The first step in understanding a 1% listing fee is to learn how real estate brokers (also known as agents) are paid. With most transactions, the average commission is 5-6% of the sale price and that amount is divided between the buyer’s and seller’s agents.
Advertisements that say you can sell your house for 1% of the sale price fail to mention that you pay the buyer’s agent’s commission. This commission is usually around 2.25%. Many services listed may not be included or may result in additional fees/charges/costs and directly impact how quickly your home will sell. Often times, these companies focus on the number of transactions that can be performed over the quality of those transactions.
The bottom line is you get what you pay for
and every transaction starts and ends with a broker negotiating for you. When
it comes to the biggest financial transaction in most people’s lives, a
broker’s experience is what you are paying for.
Your 1% broker is going to compete with
experienced brokers. Poor negotiations, bad sales strategies, pricing the house
improperly, not understanding repairs on the house and not negotiating them
properly, even something as simple as bad photographs, improper staging or any
combination thereof can cost thousands of dollars.
Would you use a cheap surgeon for your by-pass surgery? Would you use an inexperienced lawyer to represent you in court? Or purchase a Groupon for your Lasiks? So why would you use a cut-rate realtor to represent you for one of your largest investments of your life?
Who Do You Want to Represent You?