I was reading the Inman News today and was struck by an article.
The article talked about a survey that was completed by VHT Inc., which provides marketing services to real estate professionals.
I was interested in the results not because of the obvious correlation they found but because of one of the outcomes of the survey.
Many customers in the real estate marketplace have complained about the high commissions for several years now…no big news there. Consumers feel they have to pay agents in order to get the marketing coverage they feel that agents have, and agents have successfully convinced consumers of this fact.
The statistic that really surprised me was just how untrue this seemed to be. According to the survey of 1, 304 real estate agents, agents spent $682 on average for a property listed in the $250,000-$500,000 range, and $1,742 on average for properties in the $1M-$2.5M range.
Think about it. The national average commission is around 5% now, so on a $250,000 home the average agent is receiving $12,500. Half of that should go to a buyer agent, at least, which leaves the listing agent with $6,250. Of that, they are spending $682 to actually market the property.
If the home is a $500,000 home it looks worse…$25,000 paid out in commissions, $12,500 to the listing agent and still only $682 to market the property, on average.
I guess my thought for the consumers out there, is are you sure you know what you are getting?
The old adage is “you get what you pay for” but what EXACTLY are you paying for?
You might want to clarify that with your agent before shelling out a lot of money.