No matter what I or anyone else writes, many buyers believe that they can get a better deal buying their home from an unrepresented seller because that seller isn’t having to pay commissions.
No one has ever been able to prove that an unrepresented seller prices their home a certain percentage below comparable homes because of the lack of a commission. In fact, many homes being sold by unrepresented sellers are offered at above-market prices because no one’s told the sellers the reality of the market. They simply look at neighboring homes, figure there home is better and raise the price accordingly.
This past week I spoke with a seller who is going it alone. Current market value for their home is somewhere around $200,000. Their asking price is $215,000. And that price comes without a commission being paid.
There is a 7% spread between the current market value and the list price for this home being sold by an unrepresented seller – a 7% mark-up without commissions.
It’s only one example but I easily could show you another dozen. Though buyers do pay commissions in as much as it’s their mortgage providing the seller the proceeds with which they can pay the agents, the commission truly is an agreement between seller and listing agent.
Buyers can continue to believe the myths (another is that there’s a deal to be had by going through the listing agent because the commission will be less and the seller will accept less – another story for another day) but perhaps time would be better spent seeing the reality of the real estate market’s mechanics.
[tags]Phoenix real estate, real estate commissions[/tags]