Trueman, although I think this is the minority view, there are still agents around who think like this. That, unfortunately, is the nature of this business. However, an agent who understands "due diligence" and truly believes in "representing" their "client" will show your property regardless of the co-op fee offered. The rest are just "salespeople."
Human nature is one side of the equation, ethical behavior is the other. While every agent will publically state they show all listings which a client wants to see, I advise my clients not to take any chances. I suggest the selling office commission be consistent with what other similar homes are being offered for, so as not to allow the one agent who may not be ethical with the one client who might really like your unit to miss an opportunity.
To add more specific information that posters have questioned or commented on, I'll say that the competing unit in my building is in an inferior location in the building as it sits on a busy street. Mine is on a quiet, tree-lined street on one side with a nice reflection pool on the other side. Also, their unit has not had much work. It has the original formica cabinets and tiled counters. Mine are shaker style with granite in the bathrooms and kitchen, with new floors, removed acoustical material, and new carpet. Overall, my unit is much more contemporary.
In terms of me "agonizing" over a mere $6K, as one of the posters accused me of, I'll clarify that I understand that it will be spent somewhere, so maybe my question is, "in this market, is it better to spend that money in agent's commissions or in lowering the price of the condo?" Furthermore, I should mention that although the other unit is offering 6%, it has not had any offers whatsoever, since hitting the market at the beginning of November. It is priced $20K less than an equivalent unit that closed in September of this year.
Thank you again for all your comments. It's given me a lot to think about. If there are any buyers out there, I'd love to hear from you also.
You state, â€œwhy would an agent choose to make less just to waste time showing yours?â€
I completely disagree with this type of thinking. Itâ€™s this kind of unprofessional behavior that gives our profession a black eye. As a professional Realtor, bound by a code of ethics, itâ€™s my fiduciary responsibility to show ALL the units to my clients, not just the ones that put the most money in my pocket. And in reality, most Realtors these days donâ€™t put together the list of properties to show their clients - in many cases the buyers specify the ones they want to see. Most buyers are smart enough to know when there are numerous units for sale in any given location. And they can see, from the pictures on sites like Trulia and Realtor.com, whether of not the previous owners upgraded to granite counters, etc.
If their hit list includes the unit with the lower commission, how do you propose to explain to them that you will not show it to them?
Are there Realtors out there who steer their clients to the properties with the highest commissions? Absolutely. Is it right? ABSOLUTELY NOT. Do we cater to the unprofessional Realtors and build our industry around their less-than-reputable behaviors?
I hope not.
Personally, I refuse to stoop to the lowest common denominator. As a listing agent, I carefully explain how Realtors are supposed to function â€“ and I also explain that there are Realtors out there who act in a less than professional manner. Then I leave the choice of commission rate to the seller. It is then up to me to decide whether or not I will work for them at the rate on which they decide.
On the other hand, as a buyerâ€™s agent, itâ€™s my role to show them everything they want to see â€“ not what I want to show them. If a specific property brings in less than adequate commission, I have the option of explaining that fact to them and then asking if they want to contribute. I can also head this off at the beginning by having them sign a buyer/broker commission agreement with commission minimums. Personally, I donâ€™t do this for the simple reason that it is offensive to some buyers. Instead, I provide documentation that explains all the options â€“ new homes, FISBOS, etc. and how commissions might work for each of these different scenarios. It informs the buyers up front in a non-threatening manner and demonstrates that we have their best interests at heart, not our bottom line. Itâ€™s a practice that offends no one AND has worked extremely well for our team. And at the end of the day, if they settle on a property with a low commission and choose NOT to contribute, we represent them anyway. And do so in a fully professional manner all the way to the finish line.
Well, Trueman, some might argue that to get your home sold, you should do both. :)
If you want my opinion, however, and it's a choice between less commission or lower list price - I'd absolutely go with the lower list price.
If an agent is foolish enough not to show your home due to .5% less in commission - I am sure in this day and age their buyer WILL find it online, and ask to see it . If they don't want to show it, believe me, someone else will.
The lower priciing will attract more buyers, and that should be your goal.
Along the same lines, if you think that $6000 is worth holding on to, then why would you think that half of that wouldn't make a difference to at least some showing agents?
Sometimes, you DON'T get what you pay for..............I know some agents who charge full commissions (whatever "full" means, as it varies from area to area) and they do not provide the exemplary marketing and service the seller is expecting.
I listed an expired listing this year, and was mortified by the terrible job the first agent did - no photos, listing incorrectly filled out, no room sizes...wrong bedroom count, no feedback, follow up, etc, etc .......and the worst part was, the sellers received NO guidance whatsoever from that agent, especially where the price was concerned ---- - Oh yes, he charged them the highest commission being charged in the area.
There is no equation that says a higher commission equals high end service.
Trueman - when acting as a buyer's agent, I would show any condos that work for my buyer.
In your case, even if you were listed at the lower commission, I would absolutely show your home, and be more than happy to sell my buyer EITHER unit - whatever worked best for them.
Any buyer's agent, imo, who doesn't do that, should have their license revoked, as they are supposed to be working for their buyer!
In regard to your listing -- Just make sure your home stands out in price and condition from the competitive unit.
Make sure you get a WRITTEN, detailed marketing plan from both agents, and compare them............Both agents should have a strong internet presence - if one doesn't..... don't use them.
Web Reference: http://www.debbierosesells.com
Please do not listen to the ludicrous "you get what you pay for". An agent charging a higher commission has no bearing on the quality of service. Conversely, there are plenty of agents who can do a wonderful job on a lower commission.
I will challenge any agent to prove the above statement wrong and until you can prove "you get what you pay for" has any validity, all agents should refrain from using it.
And to those agents who seem to think that because an agent is "settling" for 5% it means the agent has an inability or reduced ability to negotiate and that it would mean reduced service, shame on you because that has no basis in reality. Absolutely none.
I find your question very interesting. It appears based on your question that you have narrowed down the difference between the two Realtors to 1% of the selling price.
I find that very hard to believe, if you seriously compared their proposals. And it does not just mean PRICE. Anyone can price a home correctly. It is marketing, attracting the buyers and their Realtors, negotiating the offers, helping you select the right offer, and following up on closing.
THAT is where the value lies..everything else that you did not mention.
Here are a couple of examples:
How many properties are your competition? According to the MLS there are 98. How many sold last month? 14. So there is 7 months of inventory. In our area that is a BIG time buyer's market.
Ten listings expired in October, 19 new listing just since November 1st/. So inventory is growing. That means that as supply goes up, prices go ?
Your real question should be this: How do I sell my home for the most money? What you are paying for are RESULTS. How much do I net?
I would ask your Realtors these questions:
What are the features of my condo that make it stand out from the rest and how are you going to market them?
What results can I expect from the marketing that you do?
(10-12 showings or one offer in the first two weeks, or we adjust the price)
What are we going to do if that does not happen?
How will I know if buyers are qualified?
I personally call the "winning" buyer's lender and talk with them. It might not be a bad idea to have then cross approve with another lender just to make sure that they really are qualified.
Have any condos sold in my building recently? Am I going to have any problem with buyer's financing being approved? HOA issues that affect issuing the certificate?
If you really went through the process I'll bet one of these two Realtors will begin to stand out.
Different agents will handle this situation differently. I my own case, my buyers understand that I expect a minimum commission, which is the most common commission in my area. They sign an agreement stating that they will make up the difference if the seller offers a lower commission. As such, buyers typically reduce any purchase offer by the difference, so the seller usually ends up paying the full commission anyway.
Realty Executives Select
Assuming that you do that, I would gear all incentives towards the buyer - realize that in this market, price is the driver. If you don't draw traffic, repeat visits, and ultimately an offer, then you've got to address price. So be prepared for that.
Only you can decide which agent is the right pick for you. I will say that online exposure is so critical today - as is agent effort.
Good luck to you,
Unwavering Commitment to Service
When I represent the Seller, I work hard to find a buyer for my listings....thatâ€™s why I get hired, to find a buyer. I just donâ€™t take a listing just to add to my listing inventory or to put up my sign so that I can get more recognition.
If that young guy is so quick to discount his commission how hard do you think he is going to work to negotiate on your behalf. As far as having a web presence, thatâ€™s nice to have but the web is not going to sell your home, your Realtor should be doing that.
If you want a quick sale you have to find an aggressive agent who is going to actively work hard on finding you a buyer. Having good working relationships with other agents is nice too, but again, you are hiring an agent to find you a buyer.
It sounds like both these agents plan on taking a listing and just putting it on the MLS and then sitting back to see who else can bring in an offerâ€”they should be looking to sell that property not just list it on the MLS and put up an sign....thatâ€™s not selling, thatâ€™s order taking and those days are gone.
Real Estate Broker
91 responses, It's worth another go around.
I've observed listings posted by limited service or flat fee brokers where the buyer compensation was ONE WHOLE DOLLAR.
Many times a buyers want to see a FSBO who will not play ball with a buyer agent.
All you agents to 'SHOW EVERYTHING' to your buyer are clearly pleased to work for FREE!
Will all 'Work for FREE' agents please announce yourselves, there are lots of folks who want to do business with you.
Here is what has not been discussed. REAL professionals will discuss with their buyer the minimal compensation expected that is usually paid by the Seller. The buyer can be given the option to pay out of pocket any shortfall in that compensation.
The result will be the buyer will say, "Don't show me anything with additional out of pocket expenses."
The seller offering 1.5, 2.0. 2.5 could be TAKING THEMSELVES (their real estate) out of the game, not the buyer agent.
This is a business not a hobby.
My buyer said, "I don't want to see any wonky property."
As a seller and sellers agent, I find the amount of commission offered can be a very important and strategic decision. First I look at the market, is it a "Sellers Market" (inventory levels of less than 3 months), A "Neutral Market" (Inventory levels between 3-6 months), or a "Buyers Market (inventory levels over 6 months).
In a "Sellers Market" I can offer a commission of 2.5% or even 2% with no worry of decreased interest or traffic.
In a "Neutral Market" a commission of 2.5% is acceptable, but 3% would possibly entice more agents to preview or bring clients.
In a "Buyers Market" I always start at 3% and have even gone as far as to offer 4% to entice more agents to visit the property.
Regardless of the market, I charge my seller 2.5% to list the home, so if you are offering more to entice the buyers agent, as a listing agent I don't add more "enticement" to my side.
Any agent you interview should be providing you with data, showing you sold comps that would be appraisal comparable, active comps to see your competition, and inventory levels so you can determine your immediate areas market condition.
example: If 10 homes sold last month in your area, and there are 30 homes active on the market in the same area, then there are 3 months of inventory.
In conclusion, proper pricing from the beginning and strategic planning of buyer side commission, can prove much more inexpensive than price cuts, (most buyers would not even notice a price cut that did not exceed 5% of the purchase price)
BUT...I also know of agents who practice this train of thought of NOT showing their buyers a property if it pays less then 3%. These agents are not doing justice to their buyers by limiting the options, especially in today's (2014) market where there typically are not many options.
NOW...all of this being said, I ALWAYS offer 3% (unless it is a short sale - different conversation) on the Buyer's Agent side, due to the fact that I know we would be eliminating some buyers, due to their agent's greed. Our job as Realtors is to make the home appeal to as many buyers as possible, which is the only way you will get top dollar, and one of those ways is the buyer's agent commission amount.
The agent who wanted to lower their commission to 5%, should offer 3% still, and only take 2% on her side.
In conclusion I will say that an agent who discounts their commission, typically has a reason they are doing it, and quite honestly, they should. My opinion on this particular matter is that the agent that was "older" or "more experienced" is probably going to negotiate a much better price, better terms, and do a better job during the inspection phase and protecting your overall liability as a seller.
I hope this helped.
Real estate seems to be a transient profession that everybody seems to think they are the expert at, with no real training. Most agents take a 75 hour class, pass their exams, get a website and are instantly in the real estate profession. Who knows the difference? They lure clients with discounts, rebates and a percentage point lower to get the business, but cannot really provide the service that an experienced agent can provide. That is the only way they can compete, they look for sellers who are not looking for professionals but just want cheap. It takes years to really learn this business.
Many people jump in Real Estate because it is glamorized and to make quick money, only to find that it is more than a notion. There all laws and technical issues that an expert knows and the newbie will not. Go to Georgia Real Estate Commission website, search agent, and type in any common last name. For example, “Smith” and look at all of those who left the business. Many have realized that this is not a game; we are dealing with people’s homes and finances. Real Estate is a serious business and it is cheapened by some of the activity and mistakes that happens as a result of inexperience and lack of training.
Inexperience agents can cause you unnecessary delays and can be a liability instead of an asset to you. An inexperience agent can cause you to lose thousands of dollars in profits on the sale of your home. So the decision is a personal preference. Buying a house is the largest transaction most people will make in their lifetime. Selling one is also a major transaction. Yes, you really do get what you pay for. Inexperience will tell you otherwise. Don't you deserve an expert working for you?
American Realty Professionals
Below is an excerpt from an article on the antitrust laws :
"The prohibition on price fixing forbids agreements among competitors on prices, such as real estate listing commission rates, including commission splits. The law does NOT preclude a competitor who establishes its commission rate unilaterally and without agreement with other companies FROM ADVERTISING that commission rate. The law also ALLOWS that competitor to engage in competitive advertising, in which the company explicitly compares its stated commission rate to the rates publicly promoted or advertised by other firms, provided that the advertising was truthful and not misleading. In fact, the policy underlying antitrust laws â€” promotion of vigorous and healthy competition â€” would tend to favor and ENCOURAGE such comparative advertising since it HELPS CONSUMERS easily compare and contrast prices offered by various companies..."
FYI, and as an example - There was a company called Foxtons, now defunct, that had a huge print, radio and signage advertising campaign promoting their 2% commission structure - all was perfectly legal.
It's the discussion among realtors, that might hint at collusion, that is illegal - not openly advertising a company's policy. Confusing, yes, but makes sense when you think it through!
Offered it to both of them. The one that sells it gets the prize. It does not have to go to the MLS. and no one is asking you to list it. But if you do>>>>>
Remember a listing is just going fishing with your house as the bait.
How about an agent delivering a buyer that is ready and willing with an offer.
How about a buyer paying for the broker's commission?
Not at all . Buyer's agents do that most of the time........... question are you ready to take their offer?
Listing agents can agree on what your house should list for but can they agree on what you should take when a low ball offer comes in? That is left up to you.. Especially if you are under water with your mortgage. Do you know how low you will go? Did you tell that to the listing agent? Should you? Is it much lower than your suggested listing price? So as you can see it really is not about the commission. It all has to do with at what price you will take. I whisper a secret to you. Just as your price is negotiable so are commissions. The experienced smart agent knows that buyers are NOT born every moment in this market if they want to hold out it is their mistake than what they will have is an expired listing and you are back to where you started.
There are a million stories in real estate but the one that is worth telling is. The sellers sold his house twenty thousand dollars less than the offer he received and rejected six months ago. Know when to buy know when to fold. A realtor is only a messenger but t what would you do without one . They post and deliver.
Don't get hung up on commissions take the agent that has the experience it's not the price you pay it is the risk of not getting the result.
Best of Luck,
That 1% divided between Seller, selling agent and Buying agent is only 33.3% of 1 percent. This can be a much easier strategy to swallow financially for everyone.
In direct respose to the question; YES, sadly some (not all) agents will absolutely pass on homes that are over priced, not in the general showing area or if the Commission has been cut.
Generally speaking, if we have a listing and we want (need) to help out the Owner, we might cut our commission and we (the listing agent) will take the 2% side...
There is No perfect answer to your question. So, in this market I would Highly recommend Guarding against the suspected "what if's". -You'll sleep better at night...
you need a person with good skills. Please just understand as agents we all come with different features and benifits. find one you feel will do the job then price it right!
Sheyenne Schultz 310-429-4170
Look at all the other determining factors of choosing an agent because the main goal here is to sell your property in the fastest possible time.
Hope this helps.
I have a cousin who lives in Burbank and I follow the market. I will let you know that I bluntly think both will do a good job. They're just going to get to the end result in a different way. The internet presence WILL HELP, but also will the other REALTOR KNOWING OTHER BURBANK AGENTS. So I think it comes down to: who you like better/get along with AND which strategy you prefer. Will you be made at the 2nd agent if your web presence isn't that big? THEN GO WITH THE 1st. Will you be upset if your agent hasn't worked with the agents that show and preview your home? Go WITH THE 2nd. Track record and testimonials are huge. Tell both you're about to make your final decision and would like 2-3 testimonials from past clients. I think that will help put you at ease. Best of luck! You should post your listing on here after you decide. I'm up there twice a month.
I was a member of CBA here in Seattle, so I'm not a novice. They have an MLS, and co-brokerage agreements. Perhaps that's not the practice in your area, but I do know that many a relationship has been strained over a misunderstanding in the deal.
In the commercial world. it's different.
Commercial property, in my area, is hard to come by - for sale. If it does, I can usually pick up the phone and sell it
Leasing is different - I have to show everything. It's reall different - many commercial properties may not be listed. It's more relationships - with owners and other brokers - many whom own their own properties.
a 2500 sq ft warehouse may not be the same. Every one has an opinion of what they need. I rent a 1 one room office or a 25,000 sq ft warehouse.
A deals a deal.
That being said the seasoned agent versus the younger is also not always the best way to go. You should way all services provided including internet exposure (as thats where more and more buyers are shopping these days). Ask for references and see what other clients have to say about their services. I like the idea of the 5.5 as well. After all the listing agent does have the opportunity to sell it themselves although it rarely happens.
A similar but related situation:
Say I am an employer and want to hire a good experienced manager. The going rate is $300,000 but I want to pay $250,000 so that is what I advertise. Who will show up for the interview. Will all the same applicants show up? Will it be the less experienced applicants? When I hire one, will it affect the success of my company.
I may or may not get what I pay for as even the inexperienced people will show up for the $300,000 job. If I offer $250,000, the less experienced will show up, but it is likely that the good experienced people will probably show up at my competitors interview since they are offering the $300,000 position.
Likely, my company will not do as well if I hire a less experienced manager and I wonder whether the $50,000 I think I am saving will really be saved or cost me in the long run.
The fact is that many agents will hustle to show a 3% listings to their clients.
Number of showings = greater chance of success!
Why don't you suggest a 5.5% commission, with the listing side getting 2.5% and the buyer broker, 3%.
If your listing agent firmly believes 3% sells houses, let him prove it.
Best of luck,