Tom Ashworth

Why you pay commission

Who's Commission is it?The Buyers and Sellers sometimes try to deal directly with the each other; the reason is to save the commission on the agent. This is an understandable reason however it leads to problems.

The primary problem is that the commission cannot be saved by both the parties simultaneously. The Buyers’ reasons for feeling justified in saving the commission is because they have had to search for the home, find out its correct value and deal with the seller. The buyer also has had to arrange for financing, title and inspection.

The seller feels justified in saving the commission money as they have had to bear the marketing costs and spend many hours to host prospective buyers and answer inquiries. The Buyers also have had to research the correct market value of their home, finance and do the title work.

The commission money can indeed be saved by the Buyers and seller if they put in that much of an effort; however the problem is that they cannot save the money simultaneously, only of the parties will save the commission money.

It is here that the value of the third party advocate who facilitates the transaction is understood.

The number of home sellers who sell their home on their own has declined in the last decade from 14% to 9%. (Source: The Profile of Home Buyers and Seller). This means that agents are hired in 88% of the sales compared to 82% just a decade back.

The problems a seller faces when trying to sell a home without an agent are:

  • Attracting potential Buyers.
  • Getting the correct Market value for the home.
  • Understanding and performing the necessary paperwork.

Surveys show that home sellers anticipate selling their homes in a fixed time frame and for a certain value.

The agent earns the commission by providing certain key and valuable services to the clients. The commission therefore cannot be simultaneously saved by both the parties. Home is the largest asset and investment of most people; it is prudent to let a trained professional handle the complexities involved in selling or buying it.

If you are buying the house then you don’t have to pay the agent anything if the seller hires a Realtor® because the seller will take care of the expenses on the buyer’s side. The seller however can save himself money by using the Smart Path, “Smart Fee”, and pay for only their agent’s commission.

As the overwhelming number of homes are sold by Realtors, the buyer will try to lower the asking price from the seller. So if you are the seller then ask yourself whether you really are saving money by not hiring an agent.

If you are interested in Real Estate in the Texas Hill Country, please feel free to contact Tom Ashworth (Smart Path Realtor) at (208)830-7992.


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