People become real estate agents mainly because they failed at another career. Some say they got their license because they like showing houses… Others like making friends… Isn’t that nicey nice? Rarely will you find a bad ass real estate agent and when you do they are gold…
These “Top Producers” have also established a reputation for their abilities and have earned the respect of the real estate agent community for “getting the job done”, something that a less seasoned or new agent will not have. I guarantee that an agent’s reputation will either hinder, or help, you in selling your houses.
These “Top Producers” will not lie or over-price the property, whereas a new agent might due to his, or her, need for business or lack of experience. It isn’t uncommon for a new agent to over-price a listing to justify his, or her, commission to a seller and have that listing sit on the market. Although you are trained to guide him, or her, to list your property for the correct amount, this inexperienced agent has already over-priced homes so much that unfortunately his, or her, peers will not show your listings as often.
One more note, arrange to have the selling agent receive a greater portion of the commission. Most commissions are split equally between the listing and selling sides. However, it is your option and you should request a different split. I would suggest at the very least that you pay to the selling agent 3.5% commission and 2.5% to the listing agent. The reason that you will benefit by a higher selling side commission is the selling agent may be more inclined to recommend your property to his, or her, buyer when everything about the property is equal to another property where the commission is less. Let’s face it pricing concessions sell property.
Real Estate Commission Split Guide
3.5% to 4% to the Selling Agent
2.5% to 2% to the Listing Agent
You may also want to consider offering a “Close on Time” and “Full Offer” bonus to the selling agent if escrow closes according to the contract and the contract is for listing price. I suggest an extra $750.00. The extra $750.00 paid is a great enhancement and will put money in your checking account faster.
When you pick the agent that you are going to be doing business with I would want them to be a “Top 10 Producer”. Here is why.
• They can afford you.
• They have the infrastructure necessary to do multiple deals efficiently and without procrastination.
• They have access to and they do a ton of advertising which you could piggy back on… They typically buy full page ads and can sell/give you a small corner to promote your business, not to mention that they can advertise your resells more than by just using the MLS alone.
• They always want to double end the transaction, which means you have buyers agents “Pushing” your property.
• They know the difference between escrows started and escrows closed. Most new agents don’t.
• They are a source of funds when you need them for a concurrent close… The top ten typically make a 1,000,000 a year in earned commissions and most are extremely frugal. Having someone attached to the outcome is very nice.
• The perks they receive from the vendors will reduce your costs… i.e. free inspections, quick turnaround time etc.
• They won’t steal your deals or steal your business model. They are happy right where they are.
• They tend to see the big picture more.
• THE MOST IMPORTANT QUALITY; they have a reputation for getting the job done. Other agents know this and know when they enter a deal it will close. No BS
I have found that there are factors or characteristics that I want my agent to have, they are.
• Can the Agent do the Job at hand?
• Will they reduce their commission on the listing side and offer more to the Selling side?
• Will the field my referrals aggressively?
• Will they feed me the Expired list so we can co-market?
• Are they one of the Top Agent in their field? I would want top 10?
• Is their advertising Budget large enough to consistently run Ads?
• Are they respected amongst their peers and looked at as a “Gets the job done” Agent?
• Are they willing to and do they understand Investors Strategy?
• Do they have sufficient Buyers agent employed to double the transaction?
• Are their vendors willing to service my needs as aggressively as theirs?
You definitely don’t need your license however having it, as long as you can afford the grand a year minimum in fees, then get it. Just don’t become a practicing agent at least in the beginning…