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"Saving the Commission"

When buyers or sellers are surveyed about the reasons why they would attempt to buy or sell a home without the assistance of a Realtor®, their answers are always the same; "to save the commission." Time and again, this is the response, regardless of market conditions or trends. This can be a decision wrought with pitfalls.

For sellers, we have discussed many of the advantages to utilizing the professional services a Realtor® can offer.

If you aren't employing a real estate professional,
buyers often assume
there's money to be saved by them!

However, there is another issue to explain; there is only one commission to be saved, and two entities seeking the same savings. The fact is, the real estate commission or fee is not so easy to put a finger on anyway because it is a negotiable provision of the agency relationship established between the seller and his Realtor® at the time a listing agreement is signed. Often it is based on a percentage of the sales price. And, since the seller traditionally is the one who actually pays the broker, it would seem that he would be the one to "save." Not so in the eyes of the buying public.

If you aren't employing a real estate professional, buyers often assume there's money to be saved by them! Frequently private buyers will look to deduct what they feel would have been the commission amount, right off the top of your asking price! So, now after all your effort and investment in marketing and advertising, in order to try to save some money for yourself, you are being asked to take less!

For buyers, unless there is money to be saved by them, there is absolutely NO reason to buy from a for-sale-by-owner. As a buyer, they generally do not pay the real estate's fee, and they can have a professional show them the best properties for sale in accordance with their wants, needs, and price range, anywhere they want to look. They don't have to use their own gas. They don't have to spend hours looking at homes they can't afford or would never buy. They don't have to waste time searching through maps trying to find streets in an unknown town. So, why would they buy from a FSBO? Only to save money. Now you understand their interest in your ad. With a Realtor®, they have nothing to lose. With a FSBO - they must have something to gain!

With both buyer and seller motivated by the thought that they are going to save the fee, serious problems arise. As we mentioned in our chapter on negotiation, it can become very stressful. The seller thinks they will get more, and the buyer thinks he will pay less; the result - neither party ends up satisfied. The truth is; real estate professionals are adept at getting you the best offer and handling all of the details for you - now that's where you really save. You have a life, Realtors® let you live it. Real estate is their life. They handle all of the details, professionally!

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