Should a Traditional Agent be used to Sell a Home?

How many weeks do you work each year to earn $15,000? Did you know that same $15,000, and usually more, is the fee paid to traditional real estate brokerages to sell a home? Do you know the time invested for them to accomplish this is oftentimes less than a day?

Everyone agrees that selling a home using a traditional agent is outdated and expensive. Most sellers list with a family member, friend, or acquaintance without even thinking about the cost. At that early point in the process, sellers are excited to get their home on the market and they just know their family member or friend will be looking out for their best interest. In most cases, they are absolutely right. The problem isn’t your family member or friend, it’s the broken system they are a part of.

Nearly all brokerage listing agreements are written in a way that maximizes cost to the home seller. They require sellers to pay an average rate of 3% on the sale price of their home to the listing agent, regardless of where the buyer comes from. That same listing agreement also asks the seller to commit to paying a fee to the buyer’s agent as well. This equates to an additional 2.5-3% of the sale price. The total broker commission on a $300,000 home is typically around $18,000. One would think this antiquated and costly fee structure would have gone away as a result of the NAR lawsuit, but it hasn’t. Unfortunately, brokers continue to find creative ways to charge the same inflated commissions, leaving the homeowner stuck with the same financial burden they’ve had to endure for as long as any of us can remember.

Most home sellers don’t quantify the 5-6% until they see the outrageous fees presented on their closing disclosure. It’s at this time when they begin to process the financial impact of their decision to list with a traditional agent. It doesn’t feel good to the seller, and it can even make their agent family member or friend a little uncomfortable too.

The next time you sell a home, think about what you could do with an extra $15,000. This is the average amount of agent commissions saved by using the Real Estate Exchange. More control. Fewer hassles. More money left in your pocket.