January 23, 2014, 6:53 am

Should I Get a Real Estate Agent?

by: The Financial Blogger    Category: Properties
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Our feet are still stuck in two feett of snow but it’s time to think about what happens each spring: the largest number of real estate transactions. But here’s the catch; housing transactions conclude in spring, but they start in February. The best time to sell your house is definitely in February and March. This is when most people put their house up for sell in the hopes of finding a buyer quick enough to move in the spring or early summer time. As we approach the crucial moment to put a “for sale” sign in front of your home; the $20,000 question is: Should I Get a Real Estate Agent?

If you have read this blog in the past, you know that I’m not a big fan of realtors. However, I’ll put my assumptions aside and look at the reason why you should use a realtor and how you can put $20,000 worth of commissions directly in your pocket.

 

HOW CAN A REAL ESTATE AGENT HELP YOU SELL YOUR HOUSE?

 

By definition, a real estate agent will take care of selling your house including all the tasks involved such as:

Assessing the property value: researching for comparables and establishing the value of the property according to the current market.

Marketing the property: completing the listing on the internet, newspaper advertising, taking pictures, writing an attractive description).

Visiting the property with potential clients: arranging visits, answering questions, using his network to attract more potential clients.

Negotiating: receiving the offer of purchase from the buyer, negotiating with both the seller and the buyers. Offering support and facilitating the sale.

Legal protection & paperwork: technically, the real estate agent is not responsible for the legal aspects of the transaction. However, he uses proven legal documents drafted by his banner. He takes care of all paperwork including certificate of localization, offer and counter offer, conditions, seller’s declaration, etc.

 

As you can see, it’s not like the real estate agent doesn’t do anything to sell your house. He does some work and should get paid for it; I’m not arguing with that. However, I have a problem with the bill you have to pay. Since the realtor has to pay a commission to his banner and rent an office, the commission rate the seller pays is ridiculously high. For a house selling for $390,000 (which is about the average selling price in Canada according to the Canadian Real Estate Association), a 5% commission is worth $19,500. This amount is before taxes. When I look at my wallet with the seller’s perspective, it hurts to pay 20 grand for a single transaction.

 

CAN YOU SUCCESSFULLY SELL YOUR HOUSE ALONE?

 

The answer to the question “should I get a real estate agent? is answered  by another question: “can you successfully sell your house alone?. Since I’ve just outlined the main realtor’s tasks, let’s see if you can do all of them and keep the $20,000 in your pocket.

 

Assessing the property value: Assessing a property value isn’t that complicated. You look at your property in terms of neighborhood, equipment (central A/C, fireplace, central vacuum, garage, flooring, etc), number of bathrooms and general square footage. After a few hours, you will be able to find houses similar to yours and this will dictate the price you should sell at. Just ask yourself why someone would buy your house that is $20K higher than the neighbor’s house showing similar features. And don’t answer because your place looks better ;-).

Marketing the property: 85% of potential buyers look on the internet to filter properties. Therefore, if you are able to list your property on a few well-known websites, you can reach most of the market. Writing a description of your house is not rocket science either. Just read a few descriptions of houses similar to yours and you will see what is being highlighted.

Visiting the property with potential clients: This only requires that you answer the phone and schedule appointments. In fact, most potential buyers prefer to visit the house by themselves and will come to you if they have any questions. I don’t think I really need someone to tell me I’m entering the kitchen!

Negotiating: This is probably the part where taking a realtor seems appealing. In fact, it’s not. Most people hate negotiating and that includes you and your potential buyer. If you have done your research and pulled out valid comparables, you can simply sit down with your buyer and show him why you are selling at that price. Ask him to come with comparables that validate his rationale of offering you less. It is a bit painful, but keep in mind that you are doing this for $20K.

Legal protection & paperwork: Since the real estate agent is not legally responsible if there is a problem with the transaction, the legal protection is not as important as it may seem. Then, sites like By The Owner offer legal support and a set of drafted documents where you only have to fill in the blanks.

 

ABOUT MY OWN EXPERIENCE AND WHY I WILL NEVER TAKE A REALTOR AGAIN

 

I’ve sold two houses already. The first one was done with a realtor and the second one was sold on my own. I was only 23 when I bought my first house and dealing with a real estate agent was a complete nightmare.

#1 He confused both parties on the moving date (while insisting to be the middle man between the buyer and seller).

#2 He didn’t verify the certificate of localization (which was wrong and I had to run through various hassles to get it fixed).

#3 I didn’t sell my house at a higher price than the regular market (after doing my own research, I would have come up with the same price anyways)

#4 He cost me slightly over 10K (5% commission about 10 years ago)

 

But, I would be lying to you if I told you that selling my property by myself went smoothly and without hassles. After I saw the kind of service I had gotten using a Realtor, I decided to sell my second house by my own means and put in on the market with two different websites.

#1 I sold my house at the price I wanted (my house was listed in the same range as many other properties in my neighborhood)

#2 It took me 10 days to sell it (compared to 6 months with my previous house with a real estate agent)

#3 I went through rounds of irritating negotiations (the ugly part of selling on your own is when you come upon a fierce negotiator. The guy came back at each step of the sale to negotiate the price lower and being very negative about my house. It was irritating and I almost lost my temper at one point).

#4 No confusion with regards to moving, the transaction went smoothly (in the end, both the buyers and seller got their house on time and we all moved with smiles on our faces).

 

Overall, the process went relatively smooth in regards to the transaction but I had to deal with a tough buyer several times. It is true that I had to spend a few more hours to sell my house, but what is 20 hours compared to $18,000?

 

And this is my point: I understand the job done by a real estate agent but even though he works hard, the pay check is just too big for my pocket. What he does can definitely be done yourself without too much hassle. And if you hit a few road bumps in the process, ask yourself if they are worth 20K.

 

What do you think, should you get a real estate agent? Tell me about your story.

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Comments

When buyers see that you don’t have an agent, they expect you to sell your house at a lower price. Ie they will offer you a price at 20,000 less since you don’t have to pay the commission. Of course you can negotiate, but it’s hard when they come at you with that mindset.

by: The Financial Blogger | January 24th, 2014 (5:37 am)

Hello Martin,

Some buyers tried to negotiate using this rationale. I simply answered back that I was the one doing the Realtor’s work so I was the one cashing the commission. When you think about it, if they want to buy your house, they won’t turn around because it is selling at a fair price. If they can’t buy yours 20K under the market price, they will have to buy another house with an agent and they will pay the 20K in commission anyway. There is no downside for them to buy your house at the same price.

If we move with my company, they cover all realtor fees. If I ever go to sell our house on our own, I think I will skip the realtor. I just need to figure out how to get stuff onto sites like realtor.com , zillow, or ziprealty. I didn’t 50% of the work when we sold our house 2 years ago with a realtor!!! It’s not that hard in the internet age!

Garth Turner greaterfool.ca wrote some great columns on that very issue, might be worth hunting those posts, unfortunetly I don’t know when so you have to go back a few months

Rob

I love this post! This will serve as an eye opener to each and everyone. I deal with couple of real estate agents before and I can say it was really a nightmare.

I will premise this post by acknowledging that I am an agent myself.

I am a regular reader of yours (first time commentator), and your articles are usually quite indepth, but I’m surprised by your poor at best analysis this time around and I want to clarify a few points especially for those who may take your word at face value.

5% commission: The most commonly used commission rate is 5% in Toronto, but keep in mind that 5% is split evenly between the listing brokerage and buyer agent. 95% of buyer’s use an agent when searching for a property, and if you do not offer at least the 2.5% to the buyers agent, then say goodbye to 95% of your potential buyers. Like it or not most agents will not show your property if you are unwilling to pay a commission. Scream bloody murder all you want but that’s the way it is. I’ve offered to show properties to my buyer clients in the past with the understanding they would be responsible to pay my commission (for sale by owners), and 99% of the time they chose to pass on viewing that property.

So unless you want to alienate 95% of your potential buyers you have to offer at least 2.5% to the buyer agent. So off the bat your not saving $20,000 but rather half at best $10,000.

But let’s delve a little deeper. Listing your property on MLS is the most important advertisement. If you choose to work with the least expensive brokerage that simply puts your property up on MLS and washes their hands of everything, at the very minimum you’re looking at $1,500.

So let’s recap:
$20,000
-10,000 buyer agent commission.
- 1,500 MLS listing with photos.
=$8,500 savings.

As Martin B mentioned, anyone who see’s a For Sale By Owner, they automatically want a piece of that commission savings.

Here’s why:
Let’s say you were in the market for a brand new Rolex watch that normally sells for $3,000. Unfortunately, you’ve been unable to find it in stock anywhere. One day you stop at a Garage Sale and you find the Rolex you were looking for, brand new in its original package! Would you pay the $3,000 or would you haggle the price? The same principle applies to real estate. For Sale By Owner = Garage sale, Listed with an agent = Retail.

So let’s assume you split a sliver of the commission $2,000.
8,500 – 2,000 = $6,500.

So assuming you’ve marketed, priced, staged, and done everything else absolutely correctly (chuckle) you’re at most saving $6,500!!! and not the $20,000 you’ve claimed in your post.

Now let’s get down to the meat of it. A reputable realtor will save you that money and then some during the negotiation. Everyone seems to think they are a master negotiator because they’ve bought a house…once…or a car a few times. Going to the flea market and negotiating $10 off the price of a movie doesn’t make you a master negotiator! We deal in hundreds of thousands of dollars on a regular basis, and believe me when you’re trying to negotiate the price of your own home, I can read just about every expression, emotion through your body language, tone of voice, etc…You wouldn’t believe how many times I’ve heard seller’s say to me “See what you can do for us Pawel…” when I was representing the buyer! Hello!!!

So that $6,500 becomes insignificant, in fact, if I was representing you, I would save more than the $6,500.

But let’s assume you’re the power negotiator you think you are with emotions of steel, you save $2,500 – $4,000? How much is your time really worth? Are you going to allow your wife to show the property to some strangers alone because your tied up at work? Or perhaps you’ll tell them to come back another time, in which case they may completely ignore your property.

In any case, it seems you had a bad experience with your previous realtor, but don’t paint everyone with the same brush. I’ve had my share of disappointments with Financial Advisors, but I still rely on their professional advice because I’ve found someone qualified! The old 80/20 rule applies to real estate just the same.

Before you start throwing around $20,000 savings and bad mouthing realtors, consider conducting a more thorough analysis, especially for someone in the finance industry! I trust you put more analysis into your day job than the elementary rant you posted above.

Cheers,
Pawel

I have also been very underwhelmed by the services I received from a realtor. They don’t even sell your house as in discussing with the potential buyers since most buyers come with their own realtors to look at the house without your realtor present.

That system is definitely flawed … They aren’t even able to evaluate the real value of a house. They simply look at the last sell price in your area.

There probably are exceptions …

by: The Financial Blogger | January 30th, 2014 (12:51 pm)

Hello Pawel,

Sorry for the long delay before I post an answer to your comment, I was deadly sick (allright not that bad!) for the past 5 days.

First of all, I didn’t mean to say that all realtors are bad. As you mentioned, there are clowns in each jobs and there is not much we can do about it. I actually use a realtor when I buy a house (since he’s free for me! hahaha!). But keep in mind that I also look at properties sold by the owner on my own at the same time. It’s just that booking 10 visits is so much easier when someone else do it for you.

On the other side, it is not true that you have to pay 2.5% to the buyer’s agent. If the buyer has a computer and internet access, he can easily go on more than one websites and look for properties sold by owners only. The buyer doesn’t have to go with his agent if he finds a house sold by the owner. Therefore, we are truly talking about saving 20K in commission.

I agree with you that you may reduce slightly your exposure by not being on MLS. However, the strenght of this argument is fading away slowly. I would compare this phenomenon to travel agency vs internet deals. If you are willing to put a few hours of your own, you can book your trip on the internet and save a lot of money compare to using a travel agency. Why is that? because the resource is now available on the internet. 85% of potential buyers are using internet to find their property. Is it safe to assume that a good portion of them will look outside MLS? If it was not working, I don’t think that site like by the owner would keep growing as they do right now.

When I sold my house, the buyer wanted to pay cheaper because we didn’t use an agent. I just to him that I was keeping the commission because I was doing the work. I told him to look for a similar house at a cheaper price elsewhere… there wasn’t since my price was made according to the market.

If I use your Rolex analogy, what are you going to tell the guy at the garage sale if he is not dropping his price? That you are going to buy it at 3K elsewhere later on (because you can’t buy one now) instead of buying it at 3K today? Does it make sense? If you can’t find the Rolex anywhere else, you will have to buy this one or not buy a watch at all.

This is the same thing with my house, there is not another copy elsewhere. So if you don’t want to buy my house at a fair price, you can buy another house that you don’t like as much at a fair price eslewhere. The buyer will buy it if you price your property right.

Several agents told me they could sell my house 25K-30K over than my asking price (to cover for the commission). I’ve heard this argument before; they put a higher price, they wait, and they come back at you saying the price is too high and you have to drop it to sell. I’m not a fool, I was selling my house at 344K so I checked on the market what I could get for 375K in my neighborhood and the answer was : a bigger house or a brand new construction (mine was 7 yrs old). But it was obvious that there was a lot more offered (more equipment, better materials, bigger, etc) on the market for 374K compared to my house. So tell me how can you negotiate that with a buyer? How can you convince to buy my house with no A/C and 3 bedrooms instead of buying a house 2 streets away at the same price but with A/C and 4 bedrooms (assuming everything else is similar)?

In my personal case, I have sold 2 properties:

#1 I sold with a realtor
- price of the house : 184K (and he made me lower my price because it wasn’t selling)
- cost of the transaction 10K
- sold after 26 visits, roughly 6 months
- confusion in regards to moving dates
- didn’t help me too much to negotiate the price of my future house

#2 I sold by myself
- price of the house 344K
- cost of transaction $1,200 (the cost to register with by the owner back then) compared to $17,200 + taxes
- sold after 3 visits, 10 days
- settled everything within a week
- So I have really saved almost 20K in commission, this is true and real money.

Honestly, I think that if I had been a power negotiator, I could have sold my house 5K more, not 20K. If you are asking for a fair price, there is not much to do about negotiation. You bring comparables on the table and let the numbers speak.

I think the day agents lose the exlusivity to MLS, it will be game over for half of the agents.

My point was not to badmouth realtors but rather say I would never give them a check of 20K to sell my house (even though I understand that you don’t get the full 20K but probably 7-8K after all fees).

Regards,

Mike

Mike – Thanks for taking the time to reply to my lengthy comment.

I’ll agree to disagree with you on several points, based on TREB stats.

1. The internet is the number one source for listings without a doubt, and anyone can use the internet to find listed homes. And the majority do…however despite finding listings online 95% of buyers choose to use an agent nevertheless, so you are effectively alienating 95% of your potential buyers. They choose to use an agent for several reasons, some you mentioned yourself:
A. It doesn’t cost them anything, and they get access to a wealth of knowledge!
B. Most buyers don’t know where to start if they’re working with a FSBO. Who drafts the contracts? How do they know the true market value (current listings are no indication of actual sales prices)? Additional lawyer fee’s to draft or review non-standard Agreements of Purchase and Sale. What if something goes wrong? An error is made…etc…there are simply too many things that can go wrong for them to buy directly from you. Especially if your house is just listed at market value and not discounted. There must be an incentive to take on additional risk. Unless your house is some spectacular one of a kind home, if they’re not saving, guess what, they’ll just buy the same house down the street with an agent and forego the risk.

2. You claim you’re saving the commission because you’re doing the extra leg work, but your analogy is flawed in that you don’t seem to realize if the buyer isn’t using an agent themselves, well guess what, they’re doing a lot of leg work themselves as well…with additional risk as I outlined above. So where is their incentive to buy from you? I can assure you in your price range there is probably nothing spectacularly rare about your home that can’t be found down the street with an agent. What’s the incentive to buy from an FSBO with added risk?

3. FACT: 90+% of FSBO’s choose to pay the buyer agents commission.

4. FACT: 85% of FSBO’s do not sell, and are re-listed with agents.

Perhaps you got lucky with your property, but it’s a rare occurance and I would still argue you probably didn’t get market value for your property.

5. Negotiation: $5,000 is peanuts in a negotiation, and the fact that you don’t think you could save more than $5,000 as a power negotiator shows your inexperience. Two weeks ago my client decided to make an offer on a loft in The Merchandise Building. The loft was originally listed for $345,000 and then was reduced to $335,000. Three days after the price reduction we decided to put in an offer. I showed the comps to my client and he thought $325k – $330k was fair market value and that was his target price. What do you think we bought it for? He asked me what price to go in at and I suggested $310k to which he thought I was being overly aggressive and was worried we wouldn’t get a response, but he trusted my judgement. After a few back and forth counter offers we got the place for $315K!! $10,000 to 15,000 lower than he imagined. So to answer your questions, $5,000 is nothing during a negotiation.

Agents lost exclusivity to MLS several years ago. Anyone can list their property on mls for about $1,500 with an FSBO brokerage. On top of that Kijiji and Craigslist are available for anyone to use. Despite this, 85+% of transactions are brokered by agents. Interesting fact, if you look at that same stat for the late 90′s to early 2000′s, the rate was closer to 60%. So as technology and information became more readily available, the use of agents has actually gone up not down!

Mike – Perhaps one day when you choose to give an agent another shot, give me a call and I’ll show you the benefit of using a qualified agent.

by: The Financial Blogger | January 31st, 2014 (10:44 am)

Pawel, I really enjoy this conversation since you are not trying to bash my arguments while presenting yours with solid ground :-) Still, I have a few comments in regards to your latest points.

1. I agree with you there is more risk if you buy a house you found on Kijiji. However, more professinoal sites like By The Owner offer drafted contracts, legal guaranties and legal support.

I was also under the impression that dealing with an agent was safer. In fact, IT’S NOT. When I bought my second house, the certificate of localisation was not properly done. I was young and inexperienced so I didn’t notice it until I sold the house a few years later. When I verified to get corrected at the expense of the previous owner, everybody (the agent seller and my previous agent) told me there we NOT legally responsible for anything in regards to the transaction. Both were just very happy to close a sale and never cared about legal documents. It’s convenient since they can’t be hold responsible. I also have to mention that I was dealing with the most popular and productive agent in the city. Still, no support whatsoever.

2. My parents sold 3 houses without an agent and never had any problems. I sold mine with the same thinking. Funny enough, I even got an agent calling me to visit my house with their clients which they did. So Agents will not always discard your house if you are FSBO. + I don’t see where you get additional guanratee you can’t find with a profession website.

3. I can’t comment on that, I have no source of info of my own. I would be interested in reading about this study showing such stats though.

4. What I can say about that is when you put your house for sale, you get 10 calls a day from agents (I even got calls from people living 1h30 away from my city!). Pressure is hard to handle for most people. I’m not surprised several people sign-up with an agent afterward. There is also the psychological aspect of time. After two months, some people get nervous and think an agent will bring dozens of visitors wtihin weeks. That’s not true either. When I put my house for sale, I used to get over 200 visitors on my page a day. I don’t think it was only 5% of potential buyers and that you can get 4,000 visitors per day per house you sale on your own website (or through MLS). I would be curious to see those stats (average per house, not global).

5. Well, I put my house for sale at 344K and sold it at 330K. It’s hard to get 15K better! Your example made me smile. Tell me how BAD the agent seller was on this transaction. Kuddos to you to be a good negociator, but your point fails on the other side: the seller who paid the big commission dropped his price from 345K to 335K (thx to his agent) and then, he wasn’t able to get his agent to negotiate well and still had to drop by another 15K. PLUS he pays a 15,7K commission (+taxes) on top of that. So we start from 345K to 299K net in his pocket. What was his advantage to deal with an agent again? better negotiation for… the buyer, not the seller. So I really don’t see the added value the seller got from his agent. He was obviously not as good as you and got eaten alive. If he had sold by himself and even agreed to pay your a 2.5% commission, he would have been better off without an agent!

And then, I can easily say: oh you know, I could have sold this loft for $355K since I’m good with selling houses. See, that’s not working at all. If you beleive I could have gotten more for my house, I can tell this guy should have sold at 355K and not 315K just based on the fact that I’m a good negotiator…

In order to establish a property value, you need to check what the market look like. It’s quite easy, my 8yr old son can almost do it. You check at what price houses are for sale in your neighborhood, you look at the metrics (type of flooring, type of kitchen/bathroom, nb of bedrooms, basement finished or not, space, land, garage, other equipement) and you compare them one by one to your own property.

When I look at properties selling over 350K in my market, they were all giving additional features where I couldn’t find something better in my house to compensate. They all had an attached garage with a bedroom (a 4th one) on top of it while I only had the garage. This is why my house didn’t worth over 350K and other houses did. Then again, it’s not rocket science.

Agents didn’t lose MLS exclusivity over to important FSBO network such as By The Owner. This is why they are fighting against so hard against BTO actually, because they know they will get hit very hard if BTO can publish on MLS. What do you think?

I would be willing to pay a fee of $3-4K to have someone sell my house and me having nothing to do with it. But this will never happen, so I will keep the 20K in my pocket and sell on my own.

cheers,

Mike

Mike – I’m quite enjoying this exchange myself.

1. Yes they provide legal documents and legal support to the seller not the buyer. Who’s going to advise the buyer on which clauses to include and what they mean. Ie. Status certificate, research easements, proper title, etc…the list gets very long here.

Certificate of localization is produced by a surveyor and reviewed by your lawyer, not your agents fault.

2. Agreed not all agents will discard, I personally would not as it’s an opportunity for my clients to pick up a house potentially discounted due to sellers emotional attachment. One of two conditions are req’d for this to happed. 1. Seller is willing to pay my commission (most of the time this is the case – did your parents pay co-brokers com?) . 2. I explain to my clients they are responsible for my commission, and ask if they want to proceed (90% say skip, 10% will see the property but will take the requirement of paying my commission under consideration when determining max price).

3. I’ll look for stat when I have a moment and I’ll definitely share the source with you.

4. Website hits mean nothing, how many came to view the house in person after seeing it’s a FSBO?

5. My client definitely got a steal on the property, but that just shows you the importance of selecting the right qualified agent, and not going with the person who’s willing to lower their commission! Someone who’s so willing to drop their pants and give up their money, how hard do you think they’ll negotiate for your money?

6. Mike – if you’re basing your house value on current listings on the market (not sold pricing), I’m concerned your potentially leaving hundreds of thousands of dollars on the table. Most properties today are purposely exponentially under-priced to generate multiple offers.

MLS is the most important marketing tool and it’s own by CREA which represents agents. We pay thousands of dollars every year, and have done so for many years to support MLS. The public and BTO and everyone else have zero right to MLS. They can start their own website (ie. zoocasa). Past sales pricing is readily available through your local land registry, geowarehouse, or even MPAC. Rather than freeloading of agents dues, the BTO can spend the money and create their own database. In the meantime anyone can list their property on MLS through various FSBO brokerages.

Pawel

Hello Pawel,
I can’t help it :-)

#1 so what is the additional protection that is given by an agent? against what kind of huge risk?

#2 my parents didn’t have to pay an agent either. I guess we are quite lucky in our family!

#3 thx.

#4 It’s hard to tell as I got an offer after my 3rd visits (during the first weekend I put it online). so I can’t really tell you how many visitors I would have.

#5 That was my point; getting a great agent is very hard. And if you don’t get one, you pay commission for nothing as the agent you negotiated with definitely cost a lot to his client. He didn’t help them to get their price and still, the seller had to pay the big commission. Thx for nothing! hahaha! My feeling is that there are a lot more agents like the seller and a few like you.

#6 I’m not sure I understand what you mean. If there is 10 houses for sale in my neighborhood and they are all pretty similar to mine; I can’t really put my house for sale for 30K more than the average without any reason. That’s just not the market value at that time.

It would be nice to have sold pricing but they are always lower anyway (unless you are in a very competitive market which is pretty rare).

I didn’t see this practice around. And if it was working well, houses would sell within a week, right? this is not what I’m seeing right now. Most houses are on the market for 4-6 months at the moment in my area (Qc).

I sold my house a few years ago during a big boom, but there wasn’t underpriced properties as I just mentioned.

I didn’t know that MLS was own by CREA. Therefore, I guess you will keep your competitive advantage for a while. It would be nice to be able to look at only 1 place for houses though. But It’s like booking a trip, I’m willing to jump from one site to another and skip the travel agency to get the best deal :-)

[...] Should I Get a Real Estate Agent? [...]

A fascinating discussion thank you for the measured and rational information. I have the following questions:
1. If a house could sell at 1.5 million would the commission be 75000$?
2. Given the house is approximately 4 times the price of a “regular house(i.e. 350 000$ ” and the commissions are also 4 times as high does the argument for or against using a realtor change?
PS I sold our house using FSBO. I interviewed 5 realtors to look at our home. They included #1 seller’s, referrals etc. To a person they undervalued my home. The worst were the #1 sellers who substantially undervalued my home by 20%. It struck me that they were looking for a quick sale as this would only minimally impact their commission.

by: The Financial Blogger | February 2nd, 2014 (4:10 pm)

Hello Tonino,

I think you are right; the commission would still remain 5%. I’ll let an agent (Pawel) confirm this information.

AH! that’s another great point I forgot to bring on the table: if you drop your price by 20K, the agent only loses 1K (and in fact, probably $300 if you consider the other agent’s commission + other fees involved). So the incentive to drop your house price by 20K is huge for them if they believe they can do a quick sale.

thx for bringing this up!

Thank you for this and the back and forth comments. I’m really going to try and sell my house myself. Of course a realtor is going to defend what he does… and good for him. But your points were fantastic and it gave me all the confidence I needed to sell my condo myself.

[...] very interesting discussion with Pawel, a Real Estate Agent, after answering the famous question “Should I Get a Real Estate Agent?”.  I truly enjoyed this discussion as Pawel defended his points without saying I’m a total [...]