Real estate agents are vastly more skilled than you are.

Their people skills are better and there marketing skills are unsurpassed.

They can determine the price of your house, far more accurately than you can.

You obviously believe all of this don’t you? Otherwise, you would never be prepared to pay the agent the incredible amount of money that you are going to pay him, would you?

It’s a very good thing that you don’t realize the hourly rate that you will be paying the agent during the course of selling your home. Suppose for example, that your property takes four months to sell? Let’s further suppose that your agent puts in one hour per day for the entire 120 days without missing a beat. Of course, it’s unlikely that he could put in that amount of hours in marketing your house alone during that time. But just for the sake of the calculation let’s assume that he did.

Let’s say, 120 hours at a rate of $30 per hour is equal to $3600. Now, most commissions are at least $10,000, which means that you are playing the agent at the least $60 per hour for his time. In actual fact. it’s probably more accurate to suggest that you are paying him double that amount, i.e. $120 per hour.

So it’s very lucky that your agent is so vastly more skilled than you are. Because otherwise it would be very hard to justify paying anyone that much money over such a long period of time, wouldn’t it?

Remember that the main reason you are using an agent is because you deem that his superior selling skills will net you at the least as much in terms of increased sale price, as the commission that he will cost you.

May I humbly put it to you that most agents will not be as focused on getting the highest price for you as they will be about achieving a commission for themselves.

Real estate agents operate under the legal premise that they must use their best efforts in achieving the best possible sale price for a client. This is all well and good in theory, but in the real world, there is no effective way to police or measure whether this actually occurs.

It is of course entirely obvious to anyone giving this fact a moment’s thought, that your average real estate agent will react like any other human being. They will be primarily motivated by the need to secure a commission. Actually achieving the highest price for you is almost always at odds with that lofty ideal however.

In the above example, we did some calculations based on listing your property with an agent for just four months. How will you feel on the other hand, if the agent sells your property the very first day it comes on the market? You may well be very rational about that. You may congratulate him on a job well done. You may not give another thought to the fact that in this instance your agent has earned $10,000 a day, or based on a six hour day in which your property was the only one that he worked on, then such a sale would equate to a wage of $1600 per hour. Not bad work if you can get it.

Of course, the poor old agent cannot win. If he takes a long time to sell your house you feel aggrieved. If he sells your house to quickly you feel as though he priced it to low. And what’s more, I can hear the agents tearing this article to bits. They will be saying that they also spend time in listing the property initially and in liaising with your solicitor, building and pest inspectors, banks and all sorts of other people. They will tell you this takes time and so it does. So at the end of the day the amount that you are paying your agent per hour is of course hard to quantify.

I am just trying to focus your attention on the fact that it’s one unholy amount of money you are giving up.

Now before you engage an agent’s services you might want to think about what you could do with the $10,000 or more that you could save on an average sale.

Further, imagine how long it would actually take you to save that amount from your wages. Then go a little further and work out the actual gross income before tax that is required for you to earn $10,000. Then go even further and determine how much money that will grow into at 10% compound interest over the next decade.

With these thoughts in mind I return to the premise of this article. You must have an exceedingly high opinion of your agent or else a very low opinion of your own ability to sell your own house. That is the only way I can really rationalize giving so much away when you don’t have to.

Now of course, there are certainly situations where an agent’s involvement cannot be avoided, such as, when you are actually distant from the property for sale.

I also know and freely admit that to many people, the commission is a secondary consideration in the sale. Such people are only concerned with the fact that the sales process is being looked after by a third party and that they themselves will need minimal involvement.

In such cases, I am glad indeed, that there are exceptional agents to be found if one looks hard enough. These things aside, however, it is very hard to justify financially, the use of an agent to undertake what is essentially a very simple process, that is, the sale of your own home.

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