You are ready to sell your home, so you begin looking for a seller’s agent to represent you. However, you dislike the idea of a 6% commission. It seems like a lot of money, and you aren’t even sure what an agent does to earn their keep. This article will explain your options, help you understand the value of having an agent in your corner, and explain a new option that gives you exactly what you are searching for.
If you don’t like the idea of a 6% commission, you have several options.
- You can just take a deep breath and sign a contract that gives the agents 6%
- You can negotiate a lower rate with an agent, suggesting something like a 5% commission
- You can pay a discount broker with a flat fee structure that gets your home listed on the MLS but little else.
- You can sell your home on your own (FSBO)
- You can sell your home using the flat fee, full service model offered by Recadia
Let’s look at each alternative a little more closely.
#1 Signing Anyway
You can simply do what most sellers do and sign a contract giving the listing and buyer’s agents 6% of the selling price of your home. A 6% commission will give you full service while significantly reducing the amount of profit you make at closing.
#2 Lower Commission
Many sellers find an agent willing to take less commission. They feel great about saving an extra 1%, but that still doesn’t remove the problem with a percentage-based commission. Namely, an agent’s job doesn’t increase or decrease due to the price of a home, so why should their pay be connected to the price of the home? Click here to read more about this fallacy.
#3 Discount Brokers and #4 FSBO
We’ll look at these two options together because both remove the agent from the picture altogether. With these options, you will do the work of the agent yourself and “earn” the commission yourself. The problem is that 88% of homes that go on the market this way never make it to closing. Those are terrible odds.
#5 The Better Alternative
There is a new model in real estate known as the flat fee, full service model. In this model, the selling agent takes a fairly priced flat fee and offers the buying agent a fairly priced flat fee. For this fee, the selling agent does everything a traditional 6% commission agent would do to help you sell the home, without the unfair prices. As a customer, not only will you have a full service agent helping you sell your home, you will save thousands of dollars. Because of this fee structure, both the buyer and seller can win financially, making your home easier to sell. Who wouldn’t want a win-win situation that provides the service you need, costs less money, and gives you a higher profit?
What Does an Agent Do For Their Money?
Although most homeowners feel that 6% is too much to pay for the services of a real estate agent, most will agree that those services are worth something. Before you decide to “go it alone,” with dismal odds of success, let’s look at what a listing agent can do for you.
- Understands the Market: The real estate market can be tricky and includes things like number of houses versus number of buyers, days on the market before being sold, economic factors, and even seasonal factors. A good agent knows how to look at these numbers to help you come up with the best plan of action for selling your home. Although you can get this information online, understanding what the numbers mean and how they affect the sale of your home is part of an agent’s responsibility.
- Determines the Asking Price: With technology, homeowners believe they can easily determine the market value of their home. The truth is that although information abounds on sites such as Trulia, Zillow, and Realtor.com, it is impossible to know which information is correct as each site may produce different results. This means that it will be far more difficult for you to create true comps to determine the correct asking price. However, an agent has data that a homeowner does not have.
- Identifies Key Selling Points: You love your house and know why you love it. However, you may not be aware that buyers in your area are looking for things like tiled showers or a working fireplace, for example. An agent, however, because they work with buyers and sellers all day long, know exactly what they are searching for and can help you list points about your house that will create a buzz among buyers.
- Adds Your Home to the MLS: If a home is going to sell, it almost always needs to be listed on the Multiple Listing Service (MLS). This is how other agents find your home and buyers find your home at online sites. Even though you can pay a discount broker to add your home to the MLS, you won’t have access to that listing yourself. Having an agent you know and trust create a solid MLS listing is very important. While at it, an agent will also ensure your home is promptly and accurately listed on the major online sites such as Trulia, Zillow, and Realtor.com.
- Coordinates Showings and Buyer Inquiries: Having an agent ready to welcome potential buyers and answer any questions they may have is a real plus for many sellers. Because this is an agent’s job, they don’t have to rearrange their whole schedule to accommodate those that wish to see the home. They can also take buyer calls, weed out the window shoppers from the serious buyers, and determine who is a qualified prospect.
- Negotiations and Contracts: Negotiating an offer can be tough, especially if the offer is too low or asks for too many changes to the home. Nothing feels worse than having someone lowball a price when you love a home with all your heart. The truth is that homeowners feel strongly about their home, and this can be the number one deal killer. An agent can easily take a step back and react with professionalism because they understand the market and stay focused on keeping the most money in your pocket. Agents are there to help temper the emotional aspect of selling a home, which can be a stress reliever for the seller. Additionally, they know exactly what paperwork is needed and can be sure that the contracts signed are legally binding.
- Closings: Until a home has gone through closing and funding, it has not sold. Things like low appraisals, issues with the title, inspection findings, and a buyer’s inability to get financing can all derail a sale. An agent has the expertise needed to work through these issues, often guiding a home to sale that could have ended in disaster if being handled alone.
Flat Fee, Full Service Makes Sense
Once sellers understand how much an agent does for the sale of their home, they are typically eager to get one on board, but most still chafe at the idea of 6%. That’s why Recadia developed their flat fee, full service model. We understand that we offer a great value to our clients. We also understand that due to technology, which has made our job more straightforward, a 6% commission is no longer warranted.
With Recadia’s model, buyers and sellers get all the services traditionally offered by agents, plus a few perks rarely offered by other agents, like a 24/7 communication plan. This is all done for a flat fee that makes sense for the work done. In the end, the buyer and the seller are winners, and the agent gets paid fairly for the work they perform.
To learn more about this win-win situation, give us a call at (214) 281-8500. We’re ready to help you save thousands without skimping on services.