Just wondering if a homeowner could hire multiple realtors and pay the sales commission to the one that first succeeds in selling at the desired price. Competition seems like a good motivator to me.
Speaking as a commercial real estate agent and Realtor there is nothing preventing you from having an “open” listing in which you simply pay the first Realtor to bring you a contract that results in a sale. Typically you would execute a simple “Show and Sell” document with each interested agent indicating that you will pay him a commisson if he delivers a registered buyer that closes on the property.
The flip side of this is that most residential real estate agents are not going to spend any ad dollars or marketing time promoting your “open” listing if they do not have some guarantee of exclusivity. You can certainly list your home twice, but the way most listing arrangements are written the listing agent is due a commission if the house sells so you could theoretically be responsible for two commissions if the house sells. If your notion is that you will formally list the house with multiple agents, but only agree to pay one commission to the selling agent, how is this any different in practical terms (to the agent) from a typical open listing and the unappealing risk/reward involved in sinking any marketing time or money into selling your property.
Most agents are more than happy to “Show and Sell” your listing with an open arrangement if they have a buyer that is looking for a house in the price range yours is selling for, but don’t expect any experienced real estate agents to be all that motivated about promoting it. If you are antsy about agents being motivated your best bet is simply to pick a good, experienced agent and make it a 6 month listing with an addendum that you can cancel the listing at 3 or 4 months at your sole discretion if you are unhappy with the way it is being marketed.
If what you are trying to do is save money on real estate agents it may be more effective to look at playing them off against each other in trying to get your business.
When I sold my last home I went to one agent in my suburb and asked for a quote on selling costs (commission, advertising, auction costs etc). I took this quote to another agent and asked them if they could do a better deal. When I had this second quote I took it to the agent I actually wanted (who I chose on the basis of his sale record for my type of house in my area) and asked him to match or better it.
The final cost of selling my home was several thousands dollars less than what the first agent quoted.
However, I made a conscious decision not to screw the agent’s price down too much - anybody that’s not making a reasonable profit out of a deal isn’t going to be motivated to work terribly hard for you.
For those interested, I figured out the answer on my own. Instead of paying an agent 6% (3% for listing, 3% for selling), I could simply list it myself on MLS for a flat fee of $400-$500. I figure I stand to save thousands of dollars by doing this.
If a buyer’s agent comes along, I’ll cut him in for 3% if I feel like it, and it’s still less than the normal realtor route.
Controvert, I just listed my home, and have the whole list of fees. Other than taxes, the only fees I have are 6% commission, half of which will be shared with the buyers’ agent. I didn’t have to pay a listing fee or anything else. There is crossed out, though, a $500 cancellation fee if I were to cancel before the house is sold or 60 days. He crossed it out because I’m a previous client (“unknown” people would be subject to it, he says – I guess that’s just his business sense). Pretty much, if the house doesn’t sell, I’m not out a single penny. Is this not normal?
Oh, yeah, thanks to this thread and a similar one, I’m going to use a buyers’ agent, too, rather than going it alone (will be same guy).
And, Controvert, thanks for the tip – if the house doesn’t sell for what I’m asking, I’ll try it your way when the contract expires. Knocking 3% off is a significant amount of money!