Senior Living. Senior Solutions. Made Simple.
Why you don’t need most expensive yard sign on the South Shore to sell your home
By Korey Welch, Owner of Boom Realty
and Senior Mortgage Broker, Loan Factory
There are some beautiful yard signs on the South Shore.
Some are blue. Some are red. Some have glamour shots of the agent. Others feature the logo of a giant national real estate company, presumably to remind everyone that the office has locations in 47 states and enough agents to fill Gillette Stadium.
But have you ever stopped to consider what that yard sign may actually be costing the homeowner?
On a $750,000 home, a 3% listing commission equals $22,500.
That is one expensive yard sign.
For $22,500, it should probably be made of solid gold. It should light up at night, shovel the driveway during the winter, and personally explain to every neighbor why the house is priced where it is.
Yet sellers continue paying enormous listing commissions because they have been conditioned to believe that this is simply what it costs to sell a home.
It isn’t.
What are you actually paying for?
A good real estate agent provides valuable services. Your home should be professionally photographed, properly presented, placed in the Multiple Listing Service, distributed across the major real estate websites and actively marketed to potential buyers.
Your agent should also advise you on pricing, prepare the property for the market, communicate with interested buyers, negotiate offers, manage inspections and appraisals, and help keep the transaction together until closing.
That work deserves to be compensated.
The question is whether it deserves to be compensated at $20,000, $25,000 or even $30,000 just on the listing side of the transaction.
Did the photographer take three times as many pictures because your home is worth more?
Did the MLS charge the agent $20,000 to enter the listing?
Did Zillow send a special limousine to deliver the property to its website?
Of course not.
Yet under the traditional percentage-based model, the more your home is worth, the more the agent earns, even when the basic process of marketing and selling the property remains largely the same.
That is a terrific arrangement for the agent. It may not be such a terrific arrangement for you.
Buyers aren’t waiting for the Sunday newspaper
Years ago, real estate agents controlled access to information. Buyers relied on them to learn which homes were available, obtain property details and schedule showings.
Today, buyers carry the entire housing market in their pockets.
The moment a property is entered into the MLS, it is distributed across the internet. Buyers receive alerts on their phones. They view photographs, study floor plans, check the neighborhood and sometimes know a home has hit the market before the yard sign has even been installed.
That does not mean the agent is unimportant. It means the agent’s value is no longer based on being the only person who knows a home is for sale.
The value is in knowing how to price it, position it, market it, negotiate it and get it successfully to the closing table.
You should pay for knowledge, strategy and execution – not an expensive logo.
The difference is real money
Consider that same $750,000 home.
At a 3% listing commission, the fee would be $22,500.
At a 1% listing commission, the fee would be $7,500.
That is a difference of $15,000.
For many seniors, $15,000 is not pocket change. It can help pay for moving expenses, new furniture, several years of property taxes, improvements to the next home, or simply remain in the bank as part of your retirement savings.
It could also be money left to children or grandchildren instead of being handed over at the closing table because someone told you that a higher commission was “standard.”
There is no prize for paying the most to sell your house.
No one hands you a trophy at closing. There is no commemorative plaque. You simply receive a closing statement showing how much of your equity went somewhere else.
Hire the right agent
The biggest misconception in real estate is that a higher commission automatically means better service.
It doesn’t.
Some sellers pay 3% or even 3.5% just to the listing agent and still receive the same basic package: photographs, a yard sign, an MLS listing, and an open house.
The name on the office building does not sell the home. The individual agent’s experience, pricing strategy, marketing plan, negotiating ability and attention to detail are what matter.
Before signing a listing agreement, ask exactly what services will be provided. Ask how the home will be marketed. Ask who will personally handle the transaction. Most importantly, ask how much the service will cost in actual dollars – not just percentages.
I have worked in the real estate and mortgage industries for more than 26 years. My listing commission is 1%, while still providing professional photography, floor plans, online marketing, open houses, MLS exposure, negotiation and transaction management.
Full service should mean full service. It should not mean full price simply because that is how things were always done.
The bottom line
Selling your home may be one of the largest financial transactions of your life. The equity you built belongs to you.
A great agent should help you protect that equity, not quietly take an oversized piece of it.
So, when you see a real estate sign pop up in your neighborhood, take a moment to admire it.
Just remember: depending on the commission being charged, you may be looking at the most expensive yard sign on the South Shore.
Sell smarter!
About the Author: Korey Welch, Owner of Boom Realty and Senior Mortgage Broker (NMLS: 14991) with Loan Factory (NMLS: 320841), is a licensed mortgage broker/real estate broker based in Rockland. For more than two decades, Korey has been helping seniors determine the best fit. For a complimentary consultation, contact him at korey@koreywelch.com, 781-367-3351.
