Saving That Commission!
Everyone likes to save money. So, how can you
save money in a real estate transaction? Find that new "e-Realtor"
with a discounted commission? Or, better yet, don't even use a Realtor at all?
A FSBO (For Sale By Owner) is bound to save you a bundle. Right?
The correct answers are No, No and No. Sorry,
the old adage "There is no free lunch" is alive and well in real
estate. Let's take a look at discounts and FSBO's and find out a few of the
reasons why you might want to steer clear.
Discounts: "E-Realtors" who will
rebate you something at closing seem to be the latest rage. You can even use
their search engines and e-mail updates to find the home you want. It sounds
good but did you know: It might be a problem seeing more than a few homes. It
might be hard to schedule appointments. It might be difficult to get answers,
advice and counsel. And, your agent might be new and inexperienced. Why all
these problems? The "e-Realtors" are all on a modest salary, not
commission. They have little incentive to "go the extra mile" to get
the job done for you. In order to make money (after paying the rebates) they
need to deal in large volumes of customers, not in quality service, assistance
and details. So, is a small rebate worth the chance of less than adequate
representation? Probably not.
FSBO's: The biggest problem with a For Sale By
Owner is that both buyer and seller think that they will be saving money by
avoiding a Realtor's guidance, expertise and cost. Unfortunately, somebody
usually gets burned. Lack of knowledge and information combined with greed
leads sellers of most FSBO homes to overprice them. Worse, buyers tend to be
uninformed, unprepared and unqualified. For the seller this can result in the
home not selling at all or an unqualified buyer trying to buy it
(unsuccessfully) and wasting the seller's time. For the buyer it can lead to
paying too much or buying a home with one or more unrecognized problems. In
either case someone loses. Do you want to be that someone in the hope of
"saving" a few dollars? Probably not.
So, if discounts and FSBO's don't work how do
you save money in real estate? The best way is to find an honest, experienced
Realtor and follow his or her sage advice and guidance. You will save in the
long run because that Realtor will earn his commission the old fashion way: by
working long and hard for it.
First Published 8/7/00 (1/11)
