Realtors I need your help - How low will you go?

By
Real Estate Agent with Nathan Bangs & Associates of Keller Williams Realty

Welcome to a new week, Realtor friends.

I have been faced with a big problem in the past few months..... How low will you go?

OK what I mean is what is the lowest priced listing you will take that is a Short Sale? Over the past few months I have turned down 20 + short sale condo listings that are CASH ONLY communities. 

Why would anyone turn down business?  Margin! 

Example a $30,000 condo at 3% commission if the bank allows it is, $900.00

Take out Keller Williams Reallty Fees

Take out Transaction Fees

Take out Marketing Fees

Take out Show Service Fees

Take out my Assistant's Labor

Take out Taxes on the Net

and before you add in my time you NET = NOTHING!!!!

So the question is what are you doing about this issue?

To make it worse what happens when you get a referral for a cheap low priced listing like this?  Cannot afford the referral fee.

Work 1 year on a Short Sale to "pay" to sell it is the way I feel. So I am walking from the listing... who is helping owners with these condos?  Cheap houses?

Ideas please!

Thanks,

Nathan Bangs

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Anonymous
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Rae Catanese

There is no answer to this. It's sad because the buyer's can't find anyone who is willing to work with them. Maybe it's time to start asking buyers for up front commissions:)

Jan 24, 2010 11:22 PM #1
Rainmaker
76,504
Chuck Marunde
Sequim & Port Angeles Real Estate - Sequim, WA
Sequim Real Estate Broker

Nathan, we must make business decisions that are necessary, and for me that means I do not take short sale listings and I do not list foreclosures, as a general rule.  In my neck of the woods, both of those are disasters for agents trying to make a profit.  On foreclosures, for example, the REOs are requiring the listing agent they appoint to pay them a 40% referral fee.  In addition, the listing agent has to front about $1,000 of their personal money to pay contractors to get the house ready to sell.  On a $6,000 commission, split that two ways, then pay a 40% referral fee, and the listing agent is lucky to keep $1,000 (assuming they get reimbursed for the $1,000 they spent).  I don't mind working hard, but being abused for $1.95 per hour is not my idea of running a business for profit. The system was set up to make millions for those in control, and to short change the average person.  In that sense, nothing has changed.

My suggestion is that as professional Realtors we let the short sales and the foreclosures go.  Let the free enterprise market take its course.  We don't need to grovel for pennies on the dollar.  The feds have made a real mess of our real estate market nationwide.  Many in the mortgage market made millions before flying to to their island mansions.  CEO's are still paying themselves massive severence packages.  Bernanke is getting paid nicely, and Wall Street got its billions.  All of the shenanigans go on just as before, they just changed their methods. 

We owe our duties to our clients, our buyers and sellers.  As for the banks and their partners in crime, let their short sales go stale on the market.  Let them foreclose, but don't bother listing them.  Believe me, their intentions are not to cooperate with us, but to continue to satisfy their greed.

Jan 24, 2010 11:31 PM #2
Rainmaker
652,646
Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes

We all have to make business decisions in order to stay in business ourselves -- there are some deals that are just too much work and time and so little return it's best to move on.

Jan 25, 2010 01:04 AM #3
Anonymous
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Anonymous

Nathan, You make a good point that every business needs to understand its total financial picture!

Jan 25, 2010 10:56 AM #4
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Rainer
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Nathan Bangs

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