Let’s print up a junk mail envelope: Doug Quance may already have won!
I think I might have found a winner…
I searched our MLS yesterday, and found a co-broke of 20%! New construction 4 bed 2.5 bath listed at $270K.
http://brokersfirstrealty.com/2006/11/12/commissions-incentives-and-ethics/
It’s no typo… the listing agent spelled it out in the public remarks…
Dave Barnes dropped a dime on this one, not as high in percentage terms but a huge amount of money.
Can you beat these? I know of a bunch of 10% deals, but nothing this extreme. How about you?
(Inlookers take note: We come not to praise excessive commissions but to damn them.)
Technorati Tags: arizona, arizona real estate, compensation for buyer representation, phoenix, phoenix real estate, real estate marketing
Doug Quance says:
It would be nice to win something… for a change!
It will be interesting to see if anyone can top that one…
November 12, 2006 — 7:58 am
CJ, Broker in L A, CA says:
20% co-broke! Whoa!! Two mostly irrelevant observations:
First observation: 20% of $270,000 is a different animal than 20% of 550,000 or $600,000 (550 or 600 being our average price around my part of L A)
Second observation: Sellers that purchased recently simply do not have the equity to offer anything like this, even if they wanted to. Some of them will be lucky to break even at a discounted commission.
November 12, 2006 — 9:29 am
Doug Quance says:
CJ,
While the $270K vs $550K animals are different from your perspective, a $270K property here in Atlanta is nothing to sneeze at. And a $550K property here can get a lot of leeway in regards to the appraisal, whereby the $270K will not…
Either way, it simply makes more sense to reduce the price of the property and not “stick it” to the buyer… no matter where in the country it is.
November 12, 2006 — 11:26 am
Jeff Brown says:
Guys, please stop. If the poor developer thought selling at a lower price worked better than offering the higher commission he would have done it. It’s all the same to him in the end. So unless you’re saying ALL developers are idiots, what is the motivation of the builder to choose an inferior marketing mode?
You may even be absolutely correct about the two approaches, but it doesn’t matter because the builder, at least so far, hasn’t perceived it your way. And who more motivated than a builder with unsold inventory in a market like this?
The buyer would get a better price if the builder bought your way, true enough. But apparently the builders are finding buyers doing it their way. The buyers are still perceiving the transaction to be a good one for them.
Let’s keep telling the buying public they’re stupid. Yeah, that’s the ticket. And while we’re at let’s tell them their agents are unethical whores for selling a property that appraised at or higher than the sales price.
A seller makes the decision on what he’ll accept and the buyer decides what he’ll pay. And yes, Greg, I know you will go in and cut your pay like a chainsaw on an oak tree, and hand it to the buyer. But as you’ve discovered, buyers’ apathy to that approach has been underwhelming.
Guys, please stop.
November 12, 2006 — 1:05 pm
Greg Swann says:
> But as you’ve discovered, buyers’ apathy to that approach has been underwhelming.
That much is untrue. Buyers don’t understand how agents are being paid, and so they don’t understanad the idea of a rebate in the abstract. Most understand perfectly — and love the idea – when I spell it out to them. Everyone loves the idea when they see funds going into (or not coming out of) their own pockets. I just sold a new build to the son and daughter-in-law of the couple I talked about on Friday. As a viral referral generator, it is without parallel.
November 12, 2006 — 4:20 pm
Marlow says:
In our pre-printed Buyers Agency Agreements (which we are all asked to use) it is stipulated that any commission over and above our agreed upon amount, will be credited at closing to the Buyer. That’s just the way it is. And that is not unusual, as I understand that most Buyer’s Agency Agreements are written that way. So what’s the problem? The Buyer gets the extra dough to use toward their closing costs or to take off the price of the home. There’s nothing scandelous or dishonest about that. It’s win-win. If you’re NOT using a Buyers Agency Agreement, then shame on you.
November 13, 2006 — 3:18 am
Jim Cosgrove says:
I think higher commissions or “selling broker bonuses” are a waste of time for the seller and are bad for our industry. I proffessional Buyers Broker should be looking for the best match for his or her client, period. If they are motivated by the commission or the bonus are they representing their clients best interest or their own. I refer to your previous discussion of dual agency.
I would rather see a seller price their property correctly and expect to pay a fair commission.
November 13, 2006 — 9:36 am