sacramento real estate commissions
How would you like to be in a business in which a potential client asks you to come over to her house, in the dark and cold after business hours, so she can pick your brain without making any kind of commitment and argue about how much you charge? Thousands of sales people do this every single day. It’s not that much different for a Sacramento real estate agent, either. I’m fortunate in that most people who call me have already decided to hire me, so when they make an appointment for me to view their home, it’s because they are ready to go on the market. I would not want to stay in this business if every single appointment was a 33% chance of being hired because the seller had to interview 3 real estate agents in Sacramento before making a decision.
Not because I couldn’t outshine and win the business because I perform well against the competition, but because the odds are against my favor, so I’d eventually want to stop doing it. 100% or long shot? Which is smarter? Given the choice of visiting a seller because she tells me she wants to hire me or visiting a seller who is not sure what she wants, which do you think a Sacramento real estate agent prefers to do? Which would you want to do?
One thing sellers like to discuss is how much it will cost them to hire a real estate agent. I don’t blame them, back when dinosaurs roamed the earth, I used to think the commission was a big deal. It’s not a big deal. Especially if you’re apart by only 1% of the sales price.
Oh, sure, you say, easy for you to roll off the tip of your tongue because it’s not your money, it’s the seller’s money, but I’m telling you it’s not a big deal. It’s a far bigger deal how much a seller gets for her home. The sales price and the agent’s ability to market and negotiate for the seller — to be that seller’s advocate and fiduciary and try to get the seller the highest price possible — that’s far more important.
I have never had a seller tell me I charge too much. I have never had a seller tell me she didn’t get enough for her home and that I should have worked harder for her, because I would be crushed. It’s never happened. Knock on wood, it never will happen. I focus on the seller’s needs and the seller’s rights — that’s the secret of my success.
I did have a former neighbor once tell me after he closed escrow that he picked a friend of his instead of hiring me because his friend charged him 1% less than I proposed. But you know what, he made 12% less on his sale than I would have directed him to do. He gave up many thousands in profit in exchange for that little tiny 1%. To put it into perspective, he lost almost $30,000 over that bad decision. Sellers should not look at the small percentage an agent receives for the work she does but instead should focus on the huge percentage they make selling the home. Experience doesn’t cost, it pays. Hire an experienced agent you trust and that’s all you need. Don’t be penny wise and pound foolish.
Can you always find an agent somewhere who will charge a little bit less than a veteran with many years under her belt? Sure, you can. It’s in the nature of the beast. Is it in your best interest? Probably not. It’s just not enough to work yourself into an anguish over.