**Warning! Sensitive real estate agents, proceed with caution!**
We love real estate agents. We really do. We have several friends who are real estate agents and we wish them nothing but success and hefty paydays. Real estate agents are a vital component to real estate transactions. However, the consensus at the PoFU Podcast is that for a large portion of transactions, real estate agents (especially LISTING agents) are grossly overpaid.
We offer a scenario: When a $500k house is sold with 6% agent commissions, that costs the seller $30k in commissions. When a $600k house is sold with 6% commissions, it costs the seller $36k in commissions. What is the seller getting for the extra $6k in costs? The agent is not spending extra time on the $600k house, they aren't hosting more open houses, they aren't spending more on better pictures, they aren't spending more on marketing efforts. So what is the seller getting for the extra $6k? The answer is NOTHING. Let's not forget that the cost of selling the house is as much as a new car!
Most people don't know that real estate agent commissions are negotiable. We encourage all sellers to make sure they are getting the value they deserve out of the commissions they pay. All this discussion and more in Episode 39!