Offering Office Exclusive To RE Agent In Return For A Reduced Commission
I had a post a month or so ago that had a few people (Realtors) hot under the collar regarding an agent that I was going to list a house with that insisted that 7% was the normal commission for selling a house.
Last week I was going through the same thing (different agent and house) and I tried a different approach.
She wanted 7% and I was offering 5% with the right to sell it on my own.
I explained the repeat business ect. but she was reluctant to agree to 5%.
I asked her what do you want?
She answered I want to sell your house.
"What if I give you an office exclusive for two weeks and you give me my 5%".
(For 2 weeks the property is not on the MLS and only her or people that she allows will be able to show the house.
This way she has a better chance at getting both ends of the deal. If she is unable to sell it in the 2 weeks it goes on the MLS @ 5% )
She smiled at me and said OK.
We signed the paperwork to start on the following mon. because I had not closed on the place myself yet.
Mon. morning she had a full price offer for me with a small punch list of things to be done.
I was happy she was happy the buyer was happy the mortgage broker was happy Everyone was happy!
Im sure others have tried this approach but it was new to me so I thought I would pass it along.
Best of Luck
JohnNH
John,
this is a great idea and shows excellent negotiating skills on your part. You got what you wanted and the agent got what she wanted.
I also like the 2 week exclusive. That gave the agent an added incentive to move your property quickly. I'll bet your agent is eager for your next listing, too.
This is a very grey area, and I don't understand why the deal worked out that way(and was to her benefit) with office exclusive listing, unless she was a dual-agent in the transaction. If she was a dual-agent, she certainly received the whole 5% of the commission(less broker split, of course). If not, she made her broker very happy because the firm received a split from both sides of the transaction.
However, it does sound like the agent had the buyer in mind already, and she could've just taken a listing and not put it in MLS for a certain period of time while she markets its through the office. For instance, in Illinois, MLSNI requires listing to be entered in within 72 hours of the signing of the listing agreement. That's 3 full days to market the property within the office - certainly is enough if the property is hot.
I guess the only thing they gain by going "office exclusive" for two weeks is that if they produce an offer within a few days, you can't force them to place the house in MLS to see if you can generate a better offer until the "exclusive" period expires, but I doubt you as a seller would want to take that risk anyway(and walk away from a perfectly good offer that was presented to you).
compwhiz,
I think JohnNH indicated in his feature post that he agreed that his property wouldn't be MLS'd by the listing agent during the 2-week period. Otherwise, I agree with you. It's the same here in PA. The listed property has to be entered into the MLS within a stated time or the owner has to specifically agree that it not be put in the MLS. "Pocketing a listing" without the owner's knowledge and consent is a big no-no ethics-wise in my neck of the woods.[ Edited by NancyChadwick on Date 05/03/2004 ]
Nancy
That is correct
JohnNH
You know, I may be missing something, but I still don't get it as to what the seller stands to GAIN by allowing property to be marketed office-exclusive(unless the commission are LOWER when property is sold office-exclusive). It only benefits the broker(and maybe the agent if the broker has financial incentives for cases when both listing and selling agents are from the same office).
Anyway, the way I look at it, the more people know about the property, the better - real estate is all about supply and demand, and if you want to get the HIGHEST price, you might as well expose your property to as many people as possible.
I think you ARE missing something.
The seller saved 2% commission. The agent is happy because she earned all of 5% by being a dual agent, rather then making half of 7% = 3.5. So she made more money.
The seller is naturally more happy because of reducing expenses by 2%.
Everyone wins.
First of all, it's not clear from the post whether the agent was in fact dual agent in that transaction - only that the listing was sold through their office. Also, they did agree that the property will go in MLS @ 5% if it's not sold in two weeks being office-exclusive.
Last, but not least, I find it HARD to believe that only one agent their market could budge off 7% commission(unless the property was very cheap).
Compwiz
Believe what you will, but this is what I have been dealing with and yes the offer was through the listing agent.
The full price offer was for 129K which is about average in this area.
JohnNH