Sunday, April 23, 2006
the slope area streets ( warm weather )
here in the slope
just finished speaking with a for sale by owner, who wants to sell their home on their own. they do not want to use a broker, mostly to not pay a broker's fee. okay i say to myself, yet allow me to break it down for you.
yes, there are some realtors who we all would prefer to not work with let alone see on the streets. and the vast amount of info that can be grabbed upon the web. yes, the notion of believing an owner is now an expert, well i beg to differ. there are so many things that can go wrong or even get misunderstood during the entire process. that utilizing a broker is best. yet, to each their own.
although, for those who would not chance their imported car to just any joe schmo machanic, yet will do the same upon a much bigger deal, their home. allow me to break down some myths about that commission some would like to avoid.
let's pick a simple number. sale price of 100K. let's go with the realistic going rate of that commission, of say 4%. the math of that commission is $4,000. ah but wait. now the real deal is how that money is broken down. with two brokers, one for the buyer, the other for the seller. we split that in half. thus each getting $2,000. oh, wait a moment-that half is split in half again. portion to the broker who did the deal, the other half to the company that the broker works with. which now is $1,000. now before you think that is it, we need to itemize the expenses the broker must incur. which is but not all; desk fees, phone fees, advertising for the property sold (internet, newspaper, local, etc), transportation expenses, open house signs, business cards, clothing (cleaners), paying one's own rent and bills, local chapter dues, national dues of varied realtor organizations to stay in business, fees for the multiply listing services, etc. what remains then must be broken down in the few months to follow the deal to completion, and the hourly rate.
thus after all expenses maybe a broker comes away with $500 out of their share of that $1,000 from that $4,000. and if we break it down to the hours of open houses, advertising, fielding the calls, showing the property, paperwork, and all; it may be at best close to minimum wage. funny, we still need to take taxes out, and health insurance out too. so that $500 with taxes out of the 1000, well it all boils down to very little money we get in order to get that deal from the public to getting your money to move onward.
yet, with what you do for a living; would you cut your salary or rate in order to save money for me, please? hmm, think about that the next time you haggle over the broker's measly amount they make from you. since you have the employer covering all your expenses, with paid holidays and the like.
yes, there are some realtors who we all would prefer to not work with let alone see on the streets. and the vast amount of info that can be grabbed upon the web. yes, the notion of believing an owner is now an expert, well i beg to differ. there are so many things that can go wrong or even get misunderstood during the entire process. that utilizing a broker is best. yet, to each their own.
although, for those who would not chance their imported car to just any joe schmo machanic, yet will do the same upon a much bigger deal, their home. allow me to break down some myths about that commission some would like to avoid.
let's pick a simple number. sale price of 100K. let's go with the realistic going rate of that commission, of say 4%. the math of that commission is $4,000. ah but wait. now the real deal is how that money is broken down. with two brokers, one for the buyer, the other for the seller. we split that in half. thus each getting $2,000. oh, wait a moment-that half is split in half again. portion to the broker who did the deal, the other half to the company that the broker works with. which now is $1,000. now before you think that is it, we need to itemize the expenses the broker must incur. which is but not all; desk fees, phone fees, advertising for the property sold (internet, newspaper, local, etc), transportation expenses, open house signs, business cards, clothing (cleaners), paying one's own rent and bills, local chapter dues, national dues of varied realtor organizations to stay in business, fees for the multiply listing services, etc. what remains then must be broken down in the few months to follow the deal to completion, and the hourly rate.
thus after all expenses maybe a broker comes away with $500 out of their share of that $1,000 from that $4,000. and if we break it down to the hours of open houses, advertising, fielding the calls, showing the property, paperwork, and all; it may be at best close to minimum wage. funny, we still need to take taxes out, and health insurance out too. so that $500 with taxes out of the 1000, well it all boils down to very little money we get in order to get that deal from the public to getting your money to move onward.
yet, with what you do for a living; would you cut your salary or rate in order to save money for me, please? hmm, think about that the next time you haggle over the broker's measly amount they make from you. since you have the employer covering all your expenses, with paid holidays and the like.
