"off the run" Brokers

I got a good lesson in "open" listings, as opposed to exclusives, from urbandigs and johnrealestate1 recently. I wouldn't be at all surprised to find that more sellers are hoping to have multiple brokers take an open listing and save themselves half the commission. That would leave out the big 4, who I believe only do exclusives.

On a related note, there seems to be an uptick in FSBO listings (as well as these small broker listings) on Craigslist.

Haven't noticed much change in the broker mix of the listings I've seen. The majors, with their hundreds (or thousands) of agents will always have the lion's share, but there have always been smaller players in the game. Barak has been around for years, though I believe Core is relatively new.

Re inflating the $$$, some brokers at firms both large and small have been known to "aggressively" price a listing, usually at the seller's behest. In a rising, smokin' market, that was a relatively low risk approach. In a flat-to-declining market, that's a recipe for disaster.

Sellers ALWAYS want to minimize the broker fee, regardless of the environment. The question is always, what's the best way to do this? Fees, by law, are negotiable, and some of the second and third tier firms, in particular, just MAY work for a lower commission than the majors. Offering an agent, say, 2.5 or 3.0 % for bringing a buyer (the "open" listing mentioned above) is another.

The thing is, an "open listing" really isn't a listing at all, just an agreement that IF a buyer is brought, THEN a fee will be paid. It sounds fair enough, but since the seller can make this agreement with as many brokers as he / she wants, and can always sell on his / her own and pay no fee, most brokers don't dedicate a lot of time to open listings. And then, there's always the FSBO route.

Open listings and FSBO's can work best when the urgency is not there. Also, pricing is key - in the case of a FSBO, a savvy buyer will want to "share" in the perceived "savings" (in their mind, why should the seller get all the benefit?)

With an "exclusive" (the typical) listing, a seller should expect the listing agent to sell his apartment in a reasonable time at a reasonable price. With an open listing, it should be considered just another possible source of securing a buyer, but the primary responsibility for marketing the apartment rests with the seller.

The subject of the buyer "sharing" in the savings has been brought up a lot as a negative for the seller. But isn't that the point? The less $$ goes to various middlemen, the bigger the pie is for the principals. That means two things - 1) more money all around, and 2) higher likelihood of a deal getting done.

To be clear, I am not at all saying brokers have no role. That would be the case if the real estate market had perfect information and no other transactional friction. As is, brokers can help inform the buyer (especially the newbie, as ali and john pointed out), and help navigate the process. That said, if a seller and buyer are able to make do without them, or to convince them to work for less, the savings is substantial, and saying those savings have to be shared doesn't reduce that point.

Tenemental, Good point! That is why I wonder how Citi-habitats does so well since there data base is all open listings. You can simpley beat the 15% fee if you go out and scout the buildings then make calls. Its a lot of leg work but if you want to beat the rental fee you can just dont be LAZY.
AS far as the exclusive listings thoughout the city. I think there was way to much building going on and prices to high for normal people to afford. Now the market is Saturated and will continue to be until the building stops or prices drop a signifgant amount.
I dont think the city infurstructure can handle many more people before it fails.
I think most these condos were thrown together so fast to jump on the money train housing trend producing redundant cookie cutter apartments. The City should have been rebuilt first with proper transportation for all these new people and housing, then build condos but at a moderate pace.

newbuyer99-

Sharing in the savings - not a negative at all for the seller. My point is that, ASSUMING a way to establish THE, EXACT, market price that an apartment should sell for, a FSBO should expect that a savvy buyer will want to share in the savings because the seller is not paying a broker fee. In my limited experience with FSBO's, I've found that many (not most) FSBO's fully intend to keep the savings all to themselves.

The tricky part is that there is not an exact, predictable market price for ANY apartment. It can be a little awkward trying to establish a "base" price from which to split the difference. And - consider this - if the seller is willing to share the savings with the buyer, the seller is saving about 2.5 - 3.0% on some "arbitrary" price. Who's to say he wouldn't have netted MORE $$$ by listing with a broker?

I'm certainly not stating that one course is preferable to another. Only saying that the situation is a bit more complex than what it seems at first glance, particularly IF you consider what a listing broker brings to the table.

John - I agree, that's what I meant by perfect information vs. real world.