Such a messed up system. I think the MLS with the buyer and seller commission figured in upfront is only there to protect the interests of the agents involved.
So homes typically have the 6% commission built into the price. A seller representing himself shaves 3% off the price to be more competitive. In negotiations the buyer can say “I want to represent myself, can you knock off another 3%,” to which I would say sure! (Because I would have been prepared to pay an agent anyway.)
Powayseller, the scenario in which I get to pocket that 3% and still sell at the same amount is the same scenario in which I increased the ask price by the same amount and gave the buyer the 3%. Either way, buyer pays the same, seller receives the same, hence the marketability stays the same (except for the fact that the buyer won’t know that’s built into the ask price until he asks the seller).
I don’t buy the part about realtors doing double the work. (They double the amount of paperwork on their own, actually.) Any seller has to prepare the same amount of prerequisite paperwork, and any buyer likewise. Whether someone chooses to hire an agent to do their respective part of the paperwork doesn’t affect the other side.
I’ve only done an FBSO where both buyer and seller were self-represented, not where one side is represented. Am I blowing smoke here or am I hearing FUD from the RE industry. (FUD = Fear Uncertainty Doubt).
Also note that the paperwork on the sale is pretty much the same no matter what the value of the house is. So sellers who don’t want to the paperwork can have it done for a flat fee. “Oh no, it can’t work that way.” Yeah it can, but until then there needs to be more education and less anti-competitive practices revolving around the MLS.
And if someone says “my gosh, you sure are a cheapskate.” Selling RE is hard partially because finding the fair price for a property is difficult. 1% movements matter, especially as the price of the house increases. Plus the seller has a fixed obligation to the bank, so any 1% increase the overhead of the sale comes directly out of the seller’s pocket.
Look at it another way 6% is a whole years worth of appreciation (in a normal market, at the risk of the seller) spent on what could be as few as 4-6 hours of agent time doing paperwork that is routine for them.
I know it’s a rant against the commission system. I do think buyers and sellers do need agents if they don’t want to do the work. But for those who want to be closer to the metal in the overhead costs, they’re excluded from the market, hence the title of this thread. Agents boycott FSBOs.
