A home is the largest investment that most people will ever make. When it comes time to sell your home, The commissions you pay can make a huge difference in the total amount you make on the sale of your home. When you are buying, the commission may make the difference between you being able to afford the home of your dreams, or having to settle for a less perfect home that costs less.
The real estate industry is relatively standardized. Most brokers charge three to three and a half percent, so the only way to pay a lower commision while getting the service of a broker historically has been to have a less expensive home. That’s not exactly the formula most people want to hear!For Sale By Owner
Many people who want to maximize their profit choose sale by owner. Do it yourself home sales have the advantage of not paying commissions, at least to the sellers agent. There is a long list of reasons why this is not ideal for most sellers.1. Buyer’s Agents
While choosing to sell your own home reduces the commission you will pay, the commissions for buyer’s agents still come out of the sale price. Many sellers who choose for sale by owner don’t want to pay buyer’s agents. This means that many buyer’s agents are reluctant to work with for sale by owner homes, cutting out a huge portion of the buyer market.
Another shortcoming of selling by owner is the inability to access broker specific tools such as the MLS. Multiple listing service listings allow agents to search all available homes in the area. If you aren’t on the MLS, it is much harder for buyers to find you. If buyers can’t find you, it will take much longer to get your house sold.2. Reduced Commission Realtors
30 years ago, technology resources were very limited. Real estate agents had to spend many hours just to get a listing ready to sell. The amount of time and energy that went into each sale meant that three percent commissions on each side of the sale made perfect sense.
If your options were all the resources of a trained real estate agent, or a sign in your yard with your own phone number, most people would accept that the agent was a necessity. When sellers and buyers had no ability to communicate, they would pay a higher rate to open up those lines of communication.
Now that we have the internet, technology tools can dramatically streamline the buying and selling process. This means that an agent can handle many more houses in the same amount of time. A company that focuses on low commission real estate utilizes all the technology tools at their disposal to make the work more efficient. This means the broker can maintain a profitable business while charging much lower commission rates- closer to 1 percent for the agent, rather than the traditional 3 percent.
As a seller, this means you can make more money on the sale of your home, while gaining all of the services an agent provides— the MLS listing, showings, and negotiating expertise. As a buyer, you can make a more competitive offer, since the savings on your agent are passed on to the seller.
In summary, the modern real estate market demands a real estate agent to make sure your listing is seen by as many buyers as possible. A low commission real estate agent allows you to get all of those services, while still keeping more money in your pocket, or getting more house for your money. Whether you are a buyer or a seller, a low commission real estate agent can make a huge difference in your results!