Paying a realtor a pricey commission may seem like too much of an expense when you’re already spending so much on housing costs. Typical commission for real estate agents can be anywhere between 5% and 7%. A realtor that works for a lower commission might seem appealing; however, they might not work as hard to advertise your home to get it sold efficiently, whereas a realtor that works for more commission will get you the most money for your home in the least amount of time.
A house will likely be the most expensive purchase of your life which on one hand, may seem like you should save as much money as possible. Though in actuality, a house is also the biggest purchase of your life, so you should be willing to put as much into it as possible and be willing to pay the extra cost to buy and sell right. For the buyer, hiring a buyer’s agent is free of cost! The seller of a home, however, pays 5-7 percent of the cost of the home, half to the buyer’s agent and half to the listing agent. This may seem like a lot of money for each agent to make, but what most people don’t know is that real estate agents do not keep all of the money they make on commission; part of their percentage has to go to broker, real estate membership dues, programs and technology, a photographer, marketing, and other various things as well.
As a seller, you may be tempted to list your house for a slightly lower price in order to help cover commission, or not use a real estate agent at all, but these tactics will not help you in the long run. Realtor.com reveals, “A recent survey from Keeping Current Matters… found that homes listed for sale with a real estate agent sell for $46,000 more on average than [for sale by owner] FSBO houses. Perhaps that explains why 92% of home sellers use an agent to sell their house.” Using a top real estate agent that performs their job with excellence will result in a quick sale of your home for top dollar, so the commission is worth hiring a good agent. Realtors are familiar with the current market and area, so they know exactly how to price your house right for sale. One additional reason to use a real estate agent and pay the commission is that they have access to the Multiple Listing Service (MLS) which has much more information than Zillow and other similar websites. The MLS shows houses for sale before listings will show up on other free websites accessible to anyone. Additionally, the MLS provides more photos and alternative and more accurate information on each home. Agents also take a lot of work off your shoulders and take selling your house the right way into their own hands; they take care of taking photos of your home to post in various places, creating ads of your home for sale, setting up and hosting open houses to let buyers see what you have, and so much more. All of these things combined take a lot of time and effort. Having a professional in the field to help you will benefit you more than you know.
So far, you may be thinking to yourself, “Sure, help would be nice, but I think I could pull all of this off by myself.” Hold that thought. Do you know how to screen buyers to make sure that they can even get approved to purchase your home, and do you know how to take care of all the closing paperwork, get the best price, work on appraisals, and set up all of the inspections? This is a realtor’s job, so they know exactly how to take care of all these things with ease and diligence. Not only do professional photos and advertising help sell a home, rather than the do-it-yourself kind, but getting a professional to handle all closing matters makes the whole home buying and selling process much smoother.
So why is real estate commission so high? If you sell your $300,000 house, you have to pay the agents as much as $21,000—that’s a lot! But just remember two things; One, that money gets split between several people as well as put toward agent costs and costs of getting your house sold properly. Two, you are paying to get your house sold for top dollar with no surprises and professional marketing to get the job done quickly. Real estate commission is worth the money it takes to get your house sold. Selling and buying homes is a big deal, and you should get the most for your money!