Today, I wanted to discuss with you some common misconceptions buyers and sellers often have regarding agent commissions. First, let me ask you this, would you go to an important court case without hiring a lawyer? You certainly can represent yourself but without the help of a professional, you probably won’t have the best chance of winning! In our business, we often hear from customers that they want to save money by not using an agent. This may not always be the best case because as real estate professionals we can offer knowledge and experience to help our buyers and sellers navigate a competitive market and a complicated transaction. Here are our 3 most common objections we hear about agent representation and commissions:
- A common objection we hear from
unrepresented buyers is, “I don’t want to use an agent. I want to submit an
offer myself so I can use the commission the seller saves as a negotiation
tool.”
This is a misconception. Most homes you see on the market today come from the MLS and are listed by a REALTOR. This means the seller is under a signed agreement with the Listing Agent to list their home for an “X” amount of commission. This commission amount most often already includes a Buyer’s Agent commission split. When an unrepresented buyer shows up with an offer, the commission the seller owes to the listing agent does not change. The commission the seller pays has already been negotiated BEFORE the property hits the market. In effect, an unrepresented buyer is not “saving” the seller any money but is missing out on professional representation in a tough real estate market. - Another misconception from buyers
comes from the new construction side: “I want to buy new construction. I don’t
need a REALTOR; the builder already has sales agents on site to help me with my
home build.”
Builder salespeople NEVER represent you as the buyer; they work for and represent ONLY the builder. Reputable home builders love working with local agents. Builders already factor in the cost of a buyer’s agent commission into the price of their homes. They don’t charge you extra if you bring an agent with you. On the flip side, if you choose not to use an agent, the builder is not going to subtract the cost of commission from your home price. You’d just be putting more money in the builder’s pocket! In this case, why wouldn’t you want an agent working for you and your interests in such an important transaction? - Last but not least, we have also hear
objections from sellers, “I’m going to save a commission by selling my home
myself.”
One thing to consider is that most home buyers are represented by a professional. Only 4% of buyers purchased homes directly from the seller, without the use of an agent. So even when selling your home yourself, you will need to think about offering a buyer agent commission to appeal to more buyers. According to NAR’s Profile of Home Buyers and Sellers, only 7% of homes were sold For-Sale-By-Owner in 2020. Historically, it is shown that FSBOs typically sell for LESS than the selling price of other homes. FSBO homes sold at a median price of $260,000 which was significantly lower than the median of agent-assisted homes at $318,000. That means the home sold with the help of a real estate professional sold for 22% higher than a FSBO home! Are sellers really saving money by selling their homes themselves? That 22% difference could have paid for the commission several times over!
In this fast, competitive market, hiring a REALTOR can help you navigate the complicated home sale process. If you have any questions about buyer or seller representation, please give us a call today at (214) 449-1022! We’d love to help you in your home sale!
