Apr 15 2008

Real Estate Agent Commission

Published by Carolyn Thompson at 8:29 pm under Real Estate Agent

Do you really think that you are saving money by paying both your buyer and listing agent lower commissions? 

 Well, our research demonstrates listings in which a real estate agent is paid less then 3%+  is three times more likely to sit on the market long enough for the listing to expire and the property to be relisted. 

 You may say that this is irrelevant.  You are willing to sit on the property if it means saving a few thousand dollars.

 Just as listing agents, buyer’s agents get paid by commission.  Don’t you think that they may show a property with a higher commission first?

 Statistics clearly demonstrate that the longer a property sits on the market, the less desirable it becomes.  It becomes stigmatized and will eventually sell for less than the original list price.

 So, the property sells for less and if the house is vacant the seller has just lost carrying costs as well.

 Why don’t Realtors talk about the commissions other companies offer?  In the 1970s there was a huge anti trust scam.  The story goes something like this:

Brokers in the Washington DC, Bethesda, Rockville, Silver Spring, Potomac, and possibly Virginia (although this has not been confirmed) all agreed to fix the commissions.  Some unhappy customers caught wind of this, knew that price fixing was against the law and filed a complaint.  Several brokers went to jail.

I am supportive of competition.  If I can sell my properties quickly while the competative properties sit on the market I can serve my clients better.

 This research was performed surveying 200 homes.  I personally did the tally while I was just a young real estate agent (last year) sitting in my brokerage classes, intently listening to my instructor talking about real estate finance.  A subject which many may find dry but excites some of us knowing that we can use it to help both our clients and ourselves make and save money.

 Since, I was just doing this for my own entertainment and informational purposes at the time, I did not keep the documentation. 

 I will remember to do this when I sit for my continuing education classes.  It will be interesting to see how a real estate agent’s commission has an impact in a different market?  Will it be more important?

 I am also interested in knowing how the Days On Market, DOM will be impacted by a real estate agent’s commission in different locals?  My upper end clients in Bethesda, Potomac, Washington DC and Virginia don’t dicker with me over commision.  They hire me because I am not just any agent.  I am an expert real estate agent.

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