Selling Your House - Part 1
So we make the decision to downsize to a townhouse as the flat lands dwelling in August and engage a realtor to handle the sale of the big house in which we have lived for 15 years. Now you can find any number of realtors who will provide their service for 4.8% of the selling price. In terms of hard cash, that's $4,800 per $100K of selling price and, in my book, that's absolutely insane.
Of the 4.8%, half goes to the seller's agent and half goes to the buyer's agent. Yes, that's right. You pay 2.4% to somebody working for you and 2.4% to somebody working against you. The potential buyer and their agent comes to your house. The agent has nothing to lose because the buyer is going to buy a house, be it yours or one owned by someone else. So, by law, the buyer's agent points out both the good and the bad of your house to their client. And, for that privilege, you pay them 2.4%.
Now, folks, I don't know about you, but paying a sales agent 2.4% to not sell your house just ain't right. Only a bunch of realtors in cahoots with a bunch of lawyers/legislators down at the statehouse could get away with something like that. (Hmmm. In a recent poll by the BBC, the least respected professions were found to be legislator, realtor, government official and lawyer, respectively. Scary, isn't it?) If the buyer's agent is working for the buyer, I say let the buyer pay their commission. But that will never happen because no sane person is going to pay an agent $2400 per $100K just to ride in their new Lexus and look at a house. No, the buyer will save the 2.4% and drive themselves in their old Toyota to look at the house and decide if they want to buy it or not.
As for both the buyer and seller, it's an income tax sort of thing in that the fee is somewhat "hidden" because neither ever actually touch the money. For the buyer it's hidden in the selling price and for the seller it is taken out the proceeds of the sale. If sellers had to write a separate check to the realtor for their services after the sale, there would either be a great deal fewer realtors in the world or their fees would be a small fraction of present 4.8%. With the advent of the Internet selling, my guess is that both will happen in the near future. In short, realtors and their bloated fees simply will no longer be needed to buy or sell a piece of property.
Nothing we could do about the 2.4% for the buyer's agent short of selling the house ourselves. So we went with a listing agent who would list the house for 1% (rather than 2.4%) for a total of 3.4% in realtor's fees. Hey, 1.4% is a "savings" of $1400 per $100K.
We started on the listing agent's punch list immediately: landscaping, house washing, carpet cleaning, painting, de-cluttering, fix this, fix that, etc. We sign the contract on August 24 and were told that it takes an average of 100 days to sell a contemporary house. For the only time in my life, I wished I owned a "five, four and a door".
The journey is underway.
Of the 4.8%, half goes to the seller's agent and half goes to the buyer's agent. Yes, that's right. You pay 2.4% to somebody working for you and 2.4% to somebody working against you. The potential buyer and their agent comes to your house. The agent has nothing to lose because the buyer is going to buy a house, be it yours or one owned by someone else. So, by law, the buyer's agent points out both the good and the bad of your house to their client. And, for that privilege, you pay them 2.4%.
Now, folks, I don't know about you, but paying a sales agent 2.4% to not sell your house just ain't right. Only a bunch of realtors in cahoots with a bunch of lawyers/legislators down at the statehouse could get away with something like that. (Hmmm. In a recent poll by the BBC, the least respected professions were found to be legislator, realtor, government official and lawyer, respectively. Scary, isn't it?) If the buyer's agent is working for the buyer, I say let the buyer pay their commission. But that will never happen because no sane person is going to pay an agent $2400 per $100K just to ride in their new Lexus and look at a house. No, the buyer will save the 2.4% and drive themselves in their old Toyota to look at the house and decide if they want to buy it or not.
As for both the buyer and seller, it's an income tax sort of thing in that the fee is somewhat "hidden" because neither ever actually touch the money. For the buyer it's hidden in the selling price and for the seller it is taken out the proceeds of the sale. If sellers had to write a separate check to the realtor for their services after the sale, there would either be a great deal fewer realtors in the world or their fees would be a small fraction of present 4.8%. With the advent of the Internet selling, my guess is that both will happen in the near future. In short, realtors and their bloated fees simply will no longer be needed to buy or sell a piece of property.
Nothing we could do about the 2.4% for the buyer's agent short of selling the house ourselves. So we went with a listing agent who would list the house for 1% (rather than 2.4%) for a total of 3.4% in realtor's fees. Hey, 1.4% is a "savings" of $1400 per $100K.
We started on the listing agent's punch list immediately: landscaping, house washing, carpet cleaning, painting, de-cluttering, fix this, fix that, etc. We sign the contract on August 24 and were told that it takes an average of 100 days to sell a contemporary house. For the only time in my life, I wished I owned a "five, four and a door".
The journey is underway.
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