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Sunday, November 9, 2014

Straight talk on commission splits

Straight talk on real estate commission splits

Did you know that how your agent divides the commission that you pay to sell your home can hurt you and you might never know it?  Let’s face it a 6% commission is a lot of money.  It is customary in the Raleigh/Durham greater Triangle real estate market that the commission you pay as a seller to sell your home is divided between listing agents and buyer’s agents.  Many times the split is a simple 50/50 split, 3% to the buyer side and 3% to the listing side. After all without a buyer there would be no sale and certainly no commission. Other times it isn't a simple split; and that’s where you a seller can be hurt.

Agents are required to disclose to sellers how the seller paid commission will be split, but disclosure as we all know doesn't always mean explanation with respect to consequences.  For example let’s say the a couple lists their home for sale; and let’s suppose that the sale of their home is going to be a short sale, the seller owes more on their mortgage than is supported by current market conditions. Their agent takes the listing, knowing and disclosing the short sale and he markets the property in multiple listing with a 2.5% commission payout.  He is retaining 3.5% because he’s going to have to work hard.  His listing agreement notes the commissions split but the agent doesn't explain the consequences of the split to the seller.

The listing agent doesn't explain to his clients that although they aren't “supposed to consider” commission payouts when searching multiple listing, buyer agents are only human and to expect them not to consider payment for work is naïve.  So many times when competing with a 3% paid commission against 2.5% or 2.4% commission paid, a buyer agent might be overlook the properties paying less. In the case of the sellers mentioned above with their short sale perhaps this was the case.  The property was aggressively priced but only after a series of price drops but still it languished on market. So long that the bank began foreclosure proceedings because the owners had stopped paying their mortgage. 

Ultimately the home did sell and close but it did so after about six months.  Perhaps the listing agent could have expedited the sale of the home; which he is required to do, had he explained the consequences of his actions with respect to commissions paid.  Did he?  I doubt it because why would any seller risk foreclosure when they could avoid such drastic measures.


My advice to sellers and buyers alike, ask questions.  Ask your agent if how they divide YOUR money is going to hurt you or benefit you. You have a right to know.

Friday, December 17, 2010

The Herald-Sun - Building starts remain low here

Until we are back to work with skilled, unskilled and manufactering jobs then housing starts will remain low.

The Herald-Sun - Building starts remain low here

Interested in buying, selling, leasing or renting real estate in the Raleigh, Durham, Cary and Chapel Hill North Carolina region? If so, then email, text or phone me, Michael Sullivan at 919-608-2372.

Tuesday, December 7, 2010

Today's Market; It Ain't Pretty

Durham Area Trends

Price Activity
Current Median Q3 201, for Durham 184,900 for the U.S as a whole $177,100
1 year appreciation for Durham .3% and for the U.S.-.6%
3 year appreciation for Durham -1.1% and for the U.S. -19.9%
3 year equity gain/loss, Durham -$2,000, and for the U.S.-$44,000

These figures come from NAR, the National Association of Realtors. Although median prices in the Durham, NC market are up slightly and are ahead of national median prices, it is important to understand that no market exists in a bubble. The Durham market is reliant on the U.S. market and the entire global economy. So, without equity as shown by the three year gain, or more accurately loss, home sales will remain sluggish simply because consumers don’t have the money to purchase homes. Consumer home equity is lost and will take years to recover.
Home owners can build faster equity in their homes if they make additional payments to principal, avoid borrowing against their properties and if they make cautious investments in enhancing their homes. Owners contemplating a home sale should gird themselves too; there should not be a presumption of appreciation but rather a presumption of a loss.
Similarly, owners considering a home sale should engage a real estate professional sooner rather than later to discuss merchandising their property, staging their property and enhancing their property so that it stands out among the competition.
Interested in doing so? Call me, Michael Sullivan, I’m always happy to walk through a property with an owner. I can also offer rental and leasing solutions to owners in a position to move in that direction.

Wednesday, December 1, 2010

The Herald-Sun - The fourth smartest city in the nation

As those of us who live here have suspected all along, we're pretty bright. Be bright too and move to Durham NC. I will find you a home to buy or rent.

The Herald-Sun - The fourth smartest city in the nation

Wednesday, November 17, 2010

The Rental Market



Renting and Leasing
According to CoStar Group, the #1 commercial real estate information group, almost every multifamily market saw strong leasing, rising demand and falling vacancy rates in the third quarter as the nations rental market continued a solid 2010 rally. As of now rentals should continue to surge over the next five years, with a growing supply of renters and very little new product in the planning and building pipeline.

Vacancy rates are above historical averages and in many multi-family communities robust incentives are being offered to move renters in. Still the national vacancy rate compiled from the 54 largest markets declined for a third straight quarter in 2010. Raleigh/Durham, Charlotte, Nashville and Dallas/Fort Worth have seen the highest demand and the sharpest decline in vacancy rates.

CoStar Group November 3, 2010

The Herald-Sun - This weekend s Durham Art Walk will feature addition of a Holiday Market

The Herald-Sun - This weekend s Durham Art Walk will feature addition of a Holiday Market