Commission Methods

What is the Best Commission Method to use in the Sale of My Property?

The Buyers Premium Method:
The Buyers Premium (commission) is a fee that is charged to the buyer that is over and above the high bid. For example, the high bid price is$100,000; the buyers premium is 10% making the total contract price $110,000. The Buyer's Premium concept is very attractive to sellers because it takes away the commission obligation from the seller and transfers it to the buyer; therefore the buyer pays the commission. The buyer's premium although appealing to sellers may deter buyers. Why? Buyers can not understand why they should have to pay the commission for the seller. It is more of a mindset, something that they are not used to under normal buying and selling circumstances. If the Buyer's Premium is to be successful, the seller must understand that their pricing must be very competitive in the market place. Statistics indicate that the buyer's premium is successful 75% of the time.

The Seller Paid Commission Method:
The goal of utilizing the auction method is to accelerate the sale of the property and to assure that the property sells for true market value, which will be set auction day. Utilizing the Seller Paid Commission mirrors more precisely what buyers are most familiar with. Utilizing the Buyer's Premium allows the seller to be more competitive in their pricing but by using the seller paid commission, buyers know, that the seller is committed to sell the day of the sale. Sellers may select to pay all of the commission or may decide to split the commission with the buyer. Either way auction properties are sold non-contingent and in "as is" "where is" condition and typically close within 30 to 45 days after auction day.

The Auction Method characteristically brings excitement and enthusiasm to the selling process. Never before have sellers had the opportunity to select how and under what conditions their property is to be sold. The Auction Method of Marketing permits sellers to have active participation in determining how and when their property will sell.