Tuesday, May 13, 2014

Who Saves the Commission?

Save Commission-250.jpgWhen the market heats up it is always tempting for sellers and buyers to think they can get a better deal on their own without a real estate agent to represent them. But who's really getting the better deal?

One of the most common reasons buyers want to deal directly with the seller is because they feel they can save the commission.  It’s a valid consideration but interestingly, it’s the same reason the seller isn’t employing an agent; they feel they can save the commission.

Both parties cannot save the commission.  The buyer feels they have earned it because they’ve had to find the home, determine its value and negotiate with the seller.  They had to arrange their own financing, title and inspections.

The seller equally feels that they have earned the commission because they have incurred all of the marketing expenses and have invested hours upon hours to be available to show the property, hold open houses and answer inquiries. They have had to research value, financing, title work and make decisions.

There is certainly value in all of the things that buyers and sellers are willing to do to save the commission but only one person can save the commission only if the buyer and seller can reach a written agreement.

There is value to having a third party advocate helping each party to the transaction.
The Profile of Home Buyers and Sellers (Exhibit 8-1) reports that 14% of sales were For-Sale-by-Owners in 2004 compared to just 9% in 2013.  The trend shows that agent-assisted sales rose to 88% in 2013 from 82% in 2004.

The three most difficult tasks identified by for-sale-by-owners is attracting potential buyers, getting the price right and understanding and performing the paperwork. When surveyed, sellers most value the home selling in an anticipated time frame and for an expected amount.

Buying or selling a house may look easy - just take some pictures, put it on the Internet, have an open house...so why pay a commission? The reality is that both parties cannot save the commission.  It is earned by providing specific services that are essential to the transaction.  The capital asset of a home represents the largest investment that most people make.  An investment that important certainly deserves the consideration of a professional trained and experienced to handle the complexities involved.
BTW - all real estate is local and while the media is reporting on inventory shortages leading to bidding wars, cash buyers, contingencies being waived, the market is Sudbury is actually starting to turn a bit. Current inventory is higher that is was last year at this time and also up from last month. A lot of houses came on the market in May. The median list price is also a bit lower; and there have been 24 price reductions on 23 single-family homes during the past month. Want to know more? Call 508-596-3501 or check out houses for sale at www.marilynmessenger.com. 
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