You are absolutely correct, how much someone is paid does not always determine how experienced, nor skilled they are. There are many people in this business who get paid 3% (or more), and they don't have the spark to light a candle. What you should do, in my opinion, is find an agent you know has the skills and experience you need, then throw out the norm of 6%, 3% or any other percentage and work on a compensation plan that is fair. Pay for performance, and nothing else. But to presume that somehow you're getting a deal because you have an agent that is going to rebate you some amount of their commission is as folly as presuming the higher paid agent is more experienced.
As to the issue of a rating service, you are correct again, there is none. That is, there is none in the traditional sense. What I find most disturbing in this business is the lack of checking up on the agent one selects. While most of our business is referral based, of the "blue bird" clients we have contacting us, not one asks for a resume, a list of past clients, or some other fact based information to prove we know what we are doing, and that we do it very well. 9 times out of 10 they stick with us because they "liked" how the first introductory meeting went. While we take a different approach to this business, with something we call Exclusive Client Agency, I'm still surprised at how easy it would be for someone who did not have our ethics, nor experience, to "get" that blue bird simply by having a "good" introductory meeting.
As for the appraisal issue, I have to split on this one. I don't have experience with anyone spending this kind of money who goes for some level of financing that is anywhere close to the contract price on the home. All of our deals above $750K or so are putting more than 20% down, therefore, appraisal is a moot point. In fact, because our clients tend to put large amounts of money down, have strong portfolios, and solid credit, we often get the lender to waive the appraisal altogether as long as the automated valuation models the underwriter is using, come within 10% or so of the contract price. And our ability to understand value (see below) virtually ensures that the price we negotiate is at or below market value. Even after what happened this week, waiving an appraisal is still an option.
I can see where if a client wanted to try to buy such a property for less than 20% down, that an appraisal might be perceived as a stumbling block, but I don't have any of those types of clients. Again, not sure I want that type of deal in the first place as it speaks of other concerns that create larger liabilities. So in this type of situation, with little down, less than stellar credit, or a bad negotiated price in the first place, you're correct.
As for who can negotiate better, well, I simply have to refer back to the deal that introduced me to my current business partner. I had the same opinion, and I was very good too, but I wasn't as good as he was. Of course, now I'm better than he is, at real estate negotiations, and I haven't had a single client ever feel they could have gotten a better deal than I was able to negotiate.
Now I have to admit a bit of a secret and turnaround is fair game. My partner is a licensed General appraiser in the state of Texas. He's been involved in over 17,000 appraisals in his 23 year career. For every client in the Luxo market (pretty much everybody above $750K), as part of our services, regardless of whether or not the client is going to do any financing, he does a full blown appraisal report before the option period ends. I don't care what the list price was, and I don't care what the negotiated price was, I want a full blown appraisal with at least 6 comps, done by a licensed General appraiser, not just a broker's price opinion, or an agent's opinion of value. We use that, and anything that comes up in the option period, to continue to negotiate the deal. It's pretty hard for me to believe that someone who doesn't have my resources, knowledge of the market, and the number of negotiated deals in this business, can do a better job than me. Is it possible, yes, is it probable, no.
P.S. There's no turf to defend. I never indicated that we take 3% on Luxo deals. We simply don't do rebates, we agree with our clients in these types of deals what our fee is going to be ahead of time. With most clients in this market, we bill out at an hourly rate, with a cap that to date has never come anywhere close to 3% on a $2.5M deal. Excuse me, but Jesus H. Christ, does it make any sense at all to pay someone $75,000 on a $2.5M deal? They better have spent well over 1/4 of their entire year's effort, day in and day out, doing nothing else but that deal...doesn't happen, never will. Pay for performance.
Anyway, I really appreciate your responses. I wish you the very best in finding what you're looking for. Patience and persistence will pay off in spades.