Congratulations! You’ve sold your home for $300,000! Before you start happy dancing, maybe you should know that $18,000 of your profit transfers to your listing agent’s and the buyer’s agent’s commission. That initial purchase price might have looked pretty good, but you’re actually walking away with significantly less than you thought. You might be familiar with how commissions work in real estate but have you thought about what services you are paying for when selling your home? The traditional commission structure for real estate doesn’t make sense in today’s modern market. With so many advancements in the real estate industry, maybe you should question your traditional 6% agent. You should know what your agent is getting, what they are doing for that commission, and if there is a more reasonable option.
How Commissions Are Split
In a traditional real estate transaction, 6% of the purchase price covers commissions and is divided in four different ways. The commission is split between the listing agent, the broker who the listing agent works for, the buyer’s agent, and the buyer’s agent’s broker. For example, if you sold your home for
$200,000, 6% of that amount ($12,000) would be split in half and go toward commissions for the buyer’s agent and the listing agent. The agents and their brokers split the commission based on what they’ve agreed on. If an individual has a broker’s license and sells the property he/she listed, there are no splits and that person gets the full 6%. If the agent who lists a property also sells that property, he/she only has to split the 6% with his/her sponsoring broker. It’s interesting how even though the services are the same, listing a home for $100,000 is considerably more affordable than listing a home for $400,000.
What Your Traditional 6% Agent Does
So what exactly are you paying for? When talking with a real estate agent he/she says:
“I will market your home”
“I will help you with pricing”
“I will negotiate for you”
“I will oversee the sale process and resolve problems that come up before closing”
But here’s the problem with that. The Multiple Listing Service (MLS) is the real estate market. It is the primary tool when marketing your home. Serious buyers will be looking at MLS websites such as Zillow, Realtor.com, and Trulia. You can list your home on the MLS for a flat fee of $495, instead of paying a steep percentage. Posting your home on the MLS will make sure that many, many agents and buyers are aware of its availability. Creekview Realty not only lists your home for a flat fee but can also provide agent representation when negotiating offers. With our online resources about the transaction process and your experienced Creekveiw agent, you can rest assure that the process to sell your home will be handled correctly without a traditional agent.
Why You Shouldn’t List For 6%
If you are caught paying a 6% commission, you have to price the property high enough to make up for that. When you list with Creekview Realty, not only can the listing price be lower, but when a buyer contacts us about your home, we refer that buyer directly to you. This allows you to avoid the buyer’s agent commission too, which allows you to make another 3% price concession that you wouldn’t be able to with a 6% real estate agent. When you use Creekview Realty to sell your home, you receive more for your home.