Part 1 of 2

Yes!

On the surface, it seems almost impossible, right? How can a seller give a percentage of the price away to a third party and still receive more money at closing than they would if they keep it all to themselves?

It's a great question, with a perfectly logical answer.

Studies have consistently shown that sellers who use the services of a real estate professional to sell their home get an average of 14% to 18% more money for their property than sellers who sell direct. This means that even after paying the real estate fees, sellers who list their property with a real estate broker pocket more money than unrepresented sellers.

How can that be?

That's another great question, and it too has a logical answer that consists of two main elements: Buyers and Market Exposure.

Part one will focus on the first element, the Buyers:

Buyers do not typically pay out-of-pocket for real estate brokerage services because the seller pays the fees out of the listing commission. Buyers get their broker's expertise of the area, they get access to all of the homes listed for sale in the MLS, and they use the broker's computer and gasoline to find their new home. They get all this in one place, and they get it for "free." And since most homes in the area are listed with a broker, they get access to most everything available for sale. Why then do some buyers skip all of the listed properties, all of those choices and free services, to drive around and look for "By Owner" signs? To save the commission! They want a deal. They know that the seller is not paying a listing fee to a broker, so they shop the limited number of houses being sold by unrepresented sellers in search of a property where they can save money on commission. The problem is that it's the same commission the seller is trying to save. The only way the seller will actually pocket more money is if he convinces the buyer to pay the commission savings to him. But since the buyer shopped the unrepresented seller specifically to save that money, it's a tough negotiating position.

In normal markets, buyers who shop unrepresented sellers are usually one of three types: Investors, bargain hunters, and looky-loos. A seller is not likely to receive the highest and best price possible from that kind of buyer.

Part Two, Market Exposure