Understanding Real Estate Fees

April 19th, 2007 category: Real Estate News, Real Estate Philosophy

With an abundance of choices, sellers are finally able to gain control of the costs associated with selling their home. So, what is the best program for your situation?

Traditional Real Estate Brokers: There are many fine choices for the east end of Long Island. You see the ads in local papers, sometimes with an entire page devoted to listings. They are on the Internet, utilizing realtor.com and (finally!) the MLS. Because this option is costly (typically, the broker insists that the salespeople stick to the traditional 6%) it is very important to differentiate marketing skills and strategies- ARE YOU GETTING MORE, as you PAY MORE? Is your home immediately entered into all Internet avenues? These are appropriate questions to ask, as the difference in cost should be readily justified. Typically, the listing period is six months- does this work for you? Are you permitted to end the listing should the marketing not be as represented? Again, these are appropriate questions to ask, in light of your investment.

Discount Brokers: This avenue would include FSBO sites, and flat-fee MLS sites. Are you prepared to sell your home without the benefit of a representing Realtor? While it may seem difficult, more and more people are giving this a try. You are able to offer a “co-op” fee, inviting the real estate community into your home, bringing potential buyers. While this may seem ideal, keep in mind that there are agencies that prefer NOT to participate in a FSBO (or similar) program- the absence of a listing representative forces the agent to operate both sides of the coin, often for less in compensation than they would receive otherwise.

In Between: There are companies available that have decided that real estate fees are simply too high. The motivation is to provide full service to sellers, but simply CHARGE LESS. You receive the benefit of your own Realtor, full presentation on Internet sources, ad time in the paper, showing feedback, open houses, an available conduit between yourselves, your attorney, the home inspectors, the co-operating agency- full service. The cost for this service is typically 3%-4%.

SO, WHAT TO CHOOSE? When investigating your options, take a good look at what is available. There is no magic wand that will sell a house- it’s all in marketing. Do you have a comfort level with the broker? Once that is established, you can then pursue the marketing strategy presented to you. When determining pricing, permit each office to provide your anticipated sales price without disclosing the price suggested by another office- this will encourage inflated pricing at your expense. Take a good look at the current market, but allow room for error. Either begin with a shorter listing period, or insist that an escape clause be made available to you if the representing company does not perform marketing as promised. Often, Realtors are at the direction of their brokers, so regardless of the charm or ability of the Realtor, the bottom line is office policy.

We’d love to have you review our pricing at Options Realty- simply click on the seller tab, or give us a call. We offer our services to all of the North Fork- Riverhead, Jamesport, Mattituck, Laurel, New Suffolk, Cutchogue, Southold, Greenport, East Marion, Orient, Baiting Hollow, Aquebogue- and our mls service is available to all of Long Island!

This entry was posted on Thursday, April 19th, 2007 at 12:28 pm and is filed under Real Estate News, Real Estate Philosophy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Responses to “Understanding Real Estate Fees”

laurie Says:
April 21st, 2007 at 10:01 am
We love Zillow at Options Realty. It is a unique way to get a feel for homes in the area, and the aerial photos are wonderful.
Paula Henry Says:
August 28th, 2007 at 1:30 am
Laurie – Do you advertise on Zillow? Although I signed up for an account, I have not used their service for my seller’s homes. I do not like the fact I can not delete a listing once it has been submitted to Zillow. They keep all past properties active in their site, along with all comments. I like the premise that an owner can answer questions about the property, but so can anyone else. An angry neighbor could place adverse information about a homw or neighborhood which will stay with the property forever on Zillow. Your thoughts?
Paula Henry Says:
August 28th, 2007 at 1:31 am
BTW – I like your model!
laurie mindnich Says:
March 7th, 2008 at 11:21 am
Paula, it’s dicey, but up to the seller. We had one on Zillow (no comments, etc.) so it was fine, but I agree that there is a downside.

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