Everyone thinks real estate agents are overpaid. I think it goes back to the old days when real estate agents used to advertise that they were multi million dollar producers and then people would multiply by the "sacrosanct" 6 percent (made famous by Lesley Stahl on 60 Minutes) and determine that real estate agents made too much money.
So let's clear a couple of things up. 6 percent is not fixed in stone, it's just a popular rate. But more important, that commission is shared between the listing agent representing the seller and the selling agent representing the buyer. So just to make the example easier, let's use 6 percent and that means that each agent will only get 3 percent. But, the agent has to share some of that commission with the real estate brokerage that they work for and that split could be anywhere from 50 / 50 to 90 / 10 (and there are some 100 percent models but there are other costs to the agent with those commission plans).
Offers of compensation are made to Charleston real estate agents in the Charleston MLS. Most common are commissions of 2 1/2 and 3 percent but occasionally, you'll see a 2 percent on the low side and once in a while a 3 1/2 or even a 4 percent on the high side.
I'll show my buyers any property that they might like no matter what commission will be paid. I remember talking with one of my buyers years ago and he was asking about commissions and I mentioned that I showed him some homes at both 2 1/2 and 3 percent but one home was only paying 2 percent. He asked which home that was and I laughed and said, "John, thankfully one you didn't like."
Agent bonus is another story altogether. Sometimes, sellers believe that human nature being what it is, agents will try harder to sell a home if they can make more money. On occasion when I've been the listing agent, I've told my sellers exactly that and we offered an agent bonus. Now maybe it helped to sell the home and maybe it just cost the seller more to sell it because maybe it would have sold otherwise, it's hard to really know for sure.
My job as an ethical and professional Charleston real estate agent is to find the best home for my client at the lowest possible price, not to earn the most possible money.
And as an example, on several occasions recently I have applied the bonus that was offered to discount the sales price and make the home more affordable for my buyer. It's not that I don't like money, I do. But an agent bonus has to be disclosed anyway and I'd rather not surprise my buyer at the closing by accepting a really large check. So when a bonus of $2000 or $5000 or whatever is offered, it will go to you at the time of writing the contract, not me.
In my opinion, it's all about thinking long term and making sure that I have happy clients who would happily want to refer me to their friends, neighbors, relatives and co-workers instead of just making one large check.