|Posted on January 28, 2016 at 12:20 AM|
wow, just lost a listing appointment over my not upfront agreeing to discount my commission. Wow. She called yesterday and the first question, as usual, was "How much is the commission?" I explained it is 6%, half of which goes to the buyer's agent. She immediately asked if I would do it for 5%. I asked her what she wanted me to not do.
I am a professional. My job is to use data to assist the homeowner in setting a reasonable price that will attract attention and still maximize what the homeowner gets for the home. I am pretty good at it. the process starts with a Comparative Market Analysis or CMA. I have seen other CMAs, many agents just pull a couple of properties and put in the info given, call it good. A good CMA includes parameters to make sure the home is similar. There are also adjustments given for lot size, square footage, amenities and other things.The adjusted price on several recent sales as well as current listings is used and finessed to find the right range in price, which the seller then sets. Having good information up front helps avoid issues when the appraisal comes in.
This is how I earn a living. If I don't negotiate for my own money, how well do you think I am going to negotiate for the seller's money? A discount on the first phone call indicates that the agent does not believe they are worth a full commission, or they intend to do a discounted job and just don't mention that upfront. No wonder people have such a low view of real estate agents.
Another thing to consider is that if a buyer's agent is looking through the Multiple Listing Service (MLS) for properties to show their clients, they are going to show the properties offering a 3% commission to buyer's agent before they show a 2.5% commission house. That is just reality.
This fall I had an owner ask if they ought to lower their price to get some activity on the listing. It was priced well, just a slow time. What we did instead was offer a higher commission to the buyer's broker. An extra $1000 as a bonus to the agent cost $1000. A price reduction would have cost several thousand dollars.
Once a house gets listed, a good agent earning their commission will guide the seller in preparing the house for showings by staging, making recommendations about what to remove or add, how to keep it show-ready. The seller's agent will also follow up with buyer's agents to get feedback about the house - how it showed, comments from the buyer (good and bad), the pricing, etc. We encourage the seller to incorporate those comments into the process and make adjustments as needed to get the house sold.
An offer comes in. A good seller's agent will advise the seller what costs are normal and customary in the area and whether the offer falls in line. For example, if an offer comes in lower than asking price, is the buyer paying more of the closing costs to make it up? Are they saying upfront that they do not intend to ask for a repair allowance? Are they asking the seller to pay all title costs? A good seller's agent advises their seller how to analyze the offer, accept, craft a counter, or whether to counter at all. We also know how to handle multiple-offer situations and can offer guidance to help the seller avoid legal issues.
Once escrow is open, a good seller's agent is an excellent resource for movers, cleaners, repair personnel and other people who may be needed during the process. We attend inspections, appraisals, make sure deadlines like inspections and repairs are met, make sure the loan is moving along as it should.
As we approach closing, I am there to answer questions and follow up with the various parties involved. I review the closing package and help overcome any hiccups that happen. I go over the closing paperwork with my sellers and attend their signing if they want me to be there. I make sure their questions get answered. When its all over, I keep their final closing statement to send to them at tax time so they don't have to search for papers packed away and get all available tax deductions.
This past year, I worked with a discount listing agent. Egads, so frustrating. He never answered his phone, and did not return phone calls for days. He put a sign in the yard, a lockbox on the door and put the property in MLS. As the buyer's agent, I tried to get the information for current flood insurance, since the buyer would have to have it for their loan; the seller's agent did not know and did not offer to check with their seller. The garage door openers were missing and he could not be bothered to ask the seller where they might be. It was a full two weeks after closing that he asked for the signed disclosure I had sent him in week two of escrow! I guess the sellers saved a little on his commission, but the sale almost fell apart more than once because of his absence and absolute lack of caring. It seems you get what you pay for.
As for me, I am happy she cancelled the appointment. If she wants a sign in the yard and a box on the door and to go through the process on her own, good luck. I have a buyer this week who is looking for a house just like hers. If they were to put in an offer and it was my listing, I might discount my commission. However, if I end up showing her house, I will ask for full commission, since I know I will have to be doing the other agents job as well.
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