Real Estate: Volume Over Service

One common expense that goes along with selling a home is paying real estate commissions. While real estate commission rates are hardly “set in stone”, they average is 6 percent of the sales price in a typical sale. However, many sellers in a down market will try to maximize their net profit and negotiate commission down with an agent. In fact, I know many agents willing to reduce commissions down to 4 percent, giving a buyer’s agent the standard 3 percent and taking only 1 percent for themselves. Yet, in all of my conversations with seller and with agents, reducing commissions can come with a price all its own.


Professional real estate agents take their careers seriously. If your agent is willing to reduce his commission, it is likely because you are family or because he specializes in volume. The trouble is that even if the agent has a team in place to assist him with each transaction, your customer service experience with your agent is going to suffer. The fact is that it’s not only impossible for an agent with high volume to give you the same level of service that an agent charging the full percentage would, but it’s bad business to boot.

Consider this: If you were making less than half of your normal salary over a period of 30 to 45 days, would you do the best possible job for your employer? The answer is, most likely not. You know what you are worth, and you know that you are worth more than what you are being paid, this leads to resentment and ill will on both sides.

Sellers want it all

It has been my experience, with sellers and fellow agents that most sellers want it all. They want the customized reports, the agent who answers the phone at all hours and who sells their house for a reduced commission. While sellers might want it all, the likelihood of them getting it “all” is slim to none when the number one goal is paying less in commissions. In the end, this leaves sellers and their agent with a bad taste in their mouths, happy to be rid of one another once the transaction is concluded.

The added stress and complications that come up when weighing volume suppliers over service centric transactions, often costs sellers and agents time and money. Due to sheer volume, these transactions often result in less-than-the-best sales terms for the seller, and they certainly do not revolve in the best scenario for the agent.

For me, as an agent, I insisted to be paid what I was worth. The only instances where I would reduce a commission on a sale is if that person was a close friend or family member. The best advice I can give to a seller, from personal experience, is that when you sacrifice that commission, you sacrifice services you need to account for a smooth and customer centric transaction. At the end of the day, volume discounts over service really do not measure up to making much sense, and truly don’t save you much money.

More from this Contributor:

Questions You Need to Ask a Realtor when Selling Your Home

Real Estate Buyer’s Agent: Questions and Answers

What Can (And Can’t) Do for You



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