All transactions of trade of money for services or products are about value. As consumers, we all want value in exchange for our money. This applies to the $200+ evening dinner vs. the grab-and-go box lunch. It applies to the designer dress from a boutique vs. the knit dress from a discount chain. It applies to the attorney who charges $400/hour vs. the attorney who charges $100/hour. All of us, as consumers, make price/value decisions every day.
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. Itâ€™s not different than Lexus telling us why itâ€™s worth it to pay more for their car than Kia. Itâ€™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 donâ€™t hear Kia saying, â€œLexus dealers are a bunch of rip off artistâ€â€¦..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 donâ€™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. Itâ€™s fair for a real estate service discounter to say â€œwe charge lessâ€ if they do. Itâ€™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 â€œwe will save you moneyâ€ or â€œwe are worth the higher investment.â€ 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 donâ€™t need this guidance, and be willing to forfeit the assistance for a rebate. Thatâ€™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. Itâ€™s a form of theft by deception.
I have a problem with bad attitudes, underhanded tactics, lies and poor mannersâ€¦..but, I donâ€™t have a problem with informed consumer choice. Honest pay for hones work is ethical.
Deborah Madey - Broker
Peninsula Realty Group