Real Estate Agent Commission Rebate Calculator
Are you looking to sell your home? This calculator will help you figure out the costs associated with selling your home. First enter your home’s sale price and your realtor’s commission percentage. Then input the realtor’s commission rebate as either a percentage of the selling price or a gross commission. Finish up by including any related advertising costs.
Press CALCULATE and you’ll see amounts for the commission before a rebate, the commission rebate, the net commission cost, and the total cost after considering net-commission plus advertising. Hopefully, you’ll still be able to clear a profit after selling.
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Seven Things a Real Estate Broker Won't Tell You When Buying a Home
Buying a home is not for the faint of heart. You have to accumulate and process a great deal of information in a relatively short period of time. Few people buy the first home they see, and fewer still enjoy a painless purchase process.
In order to find the perfect home, you have to rely upon your real estate agent. No matter how much you like and trust this person, however, there are still some things they will never say. Here are seven things a real estate broker won't tell you when you try to buy a home.
I Have No Idea How Home Repair Works
Every real estate agent eventually shows a customer a dilapidated home. The tactic is designed to motivate someone who is on the fence to buy a different property. The idea is to scare them by showing some place straight out of a horror movie that costs roughly the same as a much nicer house that the potential buyer has been considering. Everything is described as a simple fixer-upper.
Whether they are discussing the murder house or the one they are trying to convince you is your dream home, real estate agents will still tell you the same thing. It would be easy to fix everything that you hate about the house to perfect it. There is just one little problem with that line of thinking.
Most real estate agents are not renovation experts. They have little need to learn how to repair homes since they have early access to all the best deals on recently marketed homes for sale. If they don't like their home, they can simply list then sell it and move on to the next one. The people who know about renovation are professionals.
Ask a professional about what would be required to do a few small repairs, and you are likely to receive a much different answer. Experts in home renovation want to avoid the hassle of a potentially disgruntled customer. In order to avoid future unpleasantness, the person bidding to update your house will be brutally honest about what is required. That response will not sound at all like the one your real estate agent provided.
Refurbishing a single room means having a lot of strangers traipse through your house, generally starting earlier in the morning than you would prefer. Also, if a kitchen is being fixed, there is a lot of eating out in your future since you won't have easy access to your appliances. If your bathroom needs updating, your water will be turned off for long periods of time and probably when you need it the most. Your real estate agent brushes all of this aggravation away with a sweep of the hand. You should understand that they won't be the ones suffering while you do the fixing on your upper.
You Would Be Crazy to Pay What This Home Costs
In a shocking revelation, real estate agents are paid on commission. The amount of money they receive increases when you pay more for a house. At an industry standard of 6 percent, they earn an extra $600 for every $10,000 you spend. It would be self-defeating for an agent to argue that you should pay less for a certain home.
A real estate agent makes their living by following the philosophy that the customer is always right. If you point out how overpriced a home is, they will readily and emphatically agree. Simply understand they might be disappointed about your familiarity with fair market value in the area.
The constructive approach for a pricing conversation would be to research the sales prices for similar homes in the neighborhood. Be sure to pick the lowest priced home. Then, ask your real estate agent to explain how they believe the listing agent determined the asking price for the home.
This tactic will force the real estate agent to acknowledge that asking price on a home is similar to sticker price on a car. It is simply a starting point for negotiations. In many areas of the country, 80 percent of the asking price is considered a fair initial offer and possibly even the eventual settlement for the cost of the home. 90 percent is a general guideline for everywhere else except the few areas experiencing explosive growth. These locales are the only ones where the list price can be considered finite.
Your real estate agent is unlikely to acknowledge this, though. Until you demonstrate an understanding of the marketplace, you will be treated like a novice and possibly manipulated into paying more. The sooner you prove your knowledge, the sooner the real estate agent will give up the pipe dream of receiving the higher commission that comes with full asking price.
You cannot blame your agent for trying, though. There are good reasons beyond the monetary rewards for trying to sell a house for more money. Agents garner more respect within their organization by making larger sales. There are million dollar clubs and even ten million dollar clubs for the best agents, and those usually come with financial bonuses as well as organizational advancement opportunities.
Nobody Wants to Buy This House
There is nothing more frustrating than doing your due diligence on a home, realizing that it has been on the market for an extended period, and then having your real estate agent describe the interest of another buyer. Spoiler: there is no other buyer. It is a basic sales tactic and a disingenuous one at that.
With so much information about home sales readily available on the internet, even the worst amateur sleuth can quickly deduce how long a house has been on the market. Virtually every major real estate website lists the details as basic information for the home, right beside the contact information for the listing agent.
Why then does a real estate agent listing a home that nobody wants to buy attempt to keep up the façade of buyer interest? Honesty would be a much more effective tactic. You as a customer would respect the agent more if they were direct rather than misleading upon first contact, right?
In order to avoid such a sideshow, be blunt at the start. Mention to the agent that you are interested in the house, but that you also realize that nobody else is. If the seller isn't motivated by now, they must not want to let go of their home anyway.
Now that the housing economy has largely recovered, a listing that is over a year old is a warning sign. There is either something wrong with the property or the seller is difficult to deal with. Ask the listing agent to be honest about which one is the issue. You will save yourself a lot of time and aggravation this way.
Real Estate Agent Fees Are Negotiable
As was mentioned above, the average real estate agent fee is 6 percent. The catch is that there is no law stating that your agent must be paid this amount. It is more mandatory than a tip at a restaurant, but six percent is a lot of money, especially for an expensive home.
If you are a bit uncomfortable with the price of a house, be direct with your real estate agent. Ask them if they demand their full fee to facilitate the transaction. Even if they say yes, they hold little power over you. Real estate agents recognize that you can just as easily take your business elsewhere.
Until you reach the contract phase of the purchase, all they have really done is visit a few houses with you. You may not feel that insignificant time investment justifies what could be as much as $30,000 in agent fees for a $500,000 home. Even $15,000 for a $250,000 home represents as much as $1,000 an hour in salary. That is a crazy amount of money, especially for low maintenance shoppers who buy early in the process.
Leverage your knowledge of the situation to garner the best deal for yourself. After all, you may never need another real estate agent again in your life. Why should you pay this one so much money for such little work?
No One Should EVER Live Here
A real estate agent's responsibility is to be objective. The structure of the job forces the same person to look at dozens of homes in the same month. Think about your own behavior when looking at a home. How many homes do you like? A real estate agent is no different. There will be some homes that they absolutely despise, but they still follow that doctrine that the customer is always right.
As a professional, they also view the home in a different way than you. Their primary focus is resale value. Their keenly trained eye will note every asset of a dwelling as well as the issues that could dissuade future customers from buying.
You, however, are presumably looking for a place of residence for many years. You also have individually unique needs that your home of choice will satisfy. If the real estate agent's body language and muted comments indicate that they are not crazy about the home, you should ask them for an explanation. After all, you don't want to buy a home with poor resale value. Understand that the difference of opinion could be a simple issue of different taste, though.
This Home Is a Disaster
A difference of taste is one issue. A real estate agent's reluctance to mention a known issue with a home is an entirely different matter. The real estate field is a tight-knit industry where networking is crucial to achieving sales. As such, if a house has a known issue, there is a decent chance that your real estate agent already knows.
There are actually lemon laws for residences just as for cars, but something like a leaky roof may not be something your agent feels compelled to disclose. A new roof is one of the most expensive costs possible for a dwelling. So, their reluctance could cost you over $10,000 in the very near future.
Let your agent know that you will hold them accountable if they fail to disclose crucial information about your impending purchase. If done politely but firmly, that strategy should go a long way in loosening their tongue.
I Hate Inspections Because They Cost Me Money
As a potential buyer, home inspections are your best friend. They reveal every potential pitfall in your future home. If the basement floods, the deck foundation is in danger of collapsing, or termites are devouring the place from the inside, the inspection unearths this crucial information.
Real estate agents hate that. Nothing blows up a deal more quickly than a bad inspection. Think how frustrating this situation is for a real estate agent. They have dutifully shown you a lot of homes, they have handled the negotiations between you and the other party, and their time investment is finally about to be rewarded through financial compensation. Then, an inspector shows up and notices something that could cost the buyer thousands of dollars. The real estate agent is back to square one. Who would like that?
Unfortunately, you have to be harsh on this subject. You are the one who will have to live there. If a home fails an inspection, you may still want to buy it, but there absolutely must be conditions applied to protect your interests as a buyer. Your real estate agent won't like this, because it represents more work. That is not your concern.
Your primary goal is to buy a new home that will not immediately cost you thousands of dollars in repairs. Simply paying the mortgage should be the length of your investment for several years. The inspection protects you even as it infuriates your real estate agent, because the process works exactly as it is intended.
Buying a new home is an invigorating process, and you want to be in lockstep with your agent throughout the process. As long as you communicate your goals and identify that you expect honesty and transparency, you will have the home of your dreams in no time. You also might make a new friend as well.