Posts Tagged ‘marketing’

Here’s how the numbers shape up December 2015 vs. December  2016 in the Triangle Real Estate Market:

December 2015 closed sales

2838 closed sales, 61 average days on market, average list price $268,745  average sale price $263,923

December 2016 closed sales

2860 closed sales, 50 average days on market, average list price $279,959 average sale price $275,777

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Team Michael Sullivan

Buying, selling, leasing real estate—Call us!  We wish you very happy new year.

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Straight talk on real estate commissions

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.

To learn more about our real estate practice phone us at 919-493-7633 or email Michael@TeamMichaelSullivan.com

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