When it comes to real estate commissions, many may not understand the amount of effort and time that some of us expend to make a sale as well as failing to consummate a sale.
The average income of a Realtor in January 2019 was $41,289. according to salary.com. Earnings today can range from a low of $28,000 to a high of $144,000 or considerably more. This varies depending on the state where you are located. The average New York City real estate agent as of Nov. 2, 2023 earned $89,370 the first year, which calculates to $42.97 per hour (as per zip recruiter statistics). However, ZipRecruiter saw salaries as high as $161,992 and as low as $31,498. Additional statistics at https://www.ziprecruiter.com.
The range is from $84,024 in Yonkers to $105,159 or more in NYC. The average luxury real estate agent in the city earns $125,683 or more. Nevada is above the average income nationally for first-year real estate agents, followed by Massachusetts and Oregon a very close second. The Northeast, West, and Southern corridor enable agents to earn the highest incomes. What commission you’ll pay for a real estate agent will vary based on location, market conditions and negotiation between the parties.
I think there are times when some don’t understand what is truly involved in getting a home sold. The most crucial item is pricing your home correctly to receive the most activity, and not overpricing it, thereby reducing the potential demand. This process involves the preparation of paperwork, potential staging of the home, videos, virtual tours, and targeted marketing to attract qualified buyers in today’s challenging environment. Setting up and scheduling open houses, fliers, sign-in sheets, and all the legal forms that must be available to buyers that must be present at the open house, e.g. housing disclosures, agency disclosures, offer acknowledgment forms, etc.
Having additional assistance at the open house in this current market may be necessary as the demand for housing is still apparent. Safety concerns is another important facet as we suggest that all expensive jewelry and valuable items be locked away to be safe and not sorry. Also to be aware of any hazardous conditions that might lead to a lawsuit, whether it is broken sidewalks, walkways, or any interior spaces that you need to repair or keep clutter-free that might cause a trip and fall event leading to a lawsuit.
Keeping track using a sign-in sheet with the name, cell, and email of all attendees enables you to have a record of all attendees. However, if you are doing this on your own, as a for sale by owner, be aware that following up and calling those potential buyers, puts you in a weaker position. The reason I say this is that over the years asking purchasers why they go after FSBOs is because they feel that they are in a better position, knowing that the sellers have no representation and feel that they have a stronger advantage.
I had a story relayed to me the other day whereby an individual was purchasing a property and the offer provided to the seller was way below the current market value. The seller had no broker representing them and was clueless about the real value. This may or may not always be true as some sellers may be very astute in pricing, negotiating, and discussing the terms and conditions. However, do you perform your own dental work? Of course not, as we use a professional to take care of our teeth.
But when it comes to selling the most valuable asset that most have, there are still those who prefer going on their own. What they do not understand is that a buyer knows that the seller isn’t paying a commission, so they automatically subtract an amount possibly up to 6% (even though a commission charged by a broker could be less), and then historically the buyers take another 8% off the sale price (as per the: (NationalAssociationofRealtors.
Now this may not be the case in the current market with the severe lack of inventory on Long Island, but it does occur depending on the state where you are located, market conditions, demand, and amount of inventory. Out West and even in some areas in Florida, where inventory has increased drastically, price adjustments have been occurring, especially with major builders like DR Horton whose new construction inventory has greatly increased since 2020, as sales have been drastically affected by high interest rates.
Hiring a seasoned and professional Realtor and paying commission will go a very long way in actually saving you money, providing you with the necessary activities from the start to the closing table in having your home sold at the highest price in the shortest amount of time with the least amount of stress and inconvenience.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. For a free 15-minute consultation, value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com or via https://WWW.Li-RealEstate.Com