Real Estate Commission Too High?
The public has the misconception that real estate commission is too high. In many quarters, the consumer is under the impression that real estate commission in North America is in the range of 5% to 6%. In reality, the commission payable by consumer is much lower. In the case of a $500,000 home, most agents in British Columbia charge 7% on the 1st $100,000 and 2.5% on the balance of the sale price. Effectively, the commission cost is $17,000 which is just 3.4%. In the case of a $1.0 million dollar home, the real estate $29,500 which is 2.95% of the selling price.
Is this excessive?
The truth is, such rates as shown above are not excessive, considering the fact that the commissions as shown above are in most instances, for 2 agents involved in a transaction. There are many costs an agent has to carry to market to sell a home entrusted to him/her by a home seller. The internet allows other agents and consumers to easy access real estate information as soon as they are posted on the MLS® System.
Top5′ New Business Model
It is widely acknowledged and accepted by real estate agents, the greatest tool that they have in doing their real estate business is the MLS® System.In today’s fast pace society, consumer is demanding faster and better service. With better access to research and search, buyers are more knowledgeable with the real estate market. Home buyers and sellers are empowered with far more information than they can get 15 years ago. They are looking for help from real estate agents who can help and guide them with their real estate needs.
They can choose how and who they want to do business with. The internet and social sharing also allow them to very quickly learn from others in their network how best to benefit from the offers available in the market place.