This is email I had from Joe Bourland, branch manager of a Century 21 office in Avondale, Arizona, objecting to my column in this morning’s Republic. His arguments are not wrong, they’re just beside the point. There is no possible doubt that a good buyer’s agent will do a lot more work on a resale home than on a new build. So the question his response studiously avoids is this one: Why should a buyer’s agent get paid as much as three times more for doing less work?
Mr. Swann,
Disappointment is probably not a strong enough word to describe my feeling after reading your article in the Southwest addition of the Arizona Republic. The simplistic approach to real estate you highlight in the article may be indicative of your approach to real estate but is certainly NOT the structure of a real estate professional.
New home builders may “only pay for the introduction” but the buyer is expecting representation. Some builder salespersons may not want a buyer’s agent involvement in the transaction. That is not their option. Real estate agents will continue to have a fiduciary responsibility to the buyer client. You neglect to comment on the role of a competent buyer agent to protect the client from the builder. Too many cases of padded lender fees, lack of proper inspections and ridiculous “necessary” upgrade charges show on the settlement statement of unsuspecting new home buyers. A buyer’s representative can help deter all of that.
It is unfortunate that a real estate agent may put greed in front of what is best for the consumer. Indeed it has happened. But the majority of real estate professionals, more specifically REALTORS, overtly choose to put the client’s needs as the highest priority.
Maybe you should look into your established practices of real estate. There is an immense value in representation. Hopefully, the educated buyer you warn will realize the disservice you promote for clients.
Joe Bourland PC, CRS,ABR,QSC, REALTOR?
Branch Manager
Century 21 Metro Alliance-Palm Valley
Director-Glendale Board of REALTORS?
Bourland copies his email to nine other local real estate brokers, which I consider well-poisoning — essentially DOJ-bait — but I don’t care. Instead, I’d love to hear the phone conversations taking place in Avondale right now, as recent buyers fumble through their HUD-1s, trying to figure our how much “their” agent got paid for “representing” them in their new-home purchases.
Breathe deep, boys. There’s a clue in the air, and, if you’re very lucky, you just might catch it…
Technorati Tags: arizona, arizona real estate, compensation for buyer representation, phoenix, phoenix real estate, real estate, real estate marketing
anon says:
man, are you full of yourself.
…and STOP linking every freaking word!!! It’s the most ridiculous habit i’ve ever seen.
September 22, 2006 — 11:46 am
John K says:
Hmmm.
Whenever I have been offered incentives above what other developers are offering (which was only once), I disclosed it to the buyer, who was unaware of it, and we split it, he got $2,000 and I got $1,000, and we were all happy.
Higher commission rate, though? Not sure. I agree about disclosing and discussing.
I’m not sure I can agree about the buyer’s agent doing nothing.
This is why the whole commission structure is so messy.
If I’m doing my job, I’ve taken my client to all the available properties, old and new.
If my client decides to buy in a new development where the commission is higher than the rest, it’s his decision, not mine.
Shouldn’t I be compensated for all the work I did, prior, taking him to all the other places?
You make it sound as though I met him on Saturday morning, drove him to the developer’s project, and he signed the paperwork, that day.
In reality, we’ve probably been working together for weeks, seen multiple properties, and only now seeing something he likes.
You also make it sound as though an agent has some magical power that can convince a client to buy a property he wouldn’t otherwise buy, just so I can pocket an extra $5,000.
I’m not disagreeing with anything, just saying there is a lot more to it.
September 22, 2006 — 12:10 pm
Greg Swann says:
> I’m not disagreeing with anything, just saying there is a lot more to it.
In general, I don’t disagree. It depends on what market you’re in, surely, and the whole subject perfectly makes the case for ironing out compensation issues in advance. If your buyer buys resale at 3% or new-build at 10%, there is essentially no difference in your effort to that point. Why would your compensation be different?
> You make it sound as though I met him on Saturday morning, drove him to the developer’s project, and he signed the paperwork, that day.
That happens all the time here. Even worse, the agent arrives with the party, fills out the co-broke form, then leaves — like dropping the kiddies off at day-care.
September 22, 2006 — 12:30 pm
Joe Bourland says:
Mr. Swann,
Your point in the article addressed commission. My point addressed the lack of value you put on representation of a client in your article. If you believe buyers should only expect a real estate agent facilitate a handshaking, there is little wonder how your views are based.
No phone calls yet, Mr. Swann. If they come, I will be sure to provide solutions, not just a clue.
September 22, 2006 — 3:26 pm
new condos says:
Yikes more like blood bath (instead of blood hound)on this post…
My favorite John K make good argument…but then again it is a very touchy situation. At the end of the day…with the Internet and the growing acceptance to discount brokerage and alternatives…it will figure itself out. For now, love the blog…keep going with it!
September 24, 2006 — 1:12 pm