Most people are wired in with an incredible fear of loss... much more than the excitement of gain.
I read an article recently about lower commission agents, and here are some things to consider... these are pretty much pasted from the article, so don't shoot the messenger!
You may agree or disagree, and that's okay.
There are seven factors that generally hold true for agents who are willing to cut their commission:
(1) They don't have a marketing system that works. In today's competitive real estate market, some agents are offering to cut their commissions because they don't have systems in place to find buyers. They're desperate to accept any terms and conditions in order to list a property.
Sellers need strength and conviction in this economy -- and someone who is ready, willing and able to defend their asking price at the negotiating table. Would they really want to trust the sale of their property to someone so quick to devalue their own worth as a salesperson? More important, if they are that willing to give up their own dollars, how quickly will they be willing to give up the seller's?
(2) They will cut service somewhere. Many factors come into play in finding a buyer who's willing to pay asking price. Marketing materials, advertising, direct mail, relocation incentives and more are all valuable tools that experienced, full-service agents employ to realize the best price, terms and timing when selling a home. Which will they leave out to accommodate their commission cut?
(3) They won't give it their all. A 1.5 percent reduction in commission equals up to 60 percent of the total commission. Would you really be excited about a 60 percent pay cut? Can the agent really be excited about working for the seller? Is he or she honestly motivated to sell the property? If the agent has five listings, and the others are at full commission, which one is LEAST likely to be marketed effectively?
(4) They might not get cooperation from other agents. Today's market is quickly shifting and extremely competitive. Most agents are choosing to work smarter. A cut commission on one end means there is less to split on the other end. Making your listing attractive for agents to show and sell requires collateral. Put the shoe on the other foot. If you had your choice of 10 properties to show, two of which meant a 2 to 2.5 percent commission and eight of which offered a 3 to 3.5 percent commission, which would you be more excited about putting on your HOT PROPERTIES tour?
(5) They likely won't get top price. If the agent is willing to let the seller negotiate him or her out of 15 percent or more of the income from the sale of the property, will they also let the buyer negotiate 15 percent or more from the purchase price? What is the agent's sale price to list price ratio? The seller might be losing tens of thousands of dollars just trying to save a couple thousand dollars in commissions.
(6) They simply don't know better. Some agents might be willing to take less because they lack the experience to fully understand the repercussions that they are agreeing to -- not only to their bottom line, but also to the seller's. As an experienced agent, I know that when I do not compromise on my integrity, service, systems or skills then I can, in good faith, give customers my honest promise to do my absolute best.
(7) They don't understand timing. One thing always remains constant: What sellers want most is to walk away with the most money in their pocket. Yes, a commission cut seems like the quickest way to accomplish that goal but, more often than not, it is a false perception. Lower commissions mean lower marketability, which means more time on the market. That equates into additional mortgage payments, utility bills, landscaping maintenance and much more. Having the right person with the right tools to tell the truth up front, set the best price and promote the sale aggressively and effectively will result in the primary goal of putting the most money in the seller's pocket.
By the way Cliff, I 100% agree with you about that Larkin... what a circus.
This is a small community and word spreads fast about people who are dishonest. It's a shame that some folks tell people what they want to hear in order to gain their business.
I will save my other more candid thoughts about this topic to discuss in private with my wife.
Chuck
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. First of all, I don't charge 4% and secondly, the homes that were sold on Huffman were very different with regards to upgrades, elevations and they were sold over 2 months apart. We both know prices have sky rocketed on some models in the past 2 months. When homes are virtually identical and sold for drastically different amounts within days of each other, there's something not right.