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WORKING
WITH REALTORS
An
important aspect of working with real estate agents is to
understand how their commission structure works. It can be divided
between the following:
a) Listing agent
b) Listing company
c) Selling agent
Definitions:
Listing agent- a real estate agent, or realtor, with whom a
property owner signs a contract for the agent to attempt to sell
the homeowners property. A listing agents commission percentage is
usually dependent upon years of experience, sales volume history
or value to the company.
Listing
company- the real estate company the listing agent is employed by.
Usually the real estate companies name is on the "for
sale" sign in the yard.
Selling
agent- the agent that actually finds the buyer for the seller.
Usually referred to as the agent who is "the procuring cause
of sale". Selling agents commissions are taken from the total
commission paid by the seller.
Commissions
in the Triangle area
are divided as follows:
| County |
Total
Commission |
Listing
agent/
Listing company |
Selling/Buyers
agent |
| Wake |
6.0
% |
3.6
% |
2.4
% |
| Johnston |
6.0
% |
3.6
% |
2.4
% |
| Harnett |
6.0
% |
3.6
% |
2.4
% |
| Durham |
7.0
% |
4.0
% |
3.0
% |
| Orange |
7.0
% |
4.0
% |
3.0
% |
| Chatham |
7.0
% |
4.0
% |
3.0
% |
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If
you decide to accept an offer with a buyers agent involved, you
can expect to pay 2.4% - 3.0%.
Real
estate agents frequently contact "for sale by owners" in
an attempt to persuade them to list their property with them.
However, selling agents may have a buyer who is interested in
purchasing your home. It may be to your advantage to consider
working with real estate agents in the sale of your home, IF, they
agree to YOUR TERMS!
Three
methods of agreement are common:
1.
Agents that request to "list" your home for a specific
period of time and for a specific commission to be paid by you if
your home is sold during the period of time specified in the
listing agreement, even if you sell it yourself! This method
eliminates your FOR SALE BY OWNER effort.
2.
Agents who wish to show your home to a specific, named,
prospective buyer. These agents will
probably ask you to sign some form of temporary or "24
hour" listing agreement (commonly referred to as a one-time
listing or one-shot agreement). READ THIS AGREEMENT CAREFULLY! It
usually states that you will pay the agreed upon commission to the
agent after your "24 hour" listing agreement has expired
if you sell to the buyer specified. The extended period after your
agreement has expired is usually six months or longer. This type
of agreement only pertains to that one specified buyer. The normal
commission rate requested by the selling agent is stated above.
3.
Another less favorable method is to tell the agent that they may
derive their (agreed upon) commission from your asking price:
however, any reduction in the selling price will be a direct
reduction in their commission.
It
is always best to give full and truthful information about the
condition of the property as you know it to be. Provide no
personal information that might be used to your disadvantage by an
agent or buyer (example: we need to sell our home by the end of
the month...).
Decide
in advance if you are willing to work with real estate agents and,
if so, the amount of commission you are willing to pay. Be careful
of signing agreements that do not allow you to continue your for
sale by owner effort. There is no reason why you should not keep
as much of your hard-earned equity as possible. Selling your home
"For Sale By Owner" will reward you in thousands of
dollars of expensive real estate commissions saved.
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