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Someone somewhere decided a fair commission for selling real estate was 6% and this has become universally accepted - Why?
At 6%, for every $100,000, the commission would be $6,000. On a $500,000 property, $30,000 and on a million-dollar property, $60,000. 30 years ago when property values were substantially less than what they are now, paying 6% on a $50,000 or $3,000 may have been a fair commission to pay. As most of us are aware, property values have skyrocketed over the last decade and have increased substantially over the last 30 years. With commission rates pegged at 6%, commissions on real estate have gone up equivalently. Has your income appreciated as much? The real estate market has become flushed with real estate agents seeking to cash in on this modern-day gold rush.
Fair is whatever the market will bear. If consumers are willing to pay 6%, then 6% is fair. Real Estate agents have the right to earn a living and be compensated as much as the consumer is willing to pay for their services. However, it is ultimately up to the consumer, not the agent, to determine what fair is and the consumer can and always should attempt to negotiate the best deal.
Our goal at ProActive Financial Planning is to change the practice of selling real estate to help our members obtain the highest possible price and pay the lowest possible commissions. Individually, our ability to negotiate better terms is limited but collectively we have a better advantage. By unifying and educating consumers, we can leverage our influence. The larger our organization becomes, the more influential we will be giving our organization the power to negotiate even better terms for our members - refer a friend. If we can save our members 1% on a $500,000, that is a savings of $5,000.
When to Consider Paying a Higher Commissions:
When should you sell your property at a premium:
When should you sell your property at a discount:
Financial Planning Issues:
If You Desire More Time to Pursue Life's Pleasures, Find Out How a Certified Financial Planner Can Help.
Contact: ProActive Financial Planning
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