Like most things in life, you get what you pay for. If you go out and buy a compact car on a budget price then you're not going to get a luxury car ride with all the extras.
However you also pay less for that compact car so you do without some things. While that can be okay if you just use your car to travel to and from work a few miles each day and perhaps to do some grocery getting and laundry drop-offs it's no big deal.
However, if you're a traveling salesman who uses their car to travel thousands of miles in a month, takes clients around in your car, or a soccer mom who needs to carry around a small hockey team of kids and travel out of town then you're going to want to put that extra dollar out there get some of the comforts and amenities you really need. If you're a mechanic you don't buy wrenches at the local "Dollar Store" because, while they may work, the problem is there not going to work well enough to take you through your day or your week to perform numerous jobs.
Real Estate Agents are much like life in general; you get what you pay for or in some cases you don't get what you don't pay for. For example, you'll hear people often say "Oh how hard is it to sell your own house? You put up a sign that tells people it's for sale and maybe even list it in one of those FSBO (For Sale By Owner) booklets at the grocery stores and save yourself thousands!" Well, again you are getting what you pay for.
You're right, you can slap a sign in front of your house and hope that just the right buyer comes by at just the right time and happens to see it; but let's think about the odds of that happening. You could put it in a "free" or "low cost" FSBO book but the reality of that is that most people come home, glance through the book that has very grainy, low grade pictures if any (most charge extra if you want to add a picture) and toss the book without ever making a phone call.
So What Can An Agent Do That I Can't?
Here's a quick list of things that agents can provide that you either most probably cannot do easily or can't provide for yourself when selling your home. Remember not all agents offer all services and some of these "items" are done by "Full Service" Agents who offer special services all for a certain percentage of the sale of your home.
- Alert other agents and agencies that your home is listing even before it becomes "listed".
- List your home on the MLS listing; which is only available to qualified agents (and generally provide professional photos of your home to quickly call attention to your particular listing).
- Help show your home with the assistance of a professional stager; often a free service provided by the agent/agency.
- Have professional photographs and video taken of your home (no grainy, low grade pictures) that will be used in various marketing techniques including flyers, online viewing, social media pictures, and in the MLS listing.
- Marketing on a professional level - this includes utilizing Social Media, online tours, virtual tours, and even in some instances television time.
- Understand and know the current real estate market for your area; therefore providing proper numbers to utilize when pricing and negotiating offers. If you get someone who doesn't have a good hold on the area, the proper pricing, or the proper negotiating skills you can lose an interested buyer in a matter of seconds because the house is so overpriced they feel as though they're being treated like completely unintelligent people who don't have a clue. It's easy to offend buyers who think your home is overpriced and instead of negotiating they'll often just turn the page to the next house available.
- Specialize in Advertising Techniques - as another aspect of marketing many of the professional full service agents/agencies have professional signs that call attention to the property along with giving a lot of information and access to information, often with high-tech things like QR Codes (Smart Phones can literally click the QR Code Square & be connected to the website, the virtual tour, and/or the agent directly. This type of advertising can be very expensive and impossible for small "mom & pop" type agencies or as a FSBO seller yourself. .
- Open Houses have been a big part of selling a home for many years; some agents believe in the power of an Open House while others aren't real big on them. Many sellers prefer Open Houses because you can choose a few days that you'd like to have them and assure your home is in perfect shape for those days; making it easier on you as the seller to keep the house in viewable condition. Of course you still take appointments but with a few Open Houses it makes getting more views a little easier. Of course anyone can have an Open House, including an FSBO seller but the reality is that unless you have expertise and professional quality advertisements and flyers to hand out during the open house you're not going to come off nearly as "put together" as an experienced, full service agent.
- Negotiations are a huge and very important part of selling a home. Experience and once again knowledge and expertise can make or break a negotiation between buyer and seller. Knowing what can and can't be acceptable or what does and doesn't work in negotiating can literally make or break a sale. Do you want to leave negotiating to chance or professionals?
Are Full Service Agents Worth Their Price?
You may find that many times it's a matter of money when choosing a larger, full service agency/agent. Generally full service agents tend to be certified Realtorsâ„¢ with special training, although not always. Often full service agents have certifications in various fields and specialty areas. Most of all full service agents provide just what their title implies, "Full Service" that takes you from the beginning to the end of the selling process with them being in complete control and doing all of the work. (Okay, YOU have to keep the house presentable but many full service agents do actually provide staging professional which helps for the big Open Houses; just not keeping it up... sorry!)
Commission
Basically the Full Service Agent shares their commission with the Broker, who can also be a part of the agent's team. The agents are actually paid by the Brokers, who are the people who basically collect all the funds in the end and distribute them accordingly; handling much of the legal and financial technicalities of the buying and selling of a home. Once again there are strict laws and regulations that as a person selling your own home to "avoid paying commission" you can find yourself in a bit of a predicament if you don't know, understand, and abide by the laws and regulations of your state or federal rulings. These Brokers know the ins and outs of the entire selling process and are responsible for any wrong doings or issues as opposed to you being the responsible party. This alone is worth millions if you ask most people because the headaches and legalities you could get into are not something you want to deal with under any conditions.
Commission vs. Overhead
Full Service Agents have a much higher overhead as opposed to small agencies that don't offer full services also. They spend more on marketing, more on listing, more on internet access of information for your home (where most every buyer begins looking for a home) and know where to list these homes. They spend more on presenting professional looking media, video, photographs, and much more. Needless to say the higher the overhead the more they deserve to make when selling your home; but remember this... if your home doesn't sell then they generally don't make a cent; so they have a lot of motivation to sell! Percentages can vary from agent to agent but it will be marked clearly in your paperwork you sign for your Seller's Agreement (which most states require by law).
So How Much Do Full Service Agents Really Make?
The quick answer to that question is that it varies from agent to agent. The reality is that because Full Service Agents have such high overhead they have to pay not only for their costs related to the sale of the home but also their taxes out of the commission they make. In the end if you're paying the average commission (generally 6% to 7% depending upon your area) on your home that sold for $100,000 you are paying a total commission of $6,000. Out of that $6,000 the Broker can commonly keep 50% or sometimes more of that commission; leaving the Full Service Agent with 50% or less ($3,000 or less) of the total commission.
Out of that $3,000 they have to pay taxes (which can vary from state to state) and then any monies they have put out as overhead. In the end for all the work this Full Service Agent has done, which is generally an exemplary effort to get your home sold, they can actually make substantially less than 50% of the total commission paid. If you figure that out it's quite a large amount of money that they DON'T make as opposed to a large portion that they do and in the end you have had to do very little to sell your home other than help make it presentable and "sellable" to the potential buyers. You've received superior services for a reasonable and very fair price and your agent has worked long and hard to earn their dollar.
Of course these numbers are not written in stone and can vary from agent to agent; broker to broker; locality to locality and depending upon the market. What it amounts to is that a Full Service Agent is like pulling into a gas station of days gone by where the attendant would give you complete and excellent service that included everything from checking your oil to washing your windows and checking the air pressure in your tires if needed.
Sometimes they'd replace wiper blades for nothing more than the cost of the blades or even top off your windshield washer. In the end you paid the same price, maybe a few cents more, per gallon and got service that was above and beyond expectations. This is what a Full Service Agent is; they're the attendant that goes above and beyond expectations to make your experience easy going, pleasant, and most of all with the amazing amount and knowledge of marketing skills they utilize within a much faster time than an agent that comes in and does nothing more than sit a sign in your yard and lists your home on the MLS (often without any pictures at all) and gives you very little guidance. A Full Service Agent makes your experience easier, pleasant, much safer, and definitely more professional for both the seller and the buyer.
So What's The Decision?
Now you tell me... is it a luxury ride car that you want to take on the road for your trip or do you want to travel thousands of miles in a small compact car without air conditioning, working speedometer, and guessing if you're doing the speed limit? Do you want to assure you get to your destination with little effort (selling your home as fast as possible for as much as possible) or do you want to have to pull over to service your ride numerous times along the way yourself (have your home on the market for a long period of time & perhaps never selling or making a lot less on the sale)?
As the saying goes, "You get what you pay for" and in the case of a Full Service Real Estate Agent you get top notch service. Your job is to do next to nothing and let the professional handle it all and you don't have to worry if you know, understand, and have abided by rules and regulations that come with selling a home. Pay for the top notch service and relax as your home seems to nearly sell itself; while the reality is that your Full Service Agent and their team is in the background making it all click like clockwork.
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