If you are paying 6% commissions,
it’s likely even more...
Let’s look at an example.
- Sally Seller has a condo to sell in a popular building in FT. Lauderdale. Like 72% of sellers Sally hires the first agent she meets.
- Andy Agent lists the condo for $575,000.
- Due to high demand, they sign a contract the first weekend for $567,000.
- Condo approval and closing were smooth. The buyer was well qualified and required only minor repairs after inspections.
- At closing, the $34,020 commission paid by Sally was split $17,010 to the Buyer’s agent & $17,010 to the listing agent.
- Let’s say each agent has 15 hours of work invested in this deal. If that.
That’s $1,134 PER HOUR for EACH AGENT
Don’t blame the Agents…
Commissions are at the root of what’s wrong with this industry.
- Agents spend hours on lead generation with open houses, door knocking and cold calls.
- Often to work with and unrealistic Sellers and “tire kicker Buyers” who never make it to closing.
Commissions encourage inequity & waste countless hours at no expense to the consumer.
- When they do make a deal, many split that commission with their Broker to pay for fancy offices on every corner.
I’m not joking, start looking they’re everywhere.
In stark contrast to the first example, let’s look at a deal that didn’t go so smoothly.
- Andy Agent has been working with Bill Buyer for over 2 months.
- After looking at 15 properties, Bill finally went to contract.
- The inspections required a renegotiation of the price, but Andy was able to keep the deal together.
- At the walk-through, they discovered the fountain of a bay boy peeing was gone.
- The Buyer refused to close without it and the Seller refused to leave it.
- The deal dies…over a statue of a boy peeing.
- No cost to Bill or the Seller & NO PAYDAY FOR ANDY AGENT.