September 2008
CONSUMER REPORTS SURVEY: HOME SELLERS CAN HAGGLE ON BROKER COMMISSIONS; PAYING LESS MAY NOT HURT SERVICE OR SALE PRICE
CR’s September issue offers complete guide for buyers and sellers to get the best deal
YONKERS, NY — Many real-estate brokers are willing to negotiate their commission rates with sellers who try to haggle, according
to an exclusive survey from Consumer Reports September issue.
Forty-six percent of sellers CR surveyed attempted to negotiate a lower commission rate. Roughly 71 percent succeeded. The survey also found that sellers who paid commission rates 3 percent or lower were just as satisfied with their brokers’ performance as those who paid 6 percent or more, suggesting that haggling can’t hurt.
Respondents who paid extra, in fact, were more likely to say they had regrets about the selling process. Nearly one-third said they should have been more assertive in negotiating their agent’s fee.
Paying less won’t hurt the quality of service. While some of the survey respondents who paid lower commissions got fewer services from their agents, the gap wasn’t significant. For example, 81 percent who paid 3 percent or less said the agent provided a competitive market analysis of their home, compared with 87 percent of people who paid 6 percent or more.
“Finding satisfying real-estate services shouldn’t be too hard. All the major chains and independent brokers scored very well in our survey,” said Amanda Walker, senior project editor, Consumer Reports, “So if you’re looking for an agent, shop by personal recommendation or commission split.”
Seventy-one percent of sellers in Consumer Reports’ survey said they were very or completely satisfied with their broker, while only 12 percent told us they were dissatisfied. Most of the larger real-estate chains and independent brokers earned reader scores of 79 or higher, which indicated that respondents found them to provide “very satisfying” service.
Results were based on responses to Consumer Reports National Research Center’s re¬cent Annual Questionnaire of 3,753 read¬ers who sold or tried to sell a home, 4,029 readers who bought one, and 7,368 read¬ers who did both during the past few years.
Other Survey Findings:
Eighty-two percent of respondents who sold with the help of an agent received $5,000 less, on average, than their original asking price. Almost all of the 17 percent who sold their homes without an agent said they received about what they originally asked.
Sixty-six percent of Consumer Reports’ readers who used a real-estate agent in buying a home paid an average of $5,000 less than the listing price, and the 34 percent of buyers who negotiated their own deals, without an agent, paid close to the asking price.
Eighty-six percent of CR’s readers who put their homes on the market made a sale; only 8 percent of would-be sellers eventually gave up and took their homes off the market. (The rest were still trying to sell when the survey was completed.)
Consumer Reports’ September issue offers a complete real-estate guide with helpful advice for selecting the right broker, and tips for buyers and sellers. Here are some highlights for sellers.
Tips for Sellers:
Ratings were based on 9,141 responses to the Consumer Reports National Research Center’s Annual Questionnaire about selling or trying to sell homes using real-estate agents from 2004 to 2007. The total doesn’t include those who did so without a broker. Reader score represents overall satisfaction with the selling agent. A score of 100 would indicate everyone was highly satisfied; 80 would mean respondents were, on average, very satisfied; and 60, fairly well satisfied. While there were no statistically meaningful differences among rated companies in customer satisfaction, some companies were more willing to negotiate fees than others.
CR’s September issue offers complete guide for buyers and sellers to get the best deal
September 2008 Issue
Forty-six percent of sellers CR surveyed attempted to negotiate a lower commission rate. Roughly 71 percent succeeded. The survey also found that sellers who paid commission rates 3 percent or lower were just as satisfied with their brokers’ performance as those who paid 6 percent or more, suggesting that haggling can’t hurt.
Respondents who paid extra, in fact, were more likely to say they had regrets about the selling process. Nearly one-third said they should have been more assertive in negotiating their agent’s fee.
Paying less won’t hurt the quality of service. While some of the survey respondents who paid lower commissions got fewer services from their agents, the gap wasn’t significant. For example, 81 percent who paid 3 percent or less said the agent provided a competitive market analysis of their home, compared with 87 percent of people who paid 6 percent or more.
“Finding satisfying real-estate services shouldn’t be too hard. All the major chains and independent brokers scored very well in our survey,” said Amanda Walker, senior project editor, Consumer Reports, “So if you’re looking for an agent, shop by personal recommendation or commission split.”
Seventy-one percent of sellers in Consumer Reports’ survey said they were very or completely satisfied with their broker, while only 12 percent told us they were dissatisfied. Most of the larger real-estate chains and independent brokers earned reader scores of 79 or higher, which indicated that respondents found them to provide “very satisfying” service.
Results were based on responses to Consumer Reports National Research Center’s re¬cent Annual Questionnaire of 3,753 read¬ers who sold or tried to sell a home, 4,029 readers who bought one, and 7,368 read¬ers who did both during the past few years.
Other Survey Findings:
Eighty-two percent of respondents who sold with the help of an agent received $5,000 less, on average, than their original asking price. Almost all of the 17 percent who sold their homes without an agent said they received about what they originally asked.
Sixty-six percent of Consumer Reports’ readers who used a real-estate agent in buying a home paid an average of $5,000 less than the listing price, and the 34 percent of buyers who negotiated their own deals, without an agent, paid close to the asking price.
Eighty-six percent of CR’s readers who put their homes on the market made a sale; only 8 percent of would-be sellers eventually gave up and took their homes off the market. (The rest were still trying to sell when the survey was completed.)
Consumer Reports’ September issue offers a complete real-estate guide with helpful advice for selecting the right broker, and tips for buyers and sellers. Here are some highlights for sellers.
Tips for Sellers:
- Price it right. Homes sell most quickly if they are put on the market at a price that’s just a bit lower than those of similar homes in the area. Don’t waste time floating a high price out there just to see if you get a nibble. If you don’t get an offer in four to six weeks, drop the price 4 to 6 percent.
- Think round numbers. About 80 percent of people buying and selling homes today get information by searching online multiple-listing sites like Realtor.com, which is run by the National Association of Realtors. To conduct a search on that site, buyers specify a price range, beginning and ending with round numbers. So if you price your home that way, more people will see it.
- Pick the right improvements. You might want to update your kitchen or a bathroom for your own comfort, but don’t expect to recoup the project’s whole cost when you sell your home. In today’s market, you might get the best return if you spruce up the outside of your home by adding a wood deck, energy-efficient windows, or new siding. CR’s September issue has a list of the most popular home improvements and whether they pay off.
- Consider the type of listing. If you’re using a broker, there are two common ways to list your home: designating it as an exclusive agency listing, which means you have one broker but can still sell it yourself and save the commission. The second, an exclusive right-to-sell listing, means only the broker you designate can offer your home during the listing term (often six to 12 months), and you can’t sell it yourself.
- Interview more than one agent. Ask around for recommendations and meet with several possible candidates. They should clearly explain how they would market your property and describe how they handle open houses and newspaper and Internet advertising. Ask whether there will be any advertising costs, transaction fees, or other incidentals that you will be expected to pay.
Ratings were based on 9,141 responses to the Consumer Reports National Research Center’s Annual Questionnaire about selling or trying to sell homes using real-estate agents from 2004 to 2007. The total doesn’t include those who did so without a broker. Reader score represents overall satisfaction with the selling agent. A score of 100 would indicate everyone was highly satisfied; 80 would mean respondents were, on average, very satisfied; and 60, fairly well satisfied. While there were no statistically meaningful differences among rated companies in customer satisfaction, some companies were more willing to negotiate fees than others.
