How much commission should an agent charge? Well, I suppose it depends on the agent. I charge more than Nu-Way. I charge more than most agents charge. Why? Because I am worth more and I want to. When the market was so on fire that most of the public thought of us as a commodity – and most Realtors couldn’t wait to agree with them, we had potential home sellers call our office every day and tell us they could get someone to list it for less. We already knew that and it made no difference what commission percentage they told me they could get an agent to list their home for – I would tell them, “you can get it for even less than that”.
But there were still loads of home sellers who understood that what we did wasn’t the “same as everyone else”. In that market we factually sold homes for more money. In this one we actually get them sold. Anyone who wants to hire one of the limited service companies (who want to insist on marketing themselves as FULL service at a lower price) gets exactly what they deserve. Those companies track records for selling their inventory really isn’t the same as mine. It isn’t even as good as the market average. Those companies do have a wonderful track record with regard to marketing themselves to the public but not for marketing their listings TO the public.
Oddly enough the average home seller (they don’t tell this to agents) doesn’t believe that the agent will work as hard to get their home sold if the commission is “too low”. They don’t want the commission to be “too low” because they want the agent to “work hard” to sell their house. This was verified by a university research team (they didn’t like the answer they found).
Is it okay with me for every buyer to have access to the inventory via IDX (ed: this is the same as our MLS.ca system)? Sure. Do I believe that will put us out of business? No. My value to the seller or buyer isn’t my access to a secret database. When I go to my dentist or doctor or CPA I am not going to see them because they have access to secret information that no one else can get. I could get all of the information that my dentist, doctor or CPA can get. The problem is I can’t properly EVALUATE that information – they can. They can look at the same information I could look at and see things I would never see. [emphasis mine]
The Real Estate Bloggers discover that 50% of Real Estate Agents in the US have been in the business for four years or less:
What is even more amazing is that only 1 in 3 Realtors have seen a down market. In the record home markets of the last 4 years, if you could hammer a sign in the front yard and find a seller, you probably had a good chance of getting a commission and making some money. But now these new agents have not developed the skills to truly market a home in a difficult environment. In fact, odds are they have built in some bad habits that will need to be broken if they are to succeed.
Benjamin Bach is a Real Estate Consultant with Keller Williams Golden Triangle Realty in Kitchener Waterloo dedicated to building wealth for his clients through smart Real Estate investments, and helping people achieve success. If you are interested in how you can start your Real Estate portfolio, or have any questions and buying or selling a home, you can email Benjamin (benjamin AT benjaminbach.com) or reach him at 519 772 4376.