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!

THE DEATH OF 6% LISTING COMMISSIONS

You should know that 95%* of "listing agents" do not in fact sell their own listings. A "buyers agent" can "find" your property advertised on this web site and/or in the For Sale By Owner magazine or listed on the MLS and bring a buyer to you. You should negotiate a 2%~3% "courtesy to broker" with this "buyers agent." Better yet, pay ZERO commission since 70% of our sellers' buyers come direct from our FSBO marketing system.

It is absolutely absurd to list your property with a "listing agent" that will not actually sell it, and if they do manage to find a buyer, this agent would then be a "buyers agent" for 3%, don't fall for the "dual agency" 6%+ commission scam!

What does this mean for you the seller? Simple, Market your property through this web site and our FSBO magazine, and if you want to additionally list with the MLS (Multiple Listing Service) we can do so for a small flat fee thus bypassing half of the standard 6% commission.

Not only is obligating yourself to one "listing agent" to simply input your property into the MLS with a 6%+ commission absurd, but it can actually slow the sale of your property, because buyers these days are shopping FSBO's first, they know that agent listed property prices are inflated to cover the cost of the 6%+ commission.

When your property goes into the MLS as part of our marketing efforts, you have an "option" not the "contractual obligation" to pay a commission, thus affording you an opportunity to price your property more attractively compared to similar agent listed properties. Some buyers have agent friends that will give them an MLS lists of properties for sale, and so the buyer can come to you direct without an agent.

Our 1% broker program is all you need to aggressively price & market your property and successfully sell your property 'by owner' in the shortest time frame.

90% of our sellers do sell in 2-4 months or less, with a whopping 70% paying absolutely No Commissions and only 30% paying half a commission or less (by choice to a buyers agent), and 100% paying absolutely No listing commissions!

*2007 Jan. - Sept. mauiboard.com statistics

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!