Realtor advice sought - selling a house

In My Humble Opinion
1

I have a house on the market - it’s been on the market for over 5 months.
Our realtor is on my list of least favorite people I’ve ever met. He is an independant agent who appears to have very little experience. The only reason we listed with him is because he was the agent who sold the house we just bought. There was an equivalent offer on the table, and we knew that he would tell the sellers to take our offer if he knew he would get to list our house. (he even admitted this to me, only half jokingly)

At the time we listed our house, the market was still going fairly strong. It’s a starter house, and starter houses in our school district tended to be snatched up like hotcakes (average 2-3 months on the market). We figured we didn’t need too much help selling it, so we went ahead and listed with the guy. Then the market got nasty and now nothing is moving. We’ve dropped the price twice.
According to the neighbors we get people looking at it outside almost weekly, but only a few people have gone through it via the lockbox. Our realtor has gotten no calls on it.

The realtor has done all the typical realtor things - it’s on the multi list. We’ve held several open houses, all of which were advertised in the paper with photo adverts. There were the agent-only open houses during the weekdays when it was newly listed. I’ve put it on Craigslist (in fact that’s where several of our viewing appointments came from).

In a couple of weeks we will be past the 180 days that our realtor contract specifies is the minimum amount of time we have to work with him. I’m trying to decide if we should drop him. If so, what would our monetary obligation be, if any? Do we have to pay for the ads? If we do drop him, should we try to sell by owner or get another agent from a larger, better connected agency? I’ve contacted a company that buys, inproves, and resells houses. Of course they can’t look at it until we end our contract or they’ve got to pay the realtor his commission, but they estimate that we might *just * squeak by (close out both mortgages on the property but make no money), assuming they will buy it at all. (they have to have enough of a margin to make it worth their while)

All I know is that we can’t swing this two mortgage thing much longer, and I’m afraid of doing something really financially stupid. Any advice from the real estate savvy?

2

This sounds really unethical. Isn’t that against the law? I had thought agents weren’t allowed to try to influence the buyer or seller in any direction?

If your contract is up, and if it were me, I’d get a new realtor. I’m not sure about costs you may have to pay him, but afaia, you pay commission upon SALE.

Maybe you should look at staging? Our house was on the market for a few months and then our realtor had a group of other realtors come in and assess how it showed. They told us to declutter even more and find some more furniture for the front room. We also did some more landscaping work. It sold within a few weeks of that.

3

Too late. You bought another house without selling yours and without putting a contingency in the contract. Sorry to be blunt, but I can’t believe people ever do this.

I think it’s a stretch to blame your realtor at this point. He’s advertised in the paper; it’s on the MLS. What do you expect a different realtor to do. . .get U2 to have a concert on your roof top?

Realtors have no real skills, no more insight into the local market than your average homeowner.

There’s no magic bullet. No secret weapon that ensures a house gets sold. Oh, wait, there is. . .lower the price some more. Houses aren’t selling for what they were selling for a year ago. Keep paying mortgage, and keep watching comps plummet, or sell it now and get rid of the hassle.

4

If he is not being a good agent drop him. You usually don’t have a penalty for doing so (as long as the contract is done), and should go with an agent that you see selling many homes in your area.

Good luck.

5

Good point. I don’t know why people don’t do this either. Bad idea.

6

Gee, maybe people do this because the other offer on the house they wanted to buy did NOT have a contingency and the owners said that unless we removed our contingency that they were going with the new offer (which would have been well within their rights) and we didn’t want to lose the house.

That’s why I’m questioning going FSBO - if we didn’t have to pay commission, we’d be more flexible on the price. And I’m not seeing what he is doing as being worth the money. As far as blaming him - he appears to do this as more of a side job to his work as an attorney. We never hear from him. He doesn’t return phone calls. We don’t trust him. I think a realtor in a big office would be talking to the other realtors they work with and my impression is that they all try to sell within their office, sort of a you scratch my back I scratch yours happy commission party deal.

7

Gee, maybe people should really think about how much they really want that one house when the downside involves carrying two mortgages in a sinking real estate market.

It’s A HOUSE!

It’s not like when I get home from the video store, and I realize my wife already rented something.

8

It’s a 200yr old historic home in a wonderful location that we got at a great price and we’re thrilled to have it.
I am not asking for advice as to whether or not I should have bought the house. I am managing the two mortgages for the time being. My question regards the realtor and whether we should continue with him or exercise or right to terminate the contract and pursue other alternatives.

9

It depends on how you value your time, I guess.

Do you want to be getting the house ready for a showing every weekend, keeping up the ads, using up your weekends showing the house?

FSBO isn’t very complicated. And, I don’t know what you’re agreement with the realtor is, but you can knock 6% off it right now, hope to sell it faster, and come out the same as if you’d sold with the realtor.

10

Look, the FSBO route is good, the only thing the realtor gets you is a MLS listing and an ad in the paper. Your monetary obligation to him? ZIPPO! Seriously. It’s like paying me to paint your house, but I don’t come and do it, so you don’t pay me. He would’ve made the comission, and that would’ve been payment enough.

If you’d like to get it sold quickly, go to a different agency, and drop the price to something easier, and make an agreement that if you find the buyer, the realtor makes only half the commission.

11

I believe that going the FSBO route is a mistake. When I was looking at houses, I looked at a few FSBOs, then just stopped. They were all overpriced. More importantly, many people simply go to an agent and look at what they are shown. This is especially true of people who are relocating (they come in for one weekend and look at all the houses they can). My WAG is that when you go FSBO, you lose about 30% of the possible buyers.

The most important variable in your equation is not the agent, but the price of the house.

By the way, I am not in the real estate business in any way.

12

FWIW, when were were looking at houses to buy, the FSBO ones were uniformly the dregs. We got so tired of looking at unrepaired, un-decluttered, unstaged, unappealing houses that “FSBO” was an automatic disqualifier.

13

As a Realtor, I take offense at that remark. Do people tell you that you have no skills at your occupation, too?

To the OP: Read your contract, and IANAL. In the contracts I write, if the contract expires normally, you don’t owe the listing agent anything for the ads – that is his burden and cost unless otherwise specified in the contract.

If you terminate the contract prematurely, you might be liable for costs, since he has not had the expected time to recoup his investment. Read your contract.

This may vary by state, but in Wisconsin, the contract language has a clause that creates a “protected buyer” for a period of one year from the expiration of the contract. A list of the protected buyers must be given to the seller within 3 days of the contract expiration. If anyone on that list buys the property within the year, the commission is earned exactly as if the contract were in force.

Remember – there are only two things that make a property not sell – price and exposure. If you feel there has been adequate exposure, then perhaps it’s time to reduce the price. Talk to your agent about this. Sometimes sellers are reluctant to reduce the price and just price themselves out of the market. It matters not a bit what the value is to you, but what the value is to another.

Do you how expensive MLS listings are to us agents? Do you know how valuable they are (may depend on your market)? Can you get the same exposure elsewhere?

Commissions are negotiable, but it’s unlikely that an agent will agree to that. After all, he is the one paying for the marketing no matter how the buyer is found, and he is the one who can advise you on many matters, many which can contribute to finding a buyer.

To the OP: If you don’t like working with the current agent, find another after your contract expires. However, don’t penalize him if all you need to do is reduce the price. With another agent, you may be starting over.

A Realtor is required by ethics and law to treat all parties fairly. If you feel he has violated that trust, contact your localBoard of Realtors. The code of ethics is here.

BTW, this varies according to broker, but listing with my firm automatically puts the listing in realtor.com, our own searchable website and about a dozen other Internet sites like craigslist. Our company policy is to have a color ad in every monthly edition of a local free publication, Homes Guide, plus featured mention in other publications on occasion. This is a lot more exposure than just a sign on the front lawn.

Also, for those you you that think that an agent does nothing but sit back and watch the money roll in, experienced agents develop a list, formal or otherwise, of potential buyers and sellers that they can tap if just the right property comes along. Our networking in this manner is an extremely valuable tool that is hard to put into a dollar value, but there have been occasions when immediately after I got a listing, I made a phone call to someone I knew who was looking for just that kind of property, and I sold it immediately. A FSBO sign is unlikely to do that.

14

Couple of things:

First, it sounds like your house is over-priced. Even if it has issues that were making it hard to move (sell), it stiill should be getting showings. IM admittedly limited E, and IANARealtor, if people are interested enough to stop by but don’t bother to come in, the issue is price. What else could it be?

Second, either this realtor or, if you fire him (and I would, he hasn’t gotten the job done), your new realtor needs to re-do your market analysis. They need to look at comps (prices that comparable houses in your market are selling for) and time on market – length of time from listing to sale. The market has softened some – a lot in some areas – and comps from even six months ago may not accurately reflect what you can expect to get today. And if you see that many houses are languishing on the market, as yours has, you will need to adjust your price accordingly to move the house.

Third, incremental decreases in price are a bad sign to buyers who watch the market in the area they’re interested in. They indicate that, yes, your house was overpriced, and maybe they shouldn’t offer yet because maybe you’ll drop the price again. There is also an emotional aspect to house buying that’s kind of like dating: just like nobody wants to date the guy/girl that no one else wants to date, few people want to buy a house that isn’t generating any interest from anyone else. It’s the “What do you suppose is wrong with it?” factor. A house can go “stale” on the market.

My recommendation is that you get a new realtor, do some work to freshen the place up if possible (maybe a new coat of paint, shutters, spruce up the yard, something), and commit to a substantial price adjustment based on the new market analysis. You want the house to look fresh and attractive, and you want to price it to move. Forget about what you had hoped to get out of it; just get out of it.

And I would definitely not sell FSBO; you simply don’t have the exposure to a large pool of buyers that you do with a multilist and the network of realtors.

15

Thank you for the insight from the inside. I read the contract - it is good for one year, but we are allowed to terminate 180 days after March 20th. I will watch for protected buyer clauses.

We have dropped the price twice. The first time was approximately 2months after listing. I felt that the initial price was a little too high - set at the realtor’s suggestion based on an analysis and comps. We dropped it to what I felt was fair. Then the market tanked. We just dropped it again last week to about 85% of our initial asking price. We’re closing in on our break even number, but we’ve got a little wiggle room.

I don’t think he behaved in an unethical manner. Our offer was first, but we had the contingency of selling our house. Another offer was made for the exact same amount but with no contingency. The realtor suggested they give us the option of dropping our contingency, which we did. They still considered taking the other offer. We told the realtor that we would list our property with him. They took our offer. (not quite coincidentally the realtor is friends with the seller)

And THAT is exactly what I fear we are missing with this realtor. He doesn’t appear to have a list or any other contacts in real estate. I think his only other listing right now is his mother’s house. He claims the local Homes Guide is a waste of time (more likely he doesn’t want to waste the $) *I’m * the one putting the place on Craigslist. I’m the one who has to ask him to advertise it and set up open houses (which no one attends anyway).

The house is empty, and I’ve never seen anyone do staging in this market. It’s a small house and looks bigger without furniture. We’ve been dilligently keeping up the landscaping as the house is only 4 miles away. It’s completely updated (in the past 7hrs it’s got new paint inside and out, a new roof, new flooring throughout, new furnace, whole house air, new front porch, new entry door, waterproofing in the basement, new light fixtures, and was redecorated in mostly neutral colors - everyone says it’s cute) and priced much lower than comparables for its size and location (had the before mentioned flipping company run comps again last month and we’re definitely at the right price).
No one likes the size of the kitchen (which has been updated within its small confines - I refinished the cabinets, installed ceramic tile flooring, repainted and redid the lighting), and there’s nothing we can do about that for under $30,000. I do worry that the price drops have made it a pariah, but there’s little I can do about that now.

I’ve threatened to hijack people at the local mall and force them to come see it. We had a moving sale before we left to drum up drive-by traffic. I’m frustrated that I feel like I’ve done all I can and now I have to sit and wait. I don’t like sitting and waiting.

16

What buyers tend to forget – and this is not directed specifically at you – is that the price the house will sell for has nothing whatsoever to do with what you want it to sell for, or “need” it to sell for, or bought it for, or will break even at. I’m not saying you should prepare to sell at a loss, but I do think you should consider what you are going to do if the house doesn’t move, even at your “break even” number. Only you can decide if what is paramount at this point is that you (a) get your money back out of it, or (b) unload it and get out from under the second mortgage payment. But there’s no guarantee you’ll be able to do both.

17

We’ve got the house listed at $117,000. In our zipcode right now there are 216 houses for sale. Only seven of them are between $100,000 and $125,000. There are NO houses under $100,000. A house two doors up that is identical to ours just sold by owner back in January for $138,000. Our realtor told us to list at $134,900.
Stupid market. :mad:

18

Highly agree with going with a new agent and redoing the comps.

I have been in the market before on houses and cars. After all that experience, I believe that 90% of the houses and cars for sale out there are overpriced. I call it the ‘I just need one’ theory.

People price things high because “I just need one buyer”. Maybe he’ll like the house and will pay it. Maybe he lost his virginity in this model of car and will pay more for it because of the memories…I don’t know.

However, there is no such buyer…and so the house or the car has to sit on the market for a long time before the seller realizes this.

I’ve seen this with family and friends. A friend recently put a house on the market because he was moving way across the metro…and his agent did a comp. They found a price but it was less than break even. So he ‘needed’ to sell for higher than that plus even jacked it up another $5K beyond that. When I questioned him…it was “Well, maybe someone will buy it.” I.e…just need one buyer.

A year and a half later (very recently) he sold it for less than the original comp price. What makes it sad was that he turned down a higher offer than what he eventually settled for 2 days after it was on the market…and kicked himself ever since.

This same guy just put one of his cars out for sale on carsoup.com…overpriced of course.

Since 90% of houses on the market are overpriced, buyers will weed them out quickly…so you get lots of hits on the website and drive buy, but no interest.

19

Was the market really good 5 months ago and just recently got nasty? That’s news to me. I thought the market has been bad for well over a year now.
Where do you live that houses were snatched up like hotcakes 5 months ago?

20

Pittsburgh. Starter houses in my township six months ago went fast. (we’re in one of the highest ranked school districts in the state) I’ve been watching the market here for over two years. The comp analysis confirmed my impression, typical time on market was about 2-3 months. For Sale signs would pop up and be down in a matter of weeks. Now they’re thick like a forest throughout my suburb. Which is why I’m not saying it’s necessarily my realtor’s fault that ours isn’t moving (but I still dislike the guy).