Commissions
As of Jan 1st, 2018 we now charge the following;
Full-Service MLS® Only $7,950
(Homes over $700,000 1% + $950)
$3,500 to listing agent / $3,500 to buyer’s agent
$950 expense fee at closing
$7,950 TOTAL
How much do I charge to sell your Salt Spring Island house? Just 1% plus $900 a disbursement fee or if your house sells for over $700 thousand. If your home sells for less than $700k we charge a minimum of $7000 plus the $950 disbursement fee. All commissions are plus HST.
How can I do it all for so little? Easy. I leverage the Internet and work out of my home office, not a fancy old-fashioned real estate office that no one goes to anyway. Low commissions are a way of letting you lower your selling price but keep more of the money in your pocket when you sell.
What about the myth that other agents will not show a 1% listing? If you have followed the steps above your house will be irresistible to the buyers and the other agents will bring them to see your stunning house. The buyers’ agent might ask the buyers to pay them more commission or might ask you to pay more commission if they bring in an offer. This puts you, the seller, in the driver’s seat. It gives you leverage when an offer comes in. The buyers like low commissions because they know you are not being charged as much and can sell for less or sell at market price and make more. Low commissions are a win-win for everyone but the high overhead agents who are not adapting to the new online world we live in. Don’t worry, they will learn to adapt or go out of business.
Here is an article out of the local driftwood newspaper driftwood article March 11, 2009, regarding what one agent says about what they have to charge. quote “…minimum rates at which the full-service-downtown-storefront real estate business can function….” They need to charge more to pay for their downtown offices not because they are going to spend more on your listing marketing it.
Compare services to services. We offer all the same Full services Full MLS® listing, Lawn Signs, Virtual Tour, Agents Open, Lock Box, Brochures, Driftwood Real Estate magazine ads… Yes, we do all the same services like the so-called downtown-storefront real estate companies.
One of the biggest financial mistakes I see sellers make is the failure to realize commissions can only come out of their home equity (or capital). This is an example; If a house sells $700,000 and $600,000 is owed to the bank (mortgage) they will net out approx $100,000 (this is their “home equity”). Out of this $100,000 equity, they will pay the $24,000 commission (if they use a typical 6/3 agent), which is more than 20% of their equity. Why would someone give away so much of their equity? It just does not make financial sense to me. I’m always shocked when I see this happen. Those that can afford it the least seem to pay such a staggering amount of their home equity (their home equity is usually most of their net worth) to sell their house. It’s really quite shocking and sad to see that so many make such bad financial decisions. My Financial planning 101 advise is to preserve your after-tax capital, invest it wisely and make it work for you, Do Not Give it away.
Cheers
Scott Simmons
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