Real estate agents are the eyes and ears of the real estate business. Ninety-six percent of all sales and trades involve licensed sales persons and their brokers. It would be very foolish indeed to harbor any serious notions about excluding them from your investment plans. The best thing you can do for yourself is to diligently being a searching for a good one.
Just like a budding romance, the first thing that has to work is chemistry. It will do you no good in the long run to force yourself into working with an agent who disgusts you, no matter how good you think he or she may be. Obnoxious agents are best left to service obnoxious house buyers since there’s no shortage of either one out there. I mention this because it’s very important to develop a relationship that can last a long time. Lasting together is much easier when you like each other.
Regarding commissions…what agents earn when they help you buy and sell real estate. You must first understand there is no such thing as a standard one-size-fits-all commission. They come in all different sizes. For example, in my town, most agents charge about 6 percent for selling houses. However, that’s not the market I’m part of. House buyers generally represent one time “wam-bam” transactions for most agents. I’m a buyer and sometimes seller any time a good deal pops up. Unlike the guy who buys a house and that’s it, I’m good for many transactions. Naturally, I represent a greater source of income for my agent.
Obviously, agents will work for smaller percentage commissions when multiple transactions are anticipated. To give you an idea of what I’m saying here, I’ll share my own experience. The average commission I’ve paid out for all my transactions during the past 30 years is slightly less than three percent of the purchase price. That’s roughly half of the so called going rate in my town. I find it best to negotiate the commission fee in advance of every deal I do. Just remember, it must be fair for the amount of work involved.