Rarely does a story infuriate me, insult a profession and reinforce what I have already concluded. This story (not yet online) in the Daily Progress does all three. In a presumably-paid-for-piece in the “Business Journal” section of the DP a local Realtor says:
“The commissions offered in a buyer’s market to participating agents are very important. … When there are fewer buyers, agents have to maximize revenue out of each buyer. It makes sense to direct clients to those houses paying the highest commission.”
Beware of Realtors seeking to “maximize revenue out of each buyer.” Is directing a client to a house with a higher commission, solely because a higher commission is being offered, unethical? Is this true representation?
Placing the higher commission ahead of the buyer’s best interests devalues the actions of the Realtor and the profession.Â Is it a sad statement on the reality of our profession? This quoted sentiment may be applicable to some Realtors, but I would argue that it’s not for most of the good Realtors in the Charlottesville area.
Here are two questions for real estate consumers to ask –
1. If you’re a buyer interviewing buyer’s agents – What is your commission? (Are they dependent on whatever the seller is “offering”?)
1b. Will you show me everything or only the properties that are offering the highest commission?
1c. – Do you get a higher commission if you sell one of your company’s listings?
– How many buyers are even told anything about co-brokerage other than “don’t worry, the seller pays the commission.”?
2. If you are interviewing Realtors who are competing for your listing – What percentage of your company’s transactions close via Dual Agency? (note: in my company, we practiced Dual Agency about 8.5% of the time in the same time period – which is still too high in my opinion, and I haven’t done it yet).
As a buying or selling client – do you really think you are getting 100% representation from your contracted representative if your agent is “representing” both parties?
Earlier this year I wrote A Call for and End to Cooperative Compensation. “Marketing” may become less of Realtors’ core competencies and “Representation” of clients’ interests will take on far more importance as housing data becomes more transparent to Realtors and the public.
Anybody can “find” a home for you; it takes a skilled and competent Realtor to represent you.
Update: I changed the third sentence- “In a presumably-paid-for-piece in the “Business Journal” section of the DP a local Realtor who heads a fee-for-service company says” because the fee-for-service part is irrelevant.
Area Realtors offering unusual incentives (Daily Progress)
Price Drop or Buyer Agent incentive (via About.com) – fascinating insight into what I perceive to be the somewhat “seedy” side of the profession
FSBO’s in Charlottesville