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Archive for the 'Selling a Home in South Florida' Category

How a South Florida real estate agent makes money

People always say to me “Wow, you make a lot of money with that six percent commission, right?  I mean, six percent of $600,000 is like $36,000.”   Six percent of the sale price on a $600,000 house is indeed $36,000.  Would that I put that in my pocket, but, alas, this is not how real estate works.  The way it works is this:

First, the commission is usually split equally between the listing agent and the selling agent.  So the agent who brings a buyer to my listing and sells it gets three percent and I get three percent.  “But still, that’s $18,000,” you say.  Yessir, that’s $18,000 but my brokerage takes $8,100 of that, leaving me with $9,900.  OK, you say “But that isn’t too bad, I mean almost ten grand for sticking a sign out front and waiting for the phone to ring.”

But of course, it’s much more than that.  Here’s what I’ve spent so far on my latest listing in South Miami/High Pines:

Staging decor, silk plants, candles, etc.                $344
Mulch and plants                                                       22
Had the house professionally cleaned                     200
Professional photography, virtual tour, links           274
“Just Listed” 4 color jumbo postcards                      130
Ad for EWM flyer                                                       100
Food and drink for brokers’ open                               57
Total to date                                                         $1027

Next month I’ll have the house cleaned again and send out more postcards and do more ads.  And none of that counts my time spent answering the phone and holding open houses and providing reports to the seller and blogging about the listing. So you can see that what looks like big, easy money usually ends up being not so big and not so easy.

Also, don’t forget that $600,000 sales don’t come along that often.  The median sale price for a single-family home in South Florida is about $235,000 now.  Admittedly, I wouldn’t spend as much money or time on a smaller listing but I still invest what is appropriate for the projected income.

Lastly, in this market, no matter how hard you try, some homes just don’t sell.  My track record has been pretty good, but in the last year I’ve had two that didn’t sell.

If you’d like to know more about South Florida real estate, homes in easy-living South Miami/High Pines or Coral Gables, you can reach me at 305-401-8058 or bishopric.r@ewm.com.

How I sold an impossible to sell house–The End

Here are Part One and Part Two.

By now it was April and I was on a late-season skiing vacation with my wife’s family in Park City, Utah. I’m sitting in front of the fire nursing a brandy deciding whether to jump into the hot tub or read a book while everybody else is up on the mountain throwing themselves downhill on sticks of wood, probably breaking tibias and fibias and whatnot even as we speak.

The cell phone rings and a very nice guy named Jim and I talk about the house. He says he already stopped by and introduced himself and Theresa showed him the property. And he says he’d like to buy it. Would pay cash, thank you. Wow, I should go on vacation more often.

He was offering about a hundred and fifty thousand less than Theresa wanted. So I gulped and called Theresa and she said that he made the same offer to her and she showed him the door and said don’t let it hit you on the way out. Read the rest of this entry »

How I sold an impossible to sell house–Part Two

In case you missed Part One, here it is.

Before meeting with Theresa and her daughter and son-in-law, I toured the neighborhood sincerely wishing I was driving a beat up old car and packing a pistol. The house next door had a mattress on the front yard and the windows were broken. Some guys were lounging on the porch with a boom box and beers. The two houses across the street had every opening barred and the yards fenced in. Really big, really ugly dogs didn’t like the way that I looked at their domains. I imagined them contentedly gnawing on the bones of burglars stupid enough to go through the gates.

I spent about two hours with the family at the kitchen table going over comparable sales and paperwork and talking about how we might sell this house and to whom. Theresa had a price below which she didn’t want to go, and I thought at the time that it was realistic based on what else had sold.

It was not realistic.

My listing began, “Old Florida gem…” and went on to describe the strongly built house with fairly new roof as perfect for someone who wanted to walk to work in the Civic Center or as an investment.

The sign went up in the yard and I got a lot of calls from neighbors and friends and family of neighbors. “Wow, you want that much for that house in this neighborhood?” was the basic response in various languages and degrees of shock. Read the rest of this entry »

How I sold an impossible to sell house–a true story.

My friend, Dr. R., an eye surgeon, sends me referrals from time to time. Being an eye surgeon, most of his patients are older and many are little old ladies whose husbands have died and as they’re lying there in the chair they say “oh Doctor, I’ve just got to sell my house!” Bingo. The problem is the houses. This is a story about one of those houses.

Theresa, who just turned 85, owned a house that was purchased new by her parents in 1938. Built well, it was in a nice little neighborhood called South Allapattah Manor outside of downtown Miami.  In 1957 Theresa and her husband bought the house from her parents and they raised their family there. She has lived there ever since, maintaining her house—by herself after her husband died twenty years ago—as the nice little neighborhood fell into disrepair around her. The houses became ramshackle, the zoning changed, the demographics declined and property values went south. The Civic Center with its jail, courthouse and states attorney office sprang up. And bail bonds offices moved in to service their clients.

Then in the seventies, someone bulldozed the houses on the southwest corner of the block and built a strip mall and someone else bulldozed the houses on the northwest corner of the block and built a crematorium.

Dr. R. had sent me to sell a house next to a crematorium! Read the rest of this entry »

Two easy ways to value your house: right and wrong.

There are two easy ways to put a value on your house in South Florida.  There’s the wrong way:  use a site that purports to value your house with just a click.  And there’s the right way:  get a licensed Realtor to provide you with a “broker price opinion.” 

The automated sites generally do not do an accurate comparison within a short enough period of time. 

To be accurate, a price analysis has to compare four factors:  size, age, geographic proximity and date sold.

When I do a BPO, I compare homes within +/- 10% of size, +/- 10 years in age, within one mile and within 6 months of sale date.   For example, a house with 2400 square feet of living area, built in 1965, would be comparable only to houses between 2,160 and 2,640 square feet, built between 1955 and 1975, within one mile of the subject and sold in the last six months only.  The automated sites usually include sales that are outside those parameters and this creates unrealistic expectations.

My neighbor down the street is listing his house with me (jinx, I hope!).  For the last couple of months he’d come out of the house when I was walking my dog past and wave some more printouts at me.  Then I’d sit down at the computer, look up those sales Read the rest of this entry »