I've received several emails from my ActiveRain colleagues regarding our company's reduced commission rates. I thought I would answer a few common questions that can help you decide if it is right for you.
Q: Is this limited service?
A: No, we offer full service residential at 4.9% (land and commercial at higher rates). This includes strong internet and print marketing, custom flyers, open houses, and free home staging.
Q: Why are you doing this?
A: Why not? We knew we were taking a risk when we started this incentive in the spring, but it has been a great move for us. Not only do we get more listings (we have a large percentage of the market share in our local area, especially considering how new we are), but our sellers are more receptive to suggestions on improvements and price adjustments. We also try to minimize our overhead costs.
Q: How is it working?
A: Great! We currently have about a 30% listing rate with FSBOs, compared to the national average of around 10%. We also have earned every listing that we've interviewed for; even when up against local top-producing agents. We are definitely bringing in more money every month, even with the current mortgage market issues.
Q: How does the commission split work?
A: We keep 2.4% and give the subagency 2.5%
Q; Do you get complaints about these rates from other agencies?
A: Not really; but some think we're crazy!!! If an agent has a problem with the commission, I can usually negotiate a selling bonus (around $1,000 for most homes) with the homeowner. Again, the homeowners are SO MUCH more receptive to incentives because they are already saving money.
If anyone else decides to try this out, send me a message. I'd love to hear from you!
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