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Costs Of Hiring A REALTOR®
Dated: January 4 2021
Are you buying or selling a property and are wondering if working with a realtor is worth the cost? In this video, I’m going to break down the costs involved when hiring a realtor so you can decide if working with an agent is right for you. We’ll also discuss what a realtor does and how the cost can be worth it for you in the end.
Costs Of Hiring A Realtor When Buying
Before buying any product or service, most people look at the cost. Hiring a realtor is no different; you should know exactly how much it will cost you before you commit.
It’s important to note that there’s a difference in cost between buying and selling. If you are hiring us to buy your property, there's no cost to you. This is because traditionally, a seller will hire a realtor and the realtor will charge them a commission to market their home. The listing realtor will offer 40% of the commission to the buyer's agent, which is how buyer's agents get paid. The reason this is important is that over 87% of home buyers are represented by a real estate agent, making it in a seller's best interest to market to the real estate agents.
As a buyer, there is no out-of-pocket expense to working with us. The only instance that this would not apply would be in the condition the seller was not willing to pay a buyer's agent's commission—though that's a very rare occurrence.
Costs Of Hiring A Realtor When Selling
If you're selling a property and decide to hire a realtor, there will be a commission charge. Let me break down exactly how our selling plan works.
Our standard commission is 5-6%. If the commission is 5%, then 2% of that commission is being offered to the buyer's agent. It is in your best interest as a seller to offer a cooperating commission to the buyer's agent, since you will reach a much larger pool of buyers. The other 3% is the listing commission, or what we keep and use to market your property for sale.
Here is an exact breakdown of what we will do with that money. We will take all marketing expenses out of pocket. If your home does not sell, we lose all that money and time spent—so we have a little skin in the game with you. In today's world, if you want top dollar, you have to do a lot more than just put your sign in the yard and list it on the MLS. You need to market it, and that all costs money.
The first thing we need to do is stage the house and prepare it for sale. We call this the listing phase. Once the house is ready, we need to take photos and video to maximize the property's exposure, which can take about an hour or so to complete. Once the marketing is complete, we can then get everything ready to list. Typically, you can expect the most amount of activity the first week your home is listed. This is the time we like to host open houses and coordinating showings to get feedback. Eventually, the home will go under contract. Once that's done, we are about halfway there. We will facilitate the transaction to closing, which consists of handling inspections, contingencies, and making sure all parties are held accountable.
Is Hiring A Realtor Right For You?
I hope this helped you understand the breakdown of costs when working with an agent. When choosing to work with us, we want you to have a good idea of exactly what it will cost and how that money is spent. If you have any additional questions, please feel free to reach out to me. I'd be happy to put together a closing cost estimate worksheet for you so that you may get a more defined bottom line, whether you are buying or selling real estate.
I am a full-time real estate agent at Century 21 Affiliated. I am licenced in both WI and MN, so I do business in La Crosse County and surrounding areas. I have been in the real estate business since....