Why Do Real Estate Agents Make So Much?
Posted on: 27 May 2021
If you're selling your home, you might be wondering what your real estate agent will be paid. Usually, a real estate agent will take a percentage of the sale of your property, which can be convenient for you. Real estate agents field a lot of movement in the business, and the value that they provide is often immeasurable.
Agents Aren't Paid Upfront
A real estate agent isn't paid upfront or hourly. Agents can spend literally months working to sell your property without a dime. It's a lot of risk on the agent's side; you might decide last minute that you don't want to sell or you might not even be able to find a buyer. Sometimes, properties fail inspections and are never sold. The agent is never reimbursed for their time. Because agents do a lot of work "for free" during the process of sales, they have to be fairly compensated later.
An Agent Negotiates For You
Most people are not familiar with real estate negotiations. This can be partly due to confidence and experience, but you might not even know what your property is really worth. While your agent could take 5 percent from your home sale, it may not actually be that much if you consider that they get you 15 percent more in your home value. You're still netting a win and the agent is doing their job. A lot of an agent's job happens after the sale starts, after all.
Your Agent Saves You From Costly Mistakes
An agent is the one who will tell you that you're taking too little for a property, that you're accepting an offer that's likely to fall through, or that you may be asking too much (and consequently may be on the market too long). Agents save you money actively throughout the process, not just through their advice, but also by recommending services such as the best appraisers, inspectors, and home stagers.
Home Selling is a Complicated Business
There's a lot an agent does, such as drafting up contracts, that absolutely has to be done correctly. Real estate agents go through a lot of schooling and rack up a lot of experience to be able to do this professionally. They need to charge for the cost of that experience and that tuition.
Of course, you can also negotiate with your real estate agent. Some agents will knock down their price if you're doing a lot of the legwork, while others may charge premium rates for premium service. Either way, rest assured that you're getting what you pay for.
Share