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Aug. 22, 2006 - A little math

I was rummaging through the Rain City Guide blog in Seattle and ran across this post, which actually was a comment added by a buyer. The snip set me to thinking ...

"No buyer really understands why an agent would help them negotiate a lower price on a house, when that means the agent gets paid less in the end ..."

I've seen/heard similar comments before so I thought it might be worth a little math lesson.

Let's assume an agent is receiving 3% of the sales price as their commission. That means that for every $10,000 difference in price, my firm would receive an extra $300. Of course, that's what the firm receive. I'm on a split with my broker and also have to pay Century 21 franchising fees, etc. When all is said and done, that extra $300 really is more like $200.

So this assumption is I'm not interested in getting a lower price for my buyers because I might make an extra couple of hundred dollars. Even though if I do a good job for them, which I do, I'll hopefully receive referrals worth far more than a couple of hundred dollars. Yep, that makes sense.

Of course, if someone really thinks that of me, I think I'd rather they move on to the next agent anyway.

(c) Jonathan Dalton, 2006 / Jonathan Dalton's Arizona Homes