It's like shopping at Nordstrom's vs. Target. You can get a good deal on good stuff sometimes - depends on what you need.
Good luck in your search. For more helpful hints, visit our website below.
Consumers determine whether the services for higher fees will bring them enough value to justify the investment. When in comes to real estate transactions, there is no way to do it both ways and compare the outcome on the exact transaction.
Those who provide full service real estate at higher fees will maintain that the investment is more than offset in higher sales prices for the seller with a higher net to the seller, or lower sales prices for the buyer with a better bottom line. This, along with reduced liability, time savings, stress reduction, information, referrals, contacts, education and solutions are the arguments for full service. Is it OK for this business, this person, this advocate, to say that they offer a good value in exchange for the fees invested? Of course it is. It’s not different than Lexus telling us why it’s worth it to pay more for their car than Kia. It’s no different than a restaurant telling us why a fine dining experience has enough value for us to part with $200+. And, some consumers will opt for the Lexus, while others opt for the Kia. We don’t hear Kia saying, “Lexus dealers are a bunch of rip off artist”…..do we?
Those who provide discount, limited service, or rebates in real estate service transactions will maintain that the consumer can save money. It gets a little tricky, when the discounter claims an exact dollar amount of a higher net sale proceeds, or lower net dollar purchase because we don’t know if the buyer could have purchased for a lower price or the seller could have sold for a higher price under a different sales model, or with a different agent. It’s fair for a real estate service discounter to say “we charge less” if they do. It’s fair for a real estate service discounter to say that the consumer will pay less fees by doing some of the work themselves.
All forms of goods and services sell either “we will save you money” or “we are worth the higher investment.” All forms of goods and services sell either price or value.
It is certainly respectable for advocates of various business models to present their perceived benefits to the consumer.
Agents who work for limited service companies are not always inexperienced. Some have chosen this type of business model because it affords them the opportunity to work structured business hours without having to be on-call every evening and all weekends. They offer less service, less availability and less guidance for lower net fees to buyers (usually via a rebate),, and sellers (via a lower listing fee.) Buyer agents who are not previewing homes and are not familiar with the streets and competing properties are not going to have the same input and advice for the buyers as the agent who attends broker opens, previews and studies the market every day. Some buyers may feel they don’t need this guidance, and be willing to forfeit the assistance for a rebate. That’s fair. It is wrong, however, for a buyer to lie to a full service agent and use them for their knowledge, then abandon them for a rebate. It’s a form of theft by deception.
I have a problem with bad attitudes, underhanded tactics, lies and poor manners…..but, I don’t have a problem with informed consumer choice. Honest pay for hones work is ethical.
Deborah Madey - Broker
Peninsula Realty Group
There are agents who will offer rebates that are good, but there are some that is how they get their business, sometimes from under other agents. I only have true stories to tell.
One was actually my buyer, whom I showed many properties, and then suddenly stopped calling me right after I emailed him a perfect property. I called him and he said his job was in danger and decided not to buy. I watched that property went into escrow quickly and found out that indeed he bought the house. I called him and he was relieved that I found out - yes, he said felt very guilty - He actually told me that his agent said I would never found out. HA! … He said that when the agent offered him a $5,000 rebate, he decided to stay with me because I was worth that additional $5,000, but when the agent offered $10,000 rebate, he could not resist. Well the kicker is, he offered full price, $30,000 more than I would have suggested. I told him that.
The other two are my listings and I dealt with discount / rebate agent,
One buyer who worked with an agent who belongs to a nationwide discount brokerage kept on emailing me while negotiating credits for repairs. I told both him and his agent that I represent seller and he should talk to his buyer agent. Turns out his agent did not give proper advice and negotiate for him. The company had to send the broker out for walk through, settled on certain terms with their buyer at last minute before buyer would sign off. The agent actually told me during the transaction that the buyer should not complaint because of the rebate. The buyer called me a year ago when they were thinking about selling. I don't think he thought the discount company was worth the rebate and settlement they got.
One other buyer was represented by a mortgage broker/agent who gives rebates. I was personally amazed by how she did not negotiate for certain repairs when inspection time came. It also amazes me at how quickly you can tell by the tone of voice and emails on how desperately she wanted to close the deal. The agent's brokerage is a firm in a different area in the Bay Area and from what I saw, she did not know much about a lot of things. I think the buyer thought he got a good deal because of the rebate but he really did not know the kind of credit he might have gotten if his agent had the knowledge and tried harder on his behalf.
Many things I would not have done or I would have done much differently if I was those buyers' agents. I have other stories, but that's that for now and you be the judge.
Sean: a) a buyer’s agent is supposed to “negotiate” on your behalf b) if you feel as though your buyer’s agent’s interest is to maximize the sale price, you are working with the wrong Realtor. As a buyer’s agent I ALLWAYS work towards negotiating the absolute lowest price with the most concessions possible. When selecting an agent to represent you, ask them to show you their recent closed sale history and pay close attention to the spread between the list prices and the closed sale prices. The Realtor with the highest average spread clearly is worth their full commission.
A friend of mine in Boston used a Realtor that gave a 1% rebate. By my estimate, he ended up overpaying 4% to 7%.
I am in a hurry to go - appointment and open house, but I want to stop by quickly because I really don't want you to feel sorry for me, not my purpose for posting below.
Don't worry about me, I did not write this to get sympathy, but just want to have buyer beware - These are very good people but they were just enticed by certain things which they thought they'd sure get a great deal on. I don't blame them they want to get the best deal, just like all of us. I feel bad for them because THEY were the ones who got burned, I am sorry to say.
The tiered compensation will be difficult to say, who is to say a certain percentage is the best for a certain deal? is 10% really a great deal or is 20% a great deal? Each transaction is different. Sometimes, just finding and getting the house is the best deal for this one buyer.
The proposal sounds good but I don't think it'd work very well realistically.
Sean, I would write the state representatives, as well as the Attorney General in your state if they do not allow Real estate rebates on commissions. I read through the previously posted link to the DOJ website and was very impressed. Unfortunately, the state I am moving to does not allow rebates (Mississippi)! I have already written the AGO office in Mississippi about the clause in the Real Estate Commission's rules that prohibits this, and hope that they will do some research and work to delete this clause. I will also write my future state legislature's in the next day or so. There is no reason that Mississippi should needlessly be protecting Real Estate brokers margin in a transaction.
Tired argument that sounds more and more ridiculous every time I've heard it in the over-20 years that I've been in real estate.
Sean, go to this site to check your state re. the legality of rebates, and the reason that the Department of Justice feels that consumers should have this available to them.
They are working diligently to include this practice in all states, because the feeling is that consumers deserve choice. I agree. I'm guessing that all states, in fairly short order, will be required to offer alternatives to consumers.
No one can deny that
a) the deal can happen only if the seller and the buyer agree on a price.
b) technically it is in the interest of both the agents to sell the property at the maximum price possible because their commission is based on the selling price.
So, I don't know how much influence the buyer's agent can have in negotiating the price; ultimately its the seller who has to accept the offer.
It is absolutely normal to get back some commission. Its called a 'housing depression', and in a depression you as a buyer get the most of the deal.
Several US Senators kind of got a rebate from Countrywide to help us all out. Sometimes it is just better to have something straight forward. Have we really gained that much by having lawyers ads on TV. Have we gained by seeing Viagra advertised 20-30 times per day. Its freedom but we need some common sense.
Cindi, I also would have to agree with your comment that successful, seasoned Realtors do not necessarily do this.
Billy, I have to agree with Sylvia, a tiered compensation system sounds good but likely would be difficult to implement.
Laurie, I respectfully disagree with much of what you have to say on this subject. As a general rule, the most skilled people in ANY industry tend to seek employment where they receive the greatest benefits. On that same token, the most skilled agents will gravitate towards a brokerage with a full service model and away from those with a discount model. At least that is the way it works in Southeast FL. Maybe things are different in Long Island. Not being smug, just pointing out the obvious.
In Southeast Florida (my market), there is a group called “Master Brokers Form” which is comprised of the top 250 real estate professionals in each county. None of these elite agents work for a limited service company or discount broker. Enough said?
More and more agents in our area are doing this. I from Horsham which is pretty close to you.
Feel free to send me an email or give me a buzz so that I can explain some the options agents are using.