Consumer Reports: How to Bargain on Home Brokers' Commissions

Yes, you can get your real estate broker to accept a lower commission. That's the word from the September issue of Consumer Reports, which offers home sales tips and a survey on brokers fee.

Here's a news release they sent to me:

"HOME SELLERS CAN HAGGLE ON BROKER COMMISSIONS; PAYING LESS MAY NOT HURT SERVICE OR SALE PRICE -- CR

Many real estate brokers are willing to negotiate their commission rates with sellers who try to haggle, according to an exclusive survey from Consumer Reports September issue.

• Forty-six percent of sellers CR surveyed attempted to negotiate a lower commission rate.
• Roughly 71 percent succeeded.
• The survey also found that sellers who paid commission rates 3 percent or lower were just as satisfied with their brokers’ performance as those who paid 6 percent or more, suggesting that haggling can’t hurt.
• Respondents who paid extra, in fact, were more likely to say they had regrets about the selling process. Nearly one-third said they should have been more assertive in negotiating their agent’s fee.

Sales Tips for Home Sellers:

• Price it right. Homes sell most quickly if they are put on the market at a price that’s just a bit lower than those of similar homes in the area. Don’t waste time floating a high price out there just to see if you get a nibble. If you don’t get an offer in four to six weeks, drop the price 4 to 6 percent.

• Think round numbers. About 80 percent of people buying and selling homes today get information by searching online multiple-listing sites like Realtor.com, which is run by the National Association of Realtors. To conduct a search on that site, buyers specify a price range, beginning and ending with round numbers. So if you price your home that way, more people will see it.

• Pick the right improvements. You might want to update your kitchen or a bathroom for your own comfort, but don’t expect to recoup the project’s whole cost when you sell your home. In today’s market, you might get the best return if you spruce up the outside of your home by adding a wood deck, energy-efficient windows, or new siding. CR’s September issue has a list of the most popular home improvements and whether they pay off.

• Consider the type of listing. If you’re using a broker, there are two common ways to list your home: designating it as an exclusive agency listing, which means you have one broker but can still sell it yourself and save the commission. The second, an exclusive right-to-sell listing, means only the broker you designate can offer your home during the listing term (often six to 12 months), and you can’t sell it yourself.

• Interview more than one agent. Ask around for recommendations and meet with several possible candidates. They should clearly explain how they would market your property and describe how they handle open houses and newspaper and Internet advertising. Ask whether there will be any advertising costs, transaction fees, or other incidentals that you will be expected to pay.

Broker Fees & Services

Paying less [in fees] won’t hurt the quality of [broker] service. While some of the survey respondents who paid lower commissions got fewer services from their agents, the gap wasn’t significant. For example, 81 percent who paid 3 percent or less said the agent provided a competitive market analysis of their home, compared with 87 percent of people who paid 6 percent or more.

“Finding satisfying real-estate services shouldn’t be too hard. All the major chains and independent brokers scored very well in our survey,” said Amanda Walker, senior project editor, Consumer Reports, “So if you’re looking for an agent, shop by personal recommendation or commission split.”

Other Brokerage Fee Survey Findings:

• Eighty-two percent of respondents who sold with the help of an agent received $5,000 less, on average, than their original asking price.
• Almost all of the 17 percent who sold their homes without an agent said they received about what they originally asked.
• Sixty-six percent of Consumer Reports’ readers who used a real estate agent in buying a home paid an average of $5,000 less than the listing price, and the 34 percent of buyers who negotiated their own deals, without an agent, paid close to the asking price.
• Eighty-six percent of CR’s readers who put their homes on the market made a sale; only 8 percent of would-be sellers eventually gave up and took their homes off the market. (The rest were still trying to sell when the survey was completed.)

Consumer Reports’ September issue offers a complete real estate guide with helpful advice for selecting the right broker, and tips for buyers and sellers. Here are some highlights for sellers. For more survey results, helpful tips for buyers and sellers, advice on how to buy a foreclosed home and which home improvements matter most, the Consumer Reports September issue is available on newsstands August 5 or online at http://www.consumerreports.org/."

source: Consumer Reports

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Hidden Fees for Doggy Daycare, Plate Sharing & Beverages

A doggy daycare/boarding facility provided my family with a few extra lessons in frugal living. Due to a fine-print charge, we paid far more than expected for dog-sitting services. And while talking with a friend, I've discovered that a number of consumer services carry extra fees that inflate our costs.

Here's what happened to us: We were traveling and faced limited options for our dog. We could not bring him with us and friends weren't available to watch our dog Scruffy, pictured on our couch. Therefore, we booked our dog at an overnight boarding service that charges $35 a night. But in making reservations, we did not consider the additional fees, including a bathing fee and a late pick-up fee.

Basically, if your dog stays for two days or more, the doggy daycare operator automatically gives your pet a bath and charges you for grooming. (Prices vary.) Additionally, if you pick up your pet after 2 pm, there is an additional fee of $15. The service also charges a $15 evaluation fee.

Bottom line: We paid far more than $70 for a two-night visit.

I shared my doggy daycare experience with a friend and together we brainstormed about other hidden fees that can bust a budget:

1) Extra cruise fees: Family cruises, especially some of the budget lines, are packed with hidden fees. For example, day trips (diving, sightseeing, touring) at different ports cost extra. Using the gym or the cruise ship spa services may also carry additional fees. And even with an all-you-can-eat menu, some ships charge extra for soda, coffee, juices and other beverages.

2. Tailoring fees: We purchased a suit for my middle son at a very fair price, but when we brought the suit to the tailor, we were unpleasantly surprised by a $30 charge to hem the pants and nip the waist.

3. Plate sharing fee: Some restaurants charge a fee (about $2.50) if you share your entree with someone at your table. The eatery doesn't give you more food, but charges additional for splitting the entree.

4. Ticket broker fees: Some online and phone ticket vendors charge hefty transaction fees. I purchased bargain tickets and the fees were almost as much as the individual tickets.

The lesson: Ask extra questions and fully investigate the total cost of a product or service.

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Digg!

Out of Balance: Overdraft Fees Sting Consumers for $17.5 billion

Ouch. Overdraft fees are a major ripoff and banks are rigging the system to get more bang out of our bucks. That's the word from a new survey. This guest post features details:

"U.S. banks and credit unions are using abusive overdraft loans to generate $17.5 billion in fees each year, according to a major new study, entitled “Out of Balance,” from the nonprofit Center for Responsible Lending (CRL).

The study finds that financial institutions are deliberately using overdraft systems that are designed to generate more overdrafts from customers, resulting in enormous fees for banks and credit unions.

“Some of our largest financial institutions are hiding behind a smokescreen of misleading terms and murky practices that encourage costly overdrafts,” said Eric Halperin, director of the CRL Washington, D.C. office. “Banks should protect customers’ funds, not plunder them with high fees and harmful practices.”

As the report explains: “In a system enormously out of balance, consumers pay $17.5 billion in fees for $15.8 billion in abusive overdraft loans.” In addition, the report finds that debit card overdrafts are now the single largest source of overdraft fees.The $17.5 billion in fees is an increase over CRL’s 2005 estimate of $10.3 billion in overdraft fees.

Unfair bank practices identified in the CRL report include:

(1) posting charges against a checking account quickly while intentionally delaying the posting of deposits,

(2) lowering account balances by re-ordering debits to clear higher-dollar items first, and

(3) failing to warn a customer during debit card point-of-sale or ATM transactions if they are about to overdraw their account so that they may cancel the transaction if they choose

The Center for Responsible Lending is a national nonprofit, nonpartisan research and policy organization dedicated to protecting home ownership and family wealth by working to eliminate abusive financial practices. "

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Previous Posts
Today:
Guest Post: Don't Waste Money on Insurance for Rental Cars

Yesterday:
Hearts, Diamonds & Dollars: Tips from Warren Buffett & Cotton Threads
The Car Repair Fund & Other $$$ Goals for 2008
How to Sell Plasma TVs!?! Beware of Free CDs w/Biz & Tax Tips

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Digg

Avoid These Bank & Credit Card Fees: The Link to My Latest Miami Herald Column

Banks, credit-card companies and other financial services companies continue to find new ways to charge fees. That's the word from bankrate.com. I recently interviewed an analyst from that research firm.

Our interview resulted in my latest column in the Miami Herald. Here's a snippet from that column:

Foreign Currency Surcharge: Check your credit-card statement after traveling abroad. Some institutions add a 3 percent surcharge to overseas purchases. The fee has become a ''lighting rod'' for consumer complaints, McBride says, because the fee comes with no additional services. He gives high marks to Capital One for skipping the fee. Others such as Washington Mutual and Household Finance have foreign currency surcharges of only 1 percent.

-- source: The Frugal Duchess in the Miami Herald.

Here is the link to the full article.
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