Is Your Real Estate Broker Charging Too Much
Date Added: August 17, 2008 05:45:59 AM
Is My Real Estate Broker or Real Estate Agent charging me too much? That is one of the most basic questions that a person who hires a broker asks. It’s something that so many people can’t help wonder about. It is also something that is easily answered if you take the time to ask you real estate broker: Hey! How much are you charging me?
Is My Real Estate Broker or Real Estate Agent charging me too much? That is one of the most basic questions that a person who hires a broker asks. It’s something that so many people can’t help wonder about. It is also something that is easily answered if you take the time to ask you real estate broker: Hey! How much are you charging me? Get it over with!
Before the question eats at you like a wound that just won’t heal or a sneeze that never came to be – it is always better to get it over with. Pluck up and as your agent the question. You can take a diplomatic and less confrontational route by asking them sweetly: “How much are you charging me for this purchase?” You can also take a more severe and upfront hack at it by asking your broker: “Hey! Are you charging me too much?”
The first approach is in general a better approach compared to the latter. But, whichever you’re comfortable with is fine. As long as you don’t send your real estate agent squirming in his seat and sweating like a pig. It’s alright. Anyways, most agents get commission percentages out of the way even before they start looking into houses for you.
How much should your agent charge you?
Ideally, an agent should never keep more than 5% for themselves with each sale or purchase. Most agents charge you with a 6% rate for every sale. But, 50% of that 6% will be given to the purchaser’s broker. That means your agent will actually only be getting 3% of the total sale price. Do you follow so far?
It’s like this. When it comes to real estate, most of the time agents deal with other agents. Once you hire a real estate agent to sell your property, that agent will look for another agent who has a client looking to buy a house. If they get into an agreement, then your house is sold.
So, when you agent tells you that 50% of her 6% commission will be given to the buyer’s agent – then she is telling you the truth. Your agent will only be getting a 3% commission from your money and the other agent will be getting the remaining 3%.
Don’t feel bad for your agent if you think that 3% is too small. Just think of it this way. A house often sells from 100,000 USD to Millions of dollars depending on the size and location. And even at 100,000 USD, your happy agent will be getting a whopping 3,000 USD. Not so little anymore is it?
Discounts
A real estate broker would often be found offering you a discount if she makes a deal with a fellow agent in the same firm. The original 6% would often be reduced to 5% commission. That commission will be split between the two real estate brokers depending on their set agreements. These discounts are given in order to maintain transaction flow throughout the agency.
