There are many agents that promote their services at a low discount rate. I saw signs in the town. "Sell your house at 2%."
However, there are a few things to consider before using such an agent.
This fee is limited to the listed party! That's right, there are some rules, they are usually not included in those ads. This rule is that 2% commission is only a party to the transaction.
When the house is sold, the listed agent gets a certain sales price%. But they must also pay the sales agent [the person who bought the buyer].
They will hardly give sales agents less than 2.5%. This is because the buyer's agent is almost never willing to meet at a lower price. I know that I won't!
So now 2% has become 4.5%. Yes, it is even lower than the traditional 6%. But it is worth considering what I will tell you next?
2. Discount tax means discount service! You may not know this, but the fees that real estate agents must pay to run a business are huge! Therefore, when agents cut their pay, they must cut business efficiency.
On average, agents spend at least $500 a month to become an agent. There are desk fees, association fees, license fees, continuing [required] education fees, MLS fees, E&O insurance fees, etc., and there are countless examples.
Let's simply math. If an agent sells a $100,000 house with a 2% commission, they will earn $2,000 [but you spend $4,500 because the buyer's agent adds an additional 2.5%].
But wait! Their brokers usually account for only half of them. So now they only earn $1,000. Moreover, Uncle Sam also hopes that his production will be reduced.
So how do discount agents continue? They can get as many lists as possible, but they don't use them. They will put them on the MLS and wait and hope that the phone rings.
They can't do any real marketing for you. This is a simple math. Therefore, a small commission will get less service.
If they discount their value, they will also discount your value! Agents willing to offer such a low commission to your business are also willing to offer low offers in your home to get some kind of reward.
Think about it. If they can't even get what they deserve, how good are they really negotiating and getting what you deserve? They are willing to lower the price without being asked! How can this negotiation help you sell your house?
4. Training... Are they really enough? For each sale they made [if they made one], they handed half of the $1,000 check to their agent. Usually, a good agent can close 2 houses per month. Therefore, the broker brings his broker $1,000 per month. Is this enough training for brokers?
The fee that the agent must pay is high enough. But imagine the price paid by the broker! Just as agents cut their service levels, brokers must also cut their training levels.
What you end up with is a rarely trained agent who has no other reason than to wait for your house to be placed on the MLS. You get what you pay for!
5. Compare them to traditional 6% agents. 6% covers all aspects of the transaction. Agents who make their value will be able to offer a 3% sales price reduction to the buyer's agent. So more brokers will want to show your house.
In addition to simply placing it on the MLS, they will advertise your house in more ways. They can advertise for you instead of their "2%" fee.
They are not satisfied with their value and they know how to negotiate the best. So you can be confident that they can get the best price for your home. If they see a low offer, they will tell you that it is too low. They won't just "take away what they can get."
Moreover, the simple fact that they bring more income to brokers means that their agents have more ability to spend on their training. So they can guide you through legal issues that you don't even know may be a problem!
bonus: How much do you think you can save by working with a discount real estate agent? In general, you spend a minimum commission of 4.5%. This is 1.5% less than a 6% full agent.
So let's break it down again for $100,000. You can pay $4,500 with a discount agent and handle all of these plays. Or you can pay $6,000 with an agent who can afford your job.
This is only a difference of $1,500. But when you deal with the biggest financial investment in your life, it makes the world different!
Orignal From: 5 reasons not to use cheap real estate agents
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