|Listing Commissions and Related Issues
In most areas there is a customary percentage that real estate
agents expect to earn as a commission. When completing the
listing agreement, you and your agent will negotiate and agree
on the amount of the real estate commission.
When you agree to a commission with a listing agent, you should
keep in mind that there are usually two agents involved in most
transactions. Most of the time, only part of the commission goes
to the listing agent's company. The other portion goes to the
company representing the buyer.
Some commission-related questions you could ask:
Will your property be listed in the Multiple Listing Service?
Being listed in the MLS expands your sales force. Every agent is
invited to bring potential buyers to your property. This larger
supply of buyers effects your pricing power and the ability to
sell your home more quickly.
What is the effect on the company representing the buyer? Since
part of the commission usually goes to the company representing
the buyer, you may want to ask whether that portion of the
commission offers the customary amount. As mentioned above, the
more agents that show your property, the more pricing power you
have and the more quickly your home will sell.
What is the effect on marketing? Very few properties are sold
through advertising or open houses, but it does happen. Most
often, those ads generate calls from potential buyers or
sellers, who end up as clients for real estate agents -- and you
want agents to bring potential buyers to your property.
Advertising your property to other agents has a higher impact
than direct advertising to consumers.
Will you be tied in to other services? A real estate company
with bundled services has more income opportunity which may
allow them to offer lower prices. However, there are a few
companies whose additional services are not priced competitively
with opportunities you can find on the open market. You should
be sure to ask lots of questions and determine whether you are
limited to certain choices or you have the freedom to also
explore the open market.