Fee or Commission?
Sellers – When they do the marketing of their home themselves, run ads, post signs, flyers, open houses, show the home and find a buyer who wants to write up an offer. This is a crucial point to begin negotiations that hopefully, conclude in a successful closing. In order to do that, the seller finds negotiating for getting the most out of the transaction has to be balanced, and is not sure what action to take, and more if the buyer has no representation. This can become the “blind leading the blind!” Sellers, unknowingly let go of opportunities that could have been workable for both parties, because they have no idea of what to do next. And if the other party has representation, it can be overwhelming in trying to negotiate against a pro, who does it all the time.
Sellers – who have a standing offer even before marketing their home. Could be someone at work, friend or other family members, who heard the seller is contemplating the sale of their home, and just point blank propose to buy the home. This is where a small payment can save you a ton of cash. Sellers who have procured their own buyer need an agent to provide the negotiating, and troubleshooting the transaction in order to ensure the Seller doesn’t encounter any costly surprises, and the property closes on schedule.
Sellers – who request functionary services only, like marketing plans, including photography, videos, floor plans, and featured packaged materials to give out to buyers, including internet, do it to create more exposure. While most people have access to these tools, an agent is certainly equipped and has the know-how to perform such tasks better and faster, and it is usually worth the cost. Since internet presence is extremely important nowadays, an agent can provide a website at a monthly fee for the duration the home is on the market. It is professionally done and it looks official. Many agents are willing to provide these services with the understanding that if they procure a buyer, they will be paid the buyer-side fee.
Buyers – Who prefer to pay their agent themselves and have the money go against the offered co-broke on the property they decide to buy.
Buyers – whether it’s their first home purchase or seasoned home buyers, even investors
who in different stages of their transaction, see the value of an agent in the negotiating and troubleshooting and do not have the time it takes to go from contract to closing.
Flat Fee ~ Bundle of Services
Flat fees have long been associated with limited services to the MLS Entry only, it has proven to be unsucessful more often than not to Sellers. If you want to be included in any multiple listing service, be sure that you bundle it with the negotiating and troubleshooting services of a pro. Many of my clients expressed they don’t want to ever go that road again.
A bundle of services is structured to include vital fiduciary services. A good venue for those sellers who prefer to pay a non-contingent flat fee rather than a commission, who do not have the time to play real estate agent, and what they want is to forego the high cost of paying for an outcome. These services can be very elaborate and include everything that a seller would typically get with a commission, all except the insurance policy. On average, those who choose a full service package net a higher sales price for their property and their market time decreases.
Other bundle of services are also designed to reach at middle ground. The most important aspect is all the fiduciary services remain, with limited functionary (paperwork) and marketing utilized strategically. The choices are only limited to what is mutually agreed by seller and consultant.
Fees vary according to market conditions and determining how many hours it takes to complete various tasks, adding in material costs and a fair and reasonable profit. To get an idea of the savings, an expert consultant charges $150. per hour and it is capped at 6 hours. An average time to negotiate and troubleshoot a transaction. If it takes the 6 hours, seller pays $900. Compare that amount to even a discounted commission, it is still a much better proposition for having received expert quality services with full fiduciary services.
Commission ~ Traditional Services
We all know the many commission packages offered on the market place, and also its variations on different locations. However, there are certain circumstances where paying a commission makes more sense. Like when a seller is not 100% sure that they want to sell the home and are just testing the market, the price doesn’t matter if a non-contingent fee will not work for the seller. When selling a lower priced property or condo, the commission is less because the costs associated with the various tasks remain the same, whether they market a $30,000. condo or a $500,000. home. Under certain sale prices, the seller actually, pay less when paying by commission.
I can go on with examples, and at the end of the day.. It is all about freedom of choices to use alternatives methods that save you money.
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