Selling my condo (S...
 
Notifications
Clear all

Selling my condo (STT) question

Page 1 / 2
 
isl3985
(@isl3985)
Advanced Member

So I got a job transfer and am going to sell my condo. I am wondering which realtors are best down here (STT) and what the commission fees are like?

Quote
Topic starter Posted : May 15, 2014 3:35 pm
Alana33
(@alana33)
Expert

The commission fee is 6% paid by seller and split between listing and selling broker/agent, if not same person/agency.
The 6% commission is also split between agents and their respective companies/agencies.
The 6% is standard for residential and condos sales. Land sales are 10% commission.

ReplyQuote
Posted : May 15, 2014 3:54 pm
isl3985
(@isl3985)
Advanced Member

Thanks!

ReplyQuote
Topic starter Posted : May 15, 2014 4:00 pm
sunshinefun
(@sunshinefun)
Trusted Member

WOW...6%!!! The last home we sold in the states the commission at the full service realtor was half that.

I would suggest negotiating for a better rate.

ReplyQuote
Posted : May 15, 2014 4:56 pm
gonetropo
(@gonetropo)
Advanced Member

It is very common to negotiate the commission on a home sales, especially high priced homes. You can also specify a tiered commission depending on the sales price.

The only issue with negotiating a low commission is that some agents may not be inclined to show it. I would think that in this market, they will show anything if asked by a potential buyer.

ReplyQuote
Posted : May 15, 2014 5:33 pm
Alana33
(@alana33)
Expert

As gonetropo noted, some agents won't show properties with a sub-commission base of less than 3% (which is what they make as a selling or listing agent since the 6% is split between agents/agencies) as they have to split that with their real estate office. So if an agent lists it and another sells it, they are each actually only making 1.5% commission with the other 1.5% going to their respective Agencies.

The Norm is 6% here and most of USA as well. Negotiating a lower rate is possible (not recommended) but then you may have many less showings and a much longer "on market" period. Properties tend to stay on market here longer anyway than in USA usually unless they are an exceptional deal and very well priced.

Right now on STT -there are 172 condos for sale priced between $57,750 - $1.999M.

ReplyQuote
Posted : May 15, 2014 6:08 pm
JulieKay
(@JulieKay)
Trusted Member

My perspective:

We are in the middle of selling our house on STX (hopefully closing soon!) and our agent is definitely earning her 3% listing fee, as well as the buyer's agent earning her 3% representing her clients as well. It isn't the same as the states - there is a lot more work to be done selling a house in the USVI, and a lot more paperwork and hurdles. I don't know about STT, but on STX the agents typically won't agree to less than a year's listing agreement. I initially balked at that at first (in the states it's usually 90 days or so) but now I totally understand. Everything takes longer, is harder, and requires a lot more work and coordination. It's just how it is.

Also know that that 3% pays for all the efforts of the agent on your behalf for advertising and promotion of your property. Our agent has had brunches in our house with other agents for showing, has had it listed in several home magazines, online, as well as in her personal home magazine, all of which are distributed in the states and internationally as well as in the USVI. She pays for this out her pocket knowing that she will recoup expenses at close.

And last - don't forget her brokerage takes a cut of the fee as well, and sometimes there are other "cuts." And she has to file and pay her own personal income taxes, buy gas for her vehicle and maintenance, signs for the streetside, lock boxes for keys, heck even proper shoes for her to hike around all day showing properties - and more. That 3% rapidly whittles away to a lot less than what most people wrongly assume is pure profit.

Bottom line...you get what you pay for. Pay your Realtor what they're worth, pay the few extra thousand bucks, work hard with them to market the property in this challenging market, and get your house/condo SOLD. 🙂

ReplyQuote
Posted : May 15, 2014 6:20 pm
sunshinefun
(@sunshinefun)
Trusted Member

Fortunately our stateside house was located in a very desirable area in a very hot market at the time. Back in those days, agents would under cut each other all the time.

ReplyQuote
Posted : May 15, 2014 6:58 pm
aussie
(@aussie)
Trusted Member

The commission fee is 6% paid by seller and split between listing and selling broker/agent, if not same person/agency.
The 6% commission is also split between agents and their respective companies/agencies.
The 6% is standard for residential and condos sales. Land sales are 10% commission.

Real estate commissions are ALWAYS negotiable. It's that Sherman Antitrust Act thingy.

ReplyQuote
Posted : May 15, 2014 9:11 pm
Alana33
(@alana33)
Expert

The commission fee is 6% paid by seller and split between listing and selling broker/agent, if not same person/agency.
The 6% commission is also split between agents and their respective companies/agencies.
The 6% is standard for residential and condos sales. Land sales are 10% commission.

Real estate commissions are ALWAYS negotiable. It's that Sherman Antitrust Act thingy.

As stated:
The Norm is 6% here and most of USA as well. Negotiating a lower rate is possible (not recommended for reason stated by gonetropo -see above posts again) but then you may have many less showings and a much longer "on market" period. Properties tend to stay on market here longer anyway than in USA usually unless they are an exceptional deal and very well priced.

ReplyQuote
Posted : May 16, 2014 12:26 am
StCroixBeachBoy
(@StCroixBeachBoy)
Advanced Member

Well said JulieKay. That 6% is a tough nut to crack at closing, but R.E. agents earn it. Especially here. And don't forget gross receipts tax. While you may be able to negotiate that lower rate, don't think for a minute that anyone is going to be motivated to show or sell your property.

ReplyQuote
Posted : May 16, 2014 12:54 am
Ms Information
(@Ms_Information)
Advanced Member

Interesting conversation. I have sold property here and in the states and have always paid 6% commission. On at least one sale I felt cheated, because my property was listed for more than two years and then sold for much less than asking price. I got less, but the realtor got more. It could be argued that the realtor worked harder to make this sale in a difficult market. However a quicker sale at a lower price might have netted me more (or any) profit. A good realtor will help you price your property to sell.

In the VI most property, especially high end.. sells very slowly. The realtor still gets their $50,000 and the seller must accept less.

All of this being said( isl3985 ) ask questions about how long it might take to sell your property and how long you will need to keep paying on it. Those are the real drains on a profitable sale. Maybe a sliding scale incentive and shorter listing period would help?

ReplyQuote
Posted : May 16, 2014 1:50 am
ChrisMI
(@ChrisMI)
Advanced Member

My perspective:

We are in the middle of selling our house on STX (hopefully closing soon!) and our agent is definitely earning her 3% listing fee, as well as the buyer's agent earning her 3% representing her clients as well. It isn't the same as the states - there is a lot more work to be done selling a house in the USVI, and a lot more paperwork and hurdles. I don't know about STT, but on STX the agents typically won't agree to less than a year's listing agreement. I initially balked at that at first (in the states it's usually 90 days or so) but now I totally understand. Everything takes longer, is harder, and requires a lot more work and coordination. It's just how it is.

Also know that that 3% pays for all the efforts of the agent on your behalf for advertising and promotion of your property. Our agent has had brunches in our house with other agents for showing, has had it listed in several home magazines, online, as well as in her personal home magazine, all of which are distributed in the states and internationally as well as in the USVI. She pays for this out her pocket knowing that she will recoup expenses at close.

And last - don't forget her brokerage takes a cut of the fee as well, and sometimes there are other "cuts." And she has to file and pay her own personal income taxes, buy gas for her vehicle and maintenance, signs for the streetside, lock boxes for keys, heck even proper shoes for her to hike around all day showing properties - and more. That 3% rapidly whittles away to a lot less than what most people wrongly assume is pure profit.

Bottom line...you get what you pay for. Pay your Realtor what they're worth, pay the few extra thousand bucks, work hard with them to market the property in this challenging market, and get your house/condo SOLD. 🙂

Very well put JulieKay. Unless one is at the super-high end beating your Realtor from 6% down to 4% is really not in your overall best interest. The house we purchased had been on and off the market for nearly 7 years when our offer was accepted. That's an extreme situation but the successful Realtors earn their dough. Cutting both agents' pay by a third (gross) to save yourself 2% is shooting yourself in the foot.

ReplyQuote
Posted : May 16, 2014 2:06 am
Ms Information
(@Ms_Information)
Advanced Member

Interesting conversation. I have sold property here and in the states and have always paid 6% commission. On at least one sale I felt cheated, because my property was listed for more than two years and then sold for much less than asking price. I got less, but the realtor got more. It could be argued that the realtor worked harder to make this sale in a difficult market. However a quicker sale at a lower price might have netted me more (or any) profit. A good realtor will help you price your property to sell.

In the VI most property, especially high end.. sells very slowly. The realtor still gets their $50,000 and the seller must accept less.

All of this being said( isl3985 ) ask questions about how long it might take to sell your property and how long you will need to keep paying on it. Those are the real drains on a profitable sale. Maybe a sliding scale incentive and shorter listing period would help?

Let me explain when I say the realtor got more. Of course they didn't. However at 6% they took a bigger chunk of my reduced sale price.

As a hypothetical example...I list a condo for $400,000 and my agent agrees to a 6% fee or $24,000.
I have a loan for $200,000 and the condo sells in 90 days.
My residual cost for 90 days at about $1000 per month is $4000 and my payoff is $200,000
So I get $196000 minus the $24000 to the realtor so I still have $172,000 of my original $200,000 investment.

However, what really happens is that the condo is listed for 30 months or $30000 residual and the final sale price is $280000
My payoff is still $200000 plus the $30000 plus the $16800 to the realtor
So my net is now $33,200
Unless I had this condo rented all that time I am now out another $35000 in mostly non deductible payments on my loan.
So I ask myself why didn't I walk away from this two years ago. A lot of people did.

Bottom line...make sure your realtor prices your condo to sell as quickly as possible.

ReplyQuote
Posted : May 16, 2014 3:12 am
noOne
(@noOne)
Trusted Member

Heh, my mom just put her house on the market two days ago and had two showings yesterday... The market seems to be better, at least around here in NC.

ReplyQuote
Posted : May 16, 2014 10:47 am
STXBob
(@STXBob)
Trusted Member

Bottom line...make sure your realtor prices your condo to sell as quickly as possible.

Also put the place into show mode. Remove clutter, make repairs, paint it, clean it, turn on the lights, etc. I've seen quite a few places where no effort was made to show well. Those are a lot harder to sell.

ReplyQuote
Posted : May 16, 2014 11:21 am
Alana33
(@alana33)
Expert

Well said, STXBob.
I have shown and seen properties that with some simple decluttering, pressure washing and cleaning would have been received much better had a little elbow grease and common sense been used by owners. While a Realtor can recommend doing this, one can't force a seller to do so if they have no inclination but they will expect top dollar, regardless.
If the exterior of the property is a mess, quite often, one can't even drag a potential buyer inside.
Don't count on a potential buyer using "great imagination" to see what something "could be like."
What they see is more money they'll likely have to spend just doing the basics.

ReplyQuote
Posted : May 16, 2014 12:01 pm
sunshinefun
(@sunshinefun)
Trusted Member

Just for fun, why don't we break down the $24,000 commission and see what the agents/agencies and a such actually get.

What is the average spent on advertising a property?
All that driving around?
The cheap little signs that they put out front?
The gross receipts tax?
What does all this cost?

Now we know most of the expenses are deductable, so what is the real net net for the realtor at the end of the day?

ReplyQuote
Posted : May 16, 2014 12:22 pm
JulieKay
(@JulieKay)
Trusted Member

Make sure you break down the remainder into an hourly rate for the work our Realtor has put in the last seven months. I would say on average 5 hours per week, so 175 hours, give or take.

The NAR stats show that the average Realtor in the USA takes home from $28K to $60K per year. There are always outliers of course, but it is a myth that Realtors are, in general, getting wealthy off of commissions.

It always amazes me people that try to "cheap down" a real estate transaction and try to extract every last penny from the deal for themselves. You DO get what you pay for. We have neighbors on STX that have had their houses for sale for years. One specifically, he refuses to make any improvements to the property (it's a dump), he won't reduce the price (he needs to drop it AT LEAST $100K in the current market), and he drove his Realtor down to a combined 3.5% commission (1.75% for each side). And he blames the fact that his house won't sell on his Realtor. I've talked with her several times and frankly, she's pretty much given up on him - she can't continue to waste money marketing his property when he's so uncooperative. So the house continues to languish in the listings, like so many other homes, and then becomes a poster child for a bad market. No one wants to buy someone else's mess. Clean it up, hire a good Realtor, and get it sold.

Always remember: The TRUE value of a house/condo is what someone is willing to pay to live in it.

Values on paper are worthless until someone commits to buying at that price. People seem to forget this with all the "your home is your biggest investment" hype a few years ago. Your home is your most expensive purchase (generally), but it is not an investment. Selling at a profit (or even breaking even) is never a guarantee, and the biggest factor is YOU.

ReplyQuote
Posted : May 16, 2014 1:02 pm
vicanuck
(@vicanuck)
Expert

My impression is that the VI market is over saturated with agents and that alone should drive the commission rate down somewhat IF market forces were allowed to prevail. There are also many home owners who list but really don't care if the property sells unless its for a tidy, windfall profit like if the refinery reopens.

ReplyQuote
Posted : May 16, 2014 1:18 pm
JulieKay
(@JulieKay)
Trusted Member

In my experience, *every* market is over-saturated with agents. Doesn't matter if it's an "up" or "down" market. Too many people come into Real Estate thinking they can make the $$$. It isn't true, it takes a lot of hard work to be a good agent, and you have to out-compete.

This isn't about market forces - it's about choices and expertise. If you're going to have plastic surgery, and you have options of surgeons - who would you choose? The best or the cheapest? Or how about a lawyer to represent you in your divorce? Best or cheapest? Generally they are not the same person. It's the same premise.

Good Realtors do not negotiate their commissions because they know what they are worth - and the more money you make, the higher your expenses.

Holding on to a property in hopes that values will rise or there will be a shift in the market is very, very rarely a winning proposition. And a property that has languished several years and aged in sale will still always sell for less in an event like the refinery reopening. I don't see many "tidy winfalls" even if that happens - too many properties for sale right now, and expecting pre-market crash profits is foolish hoping. Even stateside markets are years, if not decades, away from those sorts of numbers that we all saw during the bubble. Stabilization is a good thing.

But hey, keep sitting on a dump of a house that's falling to pieces, and hope for that "windfall." *wink* The best thing for the STX market would actually be for sellers to price their houses according to the market that they are currently in - and we would have more sales, which would ultimately cause prices to start to rise. That would actually be market forces. But of course not everyone will do that because they are clutching a property that no one will pay the price they're asking to buy, and the world keeps on turnin'.

ReplyQuote
Posted : May 16, 2014 1:29 pm
JulieKay
(@JulieKay)
Trusted Member

Btw, I am not an agent, but I have many friends who are, around the US and on the island. 🙂 Just a disclaimer.

ReplyQuote
Posted : May 16, 2014 1:30 pm
vicanuck
(@vicanuck)
Expert

JulieKay you make excellent points for sure. We were very lucky to find out our STX home had actually increased in value in the 5 years since we bought it. Our Scotia balloon expired 05/13 and we had to reapply. At the end of the day, when we signed off, the house had appreciated $45 K and this closed back in 01/14. We had done really no improvements either. Who woulda' thought. I thought it would have been the other way around.

ReplyQuote
Posted : May 16, 2014 2:18 pm
JulieKay
(@JulieKay)
Trusted Member

That's great, vicanuck! We are selling at a loss, nothing terrible, still getting some money out of it...but we wanted to get the house sold too. We count the loss as the cost of living in paradise all those years. 🙂

Edited to add: We found though that our house appraised for $100K more last summer (when we thinking about doing a re-fi) than what we are actually selling it for. There's often a gap between appraised (bank) value and sale value. In our experience it seems to be fairly significant on STX right now.

ReplyQuote
Posted : May 16, 2014 2:29 pm
Alana33
(@alana33)
Expert

"Just for fun, why don't we break down the $24,000 commission and see what the agents/agencies and a such actually get."

$24,000 divided by 4 = $6000.00.

Let's not forget, the commission is split 4 ways:
Seller's side: listing agent and their agency split 3%.
Buyer's side: their agent and agency split the other 3% sub-commission.

This is before one even breaks down money spent on gas, lock box, all the time you spend, creating the MLS report and taking and uploading your best pictures of the property, advertising, making appointments, showing property, communicating with owners, other agents and their potential buyers, keeping track of showings, producing an open house, negotiating the best deal possible and finalizing details on a offer to purchase/contract, plus helping the buyer or seller navigate thru to closing and having keys in hand at the end of the day.

The road traveled is fraught with details and pitfalls and until you have finally closed the deal, you are not done working.
There is a whole lot of hard work involved for Realtors before collecting any commission and it's not done until all paperwork it signed off on, money changes hands and keys are handed over.

There are many deals that do not go thru so then it's back to the beginning.

There are different types of appraisals as well as reasons for them so if you plan on having an appraisal done be specific re: your needs and reasons for the appraisal with your appraiser. If a buyer has to obtain a mortgage, the only one that counts, will be the bank's appraisal.

ReplyQuote
Posted : May 16, 2014 5:08 pm
Page 1 / 2
Close Menu