Agent Value
With the continual buzz about real estate commission, I feel it’s best to share what Value means for you.
You may see social media posts from real estate agents offering to “sell your house for zero commission” or “now offering a discount to all sellers”. It may make you wonder, what IS the value of having a real estate agent when selling my property?
It may also make you question whether having an agent on your side during the home buying process makes sense for you.
Let’s first explain WHY a commission is charged.
When someone wants to sell their Home, they immediately wonder what the Value of the property is. The best way to obtain this number is to contact a Licensed Realtor. WHY? Because a licensed real estate agent has the experience of market knowledge, current, as well as past sales, buyer demand and criteria, and what certain improvements have done to scale the marketability of the property. They should be licensed in the state of said property, have experience, and offer you a comprehensive market analysis of your home.
A Realtor is paid based solely on commission. This means they will charge a Seller a percentage of the Sales price to List and Sell the property.
Commissions are negotiable. There is no set fee, no standard fee. This percentage is based upon what services an Agent will need to provide in order to meet the client’s goals.
Therefore, if you think about it, WHY would an agent advertise a “zero commission”?
Let’s now explain HOW a commission is paid out.
When a seller agrees to List their property with a Licensed Realtor, a commission percentage has been established between Seller and Listing Brokerage.
Said Realtor will then list, and market the property for sale. Once a buyer has been secured, and the Sale is successful, the Listing Brokerage obtains their commission.
This commission is split four ways (normally): 1. Listing Agent receives a percentage 2. Listing Brokerage receives a percentage 3. Buyer’s Agent receives a percentage and 4. Buyer’s Brokerage receives a percentage.
Your LISTING AGENT does not receive the entire commission.
HERE’S WHY:
If I List a property, I am a Licensed Agent working under my Brokerage. I have a contract with my Brokerage. I can’t disclose details, but once my Broker receives the commission check from a Sale, they take their %, pay out a % to the Buyer’s side, then I, as the Listing Agent, receive my %.
What do I HAVE to PAY for with MY commission?
Once I have been selected by a Seller to List their property, and an agreement has been signed, I need to Market the property. Whether it’s professional photography, floor plans, drone shots, open houses, showings, those fees are paid UPFRONT by me in the hopes that this property WILL sell, and I will be “paid back” my upfront expenses via my commission.
I am also responsible to pay my MLS monthly fees, healthcare, taxes, car expenses, signage, photocopies, membership for National Association of Realtors, Board dues, utilities, computer and cellphone costs, etc….everything and anything to be “self employed”. As Licensed Agents, we do not have these “employee” benefits. We are Independent Contractors. We are solely responsible to have all of the tools and necessities to run our business. None of these are paid by my Brokerage. These expenses are all paid by me.
My VALUE to a client is important to me. I aim to meet my client’s real estate goals EVERY time. I spend hours analyzing the market, preparing a plan, spending the time and money necessary to get the results, and I succeed.
BOTTOM LINE: If a Licensed Realtor is advertising a lower commission, it means something is probably being cut out of the services they are providing.
Check out my upcoming BLOG post about what I offer to my Clients……..