Myths
and Facts on Saving Money On Commissions
When
people talk about saving money on real estate commissions, what their goal
should be instead is to net the most money after the sale of their home.
Myth:
The best person to sell my house is the one that charges the least commission.
Fact:
The best person to sell your house is the one that can net you the most money
when the sale closes and all costs, including commissions, are paid.
Myth:
Just putting my house in MLS and putting a sign in the yard will sell my home
for as much money as through a marketing campaign.
Fact:
Maximum exposure to the market combined with correct pricing yields the highest
possible price for your property.
Myth:
I
can pick the best person to sell my house by the commission that they charge.
Fact:
Hiring an agent with the best negotiation, marketing, list-to-sell ratios, and
customer service skills will net you the most money.
Myth:
If I can get an agent to lower their commission they will still negotiate
strongly on my behalf during the sale of my house.
Fact:
If an agent does not have the negotiation skills to defend their commission that
pays their bills and puts food on their table, chances are that they do not have
the negotiation skills to defend your position with a buyer and get you the most
money on the sale of your home. Remember, you want an agent that can stand their ground in a strong,
polite, and persuasive way.
Myth:
Saving
money on the sale of my house is all about how much commission I pay.
Fact:
Saving money on the sale of your home is about how much money you net when the
sale closes and all costs, including commissions, are paid.
The agent’s selling percentage rate, which is a reflection of their
negotiating ability, has just as much impact.
Here is an example of how you can pay less commission but end up with
much less money at the end of the sale. This
example compares my selling percentage rate of 99% to other agents:
|
Example
house list price
|
$250,000 |
$250,000 |
$250,000 |
$250,000 |
|
|
Me |
Agent
2 |
Agent
3 |
Agent
4 |
| Agent average selling percentage rate |
98.4% |
97% |
95% |
95% |
| Sale
Price (Seller proceeds before commission) |
$246,000 |
$242,500 |
$237,500 |
$237,500 |
| Commission
rate |
5.5% |
5.0% |
5.0% |
3.9% |
| Seller net proceeds after commission |
$232,470 |
$230,375 |
$225,625 |
$228,238 |
| Potential
Seller net loss on sale |
|
-$2,095 |
-$6,845 |
-$4,233 |
As
you can see, you can pay less commission on the deal yet end up with less money
in your pocket at the end of the sale. |
