Discounted Commissions?

You have noticed the ads: “List your home for 4%”, “We will sell your home for 2%” or other
such headlines. With claims like that, it is only reasonable to wonder “why not?”

While all real estate commissions are negotiable, it is important to understand the effect of low commissions on your transaction, and most importantly, the impact on your net proceeds.

First, let’s take a quick look at the role of commissions in the real estate industry. When listing a property for sale, the total commission is split in half with that amount offered through the Multiple Listing Service (MLS) to any agent that brings a ready, willing, and able buyer and successfully completes the sale transaction. The other half is retained by the listing office as their compensation for the listing, marketing, and advertising of the property and their representation of the seller. These separate halves are then split again between the individual agent and their office/broker. Consequently, the average agent only earns just over one quarter of the total commission. This is their only professional compensation in real estate. There is no other income. No vacation or sick pay. No benefits. No minimum wage or employer paid health plan. That net commission paid at closing is their entire compensation, from which they pay their work expenses.

The most common commission for single family homes in this part of the country is 5-6% total commission, with 2.5 to 3% offered to the agent that brings a buyer. When a “bargain broker” says they will list your home for less, the offer a lower percent in the MLS to the selling agent. If you want to sell your home for top dollar, how does that affect you? Very simply, the “discount” commission offered will assure that many potential buyers will never see your home or will see it only after all others choices that offer a higher commission have been ruled out. Many agents, especially the best and most experienced agents (with the best clients) choose not to show these listings. Even those that will reluctantly show the property, will do so only after first trying to sell everything else that pays them more. If your occupation gave you a choice of income based on your choices, would you not choose the higher income when it represents the same responsibilities and liabilities?

Our goal in marketing your home for top dollar is to increase the exposure to as many agents and buyers as possible. We want every real estate agent in the area to aggressively want to show your home, not steer people away from it. One of the best methods to put your home at the top of every buyer’s agent’s list is to offer a good commission. It sis possible to price the property low enough that it will sell regardless of commission, but you will lose far in excess of the small difference in commission. Simply put, you will earn much more in sales price than the 1 to 2% difference between the “bargain brokers” and your full service Realty Concepts agent.
As in most areas of professional service, you get what you pay for. Do you really want the cheapest mechanic working on your car, or the cheapest doctor treating your family, or the cheapest attorney defending your rights? Real estate is no different. The cheapest is never the best. Let us focus on getting you the highest price using all of our marketing and negotiation skills. Our priority is for you to walk away with the maximum amount in your pocket.