Question: Why don't you warn home sellers about cutting their Realtor's sales commission? Last September 2010 , we foolishly listed our house with a real estate agent who agreed to a 4 percent sales commission. She put our listing into the local multiple listing system. If she found a buyer, she would get the entire 4 percent, but if another agent produced a buyer, that agent would get 2.5 percent and our agent would get 1.5 percent.
Other than a tour for local in-house realty agents shortly after our house was listed, we had very few showings of our home by agents. Our listing agent held two Sunday open houses but said, "Open houses don't sell listings." When our listing expired in December with no offers, we took the home off the market for the holidays, but in January we listed at a 6 percent commission with another agent. On Jan. 19, he brought us an offer which we accepted. We learned the hard way that cutting the Realtor's sales commission also cuts the probability of selling the home.
My reason for writing this: my next door neighbor is/has experienced the same results and maybe this will help someone.
- Clarence P.
Answer: This will probably irritate someone, but I try to answer all letters. Thank you for sharing your commission-cutting experience. I fully agree it doesn't pay to cut a commission because that cuts the desire of agents to show your home. As you discovered, paying the local "going rate" sales commission of 6 percent or ? gives realty agents the incentive they need to enthusiastically show your home to prospective buyers.
Theoretically, real estate sales commissions are negotiable, but the reality is each community has a customary sales commission rate and few homes sell below that rate because agents don't want to show residences
with low sales commissions. That's understandable. It's false economy for a home seller to list at a below-market commission rate, not sell the home, and occur added months of extra mortgage payments, property taxes, insurance and maintenance.
There are some agents who, for a few hundred dollars, will let do-it-yourself home sellers put their listings into the local multiple listing system. However, that alone is usually not enough to get the home sold. An enthusiastic listing agent is also needed to properly market the home to make it stand out from the crowd from the other listings. We fully agree it is best to pay a full sales commission and get the home sold as quickly as possible.
I hope everyone enjoys this Easter holiday!
Have a real estate question? Write, call, fax or e-mail:
Bob Jeffries, Realtor,
Century 21 Birchwood Realty, Inc.
4040 Del Prado Blvd., Cape Coral, FL