The reality is a lot of people think commission is an unnecessary cost and is too expensive but a lot of sellers simply don’t understand commission or how it is structured.
When meeting with most potential sellers the first question is “How much commission do you charge?” It’s understandable as a home is generally your biggest asset and you want to know “How much money will I have after everything is said and done?” Fair enough!
Do you know that commission charged is not necessarily structured the same way among the real estate profession?
For example, Seller A and Seller B have very similar homes in the same neighborhood. Seller A is being charged 5% total commission and Seller B is being charged 5% total commission. They may not be equal value for their dollars spent…why is that?
Seller A agrees to pay his Agent’s Broker 5% total commission but the Agent for Seller A is offering 2 percent commission to the cooperating agent that is selling his home.
Seller B is also paying his Agent’s Broker 5% total commission but the Agent for Seller B is offering 2.5 percent commission to the cooperating agent that is selling his home.
Keeping in mind that these are similar homes in similar areas, why wouldn’t a cooperating agent find all the positive points of Seller B’s home and be less enthusiastic about Seller A’s Home. Based on a home that is valued at $300,000 – the ½ percent commission is equal to $1500. Let’s say the sale price of the home is $500,000 – the ½ percent commission is equal to $2000.
Now let’s use different numbers all together. The total commission you agree to pay your Real Estate Broker’s office is 6 percent and the cooperating agent is being paid 2 percent. Do you think as a home seller your property may be more attractive to cooperating agent’s if the commission offered is 3 percent? Especially if all your competing properties are offering 2 percent?
Make sure you inquire about commission structure when interviewing agents! Understanding how commission is structured when selling your home can be the difference between you selling your home or you selling your competition’s home.
If you have further questions about commission or the commissions I charge and how I structure fees please feel free to email me at email@example.com or call me directly at 204 960-6872.