Be prepared before you meet with an agent!
One of the first questions I get from a buyer when I first meet them is what will it cost to hire you (me)? I will address this question but first you must understand a few things. It is illegal for agents at different companies to group together and decide on what commissions will be offered. It is not illegal for a COMPANY to tell their agents what the commissions offered will be. Some examples are:
Joe with ABC Realty had a company meeting. At the meeting he was told that any member of ABC shall take no less than 6% commission aka Brokerage Fee for each listing they get. This is legal. Now let’s say Joe with ABC Realty met with Samatha at XYZ Realty and they said that neither company will list a property for less than 6% commission or Brokerage Fee. This is illegal. That is why you will see advertisements from different companies offering special commission rates, rebates or discounts. A rebate can be a touchy subject but basically it is monies given by the real estate company at closing to the individual who used that agents company to buy or sell their home. I personally will never offer a rebate but we will always negotiate our commissions.
Buyer’s agents can receive their compensations in numerous ways. I personally only receive my compensation from the listing agent who receives their monies from the seller. If I have a buyer who wishes to pursue a For Sale By Owner than I will ask for a commission directly from the seller in the form of a “one-time showing agreement”. If he declines then I will not receive any compensation if my buyer buys that home. This is a personal choice and practice. Make sure to read your buyer’s representation agreement carefully and ask how will your agent receive his compensation. Some agreements may call for the buyer to compensate the agent.
An important question to ask when you hire a listing agent is what will the compensation be to the buyer’s agent. Its unfortunate but some agents may or may not show homes unless they are offered a certain amount of commission. This could be a very important issue when trying to sell your home. In this market every potential showing is important. Is it unethical for a buyer’s agent to not show a home that may fit their clients needs because of the compensation offered? I will leave that to you to decide!
We once again thank you for reading our blog and remember to always consult your local Real Estate expert ! If you would like to contact us about this blog or others please email me at josh@fredhollandrealty.com or call 843-343-1307.
Avg. Sales Price: $202000
Avg. Days on Market: 118
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