Why it Works
By law, real estate commissions are negotiable. What this means, is that commission rates are determined or set
independently by individual real estate companies (brokerages) and are not set by any governmental body, real estate board or association.
Additionally, some real estate companies will allow their salespeople (agents) a certain degree of latitude in negotiating the commission rate to
sell your home. This is of course no different than Ford or General Motors suggesting a retail price for their vehicles and then allowing a certain amount of bargaining at
their dealers. So, just as it is prudent to shop around for the best deal when you are buying a new car, it is equally important to shop around when you are hiring the
services of a Realtor.
“Commission rates are determined or set by individual real
estate companies (brokerages) and are not set by any
governmental body, real estate board or association”
Each and every day, home sellers and home buyers employ the services of real estate professionals. However, as a home buyer, it is unlikely you would ever be asked to pay
any portion of a real estate commission. Since it is doubtful your Buyer's Agent is working for free, how and by whom does this Realtor get compensated? In almost every
home sale, the entire commission payable to both the Listing Agent and the Buyer's Agent is paid by the seller. How this
works, is that through the MLS, the Listing Brokerage offers a percentage, usually half (usually 3%), of the total commission to the Buyer's Brokerage. The two agents
involved share credit and commissions in the sale of the home. The majority of all home sales are transacted this way. As a
home seller, therefore, you will be called upon to pay commission for both sides of the transaction. While this may not seem fair, it is fact. For this reason, it is
essential to secure the best possible commission rate with your Listing Agent when selling your home. Paying a high rate of commission, such as 7% on $100,000, will not
make it sell any faster. There is absolutely no correlation between the total amount of real estate fees you pay and the
time it takes to sell your home or the price you get for it. Paying more simply means paying more.
“Paying a high rate of commission, such as
7% / $100,000, will not make it sell any faster.”
The good news is that real estate commissions seem to be falling. The monopoly that Realtors have held over the MLS system is weakening as
a result of comprehensive Web Sites that enable the public to access this information. Web services are creating new competition to the industry which will ultimately
lower commissions rates. More specifically, it is the listing side of the commission that is feeling the downward pressure.
The role of the Listing Agent in the sale of a home is more like that of a property manager than a salesperson. Speculation suggests that
one day the Listing Agent will be completely replaced by the Web in that the public will pay a flat fee to place their home on a national MLS site. The emergence of
"buyers only" brokerages throughout the United States certainly lends credence to this theory. Our
home seller clients enjoy a much lower listing fee, than a Traditional Brokerage. Our MLS Flat Fee program is just $499!
This allows you, the home seller, to save on fees and commissions and still attract all the potential buyer's for your home through effective use of the MLS system. It really
is the best of both worlds.
Don't wait another day, take advantage of this great exposure! If you have any questions, please
Email Us. |
