September 2008
What our survey found
Most people still close the deal. Eighty-six percent of our 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 working at it when we surveyed.) Perhaps it’s not surprising,
then, that 71 percent of our sellers said they were very or completely satisfied with their broker; only 12 percent told us
they were dissatisfied.
More than 90 percent of the homes that sold were on the market for less than six months. However, there’s some anecdotal evidence since our survey that the period is getting longer.
An agent can help buyers. The 66 percent of our readers who used a real-estate agent in buying a home paid an average of $5,000 less than the listing price. Some of the agents were buyers’ brokers (they generally work exclusively for the buyer) and some were conventional agents whose legal obligation is to the seller, even if the buyer brought them into the deal. The 34 percent of buyers who negotiated their own deals, without an agent, paid close to the asking price.
If you’re selling, it’s your call. The 82 percent of our 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.
Our survey did find that as the market tanked, agents were more likely to offer extra services to get the house sold. For example, between 2006 and 2007 more agents advised clients about fixing up their homes, were more likely to advertise homes on the Web, and made greater efforts to follow up with potential buyers after an open house.
You can negotiate the fee. The usual 6 percent commission that agents charge sellers has been standard for so long that many homeowners apparently don’t realize it’s negotiable. But 46 percent of the sellers in our poll attempted to negotiate a lower commission and roughly 71 percent of that group succeeded.
RE/MAX and independent agents appeared to be a bit more willing to deal; 77 and 76 percent, respectively, of sellers who tried to negotiate with them were successful. Sixty-seven percent of Century 21, Keller Williams, and Prudential agents also lowered fees, as did 64 percent of the Coldwell Banker agents.
We found that paying an agent a lower commission rarely had any effect on the sales price. And readers who paid commissions of 3 percent or less were just as happy with their brokers’ performance as those who paid 6 percent or more. People who paid extra, in fact, were more likely to say they had regrets about the selling process. The biggest regret? Nearly one-third said they should have been more assertive in negotiating their agent’s fee.
Paying less won’t hurt service. The industry generally defends the full 6 percent commission by saying it enables brokers to provide all the services home sellers need. And some of our survey respondents who paid lower commissions did get fewer services from their agents. But there wasn’t as big a gap as you might expect. 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. And those who paid a lower commission were somewhat less likely to have agent-sponsored open houses (54 vs. 59 percent).
For more information, see What you get for 3% vs. 6%.
The big brokers don’t differ much. The services a seller can expect any agent to provide include helping determine the initial asking price, providing a market analysis of comparable homes, advising on preparing the home for sale, holding open houses, listing the home on multiple-listing services, and following up with buyers’ agents after open houses. Agents can also help negotiate selling prices and guide clients through the closing process. We did find some differences among brokers. For example, 85 percent of Keller Williams Realty agents advertised homes on the Web, compared with 75 percent of Century 21 and 76 percent of RE/MAX reps. Seventy-five percent of Keller Williams and Prudential agents helped negotiate the terms of the sale (such as repairs to be done); only 67 percent of RE/MAX brokers did so. Overall, independent agents tended to provide the fewest services, but sellers who used them were just as satisfied.
More than 90 percent of the homes that sold were on the market for less than six months. However, there’s some anecdotal evidence since our survey that the period is getting longer.
An agent can help buyers. The 66 percent of our readers who used a real-estate agent in buying a home paid an average of $5,000 less than the listing price. Some of the agents were buyers’ brokers (they generally work exclusively for the buyer) and some were conventional agents whose legal obligation is to the seller, even if the buyer brought them into the deal. The 34 percent of buyers who negotiated their own deals, without an agent, paid close to the asking price.
If you’re selling, it’s your call. The 82 percent of our 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.
Our survey did find that as the market tanked, agents were more likely to offer extra services to get the house sold. For example, between 2006 and 2007 more agents advised clients about fixing up their homes, were more likely to advertise homes on the Web, and made greater efforts to follow up with potential buyers after an open house.
You can negotiate the fee. The usual 6 percent commission that agents charge sellers has been standard for so long that many homeowners apparently don’t realize it’s negotiable. But 46 percent of the sellers in our poll attempted to negotiate a lower commission and roughly 71 percent of that group succeeded.
RE/MAX and independent agents appeared to be a bit more willing to deal; 77 and 76 percent, respectively, of sellers who tried to negotiate with them were successful. Sixty-seven percent of Century 21, Keller Williams, and Prudential agents also lowered fees, as did 64 percent of the Coldwell Banker agents.
We found that paying an agent a lower commission rarely had any effect on the sales price. And readers who paid commissions of 3 percent or less were just as happy with their brokers’ performance as those who paid 6 percent or more. People who paid extra, in fact, were more likely to say they had regrets about the selling process. The biggest regret? Nearly one-third said they should have been more assertive in negotiating their agent’s fee.
Paying less won’t hurt service. The industry generally defends the full 6 percent commission by saying it enables brokers to provide all the services home sellers need. And some of our survey respondents who paid lower commissions did get fewer services from their agents. But there wasn’t as big a gap as you might expect. 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. And those who paid a lower commission were somewhat less likely to have agent-sponsored open houses (54 vs. 59 percent).
For more information, see What you get for 3% vs. 6%.
The big brokers don’t differ much. The services a seller can expect any agent to provide include helping determine the initial asking price, providing a market analysis of comparable homes, advising on preparing the home for sale, holding open houses, listing the home on multiple-listing services, and following up with buyers’ agents after open houses. Agents can also help negotiate selling prices and guide clients through the closing process. We did find some differences among brokers. For example, 85 percent of Keller Williams Realty agents advertised homes on the Web, compared with 75 percent of Century 21 and 76 percent of RE/MAX reps. Seventy-five percent of Keller Williams and Prudential agents helped negotiate the terms of the sale (such as repairs to be done); only 67 percent of RE/MAX brokers did so. Overall, independent agents tended to provide the fewest services, but sellers who used them were just as satisfied.
