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Debunking 4 Myths Regarding Your Agent’s Commission - Bank Clip

Debunking 4 Myths Regarding Your Agent’s Commission

As odd as it may seem, 63% of sellers decide to put their homes on the market without using a real estate agent. One of the primary reasons they choose to forgo the help of an experienced agent is because they don’t want to give up 6% of their earnings from the sale. As an example, say you sell your home for $200,000 and you’ll have to give your agent $12,000 of that. That’s a sizable chunk of change? 

However, what folks who sell their homes without an agent are more likely to sell their homes much lower than they would with an agent. So, when it comes to the bottom line, you’re probably going to lose a whole lot more than that 6% by selling on your own. 

Before you think about going the for-sale-by-owner route, here is a bit of information about an agent’s commission that should prove why an agent is worth that commission.

1. Your real estate agent doesn’t get the full 6%

Although you are going to be paying your agent 6%, you need to know that your agent isn’t going to keep that full amount. Typically they’ll split that commission with the buyer’s agent. 

So, taking our previous example, your agent is going to hand over $6,000 to the other agent. Not only will they have to split that money, they will have to pay their broker a percentage, which could be anywhere from 10% to 50%! By the time they get their commission check, they could be going home with as little as $1,000! Ouch.

2. Your real estate agent puts in a lot of work to sell your house

When you’re thinking about how to pick the perfect agent, you should be looking for an agent with a strong marketing strategy. You don’t want an agent who simply puts your home on the local MLS (multiple listing service). You want an agent who does their research about the local market . They’ll have a professional photographer take pictures of your home, they’ll be networking, and doing so much more behind the scenes. 

3. 6% commission isn’t set in stone

We’re often under the assumption that all agents will receive a 6% commission, but the truth is, it can vary depending on the state or even the city. The national commission rate isn’t regulated by the federal government and because of this, you may want to do a little research to figure out what the average rate is in your area. 

4. Highly rated agents sell your home quicker and for more money

When a buyer is using a tool like home affordability calculator, they’re going to want a house that is worth the money. If you don’t know what your home is worth, your agent can help you determine a fair price. They’ll also offer some suggestions on how you can increase your home’s value to get you more money and appeal to more buyers in an effort to get your home sold quickly. Right now, it’s a strong seller’s market in 92% of the markets across the market, and because of this, sellers could receive offers above asking price! So, while you may balk at the idea of giving your agent 6% of the sale, if your home receives multiple offers, you could earn a whole lot more money than expected. So, let’s say you receive an offer for $220,000, your agent would receive $13,200, but you’d be walking away with $206,800 as opposed to $188,000. Keep in mind these figures do not include other costs associated with selling your home and you own your house outright. Cha-Ching!