Listing Commissions and Related Issues

* Is the Commission Negotiable?
* How and When the Commission is Earned
* "Hot" Market Under-Pricing Strategy

The rate of Real Estate commissions has been a hot issue lately in Hawaii. Many Realtors charge 6% to sell a house, of which half goes to the agent who brings the buyer. You can use a discount broker, but considering that Oahu's largest discount broker only sold 52% of their listings in 2006, that is a pretty bad bet. Actually it's about the same as betting on black in roulette isn't it?

Is the Commission Negotiable?

Yes the commission is negotiable, just like almost any service in the world. You can choose to use a discount broker and have about a 52% chance of selling your home, or you can work with me, a full service broker who will work hard to get your home sold as if it were my own home. Commissions have actually come up lately, as the market slows down and people want to attract buyer's agents with whatever they can. I recently saw a house offering to buy a cruise for the buyer and the agent, and I have seen houses that come with a new car.

Commission is what you as a seller use to entice buyer's agents to bring their buyer, and listing agents to spend time and money selling your house. So wouldn't you want the agents to be as motivated as possible to find you a buyer? You want your home out there as much as possible, marketed in every way possible. Going for a discount on the commissions guarantees that agents won't spend as much on advertising, so you are hurting yourself.

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How and When the Commission is Earned

The commission is earned from the moment your home is listed. Everything that starts from that point is a work in progress until you close escrow. The MLS listing, the signs, the flyers, the postcards, the internet ads, the webpages, the pictures, the virtual tours, the broker's opens, the open houses, the magazine and newspaper ads. It all adds up to a house being sold for a price you want.

If the house never sells, guess what? I just spent all that time and money on nothing. So you better believe that I want my listings to sell! I will begin earning the commission the moment you sign the listing contract, and I will pitch your house to everyone I meet and everyone that comes to my website (like you!). Did you notice the featured listings on the home page? I want to sell that house!

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"Hot" Market Under-Pricing Strategy

In any market, buyers want a bargain. And in any market do you know what sellers in Hawaii want? Multiple offers. That's right. I would rather have 3 low offers than 1 good one. Why? Because I can turn 3 low offers into 3 above asking price offers.

No matter what the market is doing, if you "under price" your house, as if there were such a thing, you'll get multiple offers and you'll be in a position of strength! You want multiple offers to find the most motivated buyer who is willing to pay the most and stick with it through the escrow.

My goal is always multiple offers no matter what I'm selling and no matter what the market is.

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