I have no use for the ridiculous notion that realtors should get a percentage of my home’s sale price.
When I sold my last house in 2002 the realtor I worked with got a 3% commission. I asked him if he would be having any open houses. He said no. When I pushed the issue and told him I wanted an open house, he told me I could have my own. I told him that if my house sold as the direct result of any open house I had, he would not get his commission. He had an open house.
11 years later I would again like to sell my house. The realtor we spoke to, Ron, is a friend of my husband Jack’s. I asked Ron if the current commission rate was still 3%. I thought he was going to wet himself when he laughingly told me that it was between 5 and 6%, but as he was a friend of Jack’s, he would do it for us for 5%. He was sure to tell me that was the same rate he charged his uncle.
I chuckled too and laughingly told Ron that if he didn’t reduce his rate I was going to comically shop him around. I stopped just short of hysterically telling him I thought his uncle was an idiot. Why was he charging family anyway? When I saw Ron look imploringly at Jack, my husband shrugged his shoulders and shook his head. He’s been down this road with me before.
Ron told me that he could probably do it for 4% but that it would have to be an exclusive listing, i.e. he wouldn’t have to split the commission with another MLS realtor. That would be a big benefit to lose, he cautioned, as the Multiple Listing service is a valuable tool. I believe it is. He also told me I could probably find someone who would do it for 3%, but “you get what you pay for” he cautioned
again. I smiled and nodded.
So what is it this guy is going to do for me that warrants his receiving 5% of the sale price of my house? Would he be doing any more or less if my house sold for $100K less? My guess is no. And more to the point, since my husband and I are the ones who paid for almost $100K in upgrades, not to mention the mortgage for the last 11 years, why should Ron be the one to benefit from that? Because he needs to make an adequate living? And as Ron himself said, the benefit one gets from having a house multiple listed is what is most important. So what am I really losing if I find a "do nothing" realtor who will take 3% as long as my house is multiple listed? Not much it seems.
Realtors should get a flat fee, just like the closing attorney. If the attorney is to be paid $10,000 regardless of whether I’m selling a mansion or a shack, why should the realtor be paid $22,500 to sell a $450,000 house when he’d get $17,500 to sell the same house if it was only worth $350,000.
I'm thinking something in the neighborhood of $5K is reasonable.
And if a flat fee isn’t enough money for realtors to make a living on, Home Depot is always hiring.
OK, what else do I need to fix?