Anon... Your bit on the commission is right on, and Merv's response to it blew me away (as I thought I was the only one attempting it). Feel free to negotiate with whichever broker or agent you might hire.

I'm in a small market with a low median price of sale. Yeah there are 600k priced sales to be had, but that is the exception not the rule around here. I'd give you a smoking deal and you'd get all the services you'd need at a fair negotiated rate. Please have your next agent explain his fee structure to you and I think you'll have a better understanding where your proceeds of sale are going.

Merv, thanks again for the kind words in the email. I may have to hit you up on your service model. I've been tinkering with mine but most clients simply settle on a % fee of final sales price. I think it's my presentation of facts to the client.

Thanks...My wife and I want to get out of here too. Cost too much, too much traffic, etc. We will put our home on the market next spring. We don't know what the market will be like and we won't get as near as much for it as we would have last year. If you consider the abnormal market of 2003 to mid-2005, prices ran up a whopping 20 to 25% per year for whatever reasons: easy to get cheap loans, low interest rates and speculators, a period of high demand. It is what it is. I believe prices could roll back 20-25% to compensate for the abnormal run up. When there are 4,500 homes on the market (Loudoun County) and only 350 contracts being written per month, those that have to sell have to attract a buyer at a price a buyer is willing to pay. People that bought homes the last two years may not have any equity remaining.

On the economy: I agree that the DC Metro area economy is robust and creating 1,000's of new jobs annually. New people coming to the area will have to live somewhere. If we are over built and over selling, inventory will have to dissipate before prices stabilize. It is simply supply and demand.

On commissions: We run our business very different than 99.99% of any other agents. We offer a fee for service model to sellers and buyers with the potential of significantly reducing commissions paid. We have several clients that only offer 2 to 2.5% to a buyer agent and we support that decision.

On agents: The home buying rush of the last 2 to 3 years attracted many into this business that had limited to zero business skills. Being in real estate was easy money. There was a corresponding agent bubble. Now, that bubble will dissipate as well as most agents will not make any money: too many agents, not enough potential clients. We view this as good for the industry. It weeds out those that shouldn't be in the business.

I am sure there are some (maybe many) agents that put their own interests ahead of their clients. Those that do, violate ethics standards and the law. Agents have a fiduciary responsibility to their clients, i.e. clients interests first. That is why I recommend that if you don't trust your agent, find one you can trust.

Anyway, thanks for the thought provoking comments and good luck on your sale and move.

As a seller, I don't have an urgent motivation, since my wife and I are trying to relocate to the Winchester region and repurchase a similar size house for 1/2 the price, so we can switch to a 1-income family.
Instead of paying $1500/mo in daycare costs, which is pretty much equal to owning two homes. So our reasons and motivations aren't as dire as some who speculated and are getting screwed or others who just bought too much house, can afford it, and now can't sell it for what they bought it for. I'm sure alot of those people are the ones throwing in Hummers and Tickets to Hawaii.

But honestly, it just seems to me that agents who keep wanting sellers to lower their prices more and more seem bias to just get that sale. Just using my own home as an example. If I sold at $650k, the buyer/seller agents get $39,000. If I sell at $600k, they get $36,000. A meer $3,000 loss to them, but a $50,000 loss to me. All things being equal, I'd say prices aren't likely to fall much more. I'd be hard pressed to believe that a booming Washington Area economy is going to see housing fall more than 10%, tops (ie: $700k home repriced at $630k). The fluff and speculators are gone. The only thing left is regular folks, with regular jobs, and built in bottoms of mortgage loans, home equity, etc...

Anon: Thanks for your comments. This is a difficult market for sellers and behind every seller story are details of needing to get out of the market that have been left unsaid.

On each and every listing engagement the very first question I ask is: Why do you want to sell? It is of utmost importance to understand the motivation. I have advised potential clients not to sell in this market if they don't have to. That is in their best interest, not mine.

Again, thanks for the feedback (and for being a reader of our blog).

Anon.. you are right to a degree. I'm an agent and I would put you in the less motivated category of sellers. I've been seeing plenty of less motivated sellers as of late. Nothing wrong with less motivated sellers most are very nice people to work with.

I do get commission when a listing I'm representing changes hands, and I want a client that is ready to do that for whatever the reason. I'm not in the business to see clients maximize their investment for profit by all means. Many took advantage of the market and I was right there when it was easy to enter a transaction. No problem.

It is my job to get the best possible price for the listing I'm representing though, but to me it's different than maximizing an investment. If there are no buyers in the market for your home at 599K then it won't sell. And like you stated you will sit and wait. Sitting and waiting is expensive for an agent trying to get a contract on your listing (if they are advertising). It's a loser for the agents business, since the agent collects no fee unless your property changes hands.

I hope to see more listings be pulled off the market from the less motivated sellers. This is a cycle we are in and I bet the market comes back again and there will be buyers for your listing. I don't know, or won't pretend, when that will be but at the same time I have to practice my business in a smart fashion. If my clients won't consider adjusting to the market, I could be faced with making a difficult choice.

I sincerely hope you get your price, and don't doubt that you will. Eventually.

Your "The hardest thing we do in a buyer's market" article might be a little bit bias in favor of the Agent.

I do agree, in a buyers market, sellers have to give "some" ground. But Agents who tell sellers to drop the price until it a reaches a point where it sells in 3/seconds, seem to me a way for Realtors to ensure they can make their Lexus Payment next month.

In all truth, anybody can "sell" their house at any moment they want. If I priced my house at $1.00, it would be gone before the ink dried on my relisting price. What isn't being factoring in is that most folks (not including myself) trying to sell their home can't lower their price just to make a sale, because there is a pretty good chance a lower price will be less than the loan they owe the bank. Or with the
loan+commissions+home equity+etc, the selling might come out with $0.00
once all is said and done. And obviously, once that house is sold, they need some cash to buy the new home they plan on moving into.

So my theory is that, because of all the payments being deducted from the home sale, sellers can't go any lower, or they risk not having enough money for their new home. That is most likely why we've seen a minimial decline in overall prices. The 1st half of 2006 experienced the removal of the fluff in the price of homes. Even myself, I dropped my price from a SRA Certified Assessed price of $649,990 to $599,990 and I'm still sitting. If the "market" expects me to lower it another 50,000 or 100,000, forget it. I'll just sit on this price and wait. As I'm sure others are doing. Those who wish to sell on the cheap can do so, and all I can say is, "thanks, one less home to compete against".