| Real estate agents are vastly more skilled than | | | | first day it comes on the market? You may well |
| you are. | | | | be very rational about that. You may congratulate |
| Their people skills are better and there marketing | | | | him on a job well done. You may not give another |
| skills are unsurpassed. | | | | thought to the fact that in this instance your |
| They can determine the price of your house, far | | | | agent has earned $10,000 a day, or based on a |
| more accurately than you can. | | | | six hour day in which your property was the only |
| You obviously believe all of this don't you? | | | | one that he worked on, then such a sale would |
| Otherwise, you would never be prepared to pay | | | | equate to a wage of $1600 per hour. Not bad |
| the agent the incredible amount of money that | | | | work if you can get it. |
| you are going to pay him, would you? | | | | Of course, the poor old agent cannot win. If he |
| It's a very good thing that you don't realize the | | | | takes a long time to sell your house you feel |
| hourly rate that you will be paying the agent | | | | aggrieved. If he sells your house to quickly you |
| during the course of selling your home. Suppose | | | | feel as though he priced it to low. And what's |
| for example, that your property takes four | | | | more, I can hear the agents tearing this article to |
| months to sell? Let's further suppose that your | | | | bits. They will be saying that they also spend time |
| agent puts in one hour per day for the entire 120 | | | | in listing the property initially and in liaising with |
| days without missing a beat. Of course, it's | | | | your solicitor, building and pest inspectors, banks |
| unlikely that he could put in that amount of hours | | | | and all sorts of other people. They will tell you this |
| in marketing your house alone during that time. | | | | takes time and so it does. So at the end of the |
| But just for the sake of the calculation let's | | | | day the amount that you are paying your agent |
| assume that he did. | | | | per hour is of course hard to quantify. |
| Let's say, 120 hours at a rate of $30 per hour is | | | | I am just trying to focus your attention on the |
| equal to $3600. Now, most commissions are at | | | | fact that it's one unholy amount of money you |
| least $10,000, which means that you are playing | | | | are giving up. |
| the agent at the least $60 per hour for his time. | | | | Now before you engage an agent's services you |
| In actual fact. it's probably more accurate to | | | | might want to think about what you could do with |
| suggest that you are paying him double that | | | | the $10,000 or more that you could save on an |
| amount, i.e. $120 per hour. | | | | average sale. |
| So it's very lucky that your agent is so vastly | | | | Further, imagine how long it would actually take |
| more skilled than you are. Because otherwise it | | | | you to save that amount from your wages. Then |
| would be very hard to justify paying anyone that | | | | go a little further and work out the actual gross |
| much money over such a long period of time, | | | | income before tax that is required for you to |
| wouldn't it? | | | | earn $10,000. Then go even further and |
| Remember that the main reason you are using an | | | | determine how much money that will grow into at |
| agent is because you deem that his superior | | | | 10% compound interest over the next decade. |
| selling skills will net you at the least as much in | | | | With these thoughts in mind I return to the |
| terms of increased sale price, as the commission | | | | premise of this article. You must have an |
| that he will cost you. | | | | exceedingly high opinion of your agent or else a |
| May I humbly put it to you that most agents will | | | | very low opinion of your own ability to sell your |
| not be as focused on getting the highest price for | | | | own house. That is the only way I can really |
| you as they will be about achieving a commission | | | | rationalize giving so much away when you don't |
| for themselves. | | | | have to. |
| Real estate agents operate under the legal | | | | Now of course, there are certainly situations |
| premise that they must use their best efforts in | | | | where an agent's involvement cannot be avoided, |
| achieving the best possible sale price for a client. | | | | such as, when you are actually distant from the |
| This is all well and good in theory, but in the real | | | | property for sale. |
| world, there is no effective way to police or | | | | I also know and freely admit that to many |
| measure whether this actually occurs. | | | | people, the commission is a secondary |
| It is of course entirely obvious to anyone giving | | | | consideration in the sale. Such people are only |
| this fact a moment's thought, that your average | | | | concerned with the fact that the sales process is |
| real estate agent will react like any other human | | | | being looked after by a third party and that they |
| being. They will be primarily motivated by the | | | | themselves will need minimal involvement. |
| need to secure a commission. Actually achieving | | | | In such cases, I am glad indeed, that there are |
| the highest price for you is almost always at odds | | | | exceptional agents to be found if one looks hard |
| with that lofty ideal however. | | | | enough. These things aside, however, it is very |
| In the above example, we did some calculations | | | | hard to justify financially, the use of an agent to |
| based on listing your property with an agent for | | | | undertake what is essentially a very simple |
| just four months. How will you feel on the other | | | | process, that is, the sale of your own home. |
| hand, if the agent sells your property the very | | | | |