Secrets of Paying Commissions
| | Monday, February 26, 2007 @ 01:10 PM EST
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Contributed by: Joseph Beauvais
Joseph Beauvais Properties
Read more archived articles about Selling
I have been selling homes in Florida for over 20 years and this is the most controversial topic to cover.
I will share my secrets with you only if you promise not to tell another sole.
I have been told by many, including my wife, other agents and brokers I know very well that I am too honest to be in business. All I can say is, “I sleep well”. So enjoy the honesty and experience absolute facts. Like it or not.
To begin with
Many people thought I must be rich because of the amount of homes I sold in a month. Good for image! What the public does not know is, a huge percentage goes into marketing, equipment, postage, printing, signs, advertisement, cars, clothes, multiple listing fees, lock box fees, Errors &Omissions and commercial auto insurance, Broker fees, office fees and more depending on if a franchise or not. Plus odds are about 2000 to 1 that the listing agent will have to give 50% to the selling agent.
Taking a listing is just the tip of the iceberg. Most sellers have no idea what a good agent does to try to sell the home.
Wow! It’s under contract, now what?
A lot more time and money expended to make sure the buyer performs and in a timely fashion, gets his loan. A good agent knows the difference between pre-qualified buyers and pre-approved buyers. Checking on inspection reports. Warning the seller what can and may very well will happen once the inspection report comes back. How to deal with the report, what is covered in the contract verses the report. What must the seller pay for or not pay for. Knowing and being prepared for the techniques of a Buyers agent. Explain why an “as” is sale does not help the seller at all. In fact it will hurt the sale and not protect the seller against an experienced buyers agent like me. Not to mention the schooling needed for core law to make sure the contract is enforceable before executed.
How much to pay?
I work mainly as a Buyers agent. I first search for homes that meet the criteria of buyers. Second I look at how much I am being paid to sell a home. This is how agents make their living so they all look. If the seller’s agent is only paying 2.5% to the selling agent on a $1,000,000.00 sale verses another home very similar to the first, pays 3.5% . The agent would make $10,000.00 more on the second home. Ethics prevents most Realtors from not showing the lower paying home but does not prevent them from putting it on the bottom of the list.
If I had some 90 homes priced similar with serves the needs of the buyers and one was last, what is the chance of them even seeing that home?
If it was you and you had many homes to show a potential buyer, would you promote the one that paid 10K less? “Be Honest.”
How to choose?
Have interviews with say 10 agents. They (I) hate that. Ask many questions from above. How would they handle different situations? (If you really get jammed for questions email me.)
We hate it when you interview more agents because we know if we leave the home without a listing agreement our chances are about 2% of getting the listing.
Sellers get tired of the interviews and some agents are very good at closing techniques, so another agent will probably win you over even though the first may be better for you.
So tell all agents at the beginning what you are going to do and live up to it. Under no circumstances do you list with one until you have had 2days to view your notes and make a decision.
Should I use the discount Companies
If you are reading this, you should start the course over again. Failing grade.
Should I sell by owner?
The real reason most all For sale by owners choose to do it themselves is not the commission. It is because all the agents have told them they are over priced and they would not take the listing for that price. I never never go to for sale by owners for a listing. Least of all, I know that many times they have repaired the home or done things without permits. I have seen electrical done by the owner that could burn down the home. If you have done that to your home, then yes, this is the only way for you. Pray the buyer does not have an inspection with a good inspector or a good buyers’ agent.
What I would agree to pay once I choose a good agent!
Fair market to poor 7%
Very very hot market 6.5%
*note: price category of the home does not make a difference in the commission.
If you disagree with any of what I have stated above, great! Prove me wrong with real facts.
Note: Visit my web site at www.SunnySpotRealty.net and email me from there. I am open-minded.
Hope that helps!
Joseph Beauvais
http://www.sunnyspotrealty.net
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