One of the things I have to explain to sellers when I'm on a listing appointment is why I can't take a reduced commission to sell their home. My first response is, weren't you paying attention to all the marketing I do for your house to get it sold and do you not understand how much time, energy, and money it costs to do that? Asking a Realtor to take a reduction is like asking you to work a full 8 hour day at the office, with your full duties, and then asking you to only work for 1/2 your salary because the company needs to cut back a little bit. What would you say to your boss? I would hope you would say NO along with a few choice words!
Well, a study came out a couple of months ago for the Dallas/ Ft Worth area and it's VERY interesting. One of the results is as follows:
*"Limited service listings sold for 1.7% less than typical exclusive-right-to-sell listings and took 17.1% longer to sell."
WOW! Let's put that into real numbers. Let's say there is a house that sells for $200,000 in 60 days with a full service REALTOR®, like me. The above statistics would show this same house, with a limited service brokerage, would sell for $196,600 in 70.26 days. So, the seller "tried" to save 2% on the listing commission... did he succeed?? NO!
The difference in price is $3400. 2% of $196,600 is $3932. Then you need to calculate those extra 10.26 days on the market. What are your taxes per day? Let's say tax are about $5600 a year which would be about $15.56 a day. Home Owner's Insurance can be estimated at about $5 per day ($1800 yearly coverage). Taxes and Insurance for the additional 17.1% marketing time is $210.95.
So, in all actuality, you didn't save 2% of the commission with a limited service brokerage. What you saved was $321.05. Is it really worth $321 to schedule all your own appointments; to be home for each and every showing to let them in the house; to sit on the market an extra 10 days; to call for feedback; or to negotiate your own contract instead of having the help of a professional? What is your time worth to you?
*Tierra Grande by James Ford and Ron Rutherford; January 2006
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