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| | The Truth About 6%
Commissions
Did you know that the only way a
commission would actually be 6% is if you owned your property “free &
clear”? When you owe on a mortgage, the commission
percentage is closer to 60%
to 90%. The 6% commission is based on the sold price of their
property, but yet the entire commission is taken from your “equity
position”
only, and therefore the real commission percentage is unbelievably higher.
With the average commission now over $58,200 you should know the facts.
Having surveyed several mortgage brokers to find
out what the average "Loan-To-Value" might be for the average home owner, it is
about 90% on properties owned
for longer periods and 95%~100% on recent
purchases. It is these high LTV's and low equity position property owners that are hit the
hardest.
If you would like to know what kind of money a
"listing agent"
wants to take from you, get out a calculator, pencil and a sheet of paper
right now and make sure you are
sitting down when you are hit with the real
commission percentage answer.
The
3 step formula is simple: 6% of your sales price, divided by your equity position = the
true commission percentage.
Follow
these keystrokes;
Step
1: Key
in your sold price,
Times 6 %, write your answer on a sheet of paper.
Step
2: Clear the calculator, key
in your sold price,
Subtract the total amount of all mortgages against your property,
Write your answer on the sheet of paper. This is your
equity position.
Step 3: Clear the calculator, key in the
answer from step 1,
Divide this amount by the answer from step 2,
Hit the percent key, this is the real commission percentage
answer.
Example: $300,000 property, 90% mortgaged
and sold with agents
Step
1: $300,000 sold price, times 6% =
$18,000 (the false commission)
Step
2: $300,000 sold price, subtract total of mortgages
$270,000 = $30,000 (your equity position)
Step 3: $18,000 divided by $30,000 =
60% commission (the true
agent commission).
Why is this? Because,
in step one, the sold price of $300,000 is not the amount that goes to you,
the $270,000 you owe to the mortgage company never even touches
your hands, the
remaining $30,000 has your name on it, BUT, first the agents take out $18,000
(60% of the $30,000) leaving you with $12,000 (less closing costs).
Be smart, sell by owner and pay No commissions!
Call our marketing department at:
Maui 877-NOT6
(877-6686),
Oahu 678-0303,
Big Isle 329-6606,
Kauai 245-9449 or email
and start your photo marketing package today! Don't wait, start today!
Disclaimer – For Sale By Owner Magazine
is strictly an advertising medium. We are not real estate agents nor are we
acting as such.
We do not represent any seller or buyer in any way nor are we in the business of
giving legal advice or providing any real estate forms.
We do not do open houses or agent caravans. Any real estate agent services
mentioned herein are offered through State Licensed
Real Estate Broker(s). All properties described herein are based solely on the
seller’s own description, we make no representation
as to the accuracy, availability, title, ownership, authorization to sell, use,
property condition, easements, restrictions, claims, lawsuits,
liens, value or zoning. We make no representation the advertising and marketing
services herein will generate too few or too many
calls nor guarantee the sale of any property. Publisher in no way shall be held
accountable for any shift in the market, losses, theft,
damage, network down time, phone calls not returned or injury Customer may incur
before, during or after marketing Customer
property. Customer agrees to have or keep current any homeowners insurance
policy and/or at their own expense protect and
indemnify Publisher from any such Customer, visitor, renter, potential buyer or
buyer losses.
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