Realtor Commissions - Negotiable with multiple properties?

Question

What is a reasonable relator commission for residential real estate in Massachusetts?  I may be relocating and have 2 properties to sell, one single family(my residence) and 1 investment 3 family.  Would I be able to negotiate a lower commission if I were to list the 2 properties with the same brokerage company?  The properties are in different towns within the same state and I am looking for creative ways to maximize profits.  Currently, the listing agents are requesting 5% for each property.  Is there a way to package this so that I could reduce commissions?  Would it be reasonable to ask for 4% for each property?Any advice/direction would be appreciated.

Dan Verteramo · Answer

Thanks everyone for the advice and different perspectives.  Luckily I am in no time crunch and the property performs well.  I can see the advantage of using a quality realtor, although the temptation to sell on my own is still there.  Great advice from everyone, I truly appreciate it

Mike Hurney · Answer

Dan Verteramo In the past I'd reduce the Listing agents % maybe from 2 or 2.5% down to 1% but NEVER the Buyers commission, otherwise no traffic!
As Ann mentioned we're usually glad to promote someone's listing as long as it's not with a Broker. If it's an MLS listed property and the Seller wants to promote it at our meeting folks will say: "If that lazy listing Broker can't sell it on the MLS and through their contacts for a commission, why should we sell it for no commission?"
Good Luck Investing, Mike

Ann Bellamy · Answer

You can pay for limited service which gives you an mls listing only, and do all the work yourself.  But bear in mind that almost all buyers will have a buyer agent, so you'll still have to advertise to pay that side of the commission.  What buyer agent is going to bring their client to a property that pays them 1% when then can show them a property that pays them 3%?  As Joe Delia says, it may be unethical, but it exists nonetheless.

It also depends on what towns the properties are in, and how hot the market is there.

If you're under a time crunch, I'd find the best agent in the market in question, and pay the freight.  A good agent is worth their weight in gold.  A bad agent is dead weight.  So choose carefully.

Depending on the town, you might be able to sell the multi yourself with a listing on BP, and promoting it at the REIA's and Black Diamond.  You can post it on the Black Diamond FB page, if you send me a colleague request, I'll give you the FB URL.

Phil Z. · Answer

1.5% to the listing agent? .. unlikely.  Also the broker has to agree to it, not just the agent.

But if your Agent has no added value other than a run-of-the-mill MLS listing, then what do you have to lose?

Joel Owens · Answer

Dan a great broker/agent will prove their value in the negotiation process and getting it to closing.

There is really so much going on behind the scenes that people do not see that happens in a transaction that many believe selling a house is like selling a car and signing the title away.

It just doesn't work that way. Sure there are flukes out there where a seller sells by themselves and gets full market but is not the norm nationwide.

Also at factor is how successful the broker/agent is. What they value is time. It doesn't make sense for someone to take less on multiple properties when they have a stable of clients where they get the same rate they want on each deal. It's still separate transactions.

If there was a portfolio sale of many properties then that can be different as you have one buyer and the deal total is high. If you want to not put much out there use the list for less types and see if you land a good buyer from their network.

There are clients out there for every kind of business.  If you are a broker/agent you need to make yourself so valuable as to insulate yourself from these types of requests.

It's like saying to a broker/agent please help carry me 1 mile while jumping on your back but I want to chop your legs off first. (just kidding but you get the point). You can go the FSBO route and they usually charge for ala carte type things but most sellers waste their money on that and then list with limited service or full service. Sometimes the property sells with limited service and other times full service. So limited service might seem like the best bet to try out first.

I really hope you can land the kind of deal you want. I only do commercial deals and my clients never make these requests but they know they are getting a valuable service. Commercial is more complex and involves a higher degree of understanding and knowledge where residential some agents can fog a mirror and get a license and attempt to sell a residential property. That is where they get their used car image from the public. 80% of new agents leave the first year in the business and after the first five years the other remaining ones only about 20% of them are left.

Thomas Quinn · Answer

I guess every market is different around here 2-2.5 per side is very common unless you are talking land or low end property we don't see 3% usually.  So depending on $ I do not think 4% is an unreasonable request.

Joe Delia · Answer

Lowering commission just lowers the traffic through your door.  Ethical? No.  Likely? Yes.

Wayne Brooks · Answer

Remember too that the total commission will be split with the selling broker.  Most agents aren't going to push a property where they will only make 2-2.5%, as opposed to three.  Would you sell for 1/3 less if one buyer wanted to buy the pair?

Kenneth Estes · Answer

Dan,

Unfortunately, we're not going to be able to give you a definitive answer.  The commission you're charged ultimately depends on what the broker and managing broker agree to.  This in turn depends on numerous factors: how hard the homes are to sell, how much marketing they need, what the typical commission is in the area, how hot the area is, etc.

One word of advice:  pigs get fat but hogs get slaughtered.  Everyone involved needs to feel they're making money or it's not going to work.  Let's say you get the realtor to agree to a 1% fee.  Do you really think he's going to put in the extra effort to get your property sold quickly?

Thomas Quinn · Answer

Hi everything is negotiable some agents will not lower their commission but some would be more than happy to.