According to the Real Estate Publication Real Trends the amount of money you pay to sell your home is on the rise. Due to the slowing market, real estate agents claim they have to market homes more aggressively in order to get them sold. A quick read between the lines interprets this to mean they have to spend more of their own money. What should you expect to pay when you list your home for sale?
A quick recap of the 115 homes sold in Pasadena for the month of May indicates that Buyers Agents (an agent who represented the Buyer in the transaction) were paid the following amounts:
In order to interpret the chart, we need to make some assumptions. Typically a listing agent (representing the seller) will offer as compensation, 50% of the fee to the Buyer's Agent. A commission of 2.5% probably indicates that the listing agreement was written for a 5% commission (2.5% for the Seller's Agent and 2.5% for the Buyer's Agent).
Many agents would like you to believe this myth that in order for you to get maximum exposure and find a qualified Buyer, you need to pay 6% to get your home sold. The numbers indicate this simply is not true. With so much data available on the internet allowing consumers to preview houses for sale, do you think they are actually telling their agents they only want to see homes paying a 3% commission? The three factors selling houses are location, condition and price. Commission paid to an agent doesn't make the leader board. On the flip side, when does a commission get too low or is there such a thing? That is an article for another day.
The Pasadena Housing Market hasn't seen much deterioration in commissions, however many sellers these days are running tight due to refinancing and taking money out of their homes and a real estate commission is one variable that is negotiable. Last month a home sold for approximately $1.8 million with a 2% commission for the Buyers Agent. I don't know about you, but a $36,000 payday is a check I would cash any day.
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