Six Percent to Sell my House? Are you Nuts?

 It’s an interesting thing that’s going on in our business these days.  Due to the influx of discount brokers and the power of the Internet, many are reevaluating what they feel a reasonable amount is to pay in commission to their broker and the cooperating agent.  We have seen the norm of six percent often be challenged down to five percent or lower.  On its face it makes sense to grind… Get the costs down, profit more.  The only issue with this is it doesn’t work that way under most cases.  Why?  Because there is a lot more to selling a home effectively, legally, and at a high dollar amount than simply uploading to the MLS and waiting for the offers to pile in.
When I was pursuing my degree in business we went deep in the area of profit and loss and those lessons apply here.  If an agent negotiates a six percent commission for example, at least 2.5 percent or three percent traditionally will go to the agent representing the Buyer.  That reduces the income of the listing agent by roughly 50 percent.  Then you have the marketing fees to promote via social and of course the high-level photographer’s fee, in our case our Sellers Advantage Program fee, etc.  All this reduces it further leaving a margin of profitability that the agent uses to pay for soccer or school for his/her kids and whatever life expenses they may have.  Common sense will say if there is already no real profitability due to a significant grind up front to five percent or below, something will be cut to allow for profitability.  It could be using their iPhone for pictures instead of the legitimate real estate photographer.  It could be only posting your listing free on social platforms versus paid ads.  One thing it won’t be usually is Timmy’s soccer.  In the end, you lose due to the marketing cuts that occur behind the curtain and this results in less exposure, often times less showings, and less opportunity for that holy grail situation in real estate of multiple offers.
Lastly, isn’t one of our top value propositions to negotiate on your behalf?  If they negotiate Timmy’s Soccer or Jenny’s Ballet right from the beginning, what do you think will happen when it’s time to negotiate for your family’s financial bottom line?  Think big picture—source out, call a trusted, highly-reviewed real estate team and let us do what we do best—get you top dollar, being financially empowered to do so at the highest level.
As always, I’m here to help any way I can.  Along with my awesome team of professionals, we will work hard to get the best purchase or sale for you and your family.  Call/text anytime and we are happy to answer any questions you may have at no charge. Randy Plaice, CalBRE#01863252 RE/MAX of Valencia 818-294-0414 or office: 661-702-4626.