Real Estate Commission
I recently spotted a question on Trulia’s Q&A section from a potential seller who had asked if it’s “standard practice for agents to have different set of commission rates”! There were about 25 answers ranging from helpful to down right surprising. One agent was down right angry at Trulia for allowing such a question to be posted as it Trulia could muzzle the users and censor each question from the public. His response was that “By Law” agents are not allowed to discuss commission in public!
This is the same old school thinking that ranks Real Estate agents and attorneys in the same pool since we refuse to discuss commissions as if it has no bearing on performance. After all, aren’t we better off when pay is tied to performance!? Don’t we remember when Steve Job returned to Apple and his compensation was $1 and all of his take home pay was tied to the Apple’s Stock performance. Why can’t we be open about the Real Estate commission and allow our consumer to have a say.
For example, if an investor whose purchased a fixer upper with us decides to re-lists the property for sale after remodeling; we will only charge 1% to list that property and will not subject him to the full 3% listing commission that’s typical in the industry. And if we offer only 2.5% to the buyer’ agent, our investor has saved more than 2.5% on commission. The rational for it is rather simple since it will take us less effort to market such a property since we already maintain the previous list of buyers who were interested in the property. Less effort, should equal less pay.
The impact of such a practice is that our investors save more than $25,000 on commission on each $1 million dollar. And that $25,000 pays for a lot of repairs and creates a huge incentive for our investors to consider our services when they are looking to buy fixer uppers in Los Gatos, San Jose, Campbell, Los Altos, Milpitas and Los Alto Hills.
Do you think you Real Estate agent is doing enough to earn a fat commission check?!
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