Imagine that your home was worth 1 million dollars.  At an average 2.5% commission, a local agent would pocket $25,000 for selling it.

BUT, of that $25,000, the agent would ONLY get $2,500 for the last $100,000 of your home’s value.

Now, do you think an agent will care more about an extra $2,500, than you about an extra $100,000?

90% of the commission, or $22,500 dollars is based on the first $900,000 of your home’s value.

Do you think it would be easier to sell a million dollar home for $900,000?  Of course it would!

So why reward your agent with 90% of their commission on the easy part of the sale?

When you do this, you are discouraging the agent from fighting for the remaining $100,000.

This is why scientific studies have proven that traditional real estate commissions encourage agents to achieve a quicker sale, instead of the highest sale price.

Most people don’t realise that a traditional real estate commission creates an expensive conflict of interest between you and your real estate agent.

This conflict of interest will lead you to sell for less than you could without you ever knowing it.

As a seller, you want the highest sale price, but that’s not the agent’s priority.

The agent wants a quick sale at whatever price, because they will get most of their commission anyway.

If you don’t believe this, the symptoms are everywhere you look.  Here are just a few examples:

• An off-market sale to someone on the agent’s so-called database of buyers. This can result in a really quick sale, but of course there won’t be as much competition for your home as if it was advertised on the open market.  This is why off-market homes that are sold to an agent’s database are sold quickly, but for less.  The quickly part is great for your agent, but the less part is not so good for you.

• A sale in under 5 days is another example. It takes time for enough people to discover your listing, inspect the home, make an offer and then for each offer to be negotiated.  All of this takes more than 5 days if you want to generate the most competition for your home.  Selling any sooner usually results in a lower price.  Is this better for you or the agent?

• Another example is an agent not encouraging you to invest time, effort and money into having your home look, feel, smell and sound emotionally appealing. You will not have much competition for a home that doesn’t pull at the heart-strings.  It may still sell quickly for the right price, just not the right price for you.  Presenting the home optimally can take some time and delay your agent’s payday.  This is why agents would prefer that you sell now, as is.

So, do you still believe that real estate agents have an incentive to achieve the highest sale price?