Why You Have To Pay Estate Agents Commission

Lately, lots of individuals frown on having to pay real estate agents commission. This is partly because of uneducated agents who were unleashed on the marketplace to offer a surprising service and because of advertising done by certain property portals, advocating that property sales is a “Do It Yourself” job for the masses.

This kind of thinking is problematic within it self and usually leads to disaster. Imagine taking a stance of never going to the dentist or doctor and applying self-medication. What do you think will happen? Those results are interesting. Perhaps a legal matter, you could do research on the internet, speak to a call center agent at a subscription legal service and then show up in court to defend your own case. How would that turn out? We discuss with professionals because they (hopefully) have years of experience and knowledge. We know that they are in a position to help us in a professional manner and know that we will not be subject to any pitfalls under their guidance.

Let’s get relevant. Ever heard of the man who signed an offer to sell his house and then agreed to let the purchaser move in and pay occupational rent prior to his bond being approved? This “purchaser” decided not to apply for his bond or pay occupational rent. He was a professional squatter and the property owner had to incur great expense to have him evicted. This is one of countless examples where an experienced estate agent could have saved the day.

Some folks feel that estate agents commission is just too high. Larger franchises usually change 7.5% of the purchase value, while independent agencies vary anywhere between 3% – 6%. When an agent works for a franchise, they have to share their commission with the agency and if not for the high percentage, would not earn enough money to survive. Freelance agents do not have this expense and can therefore afford to lower their commissions. Generally speaking, estate agents do not make lots of sales in a month. Between 1 – 2 sales seems to be the average and sometimes. Many months can pass without making a sales. Although these commissions may appear high, when you average it out over 12 months, it is little more than an average salary.

Please bear in mind that estate agents are real individuals with real families and real monthly expenses. Don’t ever attempt to get out of paying commission when it has been earned by an agent. I am certain you can imagine what it would be like if your employer approached you on the 20th of the month and informed you that your salary won’t be paid. Think about what you would do in this case and if you can bear doing it to anyone else?

In conclusion, if you do use an estate agent to help you sell your property, make sure that they’re qualified and experienced (as you would a doctor). Use their expertise to your advantage and always pay what is due.

Another great article by Wes Keller Real Estate, First American Title – Kenai Free reprint avaialable from: Why You Have To Pay Estate Agents Commission.