Pay More Commission, Net More Money?
Yup, That’s the Idea
Actually, the blog headline (above) was supposed to be a rhetorical question.
But, if you’re dubious, here’s the math:
Scenario #1: $300k less 5.5% commission = $283,500
Scenario #2: $310k less 7% commission = $288,300
Difference: almost $5k.
“The Way to Bet”
Of course, no agent can guarantee an exact sales price (or more accurately, you wouldn’t want to list with an agent who will — hint: it’s not going to be a good number).
And, not every higher-priced agent is a better value than someone less expensive.
But in general . . . . listing agents who charge more, do more — and are simply better, more experienced, etc.
As the saying goes, “the race may not be to the swift or the battle to the strong . . . but that’s the way to bet.”
Charging Like Airlines
In truth, profit-maximizing Realtors should consider stealing a page from the airline industry, and charge variable rates (note: a “variable commission” in real estate has a specific, defined meaning: it refers to the discounted commission some listing agents charge when they also 
represent the Buyer. I contractually promise not to do that, because I consider it a conflict of interest).
So, airlines will charge less for a given seat when the plane is empty, and more once the flight is close to full.
The equivalent for Realtors would be to raise their fee when they’re busiest (“close to capacity”), and lower it when they’re slack.
The catch(es)?
Realtors’ capacity tends to be more variable than fixed — we can and do enlist colleagues’ help during peak periods; and selling services at a discount price can undermine “full” pricing later on.
That’s why landlords with a lot of vacancies will throw in a free month’s rent — or incentives like a flat-panel TV — instead of reducing rents across-the-board.
P.S.: Because sales price and market time are inversely correlated, better agents not only help their clients sell for more — on average they sell faster, too.
