Buying Agent = 4%
By: Diane Tuman, Zillow Content Manager | June 6, 2007
Traditionally, the commission paid in a real estate transaction is split more or less evenly between the buyers’ side and the sellers’ side. Commissions are negotiable and they typically range between 5% and 7%. So, assuming a commission of 5%, one half of that goes to the buying side (to buyer’s agent and to the buyer’s broker) and the other 2.5% is split between the selling agent and the selling agent’s broker.
Last week, I saw a sign for a house for sale tacked to a telephone pole — actually, many signs all over my neighborhood — pointing to this FSBO in which the ***BUYING AGENT = 4%***. It is unusual to see as much as 4% commission on just one side of the transaction. This seller is clearly motivated, though you could make the argument that they would have more help selling their home if they added just 1% and split the commission.
I talked with the owner to see if they had any action on the house or if agents have stopped by with buyers. She said she had not received one phone call or visit from an agent in the two weeks the signs have been posted. Strange, I thought. Two weeks isn’t a whole lot of time, certainly, so I gave a call to a real estate agent in the area and asked what she thought. She said agents don’t really seek out stuff like this since there is so much inventory they’re now dealing with. But, if she had a buyer who was looking for this type of house (townhouse), it would be her responsibility to show it and she would show it. The Realtor also said the house was probably not being marketed in the best way possible, mentioning the MLS, holding open houses and having a network of other Realtors to show it to. I guess telephone poles aren’t quite cutting it in this down market, even in red-hot Seattle where the year-over-year Zindex change is 12%, according to our Q1 Quarterly Report. I noticed the house wasn’t posted for sale on Zillow, so I reported it — maybe that will help.
As for the seller, she said they are going to start interviewing agents so they can offically list it for sale in the MLS. It should be interesting to see how this story plays out.
- Stumble it!
- Categories: Real Estate, Zillow
Comments
6 Comments so far
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Liz Provo, Editor - Picket Fence Preview • Massachusetts 4 Sale By Owner on June 6, 2007 11:39 am
We have not had any of our sellers use this tactic, but several have mentioned that IF they did have to pay a commission to an agent, they’d rather pay it to the buyer’s agent as they are the ones who the sellers feel are “worth it”.
We are a for sale by owner service located in Western Mass. where there is also a lot of inventory right now and that means competition. My guess is that the telephone pole thing isn’t quite bringing enough traffic, say nothing of the legalities of tacking anything to a public utility pole.
Before giving up, they should contact a regional for sale by owner service in the Seattle area. I’m sure they will receive a lot of interest once they get better exposure. Many services utilize print magazines that target buyers in high traffic areas, the internet and MLS. It’s unfortunate that the sellers did not do their homework a bit more.
TitleRep on June 6, 2007 12:05 pm
I wonder how many agents will “stop by” after your mention of the seller interviewing?
Kimberly I Cavalier on June 15, 2007 7:07 pm
IS THIS A GOOD PLACE TO SPEAK ABOUT FLAT FEE LISTING COMPANIES?IF SO ID LOVE SOME INFO AND INPUT, AS WELL AS TO HEAR MORE ABOUT THIS STORIES PATH.
ARE THERE ANY AFFILIATED WITH ZILLOW.
Diane Tuman on June 18, 2007 10:47 am
Here are a few articles in the Zillow Real Estate Guide that touch upon the flat fee arrangement. The “Guide” is actually a wiki where anyone with real estate expertise can add and edit articles:
Flat Fee Legal Services: http://www.zillow.com/wikipages/Flat-Fee-Legal-Services-for-Sellers
Commissions: How Much Should You Pay:
http://www.zillow.com/wikipages/Commissions—How-Much-Should-You-Pay
What a Seller’s Agent Does:
http://www.zillow.com/wikipages/What-a-Seller’s-Agent-Does
How to Approach a FSBO Seller:
http://www.zillow.com/wikipages/How-to-Approach-a-FSBO-Seller
Gabe on February 17, 2008 12:18 pm
Here is a good idea for selling in Connecticut - Try http://www.freemlsconnecticut.com
never pay 4% common
Gabe on February 17, 2008 12:19 pm
Sell on MLS in all 50 states us http://www.mlsflatfeefsbo.com and save on selling on MLS.