Negotiating a RE broker's fee in low inventory market

[PhiloFarnsworth]

Having retired from appraising a couple years ago, my wife and I are ready to downsize and move south. Having sold my mother's condo myself (with the services of my lawyer) about 5 years ago, I did consider doing this once again or possibly using a cut-rate service. But at this point we decided that, with all the other headaches involved in moving we just don't have the time or energy to deal with things.
But I am considering doing some hard negotiating with any potential listing broker based on the following conditions of our current market:
Like a lot of places, there is currently an extremely low inventory of homes for sale in the school district, even when taking the moderate to low level of demand that is typical for this market. The typical DOM has gone from 20-30 days back when I worked as an appraiser to 1-7 DOM. The fact that it seems that there are a lot of realtors chasing fewer listings makes me think I would be unwise to accept a "standard" 6% commission.
I was thinking offering my preferred realtor a 5% fee with 3% going to the listing side and 2% to the buyer's agent. While ordinarily this might depress the response to the listing, I would think that market conditions would mean far less in this case.
Is it possible to offer different fees to each side? Does anyone have any thoughts as to the wisdom of doing this?

 

[Joe Flacco]

If you don't have a salesperson license yourself, just put it up on redfin and zillow and offer a buyer agent 2.5% to bring you a buyer.

Prep for sale as needed and get professional photos.

 

[Joe Flacco]

Don't underestimate the need of prepping for sale and professional photos. You have only one shot to make a good impression and get the most out of the sale.

 

[CGinMN]

Research “flat fee” brokerage - search Home Avenue as an example. They can put your house on the MLS for about $500. You still probably need to offer the buyer’s agent money, but apparently NAR just agreed to changes in buyers compensation, so that can be negotiated separately.


Agree you want to invest in staging and quality photos. First impression is everything.

 

[Terrel L. Shields]

If I want to move the property, I'd offer them an 8% commission and raise the asking price about 10% over your own opinion of value. Watch 'em hustle then. If a top agent, off an exclusive. If a newbie you just like, give them a 5/3% split and tell them to work for it. And watch 2 of 3 appraisers value it for the contract price.

 

[J Grant]

I would split it equally -2.5 % each, not 3 and 2- you can always try and see what the response is.

it is the listing agent nd selling agent - ( there is not not necessarily a buyer;s agent)

 

[Sandra Koutsopoulos]

I was reading some articles today regarding the settlement and its impact, where they are projecting a 60+% decline in agents playing the real estate sales agent game. I had my own brokerage for 20+ years, and I definitely earned my commissions by using my knowledge, experience and negotiating skills. Especially 1st time homebuyers haven't a clue about so many aspects of a transaction. With fewer agents (probably), those still working may have to work harder but will probably still have excellent incomes for their services as they will likely be in higher demand eventually as other agents leave the party. Seems the public might be getting the short stick as far as the numbers available of qualified knowledgeable agents shrinks. OTOH, I'd say more than 60% of the agents I've dealt with thought their client was their pocketbook and were not knowledgeable, and dare I say were unethical?, in the marketplace. It will be very interesting how this eventually shakes out. As a broker, I worked hard, provided valuable service and built up a solid referral network due to satisfied clients. So maybe the gubmt thinks real estate agents equate to AMC's "vendors"...da fastest, da cheapest, da bedda. Ignorant, and not a consumer benefit.

But how will this affect appraiser's access to information? So Zillow will be our "go-to" source? MLS listings optional? Interior condition photos? hmmm.... I think this could be problematic for appraisers' ability to get a good handle on the comps.

 

[Elliott]

There is a degree of monopoly/oligopoly in every successful (profitable) business in the US. Amazon takes a 8% to 45% commission, Facebook and Google can 'set' their ad rates. It will be interesting to find out where real estate commissions end up in a year or so. It might be like Bid-a-Note on Name that Tune, a buyer agent might say, 'I think I can get you that house for $385,000' (because of what they know) and have an agreement with the buyer for 3% at that price but only 2% at $390,000. Buyer agent doesn't have to work in the 'best interest' of the seller, do they?

As far as the OP's question. In a slow market, why would a lower commission result in getting a better price? And when you make your agreement with the 'selling agent' how can you make the agreement include the buyer's agent?

And while were in the subject of 'shrinkflation' and 'junk fees,' how about the government take a smaller chunk of the income pie, or provide adequate service for taking 25% and devaluing the currency by 25% in 3-years.

 

[CCAAMO]

20% of the agents generate 80% of the sales so a reduction of 60% of the dead weight agents should have little if any impact

 

[Sandra Koutsopoulos]

I agree that hard-working full time agents reap the most commissions, and MAYBE the new reality will cull the once-in-awhile agents who likely don't have the greatest knowledge nor skills. Looks like agents will have to "sell" their services to prospective buyers up front... that's a lot of effort for maybe no gain. The old saying, "buyers are liars" still rings true, but if the BUYER has to decide who his agent is, and sign an exclusive contract to pay that agent, perhaps that will have some unexpected consequences. Enforcement is always an issue. The first time an agent meets a buyer, they want them to sign on the dotted line, even before the buyer knows how competent the agent is. That's also not consumer-friendly. It's gonna be worse before it settles down to a workable situation for agents as well as the public. Should be a chaotic year.
So I vote for all agents to beat the upcoming deadline and sell, sell like h*ll, get those loans in the pipeline! And appraisers will have a windfall of business right now! (I hope)