"In the absence of value, commission fee reduction is
the only consideration a diminished-service broker can offer."

About Commissions

In most areas there is a customary percentage that real estate agents expect to earn as a commission. When completing the listing agreement, you and your agent will negotiate and agree on the amount of the real estate commission.

When you agree to a commission with a listing agent, you should keep in mind that there are usually two agents involved in most transactions.  Most of the time, only part of the commission goes to the listing agent's company.  The other portion goes to the company representing the buyer. 

Some commission-related questions you could ask:

Will my property be listed in the Multiple Listing Service?  Being listed in the MLS expands your sales force.  Every agent is invited to bring potential buyers to your property.  This larger supply of buyers effects your pricing power and the ability to sell your home more quickly. 

What kind of Internet marketing will you do?  There are many high profile web sites you will want your agent to advertise on.  Ask which ones he/she will use and ask for specific statistics.  Is the agent's REALTOR.COM site "enhanced"?  What about the agent's company and personal web sites?  Can you provide me with "NOeMARS"?

What magazines and newspapers do you advertise in?  Ask if the agent's company has an exclusive company magazine.  What is the distribution and how often?  Do they have an online portfolio of homes magazine?

What muti-media marketing options do you employ?  What kind of Virtual Tours are offered?  Is 24/7 streaming video available?  Where can it be found?

What Exclusive and Customized services do you offer?  Go beyond the "traditional" marketing services that are available through most fine companies and find out what your agent and his/her company offers that the other companies and agents do not offer.

What is the effect of your co-broke offering on the company representing the buyer?  Since part of the commission usually goes to the company representing the buyer, you may want to ask whether that portion of the commission being offered is the customary amount.  As mentioned above, the more agents that show your property, the more pricing power you have and the more quickly your home will sell.  And the larger the fee to the co-broke agent, the more agents will be willing to show your property.

What is the effect of your marketing to other agencies?  Very few properties are sold through advertising or open houses, but it does happen.  Most often, those ads generate calls from potential buyers or sellers, who end up as clients for real estate agents -- and you want agents to bring potential buyers to your property.  Advertising your property to other agents has a higher impact than direct advertising to consumers.

Lastly, ask yourself . . .

What is more important to you - netting the most amount of money from your sale, or paying the lowest sales fee?  Once you decide which is more important, how much commission to invest in your sale becomes clear.

Don't be fooled by limited service or discount brokers.  Commission fees provide income for three items only - Profit, Overhead and Marketing.  Overhead is a fixed cost and that leaves only Profit and Marketing.

Where do you think limited service and discount brokers cut back to make up for their reduced fees?  It is surely not Profit... They cut back in Marketing which means that as a result of reduced marketing you are highly likely to receive much less for your home.  In fact, studies have shown that sellers who pay higher commissions actually net MORE than the difference the discounted fees were supposed to save them.

Contact Jay for further details on how he can assist you in maximizing the equity you receive from the sale of your home.  He not only sells more homes; more importantly for you, he sells homes for more.

Previews® International^SM Property Specialist