Commissions And What Buyers & Sellers Should Both Know !

I have written many blogs about why you should be using a Full Service Real Estate Brokerage for the services they are able to offer is so important.  Commission is always a top  reason for why homeowners may list their home with a company and buyers opt to not use a Buyer Broker.  I wanted to take the time to explain the pro's and con's and really break down who actually decides on the commission and ways to make sure you only pay what you are comfortable to the agent who works for you.  

Sellers: You Will Always Get What You Pay For

• When your interviewing don't ask about the agents commission until the very end of the presentation.  Review what they agent will be doing, and make sure you ask the most important question: What will they be doing that another agent won't be able to offer you to get your home sold ! Often times you will begin to tune out the agent if you do not like the answer on commission, but you should always make the decision based on the work the agent will put into your home.  

• If your list your home with a discount brokerage they will often "discount" the commission on the selling agents end of the deal, and many homeowners aren't aware that they are actually in charge of who gets what percentage.  This is very important because most listings on MLS offer out between 2.5% and up on selling agent commission if your home is only offering 1% - 2% you are less likely to get showings by agents other than your listing agent.  

• When you are working with a Full Service Brokerage you will also have something that other homes will not, and that is protection to hold your agent accountable.  Specializing in expired listings I hear all the time that the agent didn't do what they said they were going to, and unfortunately working at a discount the homeowners had no recourse.  ALL Full Service Brokerages will have a part of the contract apart from the listing itself that will be their guarantee listing all things they will be doing, and allow for release of the listing if the services are not being performed.  

• My friends uncles wife is an agent, she will do it at a discount because we are so close ! How many times I have seen friendships torn apart and families at battle all because they mixed their "business" with their personal life.  Not only the fact that some hurdles can cause a bigger issue when you use this method of choosing an agent, as a homeowner you will be less likely to hold the agent accountable.  You need someone one step removed from the situation to make sure you are looking at things from a reasonable perspective not only about pricing but even things like staging can become a bit awkward for everyone involved.  

Buyers: You Can See 20 Or 200

• The myth that has been depicted on Reality TV has led to so many misconceptions about home purchasing.  I have never in my entire career seen a buyer look at 3 homes and choose 1 but that is not to say that you need to see 200 either.  If your working with a buyer broker you will have someone who can look thru listings and have them immediately filtered for you.  How many homes you will see really does come down to what kind of home your looking for but usually between 10-20 is a safe number to figure.  

• You don't need to play phone tag with agents, every agent hears how that other agent didn't call the buyer back.  When you have a buyers agent it is almost like you having an assistant you have someone there to do all the legwork for you! They will call and make the appointments, they will check status, and you will have a buffer at open houses.  

• Most of my buyers come to me because of my designations as a Certified Buyers Agent, this is something that all buyers should be looking for.  There are a lot of things that a Buyers Agents can do that a Brokers Agent is not able to.  How the offer is presented, what information is relayed to the seller from financial information to the reasons for the move are all things that are determined by the agency.  If you are not working with someone who is well versed in the law they will not always have the knowledge to know what they can do differently to help their buyers ! 

• This is the best reason to use a Buyers Agent, but often overlooked.  Your paying for it whether you use it or not ! All sellers are aware that 95% of the time the agent who sells it is not the listing agent which is why their is commission offered to the other agent.  Now if your paying for something why wouldn't you take advantage of it and make your life and process easier ! 

• The famous last reason, the listing agent will get me a better deal ! I've spoken to buyers after they use this theory and they always feel the complete opposite after the fact, because of course the agent wants to sell their own listing BUT at what cost.  NYS Disclosure is very clear if the listing agent is working for the sellers and not you than their job is to get you the home at the HIGHEST possible price ! 

Whether you are a buyer or a seller the most important part of being comfortable with the agent and the commission is to have open communication.  If you have a set plan of how your going to get your home sold or home found and purchased than knowing your getting the job done correctly will always be worth paying that little bit more in commission.  The reality is most commission objections are normally only over minimal amounts of commission of only 1% - 2%.  This is money that will be lost if your home sits on the market without selling because you will be keeping it for 6 months or longer than expected !