You Want Me to Pay You?!?
"Let me understand this, you want me to pay you for representing YOUR INTERESTS on the purchase of this home?" I said, frankly dumbfounded.
"I've got a gal in Lafayette that will work for 1%," the Buyer said. "Your answer will affect who we choose to work with."
"Where is that Agent now?" I asked, wondering why I'd spent the day working on his behalf.
"I don't make her schlep me from house to house," he said. "Our deal is that she writes up the offer once I do the work."
Correction: ONCE I DO THE WORK!
In the 48 hours since I had met this prospective Buyer, I had spent hours with him at the property, had scheduled a contractor with less than 24 hours notice, had read and outlined the disclosure package, had spoken with the Listing Agents to ascertain the level of interest and the number of confirmed offers, had pulled neighborhood comps (comparable sales) for the last two years, had created a market analysis to give this Buyer context, and I had compiled a Buyer Folder outlining the buying and escrow process for his review. AND now I was being asked to kick back the lion's share of the commission (a commission I hadn't earned yet), while defending my value. Didn't I feel like the fool . . . .
"No, I don't discount my fees," I said. "COMPASS is not a discount Brokerage, I am not a discount Agent, I don't provide discounted services, AND I don't rebate my commission." (BTW, commissions in California are typically paid by the Seller - not the Buyer.) "I bring 15 years of experience and skill to the process," I continued, "and for that, I expect to be fully compensated."
"Well, I just don't believe I've ever gotten full service out of my Agents," he said. (Perhaps because you insist on paying them far below the market rate.)
I'm sure it comes as no surprise that this Buyer moved on. Good luck. He'll need it.
I understand why discount brokerages are attractive to both Buyers and Sellers alike, and if buying a home was as simple as filling in the blanks on a purchase agreement, or selling required nothing more than installing a sign in the front lawn and printing up color brochures, these bargain hunters might have a viable point.
AND if every house were identical in style and amenities, making value a foregone conclusion, AND if Buyers or Sellers entered the marketplace more than once a decade, AND if buying and selling weren't so litigious, AND if appraisals always met the price, AND if Underwriters would rubber stamp the promised loans, AND if each home wasn't accompanied by hundreds of pages of disclosures and multiple inspections, AND if home purchases didn't represent our single-largest investment, AND if our emotions didn't run wild, AND, AND, AND . . . a discounted commission might make "cents." (Are you getting my point?)
In reality, buying or selling a home is a highly-charged transaction, fraught with fear, ego, hope, desire, doubt, dreams, anxiety and countless question marks (???) and that's under the BEST of circumstances.
Under the worst . . . well, we don't even want to go there. Suffice it to say, a transaction can turn ugly, especially if the home is being sold under extreme duress, as often happens with death, divorce, or repossession.
With all due respect, today's modern Agents play a larger part in the successful sale of a home than ever before. My father was a Broker in Sacramento, and in my dad's day, the sales contract was a single page and was often signed on the hood of a car. That world operated on a "Buyer Beware" paradigm and disclosures were barely a thought. Now, the purchase agreement is 10 pages, is accompanied by a host of warnings, inspections and disclosures, and is a highly-complicated document that very few Buyers or Sellers take the time to read thoroughly or understand.
NOR did my dad show up with gardeners, painters, stagers, handymen, window washers, house cleaners, inspectors and a host of other vendors in order to create a full-scale production. "Lights, camera, ACTION!" (Sometimes he sent his girls over to weed and mow. There were five of us and we worked for peanuts.) Nor did he contend with the Internet, video, Facebook, Instagram, Twitter, digital marketing, analytics, and the speed with which our market now moves. (Lightening fast!) Nor did his clients expect a response in less than 30 minutes, as is now the norm.
In my dad's day, Sellers tidied up their homes, edited a bit here and there, replaced the carpet if necessary, and shooed the kids out of the house for showings. Then they waited weeks or months for an offer to emerge, almost always for less than asking.
My dad's practice in the 70s and 80s bears NO resemblance to mine.
In sharp contrast, mine is a 24-hour, 7-days-a-week, 365-days-a-year commitment where I am constantly "on call." There's rarely been a vacation, a son's baseball game, or a school field trip when my phone hasn't dragged me away from the action. Smart phones have made it nearly impossible to ever fully disengage. (That's both good and bad.) My dad sold homes in the tens of thousands, I sell in the millions. There's simply so much more at stake and truly no comparison, save for the fact that he worked very hard and taught me to do the same. (Thanks Dad.)
I'm not complaining, mind you. I love what I do and find it fulfilling, interesting and rewarding, but I also make no apologies for the commissions I earn. I've honed my craft and I work for every cent. And while start-ups and newcomers would have you believe that you can get the same service with discounted fees, that making Realtors bid against one another for the lowest rate serves your best interest, that years of experience has NO bearing on the bottom line, or that doing away with a Realtor's services altogether seems like a pretty good idea, I can only say such actions are "penny wise and pound foolish."
But if you want to gamble with your family's future, your home and your largest asset, be my guest. I'm sure there's an Agent out there that will write up your contract or sell your house for 1%; but I assure you, both the journey and the outcome are likely to be vastly inferior.
Moreover, I cannot think of a single profession where hiring the cheapest and least experienced person for the job produces the desired result. In short, if my dentist, lawyer, dermatologist, CPA, hairdresser, electrician, or plumber were offering me bargain rates (because they had to), I'd wonder why, and so should you.
But if you're ready to work with a fully-engaged and experienced "pro" give me a call. I'd love to represent you; it's just that I no longer work for peanuts, and as a commission structure incentivizes me to bring you the best result, you wouldn't want me to.
How can I help you?
7/5/2019 09:02:45 am
Julie, some people have all the nerve, don’t they? So much for good faith prep! I hope you took your binder back so fast it made his head spin.
Anne Arjani, Realtor Palo Alto
7/26/2019 11:37:52 am
Julie Gardner eloquently explains the difference between Discount Brokers and a Full Service Brokerage.You wouldn't hire a discount Neurosurgeon, so why hire a Cut Rate Realtor for the largest purchase in your life. A Bay Area home purchase is typically larger by a factor of 25 tan your next largest purchase.
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Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.