Many people think that real estate agents are just salespersons. In fact, in The Bahamas, real estate professionals are legislated to act on behalf of clients as "agents". An agent is a person authorized to act on behalf of another to create a legal relationship with a third party. Persons working at a car dealership or a store are just salespersons and they are under no obligation to act in your best interest.
By contrast, we have a responsibility and fiduciary duty to advise and act in the best interests of the client responsible for paying the commission. If you plan to list your home with a BREA agent, paying the standard six percent commission, you should expect your agent to work diligently marketing the home to all agents through the Multiple Listing Service. Divulging any private information to a prospective buyer is considered unethical.
By the same token, if your agent is able to bring about an offer acceptable to you, he or she will expect to get paid. We need to keep in mind that in real estate agents do not earn a weekly salary and strictly rely on commissions to meet financial obligations. A six percent commission may sound like a huge amount to many clients, but what the public fails to realize is that on many occasions the commission earned by one agent is divided five different ways in order to pay for the services of the multiple agents and agencies who may have been involved in marketing and selling your home.
When is a commission earned? If your agent presents an offer that meets your listing price on behalf of a qualified, willing, ready and able buyer, together with a 10 percent deposit, the agent has effectively earned his or her commission. If your agents present an offer from a qualified buyer and you reach an agreement on price and terms through counteroffers, the agent has also earned his or her commission.
In the event the sale is subject to financing and the buyer is unable to complete the deal due to the bank's inability to grant a mortgage, your home will have to be put back on the market and the agent's work will start all over again. Once in a while, sellers will get cold feet when presented with a full priced offer and will not go through with the sale. If this is the case, you will have a contractual obligation to your agent, according to the terms of most Bahamian contracts, to pay him or her a commission.
I will never advise anyone to hire a real estate agent to test the waters and see how much people may be willing to offer for their home. This may end up being a very costly exercise if you are not serious about selling. Instead, I would recommend you call a qualified real estate appraiser who, for a reasonable amount, will give you an opinion of the present market value of your home.
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