- Price your home. Look at recent sales. Make sure your square footage is correct when comparing to recent sales.
- Get your home ready to sell. Clean. Declutter. Stage.
- Put out a sign. http://amzn.to/2qAFDiZ $16 on Amazon. Put your phone number, email and a website on the sign.
- Make an extra key and put it in a lockbox on the front door. http://amzn.to/2rEsIwH $23 on Amazon.
- Get a professional to take pictures. Go a little further and get a walkthrough video and drone shots.
- Put it on Zillow as a For Sale By Owner.
- Find a company that will list it on the MLS for a flat fee.
- Schedule an open house through the MLS and Zillow.
Check out my video explaining how commission works or check out info below!
Who pays real estate commission?
The seller pays the entire commission at closing or settlement (4-8 weeks after the home is under contract typically). The commission is negotiated between the listing agent and the seller when the listing agreement/contract is signed to put the house on the market. In our area 5-6% commission is typical but it is negotiable.
- Generally, the commission is divided four ways: to the listing broker, the listing agent, the selling (buyer’s) broker and the selling (buyer’s) agent. Once the listing agreement is signed the listing agent uploads the home into our MLS system. The MLS is a system agents use and pay for to share listings. The commission offered to the selling agent is shown in the listing of the seller’s home in the MLS. So if it is a total of 5% commission then it will show 2.5% commission to the selling broker. 6% commission will show 3% to the selling broker.
How is it split with the brokers?
That depends on the agent’s agreement with their real estate broker and company. Many companies start new agents at a 50-50 split and as you sell more your percentage increases.
What other expenses are there for agents?
- We are independent contractors/1099 employees so we pay self employment tax of 15.3% of our income. Many experts recommend agents set aside 40% of our income for federal income tax, self employment tax and state income tax.
- We basically are our own business so we have to pay for office supplies, computers, smart phones, cars, gas and any other expenses that are needed to be a successful real estate agent.
- We often have to buy leads (Zillow, Trulia or Realtor.com) or pay a referral fee of 25-35% of our commission if the lead is referred to us by a website. (Here’s a fun fact: realtors pay a lot of money to use the MLS system to market and research homes. Zillow pulls listings from our MLS system that we pay for. Then Zillow charges hundreds of dollars a month per zipcode to agents for leads that are captured using our listing information in our MLS.)
- We have marketing costs. If you are a listing agent you pay for professional photographs, marketing material, advertising and blasting out a lot of information to every real estate website. For finding buyers we have to market to them.
- We pay dues and membership fees to belong to the MLS and realtor associations. Also, we have to pay a monthly fee to access the electronic lockbox on listings.
- We pay money to the Real Estate Commission of Pa for our license. We have continuing education classes that are required to keep our license active and we have to pay for them.
- Health Insurance for self employed or business owners is very high. It’s a big consideration when thinking of being a real estate agent.
- Here’s the other expense to take into account. Often homes don’t sell or fall through due to inspection issues, the appraisal is too low or (happened to me many times) the loan falls through. So as realtors we spend a lot of time selling a house and we spend money (listing agent is more) and it did not pay off and actually costs us money because we don’t get paid unless we go to closing and transfer of the home happens.
- For new agents it can take 6 months to a year before you make your first sale and make your first commission.
Any other fees?
NOT FROM ARTISAN REALTY! Most real estate companies charge an administrative fee to both sellers and buyers. It should be explained beforehand and they put it on the settlement sheet. It can be $200-$600 depending on the company. Artisan Realty does not charge this fee to buyers or sellers because we are a local, boutique real estate company that focuses on utilizing technology for our clients.
Note: There are other options to sell your house: For Sale By Owner, Discount Brokers etc… I based the above on how it typically works.
- Updating & Staging Your Home: Get rid or hide any strange things. Make everything as neutral as possible. Paint it or have touch up painting and caulking done. Check out my blog about staging your home: Click here.
- Pricing it correctly: The market is the market and with so much information available online about housing and the real estate market buyers have a good idea of what your house is worth. If you aren’t getting showings the first week of hitting the market you are WAY overpriced. If you have 1-2 showings that first week you may be slightly over priced. Spend a lot of time and analysis making sure you have it priced right before putting it on the market. Here’s the general graph for showings:
- Be ready to show at any time: Your house needs to be cleaned, organized and pretty. Get the kids and the dogs out. Everyone is busy these days so being flexible with giving access to buyers is so important. Leaving bottled waters and candy or snacks for the buyers and agents is a nice touch. Make sure it smells good and leave all the lights on and all blinds and curtains open.
- Get it professionally cleaned: Depending on the size of your house it could cost $250-$500. They clean baseboards, oven, wipe down cabinets & clean thoroughly. It is worth it. You have so much to do to get your house ready for sale. Pay someone to do this so you can spend more time on organizing & decluttering. Also, don’t forget to power wash the outside, sidewalks and decks.
- Professional Pictures & Videos: 15 seconds is how long buyers spend clicking through your pictures online. They need to be beautiful and professional. Only 20% of buyers actually read the property description. Most look only at the pictures, the price and the location.