Today we’re going to talk about a question we discuss all the time: Does paying a lower commission get you more money?
People regularly assume the answer is yes. The question from us in response is: Do you want the lowest cost, the highest price, or the biggest net? I love the line that I’ve heard before, “If you think it’s expensive hiring a professional, try hiring an amateur.”
In the end, it’s about what you value in the transaction. If you’re looking for someone to just throw your home on the market and hope it sells, there are agents who will do that. They will give you no advice, and it’s almost like an FSBO situation—it’s a limited service agreement, and they are not negotiating on your behalf.
“If you think it’s expensive hiring a professional, try hiring an amateur.”
The biggest value a true expert adviser gives you is proper preparation and negotiation. Negotiation is something where you can see huge swings. You can see a deal swaying anywhere from $50,000 to $100,000 to $150,000 in one deal, just due to the ability or inability on the part of the parties that are negotiating.
Many negotiations go into a deal. You’re negotiating price, closing costs, the inspection, and the appraisal. When something goes awry, it’s typically going to cost you way more than 1% or 2% of the deal. If a party on one side of the table is a much stronger negotiator, they’ll steamroll the other side in their client’s favor, which is, of course, what they should do. So, you will save money in one place hiring an amateur Realtor, but it will end up costing you more later.
We hope you found this helpful. If you have any other questions about buying or selling real estate, feel free to call, text, or email us, we would love to help you!
