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Commissions on Jupiter single family homes sales continue to plummet

This week we saw interest rates increase again, Condo prices in Jupiter are moving higher. So are the median prices of town houses and single family homes. Insurance, title fees, property taxes, inspections, they are all costing you more. In fact, just about everything associated with real estate continues to get more expensive.

Except one thing; real estate commissions.

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Let’s step back a few years. To Jupiter, Florida circa 2009. Nine years ago. It was the last year we saw the percentage of single family home sellers offering a 3% co-broke commission increase. First, let me explain the co-broke commission is what is offered through the Multiple Listing Service to the buyers broker, and in most cases is 1/2 of the total commission paid by the seller. So usually a 3% co-broke means a seller is paying their broker a 6% commission. We will use 6% as the total commission for the purpose of this article.

Back in 2009, over 77% of all single family home sellers in Jupiter were paying their broker a total estimated commission of 6%. Since then, it has been all downhill for the percentage earnings of Realtors, as the number of those in the business has climbed significantly. The drop in the percentage commission paid by Jupiter single family home sellers has been dramatic. From 77% in 2009 to the 35% we saw in 2017. Yes, you see that correctly. Last year only 35% of Jupiter single family home sellers paid the estimated 6% commission. This was a 15% fall from 2016 numbers. Can this plummet in real estate commissions continue?

It can, but sellers, and buyers, need to beware they are looking at value and not price when selecting a broker and there is a big difference. A huge difference. If selling a home, always interview at least three brokers and ask a lot of questions. Specifically, inquire about the value you will receive from them. Ask to see their last 6 listings and how they were presented to the online community, because that is where the buyers are. Look at the photos and make sure they jump off the screen. Read the property description and ask, does in make you want to learn more about that property. But most importantly, ask what the properties sold for and how that compared to the most recent sales in that neighborhood. Ask for the contact information of those sellers. Dial in and make sure that you are not only getting a great price, but that you are getting insanely good value.

So can this drop in commissions continue? Let me tell you, it can. Even though we are only starting off the 2nd month of the year, the number of Jupiter single family home sellers paying an estimated 6% commission has dropped again. Another steep drop of about 23%, the largest ever. Right now the numbers of Jupiter single family home sellers paying that 6% commission sits at 27%. Amazing. From 77% just 9 years ago.

It means the need for education of sellers understanding what they are getting in value has never been higher. You can pay 6%, you can pay more. You can pay 5%, you can pay less. The important thing is you fully understand what you are getting for that money. If your home is worth a million dollars or more, you should maybe be paying a bit less. If your home shows like a model you should maybe be paying a little less. If your home is vacant, you should maybe be paying a bit less. If there is no inventory in your neighborhood, you should maybe be paying a bit less. If your broker handles both sides of the transaction (that’s a whole different article), you should maybe be paying a bit less.

The point is, there are a whole bunch of people out there happy to give you a low commission but there is no value. Interviewing is what prevents you from making an expensive mistake. Paradise Sharks is certainly not the broker for everyone, but we guarantee, if you include us on your interview list, we will add value. We never charge our clients over 5%. If your home is in show condition our professional photographers will take the right amount (that’s another entirely different article) of high resolution photos that will amaze you. The property description of your home is always written by a published author. You will receive detailed updates during the listing to understand what the market is telling us. And you can fire us anytime if we do not do exactly what we say.

It’s so easy to schedule an interview with Paradise Sharks. Just contact us for a convenient time to your schedule at tom@paradisesharks.com or 561.308.0175.

 

Fins up……

 

 

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