REA Question - Is this fair? Am I low-balling?

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kelela92_IHB

kelela92_IHB

New member
When I bought my house a few years back, my REA didn't do a lot for me because I switched to her last minute. She was great and referred so I had no problem with her getting the commission. The most she did was put the offer in and submit all paperwork. Now, she got paid her 3%, which trust me, was a hefty amount.



So, if I sell my house, and want to use the same REA. Would I be low-balling her if I wanted to only pay her 1.5-2%? Because of how much my house is worth, she'll still be making half my salary with the sale.



And lastly, are sellers still paying both REA's? I know typically they do, which is 3% buyer, 3% seller for a total 6%.



Thoughts? Should I go lower? Is that bad? What is right/fair?
 
[quote author="kelela92" date=1244098513]When I bought my house a few years back, my REA didn't do a lot for me because I switched to her last minute. She was great and referred so I had no problem with her getting the commission. The most she did was put the offer in and submit all paperwork. Now, she got paid her 3%, which trust me, was a hefty amount.



So, if I sell my house, and want to use the same REA. Would I be low-balling her if I wanted to only pay her 1.5-2%? Because of how much my house is worth, she'll still be making half my salary with the sale.



And lastly, are sellers still paying both REA's? I know typically they do, which is 3% buyer, 3% seller for a total 6%.



Thoughts? Should I go lower? Is that bad? What is right/fair?</blockquote>
Everything is negotiable. I don't think paying her 1.5% to 2% of the sales price would be an insult, she may be hungry enough to take the listing. Most of the listings that I'm seeing under $700k I see 3% on the buyside, but I do see an occasional 2% or 2.5% buyside commission. You can structure the commission any way you want...for example...1.5% to the listing agent and 2.5% to the buyer's agent or 2.5% to the listing agent and 2% to the buyer's agent. It is up to you and there nothing is set in stone when it comes to the commission. Also, ask her if there will be any brokerage/transaction fees that she will charge you (my broker requires a $400 transaction fee but I don't have my buyers deal with it as I eat that fee against my commissions). I would highly recommend speaking with at least 3 agents and having them give you a presentation on what they think a fair asking price for your home should be and what their sales/marketing strategy will be to sell it. Go with the agent that you feel most comfortable with. The sells side is where a good full-time agent excels. That being said, definitely have one of those 3 agents that you speak with be IriveRealtor!
 
[quote author="usctrojanman29" date=1244099161]

Everything is negotiable. I don't think paying her 1.5% to 2% of the sales price would be an insult, she may be hungry enough to take the listing. Most of the listings that I'm seeing under $700k I see 3% on the buyside, but I do see an occasional 2% or 2.5% buyside commission. You can structure the commission any way you want...for example...1.5% to the listing agent and 2.5% to the buyer's agent or 2.5% to the listing agent and 2% to the buyer's agent. It is up to you and there nothing is set in stone when it comes to the commission. Also, ask her if there will be any brokerage/transaction fees that she will charge you (my broker requires a $400 transaction fee but I don't have my buyers deal with it as I eat that fee against my commissions). I would highly recommend speaking with at least 3 agents and having them give you a presentation on what they think a fair asking price for your home should be and what their sales/marketing strategy will be to sell it. Go with the agent that you feel most comfortable with. The sells side is where a good full-time agent excels. That being said, definitely have one of those 3 agents that you speak with be IriveRealtor!</blockquote>


I didn't really even think about "everything being negotiable". I guess because I had heard that 3% was the norm. But thanks, that gives me a lot to think about. As for the last line, I was laughing at that and thinking that you and IrvineRealtor have been talked about a lot. May have to PM you both.



As for the "broker fee" is that something you pay if you don't have your own company? i.e. my old REA had her own company, would she pay a broker fee? in all honesty, I think every REA should eat the broker fees. lol. compared to what you get back, especially in Irvine, it's pennies.



Thanks. I'm not sure if we will sell, but I just don't want to low-ball anyone with some ridiculous offer, but at the same time, would like to keep most of my money (or at least my downpayment that I put in long ago).
 
[quote author="kelela92" date=1244100743][quote author="usctrojanman29" date=1244099161]

Everything is negotiable. I don't think paying her 1.5% to 2% of the sales price would be an insult, she may be hungry enough to take the listing. Most of the listings that I'm seeing under $700k I see 3% on the buyside, but I do see an occasional 2% or 2.5% buyside commission. You can structure the commission any way you want...for example...1.5% to the listing agent and 2.5% to the buyer's agent or 2.5% to the listing agent and 2% to the buyer's agent. It is up to you and there nothing is set in stone when it comes to the commission. Also, ask her if there will be any brokerage/transaction fees that she will charge you (my broker requires a $400 transaction fee but I don't have my buyers deal with it as I eat that fee against my commissions). I would highly recommend speaking with at least 3 agents and having them give you a presentation on what they think a fair asking price for your home should be and what their sales/marketing strategy will be to sell it. Go with the agent that you feel most comfortable with. The sells side is where a good full-time agent excels. That being said, definitely have one of those 3 agents that you speak with be IriveRealtor!</blockquote>


I didn't really even think about "everything being negotiable". I guess because I had heard that 3% was the norm. But thanks, that gives me a lot to think about. As for the last line, I was laughing at that and thinking that you and IrvineRealtor have been talked about a lot. May have to PM you both.



As for the "broker fee" is that something you pay if you don't have your own company? i.e. my old REA had her own company, would she pay a broker fee? in all honesty, I think every REA should eat the broker fees. lol. compared to what you get back, especially in Irvine, it's pennies.



Thanks. I'm not sure if we will sell, but I just don't want to low-ball anyone with some ridiculous offer, but at the same time, would like to keep most of my money (or at least my downpayment that I put in long ago).</blockquote>
All the smack talk about me is probably all true. haha I've mentioned it a few times already, but if I wasn't an agent I would have had IrvineRealtor be my listing agent when I sold my condo. One of the best realtors out there, particularly on the sales side.



In terms of the "broker fee", it all depends upon the broker/brokerage that the agent works under. Different brokers have different fees and different commission splits for the agents that hang their licenses there. If you are your own broker, then of course you don't have this fee (and if you do it's just a pure junk fee). I chose to work under my broker due to the higher commission split and because he is licensed both in California and Nevada so I can hang both my CA and NV licenses with him and not have to deal with the whole liability issue and getting E&O insurance. I do agree that all the agents should eat those BS broker fees.



Feel free contact me via PM with any other questions or requests.
 
btw, i recall reading not too long ago that 3%/3% was no longer the 'standard commission' nationally, but that it was down to around 5% total.
 
Personally, when I am negotiating anything, price of the home, commission, etc., I have no idea what "fair" is, nor do I care.
 
<blockquote>I have no idea what ?fair? is, nor do I care. </blockquote>


awgee



"Fare" is what you pay a cab driver. ;-)



Market is what you the OP needs to deal with.



enjoy!
 
[quote author="awgee" date=1244107714]Personally, when I am negotiating anything, price of the home, commission, etc., I have no idea what "fair" is, nor do I care.</blockquote>


I typically wouldn't care, however, I also wouldn't want to run off a good agent, just because s/he felt like I low-balled and insulted them. But that's just me.
 
[quote author="xsocal land merchant" date=1244116538]Kelela 92



Those look like great Shelties. Are they yours? We have 2 also.



Ours look almost identical. One big and one small one.



Shelties Rule!</blockquote>


Shelties DO rule! :) And yes, they are mine. The one on the right, was a puppy in that picture, so yup, he's smaller. However, he totally outgrew his brother. (Miko on the left is about 15", Koji on the right is now about 17"). Send some pics. :) Would love to see your Shelties.
 
[quote author="kelela92" date=1244158772][quote author="awgee" date=1244107714]Personally, when I am negotiating anything, price of the home, commission, etc., I have no idea what "fair" is, nor do I care.</blockquote>


I typically wouldn't care, however, I also wouldn't want to run off a good agent, just because s/he felt like I low-balled and insulted them. But that's just me.</blockquote>


I am with awgee. If anyone is "insulted" when it comes to the terms of a financial transaction, it is their emotional issue not mine. I am not interested in their emotional attachement to or opinion of the value of an asset. I have my opinion of value, and I will make an offer based on that value; if they want to sell for that price, great; if not, oh well.



<a href="http://www.irvinehousingblog.com/blog/comments/insulting-asking-prices/">Why is it that nobody considers an asking price to be an insult to the intelligence of buyers?</a>
 
[quote author="kelela92" date=1244158772][quote author="awgee" date=1244107714]Personally, when I am negotiating anything, price of the home, commission, etc., I have no idea what "fair" is, nor do I care.</blockquote>


I typically wouldn't care, however, I also wouldn't want to run off a good agent, just because s/he felt like I low-balled and insulted them. But that's just me.</blockquote>
Insulted? Seriously?

If a real estate agent feels insulted, they are in the wrong biz. Rather then run them off, you should be running away.
 
[quote author="awgee" date=1244173051][quote author="kelela92" date=1244158772][quote author="awgee" date=1244107714]Personally, when I am negotiating anything, price of the home, commission, etc., I have no idea what "fair" is, nor do I care.</blockquote>


I typically wouldn't care, however, I also wouldn't want to run off a good agent, just because s/he felt like I low-balled and insulted them. But that's just me.</blockquote>
Insulted? Seriously?

If a real estate agent feels insulted, they are in the wrong biz. Rather then run them off, you should be running away.</blockquote>
Being an agent is not for the faint of heart or those that are overly sensitive. If you can't stand the heat, time to step out of the kitchen.
 
A professional agent should give the buyer <strong>all of the comps</strong>, local area information, point out the <strong>positives and negatives </strong>and let the buyer set the offer price based on the information provided. With the information currently available to clients the agents job should be a lot simpler in that area.



The agents duty is to present the buyers offer and attempt to get the best possible deal for the client. That is where a true "buyer's agent" earns their keep.



I never told a client what to offer or would even state the percent chance of an the offer getting accepted. There are so many things involved that one can't really predict the outcome. I have seen sellers accept lower offers due to their "feelings" about one buyer over another. I have seen full price offers turned down for the same reason.



A good agent will try to ascertain the sellers motivation but that changes over time so one never knows what the outcome will be until the offer is presented in good faith, countered, and closed.



If an agent tells you the "offer won't fly" or it too low then awgee is right-Run from them as they aren't truly representing you. If they are afraid or too shy to present low offers then they shouldn't be in the business. I used to tell my clients to expect several offers to fail if they really wanted the best price possible.



Duel agency should not be considered by a buyer since only the seller and listing agent benefit from this situation.



This is really much simpler than folks here often make it.
 
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