Suppose you contacted me to discuss my helping you sell your home or any piece of Real Estate. What would you think if I told you that I could greatly increase your proceeds by reducing what you expected to pay me by my not using a portion of my fee to pay the agent representing the buyer? Would you be thrilled or skeptical?
There are different business models for compensating Real Estate agents. Our rules and regulations require that we disclose how we are paid and that the fee is negotiable. Having the seller pay a negotiated commission or fee to their listing broker/ agent at settlement or the closing of a sale remains the most common. In turn, the listing broker would offer compensation to the buyer broker/ agent who got the property sold and settled. That offer is an incentive to show and sell Real Estate.
While that business model makes sense and has worked for years, as I will explain, over the years many have questioned having a seller provide the compensation that would ultimately end up paying the buyer’s agent. That “question” finally caused enough of a stir that a major change has occurred with respect to compensation.
My local MLS, and I suspect many others, adopted a change to how properties are listed in the MLS. As stated in a recent release to agents, the MLS now will “allow users to enter any amount in a listing’s cooperative compensation fields. Prior to this update, the cooperative compensation fields required entry of at least one cent….. the fields will allow any amount, from zero and up.” The release went on to explain the change as allowing “subscribers to engage in transparent negotiations with their clients.” That seems logical, doesn’t it?
Real Estate agents have two commodities to trade for the opportunity to earn a fee or commission. One is our time, meaning that any time we devote to developing leads and working with prospects, customers and clients has to be invested wisely as the amount of time we have is finite. Time management is one of many topics we have to master. How much is our time worth? Can we differentiate between important tasks and urgent ones? How is our time best spent? Some agents have a better handle on this than others.
One of our challenges is to evaluate which clients to accept based on the likely outcome of our working for them. It boils down to probability: am I likely to sell a client’s house or is a buyer likely to buy a house? Of course, this is a “people business”. Nothing is guaranteed and we will all spend some time for which we know we will not be compensated. The goal is to manage our time as best we can or at least recognize when “time” spent is becoming a concern such as when it distracts us from more efficient and effective pursuits....
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Please remember, when thinking about selling or buying what is likely your biggest asset and largest overall investment,
There is no time for inexperience, empty promises or false expectations!
HIRE WISELY: We are not “all the same”!
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