In early 2008, I was completing a market study for a prospective seller client. As I was preparing for our meeting, I realized that this particular individual was going to have to bring money to the closing if they agreed to my recommended listing price and paid 6% towards commissions. At the listing appointment, I did what every good Realtor is taught to say “Sir, I cannot reduce my commission percentage because my office takes a significant portion of the earnings and I need to have some money left over to feed my family”.
While I have no issues with professionals charging an appropriate fee for their services, I do have a problem with a one size fits all mentality. In general terms, you do get what you pay for but I can tell you that in real estate, putting a for sale in the yard, placing a property in the MLS (multiple listing service) and praying that the property sells is not worth 6%.
The power of the internet has leveled the playing field for buyers, seller and real estate professionals. Gone are the days of only Agents having access to critical data (the MLS) and hoarding it for personal gain. Knowing that the MLS is no longer a proprietary piece of information, why are Agents still charging what is considered a ‘standard fee’? My answer to that question is two-fold: 1) the amount of overhead Agents have is significant (licensing, insurance, compliance, auto expenses, cell phone, technology, etc. 2) most large brokerages charge a percentage of commissions earned to be affiliated with their office. In many cases, the offices are very impressive and have large staff to make sure the office runs smoothly.
You may be saying to yourself, “that’s great, you offer services and commission structures that are different than everyone else but you’re probable one of those agents that collects a fee, places my property on the MLS and nothing else, right”? WRONG! Everything I do is full service but you get to pick the commission plan that best suites your needs.
My question(s) to you
1) In the end, will your agent earn the large commission or will they do the bare minimum to try and sell your property?
2) Will the agents large overhead (including office affiliation) actually assist in selling your property?
3) Do you believe that the amount of service and marketing that your receive is relative to the amount of commissions that you should pay? In other words, if you receive less service and marketing, should you pay less in commissions?