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Monday, August 09, 2010

"Hey, Realtor, You Set the Price and You Make More Money."

I heard a seller tell me that real estate agents set the price based on how much money they want to make. While it sounds like a great way to increase my income the reality is simple…

The market sets the price.   The "market" is the buyer.  The lender basically approves the price by way of the real estate appraisal.  [There is some flexibility here depending on amount of loan, down payment, etc]   The real estate agent make a small percentage of the price. 

The last point is really misunderstood.  The reality is simple…
The seller pays the real estate fee for both the buyer and seller agent. [Having a buyer's agent does not cost the buyer anything!]   Although negotiable my experience is the cost for real estate agent representation is somewhere in the range of 4% to 6% of the selling price.  The earned real estate fee  is divided between buyer's broker and seller's broker.  

The fallacy of this seller's reasoning is that no sale equals no income for anyone! 

Thus, the real estate agent can not dictate their income by simply choosing a price to meet their desired income!  To put it in basic monetary terms - the difference in my income based on you selling for twenty thousand dollars more at 5% commission is....$322 minus taxes!

If you are considering selling your Viera, Suntree or Rockledge, Florida home and have questions about the cost of selling your Brevard County, Florida home, call me.  Send me an email.  

Gary L. Waters, PLLC, Florida licensed real estate agent, Century 21 Baytree Realty, Rockledge, Florida.

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