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Should I Ask My Agent For a Portion of Their Commission? Part 1
I get this question a lot. Rather it's from buyer's or seller's asking me for money back at the close of escrow in exchange for their business, or agents debating amongst themselves, if lowering their costs exceptionally to get the business is the right thing to do.
I am going to put it simply to you... No! You should not ask your agent for a portion of their commission. I will tell you why.
If you are a seller:
When dealing with a producing agent you see that their time is very important, their focus is getting the most amount of money for your home in the least amount of time. They do this by not only spending time with you of discussing what the most competitive price is to list your home at, but also effectively marketing your home, networking with other producing agents in the area, contacting those within their database and marketing your home to them. Not to mention the open houses, private showings they will have to schedule in to make sure your home gets the most exposure possible, and cannot forget the negotitations that they will be doing on your behalf whenever offers for your home start coming in.
I am not going to lie to you, there are actually agents out there that will gladly take a pay cut just for the sole purpose of getting the listing, it happens all the time. But let me ask you this, as a professional, my time is valuable right? I also know what the value of my time is. I know what quality of service I am going to provide to my clients for that price. If you have an agent that eagerly agrees to give you a portion of their commission in order to win your busines, do you think they value their time? Once it comes to effectively marketing your home, doing open houses, and making sure your home gets the most exposure possible , do you think you are going to get the best service possible if they are giving you back a portion of their pay? How about once it comes to negotiations. Do you think they are going to do everything they can to make sure you get the most value for your home? Well if they are quick to cheapen their own value, how can you expect them to fight for the most value of your home when they are not willing to fight for the most value for themselves?
Let's also take into consideration the commission split:
Let's say the standard commission on the listing agreement is 6% of the sales price of the home.
The buyer is most likely going to to come from a buyers agent in local area because of the marketing efforts of your hired professional, and if you hired a strong professional with some ethics, they have agreed to give any buyers agent that brings in the qualified buyer half of that 6%, leaving your hired professional with only 3% to themselves.
Now that 3% doesn't exactly go straight into their pocket. 1% of it will go to their brokerage, bascially the price they pay to be a realtor and there is no negotiating on that. Another 1% will go towards marketing your home effectively and the other 1% actually goes into their pocket, which takes care of their families.
Now with that said, if you have an agent that is willing to cut the cost of their commission in order to get the listing, where do you think that money is going to be taken from? It's not going to be taken from the brokerage split, nothing can be done about that one. It most likely won't be taken out of their pockets because they probably have a mortgage to pay and a family to take care of. That money will most likely be taken out of the money that would be used to effectively market your home to get it sold in the shortest amount of time. Doesn't sound to awesome does it?
Now on the buyer's agent side of the coin, if I have a qualified buyer and your home meets the criteria of what they are looking for, and I have 5, 10 maybe 20 other homes that meet their criteria as well, I'm going to do my best to leverage my time as a professional that knows my value, so if I have all these great listings to show my buyers I'm most likely going to show them the ones that give me the higher commission first and from there work my way to the bottom of the stack. So you got to ask yourself this question... Do you want your listing to be on the top of the stack for these agents to show their clients your home or at the bottom of the stack of homes to show if none of those other homes, with similar criteria, work out?
The right professional will ALWAYS know their value and they know the level of service they give to their clients in exchange for that value, and remember this if someone is super quick to discount their pay, the level of service they provide to you will most likely be discounted as well.
Stacey Smith Keller Williams Realty 949-350-8922 DRE. License #01845411
If you are looking to buy a home or sell your current home in Orange County, Ca. please allow me to assist you. I work throughout most of Orange County but my area of expertise happens to be south Orange County and the Coastal cities. Locations I service include: Dana Point, Capistrano Beach, San Juan Capistrano, San Clemente, Laguna Beach, Newport Beach, Huntington Beach, Crystal Cove, Corona Del Mar, Laguna Niguel, Aliso Viejo, Mission Viejo, and Costa Mesa. I service all areas through out Orange County so please call me today and allow me to assist you!
Please Allow Me To Assist You and Your Family in Finding The Perfect Home As Your Real Estate Agent!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.