Want To Haggle, ReMax Agents Lowered Commission Most Often
First of all, if your sole criteria is a lower commission in this market you better have 2 things going for you. The perfect house and the perfect price. Otherwise, you are much better off finding the best real estate agent you can find.
Saying that, Consumer Reports is coming out with a report in September in real estate and one of their analysis points is lowering agents commissions. The reports shows that ReMax agents when asked lowered their commissions 77 percent of the time.
What is interesting is that only 46 percent of sellers brought up negotiations on the commissions at all.
Among five major real-estate companies, RE/MAX agents agreed to lower commissions most often when asked, at 77 percent. That was compared to 64 percent for Coldwell Banker agents.
“Real estate commissions are determined between the sellers and their agents, but the best advice I can give home sellers is that it is far more important to focus on an agent’s performance, especially in today’s housing market,” said Alex Perriello, president & CEO, Realogy Franchise Group, the parent company of Coldwell Banker and Century 21 Real Estate.
Most respondents to the Consumer Reports study said they found service from the larger real estate chains and independent brokers to be “very satisfying.”
The survey was based on 9,141 responses to the Consumer Reports National Research Center’s Annual Questionnaire about selling or trying to sell homes from 2004 to 2007. Despite the shift in the housing market in that time span, Kotkin said there was no significant difference in the outcomes by year. via SignOnSanDiego.com
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Comment by Santa Barbara Real Estate Voice on 5 August 2008:
It is amazing to me how short sighted so many people can be on services that are provided to them. I am a big believer in paying experts to do what they do (whatever the business is). Hire a professional to do what they have expertise in.
When it comes to agent’s commissions it seems crazy to haggle this…especially in a slower market. Let the agent market the property and spend ad dollars and do their job and get you the $1 Million asking price. If they feel short changed upfront and don’t have the confidence from you and the money to market the property you might save that 1% on commission you haggled, but you most likely will also only get maybe $950,000 as a sale price because of the effort put into marketing the property.
This goes along the FSBO theory as well. Wow…you saved commissions and did not pay out the $15,000 to agents…but you might of got another $30,000 on the price if it was marketed well…and you also don’t have to lose your free time and take away from your time to do what you do for a living (by trying to sell your home on your own).
Just my thoughts.
Comment by Nicki on 5 August 2008:
I would speculate that RE/MAX agents lower their commissions most often because of how the brokerage is set up – that they keep 100% of their commissions, and all their bills are theirs. I suppose if I was responsible for buying my own signs, producing my own mailings, paying for all my own advertisements, that I would be willing to lower my commission just to get the job as well.
I don’t think it’s because they don’t feel that they are worth the higher commission, I think they’re trying to be competitive.
And to be honest, I would bet if you saw which percentage of those RE/MAX agents who lowered their commissions had been with the company for less than 7 years, it would be a high number.
Comment by Don on 14 January 2009:
Contrary to the opinion of the Santa Barbara RE agent, in the northwest, I don’t believe the RE industry has earned a reputation for being “able” to get an asking price. What is observable may be ad dollars spent, but the clear goal of the agents is to sell “something” and make a commission. The norm is for an agent to approach the seller with a lower-than-asking-price deal and encourage them to “take it,” vis-a-vis having the skill to actually close a deal at the asking price.
Bottom line, you’re dealing with an agent NOT a true saleperson. I have yet to observe any true sales “skills” with the many agents I’ve dealt with over the years. Typically they’re not much more than tour guides for your home, order takers and scribners.
Without a doubt, if I believed an agent could actually do what you describe, common financial sense would dictate using them and paying full commission.
You speak of sellers as “short sided.” I believe what you’re actually observing is an awakening of the public to realize that, in most cases, it is an easy money profession. There are, of course, exceptions – but I personally haven’t seen many cases where an agent is really a power to be reckoned with. The job performed could be done with much less education than going to a community college (as is witnessed by as many agents as there are) and, again, is typically more order taking and paper processing.
Sorry – I still believe in a day’s pay for a day’s work. I just don’t see the commissions equating at all with the work performed. Possibly in Santa Barbara, where money flows more freely, and a certain je ne sais quoi is possessed by the agent, you can condone what is paid, but there are very few in the RE industry that have earned superstar status – yet many who could never even qualify for American Idol being paid superstar commissions.
Just “my” thoughts.