Answers - Real Estate

Real estate sales commissions are a topic that garners a great deal of attention. This is perfectly understandable since sellers naturally wish to reduce the cost of selling their home. But, there is a point after which the reduction of

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

a commission becomes counterproductive and begins to undermine the sale of your home. A significant portion of the commission you offer should be dedicated to attracting more buyers.

Commissions are comprised of three parts:

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

i>Advertising budget – the money spent to advertise your home.

Buyer Agent Split – this is the share of the commission that is offered to other agencies as an incentive to find buyers for your home.

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

Fee for Services – this is the portion of the commission that the listing agency earns for all services performed on your behalf.

A common mistake made by sellers is to think of commissions strictly as component number t

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

hree – Fee for Services. They feel good about negotiating a low commission rate but fail to realize that they may have undermined the successful sale of their home. To compensate for a low commission rate agents will sometimes lower

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

the advertising budget and commission split offered to other agents. From the seller’s standpoint this is counterproductive. What good is it if you save one or two percent on the commission rate but fail to attract qualified buyers?

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

For superior results you need to attract as many buyers as possible.

Another aspect of the “Services” portion of the commission is that it’s really more than a time-and-materials charge. You can’t calculate the service portion of the

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

commission by multiplying a fixed dollar amount by the number of hours an agent invests in selling your home. Why? In a traditional commission arrangement payment of the commission is conditional. The seller is only required to pay a c

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ommission if a buyer is found and the home actually sells. If the home does not sell, the homeowner pays NOTHING. The agent and broker are assuming the costs and risk of a home not selling. If the home doesn’t sell not only does the ag

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

ent not earn a single penny, but they actually lose money. You don’t need to feel sorry for the agent. But, understand what you’re paying for. A large part of the “Service” portion of the commission is actually for risk mitigation.<

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

b> Not only are they assuming monetary risks by paying for marketing up front, they assume some of the liability risks via their involvement in the sale. You are also paying for the agent’s knowledge and experience to guide you through

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

the sales process. There are a few agents that are willing to work for time-and-materials. But interestingly, once a seller understands that under this business model they may have to pay several thousands of dollars without any guarant

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

ee that the home will sell, most opt for a traditional commission arrangement where payment is only due if there’s a successful conclusion.

The commission is built into the price of your home. The proceeds from a sale come from the buye

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

r. So, who really pays for the commission? You’re better off raising the price of your home and offering a fair commission than setting a sub par commission rate. At a minimum, you should negotiate a commission rate that is equivale

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

nt to the average commission rate on the multiple listing system (MLS). Offering a lower commission rate will only result in less marketing exposure and less showing activity. The key to a quick sale at top price is getting full mar

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

ket exposure and leveraging the hundreds of real estate agents in your area by offering a fair commission split. A low commission is not a bargain if your home doesn’t sell or you only receive inferior offers due to low activity.

Commis

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

sions are always negotiable and the real estate industry is very competitive. Although brokers and agents are permitted to establish their own business policies with respect to commissions, if you’re looking for a “bargain” you can alwa

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

ys find somebody that will accept a very low commission. But doing so will result in less activity and possibly an expired listing. The commission is more than a fee for services and traditionally only due if your home actually sells.

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

Furthermore, your advertising budget and buyer agent split are critical components of your marketing plan. So, never chose an agent on price alone. Understand what you’re paying for and the kind of services that are being offered. T

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

he best commission is the one that offers the best value and attracts the most number of buyers. The superior results you achieve should more than offset the one or two points a “discount” or inferior agent may try to seduce you with

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Answers - How Much Commission Should You Pay?

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