Typically agents charge 6%, and then split a portion of their commission with the buying agent.
The selling agent (listing agent) will take your home and post it on the MLS (multiple listing service) where other agents can then take a look at your home. The 6% charge is simply to list your home on the MLS, which takes all of 15 minutes. They will then give approximately 3% to the other agent who brings the buyer to your home.
The listing agent does not usually market your home any further than that. Some agents advertise themselves on magazines or other media so they can bring in additional clients. When you meet with an agent at a listing appointment they might show off the fact that they advertise in these types of magazines but that is an effort to attain new business from clients like you.
Most real estate agents will tie you into a contract for 3-6 months. They do this so they don't spend any extra time advertising your home directly. They are hoping that some other agent sells your home to their client and the contract buys them time. Wonder why a staggering, 80% of all listings expire?
OPEN HOUSE
There are agents who will also perform an "Open House". Understand, open houses DO NOT SELL homes! The main purpose is for the agent to pick up other clients. They most likely host open houses because it is customary for the area that they live in. The rate of homes sold successfully at an open house is about less than 5% throughout the United States.
If you choose to go with an agent be sure to ask the right questions:
-What kind of advertising will you do FOR MY HOME SPECIFICALLY? Do you use any other methods beyond open house and MLS?
-Do you have references of clients that you have worked with? (Actual non-related clients)
-What will you do to sell my home?
-How long will my home be under contract with you? The original contract should be no longer than 3 months, if the agent does a great job you can always extend the contract.
-What makes you different from other agents?
- How much commission will you offer to the buying agent?
Check to make sure they are in good standing with the DRE (department of real estate).
Ask them for their license number and check their reaction to the question. They shouldn't ask why, they should provide the details without hesitation.
BUYING AGENTS
If you have set your mind on buying a home and you choose to work with an agent you have to consider that you may run the risk of missing out on certain properties. Not all homes for sale on the market are on the MLS , many real estate investors and real estate "flippers" DO NOT list on the MLS.
A selling agent gives a certain amount of their commission to the buying agent another reason why they wait until they have a letter from your lender saying you are approved for a loan ( They want to make sure you can buy before they take you to look at homes). The buying agent will ask you what kind of home you are looking for. How many bedrooms and bath rooms, etc?.
They look on the MLS to see what options they have to offer you and once they have pulled up their list they will most likely consider the homes that GIVE THE MOST COMMISSION back. They will start showing homes to you that will benefit you both but may not include all of the best options for you. This means you are not getting everything on the market, and you could lose out on your dream home.
Not all agents are the same, but unfortunately most follow the model of doing what benefits them the most. This is why we have developed this informational site in the first place. The worst part of working with an agent can be their slow response or complete lack thereof. At times they do not speak with each regarding your home and may not even speak with you. Often times you speak with a machine or their assistants. This LACK of communications contributes to the length of time it takes to purchase a home and is the main reason so many deals fall apart..
There are some steps you can take to avoid these issues:
Go to the agent's office and sit there with them while they look for the homes and get a copy of the list right then and there.
Make sure you look at homes IN THE AREAS YOU PREFER. If you are not shown homes in the areas you want to live that is known as "block busting" and is illegal for agents to do.
About the Author: www.learnrealestate101.com
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