Update: Newbie real estate agent and commission

[scm1011]

Update: We didn't get the house, womp womp. We offered $1.2M on a $1.1 list price, there were 12 offers, and they went back to the top 4 for their best and final. We weren't even in the top 4. Here is the listing if you're curious:

www.redfin.com/MA/Somerville/29-Berkeley-St-02143/home/8717520


We found a house we will likely put in an offer on today (OMG!). A good friend has been trying to break into the real estate world for the last year and has been having trouble (its tough around here; a handful of super agents pretty much control the market). We already signed on for her to be our buyer's agent which I'm comfortable with - she's super knowledgable and has been really helpful with our hunt for the past several months. She's also signed to an agency so she's not flying blind.

What I'm hesitant about is signing her on to be our selling agent if we win the house and put our current one on the market. I don't want to leave any money on the table, but I also really would like to help her. I'm considering asking her to take a lower commission in exchange for giving her the listing (it would be her first!). Does this seem reasonable? We haven't discussed this part yet but I assume normal sellers commission is 3%, and I was considering asking her if she'd take 2% instead. We'd put our house on the market for ~$1.2M, so the difference is fairly significant. 

Thoughts?

[hbomdiggity]

A lot of it will depend on what her broker will allow. That said, I think most sellers agents start at 2.5 in my area.

My fear is that she gets taken advantage of and bamboozled in the negotiations. As you may have seen with recent posts, there is a lot of games played from drafting offers to second/third/fourth bites at the apple. Does she have a mentor or more experienced agent she can partner with or at least consult?

[scm1011]

May 20, 2021 9:26:56 GMT -5 hbomdiggity said:

A lot of it will depend on what her broker will allow. That said, I think most sellers agents start at 2.5 in my area.

My fear is that she gets taken advantage of and bamboozled in the negotiations. As you may have seen with recent posts, there is a lot of games played from drafting offers to second/third/fourth bites at the apple. Does she have a mentor or more experienced agent she can partner with or at least consult?

Good point and question - I'll def inquire.

[Susie]

omg, good luck with the offer!

In our market, sellers pay a 6% commission to their agent, of which 2.5% goes to the buyer's agent and 3.5% to the listing agent. Our agent is doing our sale for 5.5% (net 3% to her) since she also handled our purchase and will get 2.5% of that.

As a more general matter though, ugh, IDK. That's tough. I chose an agent I'm friendly acquaintances with (through tri club, she transitioned onto the board as I transitioned off when it got to be too much with the kids). However, I did it because I'd been following her and her small local agency on social media for a long time, and I knew how they present homes for sale. They are based specifically in our burb, and our burb is their specialty. I liked giving her the business, and I'm happy to promote/recommend/publicly share that she's selling our house (you prob saw my pic on FB or IG of her sign in our yard). But I chose her to sell our house specifically because of her experience and past history, and because I liked how she presents homes for sale.

I am not sure I would have the confidence to give a newbie agent my sale listing, even a good friend.  If anything went significantly wrong, it's a huge bind for you to be in, and that could be friendship damaging.  I feel like the risk of that is lower on the purchase end.  You already gave her some business with your purchase, if (iieeee!) it works out. You can recommend, promote, etc. as a happy client afterward.  

Now that you've signed with her for the purchase it might be harder to draw the line on the sale, but I personally think I would need to.

[daisyduck]

I would never let a brand new agent list my house for over a million. I wouldn't even buy that much house with a new agent (assuming you are buying a similar house to the one you are selling), so you've already been very kind to let her be your buyer's agent. Especially in this market where things could move very quickly, I'd want a very experienced Realtor.

[RockNVoll]

OMG, so excited for you! What town is the house in? We need to catch up.

On this point, I think you've been supportive of her already on one half of the transaction and I would hope that she'd understand from a business perspective that you'd rather hire someone with more experience to help with the biggest sale of your life. That said, I think the suggestion to see if she could partner with someone more senior in her office is a good one, but if so make sure you're also comfortable with that person's experience. I know in our previous town that two agents dominated that market as well and it would've made me nervous to go with anyone but the two of them for our sale.

[scm1011]

You guys are right; I'm already doing her a solid by have her as my buying agent. I've felt uneasy about her potentially taking the listing for our current house, so I think I need to go with my gut. I'm actually well-acquainted with one of the super experienced agents in my area (we were friends in high school), so I think I'll probably give him the listing when the time comes. I hope this doesn't muddy the friendship with newbie.

RockNVoll, I need to pop out but I'll return your email after lunch. House is the same city I'm currently in, but actually in liveintheville 's neighborhood

[annieh22]

You could suggest co-listing it with an experienced agent. It would end up being good experience for her (and you can still be the supportive friend) while you get reassurance that it would get handled well. If she’s with a brokerage, try to find an experienced agent in the same one.

[scm1011]

Thanks for the opinions, all! I like the suggestion of her co-listing with an experienced agent - I'm going to mull that one over.

I'm going to take it one step at a time. We're submitting the offer at $100k over asking on a $1.1M list price, 40% down, no house-selling contingency, and waiving inspection. Still, not sure that will be enough to get the deal done in this market. Allegedly they're not looking at offers until Tuesday (there are 3 open houses Saturday, Sunday, Monday), but I've seen other houses disappear before the open house so I don't want to take a chance. Fingers crossed!

ETA: For those not familiar with my situation, we're looking to sell our multi-family (we live in one unit and rent out the other) and get into a single family, which are hard to come by here.  

[fryjack2]

Good Luck with the bid!

My good friend is an agent and when we bought our first condo, she was living across the country. She referred us to an agent in her East Coast office. She then got a cut of our agent's profit. She then gave half that money to us. It was a nice surprise and kind of like a house warming gift.

I wonder if she can do something similar, or if she recommends someone at her agency, if they would then give her a cut of the proceeds so you are still helping her out but also using someone more experienced.

[darby]

Realtor here...I’m going to stand up for your friend for a minute. I have no idea where you are, but where I am new agents are supervised much more heavily for their first two years than other agents. I’m sure how closely is office dependent & some do a better job than others, but I have my managing broker on speed dial. He is also the owner of the office I work for and it’s his name on the line if I screw up too. And human nature being what it is, my feelings would
be very hurt if you trusted me enough to represent you on your purchase but not on your sale. I also am happy to reduce my commission on the listing slightly if I help you with both sides. Also, unless you want those few agents with a corner on the market to stay that way, at some point the newer agents need to be trusted too. I can also say that if I was your friend and it was my first listing you are going to get 1000% of my attention and I am going to go out of my way to show you that I am the best listing agent you’ve ever seen. Unless your friend isn’t really serious about being an agent, she will likely do the same. I doubt one of the few listing everything will be that attentive. Final disclaimer....I’ve only been an agent for a year and a half, and I am rocking it...because a couple of friends gave me a chance, and their referrals have lead to more & more.

[origami]

I had a newer agent friend sell my first house and her boss was heavily involved in some of the steps in the process. I don’t remember if it was co-listed or not. I just know she wasn’t on her own and we had no issues. Assuming your friend would also have help I’d be ok with it but I’d for sure ask about a reduced commission, esp at your sale price.

[scm1011]

darby and origami, that appears to be the case. She has said several times she is going to run x,y,z by her broker first and mentioned her broker is checking her work and that its a good system because she is directly responsible for her and she benefits from the split fee. So that's good?

I'm still taking it one step at a time. It's a huge transaction and I have to prioritize what's best for us - if I can do that while also helping a friend I will.

[amandakisser]

Also a realtor, and a new one at that. My first three transactions I worked very closely with my mentor, and she gets a cut of my commission. For the first transaction she probably did half of it and held my hand through the other half. And I am GLADLY handing over 30% of my commission to her.

Also, as realtors, we are encouraged to tell our clients to double check with their lawyer on everything that needs to be signed, so that we can protect them and ourselves.

Not that I'm telling you you HAVE to use her - sometimes people prefer not to mix personal life with business, and that's ok! BUT, I've seen this frequently with more established agents: they are BUSY. So busy that they oftentimes skim on the customer service aspect, rush through writing offers, and make sloppy mistakes. And they charge a higher commission because of their names, and many times you can get much better service with an agent that is solely focused on one or two clients. Just another perspective to consider.

[liveintheville]

I just saw this! Hurray for being neighbors!
I’m dying to know which house. Good luck with your bid. I understand the market here is crazy.
I have no advice on the realtor issue but I am so excited for you!

[scm1011]

May 21, 2021 14:19:23 GMT -5 liveintheville said:

I just saw this! Hurray for being neighbors!
I’m dying to know which house. Good luck with your bid. I understand the market here is crazy.
I have no advice on the realtor issue but I am so excited for you!

PMing you!

[icedcoffee]

We had a situation that was a little different but we ended up going with newbie and it worked out.

Basically we were selling small condo and reached out to friend who sells multi million dollar homes. Our $300k condo was essentially not worth her time so she passed us off to a newbie. Newbie did great. Million dollar lister worked closely with her and we found she worked harder than we expected because she really wanted it.

I’d go with newbie and ask her to be supervised by a seasoned agent.

[Susie]

scm1011, any news on your offer?

[scm1011]

May 24, 2021 12:54:55 GMT -5 Susie said:

scm1011 , any news on your offer?

Offers are due tomorrow, so we'll hear either tomorrow night or Weds morning.

At this point I don't know which way I want it all to go. My anxiety is a bit through the roof thinking of all the things we'll need to do if its accepted (change schools for both kids, inform our tenant and deal with the unpleasant fallout there, plus purge and ready our house for sale). 

[liveintheville]

Oh man I’m so sorry you didn’t get the house
Hopefully this next one will be the winner!
Market here is crazy. I can’t believe what things are selling for.

[scm1011]

May 25, 2021 16:28:32 GMT -5 liveintheville said:

Oh man I’m so sorry you didn’t get the house
Hopefully this next one will be the winner!
Market here is crazy. I can’t believe what things are selling for.

Their agent insinuated we weren’t even in the ballpark 😩

[Susie]

Aw, what a bummer. It's such a cute house! I know you guys are super tight on space now, I hope you catch a break soon.

[expectantsteelerfan]

I'm sorry you didn't get it. The market has definitely slowed down a bit here. There are still houses that go quickly and with bidding wars, but there is significantly more inventory, and some houses that are decent and priced at least in the right ballpark are sometimes sitting for a few weeks and then going for slightly under asking. I hope it slows down a bit where you are too (while at the same time hoping it doesn't slow down here more until we sell, hopefully in July!)

[RockNVoll]

Oh bummer, I'm sorry you didn't get it Your area is so crazy; I know how few options there must be that fit your desires. Fingers crossed something comes up and you have better luck with the process!

[aspentosh]

Sorry you didn't get it