The age old conversation about commission, and the true value added from your realtor. This is a conversation that I get into at least twice a week, and I want to be as unbiased as I can be when writing up this article. My aim here is not to convince you to pay 6% commissions when selling your home, but rather to understand the logic used in the title. Any service you use (lawyer, doctor, notary, mechanic) should be expensive if they have a proven track record, right? So here we go!
I met with a client this week, a wonderful old man who had stories about his life’s journey and everything in the middle! After an almost two hour meeting that covered his time in Italy to the most recent sales in his neighbourhood he looked over at me dead in the eyes and asked “So, how much will it cost me to do business with you?” I gave him my commission rate and started to explain why, when he answered “No need to justify, an expensive broker pays for himself”. In my eight years as a real estate broker, That was the first time a client really said something that stuck with me and helped me understand the true value of service that my team and I offer to our clients.
The first thing to remember about real estate services is that you do not pay anything until the job is done. Yes that’s right… your broker actually carries all the risk in trying to sell your property. They sign a mandate with you, pay for photography, stage the home, videography, drone photos, visits, phone calls, negotiations, inspections, more negotiations, more phone conversations, forward the sale to the notary, make sure all is in tact and then once, and only once you get your profits, we get our cut. The point in all this? We’re actually the main orchestrator of your whole transaction, we play the role of marketing, advertisement, administration, sales, negotiations and so much more!! Although our salaries are well justified in most cases you should still never blindly sign a contract with a broker just based on referrals, instead ask the right questions and the answers should guide you in the right direction.
Questions to ask any broker before signing a contract:
– What marketing and advertisement will you put in place to help us sell our home?
– How well do you know my neighbourhood and when was your last sale here?
– What types of properties do you sell most often?
– Do you have a list of contacts in your industry that we can benefit from?
– Do you know any other brokers that work primarily in our neighbourhood?
– What does your banner (i.e. remax, sutton, century 21) offer us more than others?
– Do you have any testimonials from past clients and where can we see them?
– Can you give me an example of a situation where your qualities as a broker were tested and how you fixed the situation?
– Do you or your team members offer an after sale service or solutions if necessary?
Once you get the answer to these questions (and any others that you feel are necessary to ask) you will either feel completely compelled to sign the contract, or question if this broker is the right fit for your family. The truth be told, if it is not an automatic click and connection, then you should always interview at least two other brokers to make sure that you are making the right decision.
Remember not to refuse signing a contract based on commission, but refuse ONLY if you are not confident in the capabilities of that broker in particular. Whether the commission be 4, 4.5 or 5%, the difference is not in the price, it’s in the service offered.