I teach real estate pre-licensing, post-licensing, continuing education and exam preparation classes for Hondros College. In those classes, students often ask what the customary commission is for selling real property; additionally, they sometimes ask what I charge to sell real property at auction.
Merely discussing hypothetical commission rates is certainly permissible in a classroom setting and I often disclose that we charge upwards of 10% to sell real property at auction. That disclosure is often met with surprise, as it’s more than the average commission rate in the United States for traditional sales.
In fact, it’s almost a guarantee that most real property auctioneers charge more than so-called traditional agents. A student asked me the other day, “How can you can charge more?” Seth Godin wrote about the same the other day here: https://seths.blog/2018/08/emergencies-cost-extra/
What do real property auctioneers do different than traditional real property agents? Many things, including that we sell “by a certain date” instead of “whenever an acceptable offer comes in.” Further, we sell “to the highest bidder” instead of the “first acceptable offer.” We often sell “as-is” instead of in a contingency-laden arrangement.
In other words, as Seth Godin suggests, we as auctioneers are often operating in more emergency situations — I need to sell by a certain date, minimize holding costs and/or a more guaranteed future. I’ve often said as an auctioneer my ideal client (with real and/or personal property) has equity, urgency and realistic expectations.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.