Want to sell faster? Pay your agent more
So, it’s time to sell your house. You’ve been reading the news. You know how tough the residential real estate market has been. The thought of watching your house sit on the market, unbought, terrifies you.
What to do? Some agents have a suggestion: Pay them more.
An interesting story on BusinessWeek, written by Prashant Gopel, says that as it’s getting harder to sell homes, some agents are charging more to guarantee better results. You can read the story here.
Typically, real estate agents earn a commission of 6 percent of the house’s sales price when it finally does sell. But because selling a house during the current residential slump has gotten so much harder, and takes so much more time, many agents are charging more than that standard 6 percent. According to the BusinessWeek story, sellers are paying up to 8 percent commission to their agents. Even more surprisingly, some builders, hoping to get rid of their excess inventory, are paying real estate agents commissions of 10 percent.
Wow. That’s all I can say. Not to sound churlish, but I can’t imagine paying a real estate agent more than a 6 percent commission. Frankly, a 6 percent commission — even though the agent does not come close to receiving that entire 6 percent — is a lot of money for a seller to give up. And I know that it’s harder to sell houses today. But it was awfully easy to sell them just two years ago. In fact, it was easy to sell houses for a long time.
I don’t think agents deserve larger commissions just because the market has gotten tougher. Now’s the time for agents to work more creatively, to take those extra steps — both in marketing a property and by digging deeper into their network of other real estate professionals — to sell homes. Yes, it’s harder work. But that’s life. Real estate is a cyclical industry. There are going to be tough times and great times.
Unless agents are willing to take 3 percent commissions during those times when it’s easy to sell homes, I don’t like the idea of giving them 8 percent commissions when it takes longer to move properties.
Tags: BusinessWeek, commissions, sellingRelated Stories
POSTED IN: Buying a Property, Insights and Commentaries, Real Estate Terms, Real Estate Tools, Road to Profits, Selling a Property
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