Agents!  Get nervous...we're about to talk to our customers about COMMISSIONS and little about pricing.  Hey client!  What is there about commissions that you want to know...most likely how you can pay less.  Right?

So here we are, agents want more commissions and the people that are selling their houses want to pay less...this tug of war is really funny when it comes down to nuts and bolts because money is involved.  Money, the root of all evil, the stuff that does not make people happy, it does not grow on trees, it makes the world go round, it pays my bills...money.  Let's look at these points of view and even though there are some really strong statistics, I am not going to use them.  Why (the real estate agents of the world ask)?  Because even though numbers don't lie, this is a somewhat EMOTIONALLY charged issue when it comes up...not always, but regardless, when emotions are in play, facts and figures are usually ignored.  Agents, sellers...think of it like this: "There is a Win-Win-Win" Lets look over the ASSUMED points of view (note: this is not the way everyone thinks, but they are great representatives on our emotions initially.):

Seller Point of View:

Hi, I am the seller.  I want to and NEED to sell my house for $XXX's.  I know my house is worth it because I personally stroked that check for the pouring of concrete last month for my back porch extension, upgraded the water heater, put in new insulation, yada, yada, yada...  AND I have to have $XX's down for the down payment on my new home that I want and to pay off my car and get that new washer and dryer set.  (With Determination) I cannot sell my home for less!

Agent Point of View:

I need to sell this house quickly!  If I can get this couple to price their house just below market value we can get a bunch of people to look at it and get some offers quickly!  Especially if we can get the house commission set above average!  The owners can get it sold and I can get it done and "WoooHoooo!  I just hope the sellers are willing to do this.

Reality:

Seller, Agents, I have bad news for both of you.  We don't determine how much a house is going to sell for.  Sellers, you hire agents, Realtors, FSBO companies etc to work for you.  You determine what your home is going to be offered at, BUT there are a few ugly truths that you need to KNOW.  Don't take my word for it, if you don't grasp these concepts, It could be said that you are in an incredible market...a.k.a.  The Land of Oz.

Truth Number 1:  Greed is an incredible motivator.  Example; and this is for real.  The way most agents work is they look for homes that match what their client is looking for.  Bubba and Bubbett are looking for a 3 bed 2 bath with a kitchen...well, there are a couple of hundred in your MLS...then the agent looks for specifics like 2 car garage, hardwood floors etc.  Now the list is narrowed down to 40-60 homes.  What next?  Commission percentages.  Now there are 40 homes (or even 3 homes that match or semi match) all of them are standard 3% except for one which is at 3.5% and it is not exactly what the client has said they want and the other 2-3 are exactly what they like...which home is this agent going to show to his clients with the MOST excitement?

Truth number 2:  No matter what your market, getting people in the house to look is the NUMBER 1 way to move the house for the most money!  If your house is priced above the comps, you will not be looked at unless there is something that is OVERTLY different and the agents are excited about it (like higher commissions you think?).  If not the commission, then the pricing of the home needs to at worst, compete.

Truth number 3:  Curb appeal comparisons are no joke.  I've shown great houses at great prices with great commissions that were DEAD before the car came to a stop on the curb.  Then again, I and many other agents have been very surprised at showing homes that we had our own opinions on, but the curb appeal set the stage that obviously blinded the clients from the interior...and they bought.

There is a balance and it takes a minute to just slow down and present your thoughts to your agent and agent, the same goes for you...listen to your seller, there are realities that we may be blind to, but to ignore them when you client is trying to show you is rough.  Sellers, your agent does this everyday (you hope) and their job is to sell that home...listen to them and communicate.  There is always a win-win-win.  Know your market.