Commission Offered when Listing your Home

Sellers, are you thinking of listing your home? With the softer market we are currently experiencing, you have to do everything right from the first day of the listing. Of course pricing it competitively is KEY. In my St George Utah real estate market, many homes listed for sale are overpriced. These homes usually remain in the inventory for 6 months to a year and have only a few showings, and no offers.

Of course, having your home in "show quality" condition is equally important. It is easy to become frustrated because the asking price you initially considered may be too high, so now you refuse to implement the suggestions your listing agent has offered. Buyers have a choice in today’s market. If your house is the wrong color, they will look at the home (or two) down the street. Make your house neutral and CLEAN. Buyers do not enjoy the "lived in look" and they will usually not agree with your paint selection such as that bright green wall in the dining room.

One of the most imperative and most underestimated selling techniques in today’s market is the commission offered when listing your home. Here in my St George Utah real estate market, most home sellers are becoming competitive with offering a selling bonus or incentive. This can be offered to the buyers’ agent or to the prospective buyer. Offering a bonus commission will entice an agent to push your listing under the nose of a buyer who may have otherwise overlooked your listing. Offering an incentive to the buyer, such as an offer to assist with closing costs, may entice the buyer to consider your listing when they may have not previously considered it.

Use caution with the way you advertise your incentive to the buyer. You do not want to offer: $3,000 credit for DAMAGE. This will make a prospective buyer RUN. Also, as a seller you should be very aware as to what your listing actually looks like in the local MLS (Multiple Listing Service) after being entered by the listing agent. It truly amazes me that many agents never show the final listing (including the private remarks) to the seller. I am sure that if they were aware of the information their agent was entering on the listing, the seller would be less than pleased.

Be SURE you understand exactly what you are offering in a commission split. The days of discounting real estate agents are OVER. If you are looking for the "cheapest" representation, you may find your listing sitting on the inventory far longer than it should. When you come to an agreement on a listing percentage, be SURE you understand exactly what amount the listing agent will take and what will be offered to the buyers’ agent. For example, if you are in a listing agreement for 5%, will the listing agent take 2% and offer 3% to the buyers’ agent? Do not take this split as "expected". Many times the agent will imply that this will be the split; however on the MLS they will offer 2.5% to the buyers’ agent.

Of course buyers agents are not supposed to discriminate on the basis of the listing commission percentage, but if you are technically making a public statement of: "I will not pay you as much as my neighbor will pay, but please show my house to all of your buyers?" Whose home do you think they will show first? Your home will likely become a last ditch effort with little enthusiasm from the agent. Many times the owner is completely oblivious to the fact that they are not even offering a competitive commission. As an owner, if you plan to list your home for sale, be sure you understand exactly what the competitive commission rate is for your area, and also be sure of how much of that is going to the BUYING agent. Request an updated copy of the MLS printout throughout the course of the listing. Attempting to save money by cutting the commission of your agents will only cause you to pay more in carry costs, as it will likely take longer to sell thereby forcing price reductions (which will be adding to your loss).

Paula Smith is a REALTOR in St George Utah. I specialize in St George, Santa Clara, Ivins, SunRiver, Washington City, Hurricane and LaVerkin Utah real estate. If you would like to search property for sale in these areas, visit my website www.StGeorgeUTproperty.com