March 21, 2019

5 Myths Real Estate Brokers and Agents Use to Support the Commission Paradigm

1. You must pay a commission to sell your house.

2. Agents “sell” homes.

3. You need a big-name firm to get maximum exposure and the best agent.

4. Listing with a team equals a better selling experience.

5. The value level of service increases with the value of the home.

So, lets dive in because to me that looks like a juicy list of myths that agents and brokers like to use to support the commission paradigm and line their pockets with inflated and overvalued real estate fees.

To put things in perspective I am going to explain and clear up any confusion or questions you might have with myth five first. So, I will be working from item 5 to item 1 in reverse order.

Myth 5 comes from many conversations I have had over the years with sellers.

As the value of the home increased the frequency of this issue also increased.

It typically comes from homeowners who are selling homes $300,000 and higher. The conversation usually goes something like this:

Homeowner: “So your going to charge a commission to sell my house?”

Me: “Yes that is correct to list and sell your home, I charge 6% commission which is then split between the listing company and the selling company.”

Homeowner: “Ok, I see, so do you charge 6% to all your home selling clients?”

Me: “Yes I charge 6 percent to anyone who hires me to help them market and sell their home.”

Homeowner: “So you don’t discount your services for higher priced home sellers?”

Me: No, I don’t discount my services to homeowners regardless of price.

Homeowner: “Even though based on the percent commission you charge you receive more money selling a higher priced home while providing the same basic level of service to me as you do the lower priced sellers. It seems odd I would be penalized paying a higher price for your service than the lower priced seller does for the exact same suite of services.”

Me: “Uh, ummm, stammer, uh, stammer, stammer, hmmmm…..did I show you my 3 step system that will identify and locate your ideal buyer?”

The point is that over the past 20 years of my real estate career I heard this argument from the higher end sellers over and over and really never had a great answer.

I am sure there are some slick real estate coaches out there showing and selling agents and brokers how to get around this type of price resistance from potential home sellers but for me none of these solutions seem genuine and I don’t believe in using these types of tactics.

Based on conversations with other agents and the fact that there are real estate coaches selling scripts to agents to help them overcome this objection, it is a very common conversation in an agent’s career.

Whenever a home seller would point out this value discrepancy, I would just skirt around it by trying to justify why I don’t discount my service based on price.

These conversations are always uncomfortable to me. So, I eliminated commission from my listing service. When you list your home using my Premier Flat Fee Home Listing Service you won’t have to worry about paying a commission when you sell.

Click here to watch a video that shows all the advantages of utilizing my flat fee services to list and sell your house.

Commission Vs. Flat Fee

One major advantage of flat fee over commission based agents is that commission no longer influences the sale process, you get upfront pricing and you know exactly what to expect when you list.

For comparison let’s look at the difference in commission from a $100k house to a $400k house.

At 6% a seller with a $100k house will pay $6000 in commission. A $400k seller will pay $24,000 in commission.

Even if it cost 25% more for an agent to sell a $400k house as compared to a $100k seller we are talking a huge swing on the value scale.

When you look at it from this perspective its easy to see why this is a common concern with most sellers, especially when the value of the house starts creeping above the $300k range.

I must admit, it is a very valid question. One that makes a lot of sense to me when I take off my real estate broker hat and put on my home seller hat.

A Challenge to Selling Homeowners

Here is a challenge for you, interview 3 traditional agents and ask them why you should pay the same rate as lower priced sellers and see how they respond. After you have had your fun, call me and ask me the same question.

Guess what, I don’t have an answer, that is why I charge sellers a flat fee when I list and sell.

When you list your house with me using my Premier Flat Fee Listing Service you won’t have to worry about any unfair pricing schemes or commissions getting in the way of pricing your home competitively in the market when you sell.

Pricing your home more competitively will result in less time on the market and a higher price.

Myth 4 Listing With a Team Equals a Better Selling Experience.

Take it from me often nothing could be further from the truth. In my 20 years of listing houses for homeowners, there have been many instances where I have heard complaints of how real estate teams have to many layers and protocols for how they operate their business that becomes cumbersome to the seller and creates a negative experience for them.

It can get frustrating for homeowners who must deal with many people through the different stages of the home selling process.

Stages of the selling process:

  • Pre-listing
  • Listing
  • Marketing
  • Showing
  • Offer
  • Negotiation
  • Acceptance
  • Inspection
  • Walk Through
  • Escrow
  • Closing
  • Move In

It isn’t unheard of for many of these teams to have specialists for the various stages.  When the seller has a question or concern during the sale process, they have to deal with multiple people often making an already confusing process even more confusing.

In an effort to provide a smooth transaction for the the seller the team concept was invented but can become cumbersome and create a negative selling experience.

I have heard stories of homeowners who met with the listing agent once and never saw or heard from them again, not even at the closing when the house sold.

So, you can see why listing with a team doesn’t always translate to a happy selling experience.

The Alternative to Paying a Commission to Sell

List with me and my Premier Flat Fee Listing Service and you won’t have to worry about getting shuffled around from department to department and person to person for every step of the selling process.

I only work with a few select home sellers at any given time and handle every step of the selling process for my home selling clients.

When you have a question or concern, it will be me who will provide the answer or find the solution.

You can count on me being with you every step of the way through the home selling process.

Myth 3 You need a Big Name Firm to Receive Maximum Exposure and the Best Agent.

Again, this myth just simply isn’t true for many of the same reasons listed above, choosing a big-name firm doesn’t always mean it is the best option.

The truth is as an independent broker in a company of one I have the same access and use the same tools as the big-name brokers so there is no strategic advantage to using a big-name firm when you list and sell your home.

Big name firms carry the weight of huge overhead and in many cases, they have additional add on fees over and above the agreed upon commission, these fees can range anywhere from a couple hundred dollars to several thousands of dollars.

As an Industry Insider Even I Thought This Was a Low Blow to Selling Homeowners.

I remember a time long ago when a big firm I was working at decided to charge their clients an administration fee.

The brokers of the firm decided they would charge a $295-dollar processing fee at closing and would have the agents have their clients sign a form acknowledging this fee would be paid at closing.

Which again seems excessive and very unfriendly to the consumer. I had one broker tell me it is how they cover admin. Expenses for the brokerage.

I was always confused by these types of fees, after all aren’t those types of expenses covered in the commission?

I get it we live in a capitalist world we are all entitled to earn a living, but I mean come on some of these brokers are crafty and figured out a way to create a whole new line of revenue above and beyond the commission they are already set to receive.

Today it’s not unheard of for these fees to hit the high $100’s and even into the $1000’s depending on the market. That is over and above the commission the seller already agreed to pay.

If you are about to list your home with any agent or broker and they are charging some type of fee that is not included in the commission, please take my advice and save yourself the trouble.

You don't need to pay these fees, find an agent who works for a broker that doesn't charge unnecessary add on fees.

Click the button below to send me a message, I charge a one-time upfront fee with no add on or hidden costs.

For less than $1000 dollars I will list your home, provide you the access and expertise you need to get it sold without any hassles or headaches.

Even if you don’t like me personally, if you’re selling a $300k dollar house it might just be worth it to put up with me to save nearly $17,000 dollars in commission.

Myth 2 Agents Sell Houses.

LOL, ha-ha I know that is a strange way to begin a sentence especially in written format, but I have to laugh, I literally laughed out loud typing myth 2 into the computer.

This may be the worse myth of all 5 and maybe worse than the other 4 combined and keep in mind my list includes paying bogus fees and overvalued over inflated real estate commissions to sell.

Agents don’t sell houses, saying agents sell houses is like saying the clerk at 7-11 sells Slurpee's. That is how ridicules this myth is.

Think about it just like someone isn’t going to pay $20 dollars for a 7-11 Slurpee, no one is going to pay you $325,000 for your $295,000-dollar home.

Agents don’t sell houses!

Agents are just that they are simply agents in the transaction.

No agent has a leg up on another in selling a house.

The Number One Factor You Need to Remember

The number one factor that sells any house is price. I am sure there are a lot of agents out there who are going to disagree with me and try to convince you otherwise.

Just remember if you price your house right it will sell itself.

These types of agents are good at selling this myth, but they aren’t going to sell your house better than any other agent. They will try and convince you they are great sales people and that they will be able to sell your home better than the other agents.

If you find yourself in the midst of one of these ego-centric agents, I urge you to hire a different one to help you sell you may end up frustrated and broke.

Save yourself the headache don't hire this agent, you will regret it. You've been warned. There are other alternatives out there, better options are available.

You will be much better prepared to defend yourself from one of these types of agents now that you have read this report and are aware they exist and know what to look for.

The best sales person in the world whether licensed in real estate or not will never be able to sell a $295K dollar home for $325k it just isn’t going to happen.

And on the small chance that it does happen, guess what?

The appraisers are going to do their job and they are never going to miss the value by 10% so you’re going to end up back to the true fair market value of $295K anyway. And the salesperson who just conned you out of 6% is going to be laughing all the way to the bank.

They still got the sale and a commission and you’re out the $30,000 dollars of value they promised they could get you.

Agents and ego don’t sell houses, price and only price sell houses. 

In fact, I am so confident in the last sentence I believe if I had a properly priced home, I could easily find a buyer with a well-placed, highly researched and targeted Facebook ad.

No agent no commission needed!

It is my humble opinion that Social Media especially Facebook has as much or more power to locate and find a buyer than the MLS.

But it takes the right agent who knows exactly how to target specific audiences for specific houses. And then set up the correct type of Facebook ad to attract the perfect buyer.

As a Freelance Real Estate Broker who happens to be a Facebook Certified Ads Specialist, I can tell you most agents don’t have a clue how to run successful Facebook ads.

Just like Slurpee's properly priced houses will sell themselves with enough exposure. The MLS will provide all the exposure you need, adding Facebook paid ads will put that exposure on steroids.

One last point to really drive just how much I believe price sells homes.

If you price your home properly and promote it organically through Facebook, other social media outlets and your friends and family, you don’t need an agent or the MLS or paid Facebook ads to sell your house.

A properly priced house will find its own market and buyer given enough time and exposure. The only advantage the MLS and Facebook paid ads provide is they can gain the exposure exponentially faster than you can by word of mouth.

Agents don’t sell homes, they show homes and process paperwork, price and only price sells a home.

Myth 1 You Must Pay A Commission to Sell Your House

The final myth is another consumer un-friendly fallacy perpetrated by the real estate industry to protect the residential real estate commission paradigm.

The myth that you must pay a commission to sell is not true at all.

Google discount broker or flat fee broker and you will find alternatives to paying a commission when you list and sell your house.

In just about every real estate market there are discount and flat fee brokers.

The problem is most of these resources are not prolific in advertising their services, many of them are not local or they don’t offer full service or there are holes in what they do provide.

You can read more about these issues in an article I wrote by clicking here.

Be sure to do your due diligence when choosing a broker, I suggest you call at least 3 different agents when you are researching brokers and agents.

It is my hope that out of the 3 agents you interview I am included. I am looking forward to discussing with you your options and how I can save you $1000’s when you list and sell.

Bonus Myth. You need an agent who has a huge client base and has a great ranking website that gets 100’s of visitors a day, and sends out 1000’s of postcards, and places your home in the real estate magazines and all the other B.S. gadgets, tricks and tomfoolery that agents will tell you in order to get your listing and your hard earned dollars in real estate commissions.

You absolutely don't need any of the B.S. agents and the real estate industry spread in order to sell and you certainly do not have to pay a commission.

Message me below and get a FREE Report.  

Save $1000's when you list and SELL! Click Below.

About the author 


JohnG has been a licensed Real Estate professional for over 20 years in three separate states. He has a master's degree in business and has to many personal real estate transactions to count. With this much experience it's safe to say JohnG knows a thing or two about how to sell a home. He is dedicated to helping homeowners discover the truth about the real estate industry and the COMMISSION LIE, many agents and brokers perpetrate in order to earn an income at your expense.  He says "if your paying a commission to sell your house your paying way to much!"

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