How do Commissions Work?

 

Sometimes consumers confuse terms like “fee-for-service” or “variable rate” broker with terms like “discount broker”, “discount Realtor” or “FSBO” meaning “For Sale by Owner”. But fee/variable rate brokers are not “discount brokers” or “FSBO” services. In fact, they’re full service brokers. However, unlike full commission brokers offering only the one-size-fits-all commission rate, fee/variable rate brokers offer you a complete menu of professional services. Simply put, that means informed buyers and sellers can pay for the services they need, and nothing more. In return, fee/variable rate brokers reward their clients with significant commission savings and rebates at settlement. At the same time the real estate consumer receives high levels of personal service and guidance from an experienced broker.

Here’s a couple of examples:

Example 1 for home sellers

You have a home to sell and are located in a metropolitan/suburban market where the large majority of buyers use mobile applications and the web to find listings. Beyond that your home shows well and you’ve priced it consistent with market conditions. In other words, you’ve already done the hard work. All you need now is market exposure and help through the process. You could list with a traditional broker and pay the one-size-fits-all 6% commission rate. That’s $30,000 on a $500,000 property!  But first ask yourself if you really need to pay that much to sell your home. With Spicer you’ll save thousands in commission expense and sell your home for a great price and terms. Click here to see our commission options.

Example 2 for home buyers

You’re a buyer and like to use the web and mobile applications to learn about listings. You visit open houses and drive by homes on your own. When you find the right property you hire an agent to help you with the paperwork and process. At settlement your broker is paid $15,000 which is a 3% commission on the $500,000 house you purchased. The broker was nice, but you did the work of finding the property. If you hire Spicer Real Estate you can benefit from meaningful broker commission credits. You can use the credit to help with closing costs, defray moving costs, purchase furniture or anything else you want. You might even just want to save it but that is up to you. Please click here to learn more about out buyer broker services.