If you plan on buying or selling a home with the assistance of a Realtor, there will undoubtedly be a real estate commission involved on the sale. Since the average commission is around 6%, the sale of a $100,000 home would yield a commission of $6,000. Not bad for a day’s work, right?
Problem is, a Realtor and their Broker spend hundreds (and sometimes thousands) of dollars on their clients prior to the sale. The commission checks serve first and foremost to reimburse. Umpteen trips to listings, checking on vacant properties, advertising, photography, videos, meeting with contractors and inspectors, gas, automobile wear and tear. It all adds up, and a potential buyer may not purchase after all. Rain, sleet, heat and snow – just like your postman – they show up for you wearing a smile.
Aside from the reimbursement of expenses, real estate commissions serve to keep the market moving. Because commissions motivate Realtors to sell homes (they don’t earn bimonthly paychecks, after all), this keeps market inventory at reasonable levels and contributes to higher home values. A home sold with the assistance of a Realtor typically sells for at least 13% higher than those For Sale by Owner.
On average, homes sold by their owners 1) don’t sell for their full market value, and/or 2) take longer to sell, cutting into potential profits because of extra mortgage payments that had to be made. Simply put, being represented by a Realtor allows you to take advantage of their marketing exposure, thereby generating a greater number of potential offers and increasing the likelihood of a higher sales price.
Buying or selling a home can be emotional and time consuming. Team up with a professional who will shoulder the majority of the workload and be your advocate time and again.
Did you know? Real estate commissions are paid by the seller out of the proceeds of the home. The commission is not an extra fee, it’s built into the listing price.
