Paying commission to a real estate agent when selling a property is standard practice, but how can you tell if your agent is doing the right thing and really looking after you? In this article CRAIG WILSON, CEO of PiC Group, explains commissions payable to real estate agents and why it is important to shop around to broker the best deal for yourself.
This is a popular question that I get asked a lot, and it’s definitely worth being aware.
If you are thinking about selling and on a mission to find the right agent, make sure that you read this blog first.
Let’s start with some quick basic knowledge.
What is real estate commission.
Is it usually a set percentage of your home’s sale price or a set price regardless of your homes sale price.
Previous to December 2014 real estate commissions were capped, but the day after these caps where lifted. This means every Agent can charge differently and they definitely all do that.
How much does it cost?
Usually there will be a fee plus a commission that the Agent will charge. Some bundle it together and make it the one percentage fee.
The fees involved are designed to cover the Agents costs for advertising and marketing your property, whereas the commission is the percentage of the sale price the property goes for.
Some agents can also offer a tiered commission.
For example 2% on the first $800,000 and 4.5% on anything above that, which can act as an incentive to reach that higher sales price.
What does that mean for you as a seller?
Easy, it means you need to shop around but don’t treat us like car salesmen.
One very important thing to keep in mind is paying more doesn’t always mean you are getting the best.
Try to find an Agent that has a percentage commission that works for you, but also makes you feel confident they can do their job, and make you comfortable.
Go for experience! Some Agents have been in the area for so long their knowledge is the best part about having them working with you on getting the best price possible for you.
There is no one rule that is the best rule, it’s what works best for you in the total package.
Look at price, marketing strategy, confidence, knowledge & skills, and overall vibe or feeling you get.
Craig is the founder of PiC Group since 1993 and SiNC Surveys, and a successful private investor in his own right, coming from a background in the insurance, financial planning and real estate development industries.
General Advice Warning: This blog is not designed to replace professional advice. It has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the advice, in light of your own objectives, financial situation or needs before making any decision as to what is appropriate for you.