Lowering the cost of real estate fees, is that an option?
All real estate commission fees are supposed to be negotiable, as they say. How’s that working out, these days? When all agents charge basically the same real estate commission rates, how negotiable are they, really? If you wish to pay lower real estate fees, what should you do?
It may not be so easy to negotiate a reduced real estate fee if the agent you choose to work with simply won’t cut his or her fees; even though you are free to “negotiate” these fees.
Interestingly, ti’s still true that a seller pays all the real estate fees, even for the buyer’s agent. Even though it’s entirely true that real estate commission fees are negotiable, they seem to be stuck at a certain price point. No Real Estate Board or Association can mandate the rates. If you wish to pay your real estate agent more or less than others would, then that’s completely acceptable. Of course, this only would work if the real estate agent in question as well as the brokerage this agent is working for, will agree to this.
Since a real estate commission fee usually includes the fee for the buyer’s agent, you have to watch out here. This part is sometimes hard to explain to people with an eye for the logic of a contract.
How can the seller be asked to pay a fee for an agent who’s not even working for him/her? In fact, is possibly even working “against” the seller’s interests. Because that’s what a buyer’s agent may well do: they are working FOR the buyer; not the seller.
Why do we let sellers pay for the buyers’ agent? It’s usually done this way because it’s highly impracticable to collect a fee from a buyer, as would be the logical alternative.
Often, a buyer couldn’t even afford to pay separate real estate fees because most people purchase at the apex of their financial abilities. However, if the real estate commission fee is being paid by the seller, then it’s considered included in the purchase price and it can be financed quite easily by the buyer.
Real estate fees may not be “set” as such. However, if everybody involved needs to get paid, there may be less room to negotiate then you’d initially think. At least, you should find out where the money goes.
WHAT YOU NEED TO KNOW ABOUT REAL ESTATE FEES
There is much more you need to know about real estate fees. I’ll go through that in little chapters below and in other blog articles on this website. Probably the most important thing you need to realise is that almost all real estate fees get split four ways. There is the split between buyer’s agent and seller’s agent – then each has a splitting arrangement with their brokerage.
You should also know that even the net fee is not straight profit. That final amount needs to be offset with a range of business expenses before the agent can actually make some money. It’s not so easy to make money in commissioned real estate sales, these days.
The life of a real estate agent is not a life of leisure – it’s a commission-only environment. No sales – no income, just ongoing expenses. A lot of work goes on behind the scenes.
The Canadian Real Estate Association controls the listings and the MLS. Nobody else has been able to make substantial inroads into the property business with online tools. Buyers want choice and that choice is available through the MLS system. Sellers know this too – it all comes back to the large listing pool of the MLS system. The MLS system alone might be worth the real estate commission!
Real estate, it’s not a get rich quick scheme, not even at the current high real estate fees. Read some more about how the world of real estate functions in the blog articles highlighted below.
MORE on the business of real estate fees in the following blog articles:
Benefits of organised real estate: http://www.lotuslandrealestate.com/victoria-professionals/.
Real estate and some financial advice: http://www.lotuslandrealestate.com/category/financial-advice/.
Victoria real estate bargains: http://www.lotuslandrealestate.com/stable-real-estate-market/.
Bargain brokerages and real estate statistics: http://www.lotuslandrealestate.com/category/statistics/.
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