![\"traffic-light-red_350\"](\"http:\/\/neighborhoods-in-austin.com\/tx\/wp-content\/uploads\/2009\/10\/traffic-light-red_350.jpg\" "\\"traffic-light-red_350\\"")
I had a prospective client tell\u00a0me recently that another agent he was speaking to had offered to rebate half of her commissions back to\u00a0the client\u00a0and he wanted to know if I would do the same.\u00a0 While acknowledging to him that there are certainly circumstances under which we feel it appropriate to negotiate our fee structure, I wanted to share with him some important things to consider when approached by discount realtors.<\/p>\n
Firstly, the 1.5% rebate is largely a ploy by discount realty shops to “buy” clients because their poor service doesn’t win them repeat business or referrals like others.\u00a0 Oftentimes, they are able to offer these kinds of concessions by requiring that the client use their title company, mortgage company, home warranty company and other ancillary businesses.\u00a0 The higher fees\u00a0generated by these ancillary services\u00a0are used to offset the discount in the real estate commission.\u00a0 Anytime you’re being told that you’ll pay less here if you also use these other services, you should ask yourself why.\u00a0 These are businesses, not charities, and their interest is in their\u00a0profit, not yours.\u00a0<\/p>\n
Here’s\u00a0some important math to keep in mind with discount realty:<\/p>\n
On a $225,000 sale, the buyer’s broker commissions are $6,750. If\u00a01\/2 of that is rebated to the client,\u00a0that leaves $3,825 to be split between the agent and his\/her broker (company).\u00a0 With typical splits at 50\/50, that means the agent’s portion is $1,912.<\/p>\n
How much time and attention do you think an agent under that kind of an arrangement is going to spend with each of his or her clients.\u00a0 The answer: as little as humanly possible!\u00a0 Seriously.\u00a0 And how many clients does he or she have to juggle at\u00a0one time for those kind of numbers\u00a0to work.\u00a0 Answer: more than they could handle effectively.\u00a0 And, perhaps most importantly, what kind of agents do you think\u00a0discount firms attract with those kind of numbers?<\/p>\n
This lower-cost, lower quality approach is why most people don’t get their taxes done at Wal-Mart or Costco.\u00a0 Volume is good if you’re buying toilet paper and frozen chicken breasts, but not when you’re hiring someone to assist you in one of the largest, most expensive purchases you’ll make in your life.\u00a0 And certainly not in the kind of market we’re in today where there’s so much negotiation going on.\u00a0 Market knowledge and negotiating skills are more critical now than ever.<\/p>\n
Buying a home is a much more complex and dynamic process than many people initially think.\u00a0 Thousands of dollars (tens and hundreds of thousands in some cases) flow one way or the other (to the buyer or the seller) in the course of the transaction depending on how well the agents advocate for their clients.\u00a0 That advocacy begins from the first time those agents speak.\u00a0 An agent who has to sell twice as many homes as others just to make the same amount of money has one goal in mind:\u00a0 get to a contract as quickly as possible.\u00a0 It’s not that they’re bad people; they’re not.\u00a0 They’re just in a position where it doesn’t make good financial sense for them to spend much time or energy getting their client the best deal.<\/p>\n
The next time you hear of someone thinking about using discounted real estate services, ask yourself what’s really being saved.\u00a0 Is it\u00a0their money or\u00a0just their agent’s time?<\/p>\n","protected":false},"excerpt":{"rendered":"
I had a prospective client tell\u00a0me recently that another agent he was speaking to had offered to rebate half of her commissions back to\u00a0the client\u00a0and he wanted to know if I would do the same.\u00a0 While acknowledging to him that there are certainly circumstances under which we feel it appropriate to negotiate our fee structure, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[35],"tags":[39,38,37,36],"class_list":["post-99","post","type-post","status-publish","format-standard","hentry","category-real-estate-sales","tag-choosing-a-realtor","tag-commission-rebates","tag-discount-realtors","tag-discount-realty"],"acf":[],"_links":{"self":[{"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/posts\/99","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/comments?post=99"}],"version-history":[{"count":9,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/posts\/99\/revisions"}],"predecessor-version":[{"id":109,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/posts\/99\/revisions\/109"}],"wp:attachment":[{"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/media?parent=99"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/categories?post=99"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/neighborhoods-in-austin.com\/tx\/wp-json\/wp\/v2\/tags?post=99"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}