Real Estate

Are real estate commissions fair

If you’re looking to buy Penticton real estate, and especially if you’re selling your property, you’re going to find that if you deal with an agent there’s an unavoidable fee that you’re going to encounter: their commission.

There are those who understand that paying an agent’s commission fee is the price of doing business, but you might wonder to yourself if the commission fee is fair, especially since if you’re the seller, then you’re the one who will have to pay the commission.

You’re not the only one who has asked themselves this question, so let’s explore the topic below.

Here’s why real estate commissions are fair

As the saying goes, nothing in life is free. In a perfect world, licensed professionals would willing offer their time, energy, and services for free. But in reality, it’s only fair and right for professionals to charge fees for their services.

Doctors and attorneys charge a fee. You pay a fee when you purchase commodities from a store. And in the same vein, real estate agents (and brokers) charge fees for their services through a payment structure called commissions.

But here’s the good news for you: If the realtor doesn’t do what you’re paying them to do, then they don’t get paid. This means that without the cushion of guarantee pay, the realtor is going to go the extra mile to either buy or sell your home. While it’s their responsibility to do right by their clients, it’s practical for them to want to generate revenue to earn a living!

You can pay the fees later on

Honesty, the last thing you should concern yourself with when you’re buying or selling a home is paying the commission fee. But if you’re pressed for money and you really need to make your deal happen while conserving as much money as possible, then know that you can always pay the realtor’s commission on the “back-end.”

This means that you if you’re the seller, then you can include the realtor’s commission into the closing costs. And closing costs can be included in your mortgage financing terms. You’ll receive all of the pertinent paperwork to review before you sign so that there aren’t any surprises as to how much your realtor will earn, along with how much you’ll finance if necessary.

Marketing expenses costs money

Here’s another reason why a good realtor earns their commission: They invest their own funds into marketing your property.

A top-notch realtor will put on their event planner “hats” to showcase your property via events such as private showings, broker showings, and open house events.

The events usually include marketing media, food, beverages, staging services, and sometimes, they can involve hiring entertainers or entertainment rentals such as tents, dunking pools, games, and anything else that’s going to leave an impression in the minds of brokers and prospective buyers.

Again, keep in mind that the realtor pays for all of this out of their own pockets, at no additional cost to you!

Open Houses take up their time

In addition to the monetary costs that realtors incur, they also incur time costs. The time that they invest in marketing your property, transporting you around the area, and networking with the realtors of potential buyers costs them value time.

This is time that could be spent on another client, skills training, continuing education, seminars, or generating income in other ways.

There are associated administrative tasks

If all of these were enough, realtors incur administrative costs. There’s databases to be updated, CRMs to be uploaded and followed up with, smaller tasks to be offloaded to less experienced staff, and a host of other back-office activities.

Keep in mind that the realtor doesn’t work on the clock, and yet they often perform the tasks of at least 3 different professionals who typically work on salary.

A realtor’s expertise is an asset

Here’s a few examples of how a realtor’s expertise translates into valuable assets:

A good realtor shows up to your home inspection appointment, whether you’re buying or selling your property. While they can’t interfere with the inspector’s findings, they can and will translate anything on the report that sounds confusing or overwhelming.

They’re also knowledgeable in real estate and property laws. In fact, in order to keep their licensure in good standing, they have to take continuing education courses. This keeps them on top of the latest industry standards while protecting all parties involved from needless liabilities.

Their experience translates into brokering the best deals

Finally, realtors know how to price a property correctly. What’s more, they know from experience when a property’s asking price is too high. They can negotiate prices while also advocating on your behalf, based on facts and precedent.

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