Whose Commission Is It?

One of the most common reasons buyers want to deal directly with the seller is because they feel they can save the commission. It’s a valid consideration but interestingly, it’s the same reason the seller isn’t employing an agent.

Both parties cannot save the commission. The buyer feels they have earned it because they’ve had to find the home, determine its value and negotiate with the seller. They had to arrange their own financing, title and inspections.

The seller equally feels that they have earned the commission because they too have had to research value, financing and title work. They have incurred all of the marketing expenses and have invested hours upon hours to be available to show the property, hold open houses and answer inquiries.

There is certainly value in all of the things that buyers and sellers are willing to do. However, only one person can save the commission assuming the buyer and seller can reach a written agreement.

The Profile of Home Buyers and Sellers survey reports that 14% of sales were For-Sale-by-Owners in 2003 and 2004 compared to just 9% in 2012. The trend shows that agent-assisted sales rose to 88% in 2012 from 82% in 2004.

The three most difficult tasks identified by for-sale-by-owners is attracting potential buyers, getting the price right and understanding and performing the paperwork. When surveyed, sellers most value the home selling in an anticipated time frame and for an expected amount.

Experienced, third-party advocates helping buyers and sellers is a valuable contribution to the transaction which may determine whose commission it is.