With Real Estate Agents, do You get what you Pay For?
There’s a funny thing with real estate agents, and it’s called commission. Some charge 5 per cent, some 7. Others still get away with charging only 3, or as low as 2.5 per cent commission. But why the difference in commission rates? And are real estate agents really worth 7, sometimes up to 9 per cent of the sale price of your home? When it comes to real estate agents, do you get what you pay for?
Some home sellers believe that if not all, at least most, real estate agents are only after their money. Money made off of the sale of their home. But the problem is that home sellers, and even home buyers, only see what real estate agents do on the surface. To these individuals, it might seem as though agents only file a few documents, fill in a few blank spaces, and snap a few pictures of their home. But truthfully, real estate agents do a ton of work behind the scenes. They are registered with MLS, and know how to work within the system in order to best sell a home – any home.
“I do not think that agents are being unrealistic with their rates, especially if people understood what is involved in the selling process and the work that goes into getting the highest price for that property,” said Alex Prasoulis, the owner of iListRealEstate brokerage.
But sellers and buyers want to know why their $900,000 home is being charged the same commission rate as a $300,000 home. After all, if the home price is higher the real estate agent will make more money anyway, so why do they need to charge the same commission, just to make even more?
The fact of the matter is that, just like with any other policy – such as only holding Open Houses on the weekends – most real estate agents set their commission rate as a policy and leave it like that rather than choose to discount certain homes or certain people and then constantly keep changing their rate.
But that doesn’t mean that you don’t have a choice in the matter. And you can still opt to work with a real estate agent that doesn’t charge exorbitant commission fees.
Tarik Gidamy, a broker at TheRedPin says, “I can see why some people believe they are being charged too much when they see the rates offered by others. It’s like anything in life, you get what you pay for. My advice would be not to go for the highest or lowest rate, go for the middle ground.”