Palm Beach Real Estate and Loans

Next to Pricing (don't even get me started!) the most misunderstood topic I run into when talking to people about Palm Beach Gardens real estate has got to be Commissions.

The most important thing that you need to realize is that no matter what anyone tells you there is no such thing as a STANDARD COMMISSION!  Low-quality Agents would prefer it if you thought there was - it just makes their job easier because there is less to explain, they just tell you what you HAVE to pay.

I have seen commissions anywhere from 4% to 8% - it all depends on the specific situation and there is always room to negotiate.

That might sound like a lot of money to some of you and I think it is the main reason that some people decide to go FSBO (For Sale By Owner Nobody). 

If all of that money was going to one person, it WOULD be a lot!

But it's not - the total commission is split between the Seller's Brokerage and the Buyer's Brokerage.  It's typically a 50/50 split.  Then, each Brokerage splits what it received with the Agent that did the work.  Each Agent will get around 35% of the total commission.  Out of that, the Agent pays for advertising and all of the other job-related expenses and if the home doesn't sell, there is NO income.

So, as you can see, your Agent is not making anywhere near what you might think- no sympathetic pat on the head is needed, I'm just presenting the facts!

That's the typical situation, there are also:

• Brokerages that will advertise 'extra low' commissions - of course you'll get less advertising and less help - what a deal!  If it sounds too good to be true.....
• Companies that charge a large, non-refundable, up front fee.  I actually talked to someone who got conned into this one - the deal was this: You pay $thousands up-front. If the house sells, they refund the money and just charge a percentage of the sales price.  What a scam!  They get paid even if the house DOESN'T SELL!  Please don't fall for this.

OK, now you know where the money is going - so how do you arrive at the amount that you want to offer?

I'll discuss that soon, in Part II.