A client recently spoke to me about a conversation she had with another local real estate agent. My client asked the agent if my 3% listing commission had anything to do with her home not selling yet. The answer was disturbing. My client was told that there was a legal obligation to "show" her home if any would-be buyers asked to see it but because the commission was only 3% the agent would not suggest this home as a viable solution to their real estate needs.
Setting the record straight. Let's say the agent did show and sell my clients home; how much would that agent receive for taking her buyers to the home and then writing up an offer on the property?
Every property is different in price and so for the sake of this exercise I will use the average price of a home in Okanogan County, i.e., a 3 bedroom, 2 bath home with 1500 -2000 sq ft. The average list price is $339,000.00. My commission is 3%, which is split 50/50 with any other broker who brings a buyer to the table. This scenario would bring $10,170.00 to the table, of which $5,085.00 would be given to the buyer's broker.
Take that same home and place a 6% commission on the sale and the home owners would pay $20,340.00 to the selling broker.
I think the question that really needs to be asked is this; should an agent be expected to show a home that is listed with a 3% list fee? Or better, how much work should one be expected to do to garner a $5,085.00 pay check? Would a simple trip across town be too much to ask?
(I will publish the statistical chart that I used for the calculations of this exercise on my website at www.ljgood.com I will place it on the front page for easy viewing and access.)
In light of our troubled economy and recent trends in the real estate market place a shift in the practices of each realty office would make a substantial difference in the lives of our citizens. That's something to think about.
Sincerely
Lonnie J. Good
Owner/Broker L.J. Good Real Estate
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