What's Your Commission? On Hiring a Realtor Based on their Fee...
I always say (oh well maybe somebody did say it before me) - if the Realtor cannot negotiate their own Commission then how are they going to negotiate the best price possible for your home? Negotiation skills. I would think, given a choice - you would want an aggressive negotiator, not someone that either doesn't believe in their own ability or the value of your home!
The question that begs to be asked is....Why do some Real Estate Agents offer Discounted Fees? Is it because they're the Good Guy? They just want to see more money in your pocket then theirs?
Well there could be a number of reasons:
- they feel that's the only way they can compete
- they have poor negotiation skills
- they have trouble justifying their own worth
- they're hoping to make up for it in volume
- the agent is desperate - any commission is better then no commission
- qualifications/experience of the Realtor
- you're willing to do the marketing instead
- they feel sorry for you
- they believe in pro bono
- having a sign on your lawn is more important then the commission
So let's do a little review.
Did you know that the commission the seller pays is split between the Selling Agent (the person with the buyer) and the Listing Agent (the person with the seller). So if the commission is 6% then typically 3% will go to the Selling Agent and 3% will go to Listing Agent. Sometimes we Realtors assume that you know that! However I'm pretty sure that some of you think we get the whole kit and caboodle!
Do you know that there are Real Estate Companies out there that Do Not put your home on The Mutiple Listing System (MLS)? They have this 'exclusivity' thing happening. They think that their paycheque might be a lot bigger if they do not have to co-operate and share their commission if they get to to List AND Sell your home. Be sure to ask them what portion of the commission you are paying will be going to the Selling Broker. How much longer do you think it will take to sell your home if it's only YOUR AGENT that's trying to sell it? I think I read somewhere that it's like 16:100 odds.
When looking at an MLS Listing - the Selling Agent can see the commission they will be paid. It may not show up on the Public Version - but that information is disclosed in the Realtor's version. Note: It's the Selling Agent that reviews the properties for sale in the MLS and most often choose those they deem appropriate for their buyer. Guess what? Herein lies the conundrum.
Now put yourself in the Selling Agent's shoes. You can sell House A or could sell House B. But house A will pay you $1,000, $4,000, $7,000 or MORE! You have mortgage payment, bills, & children to support. Which house would you like to sell?
Did you know that unlike Doctors, Lawyers and Government Employees - Realtors are not paid per hour. But we do take all the risk by putting our time & money into advertising YOUR property in order to get it sold. Chances are we also have an OFFICE cost, MLS Fees, Board Fees and more! Do you know that we only get paid if the Seller sells and the Buyer buys? If they don't our costs are not recovered.
So no - commission is not regulated - there is no set rate if you're selling your home - but it IS a good idea that the commission you're paying the Selling Realtor is in-line with the rest of the comparable houses on the market. Market slow? Well in that case you might even consider offering a greater sales commission or a sales bonus. You say WHAT??? But look at it this way. For every week/month your home doesn't sell - how much will THAT cost you? You get to choose!
Still think you'd like to go with a Discount Broker?
*Please note - this is not meant to suggest that the Commission fee charged is the only criteria - there are many, many different aspects to hiring the right Realtor. Please check out these posts:
If you or someone you know is thinking of Buying or Selling property in Cultus Lake, Chilliwack, Hope, Abbotsford, Langley or anywhere in the Fraser Valley Area of B.C. - or if you would like more information please give Liz Moras of Landmark Realty Chilliwack a call at- 604-799-0459 or e-mail at firstname.lastname@example.org.