One subject matter that can be hard to discuss between clients and agents in real estate is the matter of compensation. No one likes to talk about money that much, or what a buyer/seller is going to have to bring to the table with it comes time to pay the agents for their services. I find when I discuss my fees with clients I like to break it down into a few realities and truths that many people do not know about agents:
· We receive no hourly salary – Time is our greatest commodity and when we are working for you we are investing countless hours taking you to see homes, having open houses, writing up contracts, getting on the phone with other agents, inspectors and other real estate people. We spend seven days a week working for our clients to make sure a transaction runs smoothly from the acceptance of the offer to the closing day. We are in a career where we spend hours upon hours helping clients and will only be paid if and when we close the deal. If we do not close, no matter how much time we spent on your real estate endeavor, we do not get paid. No ifs, ands or buts about it.
· We split our commission with other people – A lot of clients see the commission rates anywhere from 3%-10% and sometimes question why the amount for the agent. Well the truth is, we have to split our commission with everyone involved in the real estate transaction. First, between the real estate companies involved in the transaction. The company with the closing agent will then pay out that agent and the rest will go to the real estate firm to help pay taxes and business overheads. They also use their portion to help market your home, media and other social platforms to help give your house the best chance to be sold. Remember, both agents get paid, the seller’s agent and the buyer’s agent all comes out of one commission. When explained that way, it is easier to see why a percentage may appear high but actually is being divided when the real estate deal is done to cover everyone’s expenses that was involved in the transaction.
· Our commissions = Our salaries – This last discussion is always tough because when it comes to my clients; I want to do my best for them as a real estate agent. And when it comes to my commission, there is a little room for negotiation but for the most part, I have set prices for a reason. It would be like if your boss came into your office tomorrow and said hey, I want you to do all the work you are doing and maybe a bit more, but I’m going to cut your salary by 20%. What would you do in that situation? You would be one unhappy camper and would probably start looking for another job. That’s the same for us agents, you may not see all the work we do behind the scenes but I have spent countless nights working well into the wee hours to make sure my clients buy or sell their homes in the best way possible. You are paying for experience, you are paying for my time, you are paying me because you know that I care immensely about each of my clients and will work my butt off to make sure everything happens the way it should in any real estate transaction.
No one likes to talk about money and payment but I also want to educate my clients so that when the time comes they will know what to expect. Just remember, anyone can pay an agent, make sure you have a great agent working for you so you know your money is going towards everything you want in your real estate endeavors. Feel free to contact me today and let me help you with your next real estate purchase or sell.