Are Realtors Worth The Commission Anymore?

[Bryan Hancock]

Given that there is such a liquid market of buyers online I was wondering what people's thoughts are on the commission paid to Realtors. A 6% commission has always seemed scandalously high to me given the typical amount of service one receives on a listing.

I would love to hear the opinion of others on the matter...including the Realtor's take.

[J Scott]

Originally posted by Kristian Peter:

The next part of the equation is the ability to Close the transaction, and this is the part of the sale that sellers never seem to understand or appreciate.

This is actually the part of the equation where most agents I've encountered are really bad (not all, but most)...

Here are things we do with every one of our sales (my wife got her license just for this purpose btw) that very few other agents do, in my experience:

- I make sure I'm in touch with the broker/lender within 24 hours of a contract. When I've used other agents or left it up to the buyer's agent, the appraisal(s) generally took 1-2 weeks to get ordered, and if they were to come in low, there's 1-2 weeks wasted. I make sure an appraisal is ordered within 48 of the contract being signed...if it takes longer than that, I know that the broker or the buyers is lying about how qualified they are to buy (and need more time before they want to pay for that appraisal).

- Same as above with the buyer/buyer's agent and their inspection.

- I'm present for the appraisal. In fact, we take the agent lockbox off the door so that if the appraiser shows up without anyone telling us, he needs to call us to get in. We tell him we have the key and we'll run right over. Luckily, we're generally informed beforehand so we can be there with comps in hand, renovation lists, etc. We've never had an appraisal come in low when we've been there during the walk-through.

- I'm present for the inspection (assuming the buyer is okay with it). This way, I know beforehand what the buyer is likely to come back with when requesting repairs. More importantly, if the inspector brings up something that I think may be confusing to the buyer (and that I think might freak the buyer out unnecessarily), I can ask leading questions right then and there to get the inspector to clarify and make the buyer feel more comfortable.

- Here's a BIG ONE: Within 48 hours of the contract, we call the closing attorney and get the closing put on the calendar. While this date may change, when you have something actually scheduled, it makes people focusing on hitting that date. Trust me, you'll get much more cooperation from the lender when you say, "Are we still on-schedule for August 18 at 3:30pm?" then if you say, "Are we still going hit mid-August for this closing?"

- We make sure that the lender keeps us apprised of the situation every step of the way, including sending us the stip sheets for the loan. That way we know where the loan is every step of the way. If we see that the buyer needs to turn in his last paystub to move the process along, we can call the buyer's agent and say, "Hey, lender is still waiting on that paystub...and we need that if we're going to close next Wednesday at 3:30pm."

These are the types of things we do that most agents don't do. Not necessarily because they're not good at their jobs, but more because they don't care as much about the sale of our property as we do.

The agents that do do these sorts of things are easily worth their 6%...and more.

By the way, the other big part of the process where agents don't do as much as I'd like is with showings.

We keep our houses on a portable alarm system. One reason is to protect our investment. But the bigger reason is that we want to ensure that buyer's agents call us and let us know BEFORE they show the property (our listing asks for 30 minutes notice so we can turn off the alarm).

This gives us time to send one of our employees over to the property to turn on the lights, open the blinds, verify the temperature, refill the scented air-fresheners, make sure there are flyers and blank contracts on the counter, make sure there is no trash in the yard, etc.

I would virtually guarantee you that we get many more offers (and higher offers) because of this than any other single thing we do. After buyers have been looking at dark, hot, smelly houses all day (because the listing agent hasn't set foot in there in 2 weeks), when they walk into a nice, bright, cool and fresh house, they are going to notice the difference.

So again, don't settle for an average agent. And if you can't find a great agent, do it yourself (flat-fee listing, get your license, whatever)...