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February 6th, 2008 Jason Moore | News Stories
 

Vocation, Vocation, Vocation

Freaked that you can’t sell your home? Let us help.

     
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While the latest data shows the local housing market appreciated a modest 1.1 percent in December, there’s no doubt the once red-hot Portland real-estate landscape now rarely sparks bidding wars moments after a for-sale sign pops up on the lawn. That same December data from the Regional Multiple Listing Service report also shows the number of pending and closed sales keeps dropping. So, if you’re stuck selling a house, and trying to save money by considering alternatives to paying a Realtor a 6 percent commission, here are the pros and cons to weigh.

How to Sell


1. Traditional full-service Realtor


How To Find Them
They’re everywhere, like Starbucks and iPhones—only more expensive.

The Basic Strategy
Still the easiest—and by far the most expensive—way to sell your home. Realtors will do it all: list on the Multiple Listing Service and Internet real-estate sites, show your property to buyers, have open houses, fill out the paperwork, negotiate, bake cookies to give your place that homey smell, and give you a shoulder to cry on when the third buyer in a row has backed out.

i]Downside[/i]
The average sale price for a single-family Portland-area home was about $350,000 in December. With a 6 percent commission, is it really worth $21,000 to use a Realtor? And if you’re unhappy with the service, it’s painful to change. You typically sign a 120-day contract.

The Spin
Realtors claim to be nearly indispensable. Some even say they can sell your house for more than you would on your own, so you can actually come out ahead. Tony Kelly, of the Tony and Libby Kelly Group and Keller Williams Realty, says more people are turning to Realtors for help since the market has cooled. “People come to us seeking expertise. You need someone who knows the market, someone to negotiate for you.”

Hit to the Wallet?
A 6 percent fee, paid by the seller, is standard in the Portland area. i]Advice[/i]
Don’t be afraid to bargain that fee. Many Realtors are willing to charge 5 percent or even less. But Kelly adds that the slowing market has actually made Realtors less willing to lower their commissions. “There was more pressure to lower commissions when the market was hot, like in 2005, when people were sometimes selling a property in one day.”

2. Going solo, or For Sale By Owner


How To Find Them
Google “for sale by owner homes Oregon.”

The Basic Strategy
Yard signs, word-of-mouth, Internet and classified ads. But many FSBOs don’t have a strategy and eventually turn to Realtors, according to the National Association of Realtors.

i]Downside[/i]
No support, determine selling price on your own, Realtors often won’t show your home to prospective buyers (even though Realtors usually won’t admit it). Can be intimidating if you’ve never done it. Realtors will bombard you with calls trying to get you to list with them. FSBO signs are often a shade of orange so ugly that they can scare small children.

The Spin
A good choice for the adventurous or experienced seller. Jeffrey Summerson of ChoiceA.com, a Portland-based free real-estate listing site, says, “Car and home sales are the last two industries to be affected by the Internet. Selling with a Realtor is a 100-year-old practice, like a secret walled garden. They defend it, but is it in the consumers’ best interest? There’s a lot of greed in the current market.”

Hit to the wallet?
No mandatory fees.

i]Advice[/i]
If you choose to offer a courtesy fee to brokers (at least 2.5 percent, but 3 percent is better), some agents will show your house to their clients. If your home isn’t selling, this incentive might help. Also, FSBOs can advertise for free on Internet sites like Craigslist, choicea.com, zillow.com, and more. Sites like homesbyowner.com can help with the forms and give advice.

3. Flat-fee brokers


How To Find Them
Google “flat-fee realty Oregon.”

The Basic Strategy
You choose your level of service, and your cost. Get on the MLS by paying as little as $299 and be seen by lots of prospective buyers.

i]Downside[/i]
Paying the minimum $299 just to get on the MLS only gives you visibility. You don’t get the services of a Realtor, like help on pricing your home and negotiating with buyers.

The Spin
You choose how much to pay, and your level of service. Christian Dreke of flat-fee brokerage Relution.com thinks there aren’t enough options for sellers who don’t want to FSBO, but don’t need a full-service broker. “We think there’s a vacuum. Most of the market is being served by full-service brokerages, but there should be a piece in the middle. We think people should only pay for services they need.

Hit to the wallet?
While paying $299 gets you on the MLS, the price increases as you add services like a key lockbox, help with pricing and paperwork and so on. If you’re not in a big hurry to sell, and you don’t mind showing the house and doing the paperwork yourself, this is a bargain. Some flat-fee Realtors will even do everything a traditional Realtor will, for just a few thousand dollars. An especially great deal if you’re selling an expensive home, where commissions with a full-service Realtor will be in the tens of thousands.

i]Advice[/i]
Pay more to add services, and offer commissions to brokers of at least 2.5 percent so they will bring their buyers.

[b]Conclusion:[/b


Nationally, real-estate commissions have been drifting downward over the past few years, but there isn’t much sign of relief here in Portland. The big change has been in the proliferation of information and free listing sites on the Internet. But even with these options, most people end up using a Realtor. At least we have more choices, even if we aren’t using them yet.
 
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