How Do Commissions Work?
Professional Real Estate is a service. Like many services, our fees can be negotiated. Granted, there are some Real Estate Agents that never (or say they never) reduce or negotiate their commissions. Of course, I can only speak for us & what we do.
The fact is, we’ve worked with many of our Clients for years…often representing them many times over. We often reduce our commissions for a number of different reasons, but first & foremost as a thank you for their continued loyalty & trust.
Firstly, it’s important to understand how commissions work.
- The Seller pays the commission.
- The Listing Real Estate Agent (us) covers all associated advertising & marketing expenses. If you’re home/property doesn’t sell, we’ve lost our own money & You haven’t paid a cent.
- In order to make your home as attractive as possible to fellow Real Estate Agents, we offer approximately half of our commissions to them – to help us find a Buyer for your home/property.
- Lastly, regardless of what you’ve heard…Real Estate is an expensive industry. It costs a lot each month simply to maintain a license. Advertising & marketing properties to a global audience ensuring you the best opportunity to Sell for the best price possible, encompasses many expenses.
Reasons we’ve negotiated or reduced commissions in the past:
With respect to commissions, we normally but not always charge 7% on the 1st 100k & 3% on the balance. We pay/offer approximately half of that amount to any other Real Estate brokerage that helps us find a Buyer. I’m willing to negotiate or reduce commissions under these circumstances;
- your property sells quickly (meaning we haven’t spent thousands advertising/marketing it)
- if we find the Buyer ourselves (we then would be entitled to the entire commission & therefore able to often offer a substantial reduction)
- if you bought another property (using us as your Realtor)…& used us to represent you to facilitate your Sale
- or of course, if you & the Buyer can’t quite come to an agreement on Sale price (in this scenario, how much we’re able to reduce depends on length of time on market & whether another Agent is involved representing the Buyer)
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