Saturday, June 25, 2011

I'll Let You in on a Secret----

Actually, it's never been a secret to my clients, because I always walk them through the whole thing.

Realtors often mention that the "standard" brokerage fee is 6%. In Piedmont, it's actually 5%. Only 8 of the 56 transactions that have closed in Piedmont since 1/1 involved a brokerage fee above 5%. I always say to my clients that I feel 5% on a million-plus transaction is fair enough, that I work very hard and won't work any harder for an extra percent (only a small portion of would make its way to my pocket), and the last thing I want to do is start out our relationship by having a fight about brokerage fees.

By the way, the 5% flows through to the listing agent's brokerage, which in turn splits it with the buyer's agent's brokerage, and each brokerage, in turn, splits that fee with the agent who was involved. The percentage "split" between brokerage and agent varies based on sales volume, as you can expect, but with so many fewer transactions, many at an incrementally lower sales price, all our incomes have been hit in the last few years.

So don't ask your realtor to market your home at a super-low rate--you can't afford that strategy. On the other hand, know the facts before you negotiate the brokerage fee--

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