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Old 05-16-2018, 04:43 AM   #10
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Futzee's Avatar
Join Date: Jul 2016
Location: Calgary

Discount services are gaining traction but it will be a slow transition. I've bought and sold a bunch of places since 2006 and have never paid full commission. It always pays to negotiate the commission with the realtor (when buying or selling).

I've sold privately using Kijiji and Facebook/Google marketing. This was for an acreage a half hour out of Calgary that was pretty unique so I didn't think it was so critical to be hitting the MLS system and blasting everyone with the MLS email alerts. I spent probably 10+ hours and $500-$1000 on FB/Google/Kijiji ads. Then maybe another 20-30 hours showing the place which a realtor would have done for me. It sold for 10% more than the local realtor wanted to list for (so maybe 20% more than we would have ended up with after some negotiations and commissions). In this instance I thought it was well worth the money to do the work myself.

I've also bought/sold a few cookie cutter homes in the suburbs. I tried doing that privately and it wasn't worth the hassle. It was a ton of work to get a few inquiries privately vs tons of inquiries as soon as it would hit the MLS system and the 'new listing' email alerts would go out. I use a discount realtor for listing (whoever will offer me the lowest selling commission - though I factor in if they will show it for me or if I have to show it myself and how much comparison data they are happy to give me). But I make sure the buying realtor is still getting a big juicy commission - they are the ones making the decision to show it to clients or not so you definitely need to pay them. I don't do the 7%/3% default - I calculate what they would get in that setup and then pick a lower nice round number. On a $450,000 place the half of 7%/3% would be $8750 so I might offer $5000 or $7000 depending on how hot the market is at that time (less in a hot market).

The most important thing I've found is to do the pricing research myself and be fanatical about it. I have big spreadsheets of all the comparables for every place I've listed so I have a really good idea what is realistic to expect (I make sure my listing realtor is happy to provide me tons of info - I want everything in the nearby neighborhoods for the last 18 months with full reports including days listed and asking price changes and final sale price - don't settle for those quickie reports that skip a bunch of that). Deciding the price yourself is the most important thing. The realtor commission setup encourages them to makes sales - not to get you the best price. I'm not faulting them - it's just the nature of the traditional realtor compensation system. When selling a $450,000 the selling realtor gets $8750 if it goes for list price or he/she still gets $8000 if it sells for $400,000. Most care a lot more about getting a sale done quickly (as they should, makes sense) vs earning an extra $750. But I care a LOT about that extra $50,000 on the selling price so I make sure I know exactly what I want to sell for and I watch the weekly sales nearby to stay right on top of what the market is doing while I'm selling.

It's a bunch of work if you want to do it yourself but I think it's often worth the savings.
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