The Commission Is An Investment and Not An Expense!

Dated: 11/09/2018

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We all know that the plumber makes money by fixing pipes, the mechanic makes money by fixing cars and the builder makes money by building beautiful homes, but here is one aspect that a lot of people do not see. All of these businesses no matter who they are, they build, fix, create products, but at the end of the day they have to sell their “product.” The closer you look the more you will understand that nothing gets done without selling.

You can offer a product, a service, a meal, or even an idea. No matter what it is you have to convince someone else to buy it. If you cannot do that, money does not exchange and value is not created. I hope by now you get the idea that we needs salespeople, and the higher the price, the more the need for a salesperson.  If you do not believe me, try selling something for free, and see how hard it is.

Salespersons are either paid a salary or a commission. I am here to talk about commission, as that is the one aspect that is being negotiated at all times. When the market is doing great, (a sellers’ market) I see a lot of new discount brokerages popping up. And yes they make headlines and predict the doom of real estate agents. I see them, but let me say this, I am never afraid of them. You know why? Because I know that a salesperson works best when he is incentivized (aka commission). He or she will do everything for his client to ensure that the sale will conclude.  Wait until the market turns and when the seller cannot get a hold of the discount broker at 9 p.m. or when the broker is off for the weekend. That is when those companies will disappear, once again, from the face of the earth.

I see discount brokers come and go. Market is good, they show up, market turns around, they are gone. If you don’t believe me check out the headlines about Redfin. Their profits just tumbled. When you want to take out the people that make things work, the process will eventually break down. Case in point with Redfin.

Here is my advice, look at the commission as an investment in your home. The best agents charge the most commission, because at the end of the day they know what they are doing, and how to do it to sell your home in the shortest amount of time, and most important, for the highest dollar.

By now you are probably thinking that full commission or discounted commission should do ok no matter what, as any real estate agent can take picture, put the house on the market, do an open house and sell the home. And you know what, you are right. That is exactly what an agent does right before the sale, however that is just 10% of the sale. The rest is all happening before the home even hits the market and that is where you pay the commission to get the best service and price for your home.    

Here is what should happen before you put your home on the market. Your agent should help you understand all the similar homes that are selling in the area, their prices and features. He or she should advise you on improvements you need to do to your home, repainting some walls if needed to cater to the general public. First impression matters, so cleaning your home is a must, front yard, inside and outside. Getting a termite report ahead of time is also something you should do so you can anticipate problems, or even fix them ahead of time. Getting an appraiser is a smart idea especially when the market is slowing down. Staging the house, because 90% of people cannot picture themselves in a space unless they see the furniture placed inside the house. Getting the right pictures for every room, and not exaggerating with the wide angle lenses and the Photoshop. Video is a must nowadays, to entice buyers to preview the home in person.

There is also the marketing to an entire database of real estate agents that have buyers for your price range. Marketing to other buyers that are local or from outer state or another country. The higher the price the higher the chance that your buyer will come from outside of your city. Once you get in contract you have to worry about negotiation for price, repairs, terms, escrow fees and so forth.  All of these will dictate how much money you will get for your home. The more your agent does the more you will get for your home.

So at the end of the day, do you want a discount broker to do 10% of the sale, or do you want a professional real estate agent to do 100% or more of what it takes to sell your home.

For any real estate questions or if you are looking to buy or sell reach out to us at 916-770-7783 or on our website at AlexSirbHOMES.com.

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Don’t forget to follow us on Facebook | LinkedIn | Instagram  Alex Sirb is a real estate agent in California serving Sacramento and surrounding areas. DRE 01945322 - Fathom Realty Group DRE 0901202

  

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Alex Sirb

I Don't Sell Homes, I Sell a Lifestyle! WHAT I DO: I sell homes where people can make their dreams come true, where families come together, memories are made and goals are met. WHAT TO EXPECT: ....

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