Often, we find that many in the general public don’t truly understand the way the real estate industry works. Unfortunately, that can be dangerous for those about to make one of the biggest decisions of their lives! The uninformed may be taken advantage of, in little or big ways.
The realtor is a central part of this industry, and their role is essential to the success of the home buyer or seller. A great agent can make the difference between a great result, or an awful one. Those who have experienced the latter may not even realize what or who is to blame. In fact, due to the inherent nature of buying or selling a home, they may have expected a bad experience in the first place! Either way, staying informed is crucial for all members of the transaction.
The ‘Standard’ Commission
The backbone of the residential real estate industry is the commission. When the commission is paid, it is then split between any third parties involved in the transaction. Despite what many think, the realtor does NOT take the entire percentage. In fact, it’s actually the brokerage who initially receives it, and then pays others (such as the agent) involved in the transaction.
Another common belief is that the commission is always 6%. That ‘standard’ 6% commission actually isn’t standard at all. While it is good to use as a baseline, that number can change due to a variety of factors. Including the type of property, price, market size, and more. If your home is selling for a higher price, 4-5% is often a better baseline.
High Prices, and Low Offers
Often, many sellers believe that they should start with a high price on their home, and work to meet buyers in the middle. Many think that buyers will just make the offer they are comfortable with, and the negotiation can start from there, but this simply isn’t true.
A high price prevents the home from showing up in search results as buyers surf the internet, looking for good prospects. There are many homes on the market, so often it is just easier to move onto the next (and better priced) home. A seasoned real estate agent knows that a competitively priced home is the best way to reach the optimal level of traffic.
Low ball offers from buyers have a similar reputation and effect. Unless the home has been on the market for a very long time, a low ball offer can be easily ignored as the seller waits for other offers to roll in.
The biggest myth about the real estate industry is that is is a tedious and overwhelming process. Our goal is to turn this misnomer on its head. A dedicated agent can and WILL create an experience that the client is excited to share. We aim to do that with every single one of our clients!