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3. Show us things we cannot find on our own
We had one agent drag us around to four open house listings we had already seen online. We can do that w/o you, and minus the 2nd agent's fee leaves more room for negotiation the price down.
Instead, take us to things we couldn't find without you. New listings (that aren't online), contracts that recently fell through, off the beaten path homes. Now you are adding value.
Two opinions here. One - where do you think the information comes from to begin with? The MLS. Realtors have two different prospects to market to. One being other Realtors with qualified buyers and the other is unrepresented by a Realtor buyer. So if the property is online then the listing brokerage/agent is doing their job correctly.
Second, in all listing contracts with the seller the total fee has been agreed to and is in writing. There is no provision for the listing brokerage to get less if a unrepresented buyer wants to buy this house. Is it reasonable that an unrepresented buyer could get a 2-3-4% discount on a property. Sure. Is it reasonable that the money comes from the listing brokerage. Nope. All of the work still needs to get done, or there is no deal. If you want my services and expertise, get your hands out of my pockets.
Regarding lowering commissions...this is decided at the listing stage. It is contractually agreed upon in advance of any offers, and is the seller's choice. So noone later can change the fee without the mutual agreement, signed by all principles, in writing. Period. I do not negotiate my commission to make a deal happen. I bring buyers and sellers together and they decide the price, subject to the previously agreed upon fee, without me in the middle. Why should I pay for a buyer or seller's decision? To me, it reeks of 'bribery' or something. It's not my business as an agent to sway one side of the other, so whoever started this idea should table it. The only time an agent might reduce or give up their commission might be to help a special friend or family member. That's just my opinion, but it keeps things simple.
After a client asked me once to kickback half of my commission to him, (it is illegal anyhow) which was on a large commercial listing and one year of work before it closed, I calmly asked him what he would say if his boss came in 'tomorrow morning' and told him his paycheck for the year would be cut in half. He was stunned.
But the following year, he listed his home with me that he had bought 8 years prior, also through me. So it was an ah hah moment for him after all, and made it easier for him to take his hand out of my pockets.
People who write blog posts like that, IMHO, are a little undereducated in the field of professional real estate, regardless of what they think they know.
Frankly, I'm tired of hearing from people that "can't stand Realtors." If you don't like 'em stay away from them and keep your stupid mouth shut. You'll be doing Real Estate professionals everywhere a huge favor.
Regarding lowering commissions...this is decided at the listing stage. It is contractually agreed upon in advance of any offers, and is the seller's choice. So noone later can change the fee without the mutual agreement, signed by all principles, in writing. Period. I do not negotiate my commission to make a deal happen. I bring buyers and sellers together and they decide the price, subject to the previously agreed upon fee, without me in the middle. Why should I pay for a buyer or seller's decision? To me, it reeks of 'bribery' or something. It's not my business as an agent to sway one side of the other, so whoever started this idea should table it. The only time an agent might reduce or give up their commission might be to help a special friend or family member. That's just my opinion, but it keeps things simple.
The Realtor's commission has absolutely nothing to do with the sale price of a property. We need to get that nice and clear everyone. Usually, this is how commissions are split in most offices; and I will use a 6% commission. (There is no "standard" commission in the country, it is usually what is the common charge in a given area. Some in CA are 7%, some in the northeast are 5%).
Sale price of home: $200,000
Commission: $12,000
Listing office: 3% $6,000 anything lower is up to the Manager
Selling office: 3% $6,000 " " " "
This is where it varies according to agent's contract*,
Listing or selling agent: *depends on length of experience or incentives
{high} 60% of the 3% after desk fees: $3,480. (agent A)
{low} 40% of the 3% after desk fees: $2,420. (agent B)
Sale price of same home at $210,000
Commission: $12,600. 3% = $6,300.
Agent A $3,660. Difference: + $180.
Agent B $2,440. " + $20.
These are approximate commission splits between offices (the office always keeps 3% or half of what comes in ). These are also averages, and are not written in stone. Just an example.
So based on these examples, why would any agent compromise his or her valued license, integrity, honesty, reputation for those "difference" amounts. I also gave the home a $10,000 increase which is a big difference just to point out the increments. It's ridiculous to say there is any incentive for an agent to boost a price for his own gain.
As far as getting the buyer the lowest price for the home, no way. The agent, even the buyer's agent, has a duty to responsibly negotiate in the best interests of each party according to law. A good buyer's agent will do a CMA for the buyer showing what like kind properties in the area have sold and closed for and if he knows, what the intracacies of the sale included. There usually are variables in "the price" as well. It is up to the seller to accept or reject an offer.
Now a scenario where there is no co-broking with two agencies involved:
The listing office still keeps 3% or half of what comes in to the office, and the two agents within that office still do a similar split on the commission. If the listing agent happens to be the selling agent as well (rare), he will get the remainder after fees. But don't forget, he is also doing the job of two agents at that point.
Now let's see how the agent would become wealthy with these scenarios:
Take the commission, divide it by the number of hours, and then deduct the agent's expenses (from the 1st dollar), put aside at least 25% for Uncle Sam, and see what you think the agent is actually going to net. If you still want to gripe about agents making too much money, shame on you.
The only way to make a decent living in the real estate business is to work work work, and increase your production of sales every year, thereby increasing your experience and referral system. Not many folks want to work 60 or 70 hrs. a week to put up with the mistrust of the public.
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