) ) Why? Any increase in the sale price of an agent’s own property goes into their pocket 100%. Any increase of the sale price of their clients’ properties goes into their pocket at 1.5 cents on the dollar. Not really worth it to them.
Using this “what’s in it for me” mentality, it might be best worth it to use the MLS and pay the buyer’s agent the 3%, because the typical buyer’s agent really isn’t going to dicker with you that much. Why not? They lose money if they get a lower price for their client. They just want to close the sale. That’s the only way they make money, and they need to do this as fast and as often as possible.
Or, if you are in a really hot market, just stick a sign on the front lawn and educate yourself on how to sell the property, rather than paying the buyer’s agent thousands of dollars just for holding the buyer’s hand.
2:01 am (reply)
I’ve definitely seen this in my neighborhood. Almost 2/3rds of them start out FSBO, then a month later they get the 1.5% commission cheapo guys, and then finally they get a real full service broker. Every time, it’s almost funny.
2:08 am (reply)
I have bought a house FSBO and the people did not know what they were doing at all. One was a stay at home and dedicated every day to staying on top of things and just had no clue. Would ask my broker for advice all the time. Ended up costing them on because my broker made it clear they were working for my best interest, albeit their commision, but I do not mind paying for good service. I agree commisions are large, but are rarely as easy to come by as they have been just recently.
2:45 am (reply)
That’s a common practise all over the world to charge that commision. But as you said we should pay for someone’s good work.