Where does all that money go? I have had many discussions on this with potential clients. It seems the general public is under the misunderstanding that all the money goes directly into my pocket. My discussion goes a little like this:
"How much do you charge?" asked Mr. Seller
"Well I generally charge 6%, but do you know why I have to charge so much?" I ask
"Well yes. You are greedy and all that money goes strait to your pocket!" Mr. Seller says
"No. Actually I get very little of that money. Let me tell you why: The very first thing we do is cut that % in half. I offer a buyers agent 3% to entice them to show your property to their clients. It is important to offer them a fair amount because if we don't they will simply ignore your property. 95% of buyers out there have their own agent. So it makes sense for us to get every agent in this area working to sell your house. So that is why I have to offer 3% to a buyers agent." I now have their attention
"Well that is 3%. Where does the rest go?" Mr. Seller ask
"Well I am going to spend at least 1% of that money on marketing your house. It cost quit a pretty penny to advertise your home in the paper, on the internet, making flyers, getting lock boxes, having an open house, and so on. It all adds up." I say
"So now we are down to 2% left for all of my services and fees. Do you think I'm worth 2%? I know I am. So as you can see it actually takes most of the commission just to get your property sold. If any other agent tells you differently they are not doing their job. It will take every bit of that 4% that goes out just to sell your property. Do you have any questions?" I ask
After I have gone through this discussion most people are willing to pay my commission. It is my belief that knowledge is power and by giving my clients all that knowledge helps them to make a really informed dission. I will not be a discount broker because I know what it takes to sell a house, at least in my market. Does anyone have any advice or comments on commission? I would love to hear it. Thanks!
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