The Anna Maria Island Sun Newspaper


Vol. 17 No. 3 - November 2, 2016

REAL ESTATE

Broker commissions

 

Earning your living strictly on commissions earned is a double-edged sword. On the one hand, you are compensated based on your hard work and creative abilities to bring two parties together. On the other hand, you’re subject to forces sometimes beyond your control, resulting in zero compensation.

Real estate professionals are paid a percentage of the negotiated sale price of a property at the time of the property closing. Commissions are not regulated by any federal or state governing authority, but rather are an agreement between the listing agent and the seller at the time the listing agreement is signed. Commissions are always negotiable but generally are within a point or half point of what is acceptable in the region where the property is located. An agreed upon commission can also depend on the value of the property as well as the level of marketing the listing agent promises to perform.

With the proliferation of on line real estate services in recent years, real estate commissions are becoming more and more an issue to be discussed rather than just accepted. Per a recent survey by the discount-brokerage firm Surefield (which charges 1.5 percent) the United States has one of the highest commissions paid at between 5 and 6 percent. This is down by a full 1 percent since 2002 and is way above the average commission for all of the different nations polled at 3.4 percent.

The international survey involved 17 different countries, of the 17 the commissions in only six of the countries either remained the same or increased. Mexico was the only country that was above the United States at 7.5 percent, which is where Russia was in 2002, but now is at 4 percent. The other three English speaking countries in the survey were Australia at 5 percent, Canada at 3 percent and the United Kingdom at 1.5 percent.

Argentina, France, Italy and Japan commissions are closest to ours at either 5 or 6 percent. China, Finland and Hong Kong were all 2 percent, and Germany, Greece and Israel were all 4 percent. Sweden averaged 1.5 percent just like the United Kingdom.

Per Surefield, one of the reasons the commissions paid in the United States are high may be partly because of buyer’s agents, something that is not common outside of the United States. A buyer’s agent specializes in representing buyers, in other words their loyalty is to their buyer not to the seller, which is the case in most brokerage arrangements.

Buyer’s agents give full disclosure to their clients regarding other buyers interested in the same properties and are obligated to show all properties the buyer is interested in that fits their criteria and budget, as well as keeping their client’s financial and personal positions confidential. In return, buyers must work with their buyer’s agent exclusively and not call or provide personal information to other agents. If you’re working with a buyer’s broker, expect to sign a written agreement with him/her regarding the above, as well as other possible restrictions. However, unless your buyer’s broker requires you to compensate them directly, most buyer’s brokers are paid by the seller by splitting the commission between the listing agent and the buyer’s broker.

My position on real estate commissions is like most things, you get what you pay for. On line brokerage companies can do a lot, but there’s nothing like a firm handshake to make you feel comfortable. At one time, I thought working on commission was the most fulfilling way to earn a living and that nothing could replace a hands on local broker to help you with the most important financial decision of your life. Now, brokers must compete with both the flesh and blood brokers as well as the cyber ones. Welcome to the brave new world of real estate.

Real Estate Transactions
Real estate transfers of June 2016

Sponsored by Alan Galletto Island Real Estate

Sold Date | List Price | Sold Price | Address | Provision | Property Style

Anna Maria

16-07-11 625,000 525,000 122 Oak Ave 1176 3 Br/2 Ba SFR 16-07-08 745,000 689,000 405 Spring Ave 1696 4 Br/3 Ba SFR 16-07-01 899,000 850,000 302 Tarpon St 1878 3 Br/2 Ba SFR 16-07-05 1,099,000 919,000 525 Kumquat Dr 2288 3 Br/2 Ba SFR 16-07-22 1,200,000 1,100,000 116 Peppertree Ln 1996 3 Br/2.5 Ba SFR
16-07-14 1,250,000 1,153,500 229 Chilson Ave 1597 3 Br/3 Ba SFR 16-07-21 1,250,000 1,170,000 238 Lakeview Dr 2281 3 Br/2 Ba SFR 16-07-25 1,745,000 1,600,000 909 N Shore Dr 1868 3 Br/3 Ba SFR 16-07-25 3,500,000 3,300,000 825 N Shore Dr 3486 3 Br/4.5 Ba SFR
16-07-21 620,000 580,000 218 Palmetto Ave 1648 52x100 Duplex
16-07-15 399,000 350,000 710 N Shore Dr 60x85 Vac.
16-07-07 495,000 470,000 401 S Bay Blvd 76x105 Vac

Bradenton Beach

16-07-01 1,495,000 1,495,000 106 4th St S 3000 6 Br/5 Ba SFR 16-07-01 379,900 349,000 1301 Bay Dr N #5a 1079 2 Br/2 Ba Condo
16-07-28 610,000 585,000 1417 Gulf Dr N #1417 1524 3 Br/2.5 Ba Condo

Cortez

16-07-26 1,800,000 1,720,000 12614 Baypointe Ter 4677 3 Br/3.5 Ba SFR
16-07-12 123,500 107,500 12334 Baypointe Ter 110 x 151 Apx Vac.

Holmes Beach

16-07-11 489,000 475,000 406 Bay Palms Dr 1332 2 Br/2 Ba SFR 16-07-06 549,000 490,000 308 56th St 1080 2 Br/1 Ba SFR 16-07-12 579,000 575,000 208 Haverkos Ct 2181 65x98 3 Br/2.5 Ba SFR 16-07-18 619,000 620,000 5802 Imperiore Ave 1020 2 Br/2 Ba SFR 16-07-20 650,000 650,000 304 60th St #B 1150 3 Br/2 Ba SFR 16-07-15 849,000 790,000 206 67th St 2139 4 Br/3 Ba SFR 16-07-27 999,000 975,000 307 74th St 1676 3 Br/3.5 Ba SFR
16-07-11 1,299,000 1,185,000 671 Key Royale Dr 2885 221x78 3 Br/2.5 Ba SFR
16-07-19 2,190000 1,800,000 512 59th St 4544 6 Br/4.5 Ba SFR 16-07-11 2,399000 2,100,000 625 Key Royale Dr 3118 4 Br/3.5 Ba SFR
16-07-05 375,000 350,000 3215 Gulf Dr #3215 672 1 Br/1.5 Ba Condo
16-07-01 360,000 360,000 600 Manatee Ave #205 1187 2 Br/2 Ba Condo
16-07-01 389,000 375,000 3402 Gulf Dr #3 359 2 Br/2 Ba Condo
16-07-18 415,000 392,000 5806 Gulf Dr #204 1078 2 Br/2 Ba Condo
16-07-15 499,900 485,000 6006 Gulf Dr #111 1154 2 Br/2 Ba Condo
16-07-11 395,000 367,500 3009 Avenue E 751 2 Br/1 Ba Villa
16-07-26 469,000 425,000 5613 Guava St #A&B 1580 57x105 Duplex

Source: Mid Florida Multiple Listing Service


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