Five Little Known Facts About Real Estate Agent Commission

Real estate agent commissions – an unavoidable, fixed cost of buying or selling a home, valuable only as incentive to real estate agents. Right? Wrong. Here are five little known facts about real estate agent commissions.

1. Real estate agent commissions typically come out of the proceeds of the sale of the home. Some people think of their real estate agent’s commission as a fee charged on top of the sales price. It’s not. Because most homes in the Portland real estate market and around the world are bought and sold using a real estate agent, market prices reflect the value of the home, real estate agent commission included. It’s not tacked on above and beyond the price the home sells for.

2. Real estate agent commissions keep the market moving. The agent commission system is set up the way it is — in Portland, Oregon, the U.S. and most developed countries — because it works. Real estate agents are motivated to sell homes because otherwise they don’t get paid (no bimonthly paychecks!) This keeps market inventory at a reasonable level, and in a sense keeps homes values high. Real estate agent competition creates powerful marketing platforms and systems to get the job done.

3. Real estate agent commissions are a good for your home sale. Here’s the bottom line, according to the NAR 2014 Profile of Home Buyers and Sellers:

“FSBOs typically have a lower median selling price: $208,700 compared to $235,000. Thus the typical agent- assisted home sale typically has a 13 percent higher sales price than the typical FSBO sale.”

4. Real estate agent commissions are not fixed. All real estate commissions are negotiable. I offer my services to Portland home sellers for a 2% commission (and offer the standard 2.5% to the buyer’s agent). If I represent both the home seller and the buyer, my total commission never exceeds 3%.

5. Real estate agent commissions pay for themselves. Yes, it’s technically possible to pocket more of your home’s sales price by listing it yourself. On average, however, homes that are sold by their owners don’t fetch their full market worth, or they take so long to sell that the homeowner negated any potential savings by continuing to pay out on the mortgage for those additional months. Real estate agents do their work (namely, marketing your home) in order to generate a greater number of offers, which translates to a better sales price for your home. We typically get over 100,000 online views per listing! This often translates into as many as 2,000 online buyer views a day. That is STRONG marketing you can’t obtain by yourself. Once that offer is in, your real estate agent will continue to work on your behalf to insure the deal doesn’t fall through.

Still have questions about Portland real estate agent commissions? Feel free to contact me. For 4.5% to 2% commission, I offer one of the best listing packages in Portland.