Divorcing Real Estate Commissions: Has Anyone Asked the Buyers?
Last night I was putting together an offer on a short sale, currently the bane of the MLS for a number of reasons (which I’ll get to either this afternoon or tomorrow), when a client and I had a conversation over the commission.
In short, the listing agent had indicated that the co-broke listed in the MLS was subject to bank approval counter to MLS rules. And since I’m a businessman requiring a degree of certainty in compensation (if I wanted to put in a considerable amount of time working for no financial reward I’d take a listing), part of the offer package I’d e-mailed to this client included a Buyer Broker Agreement with a set commission rate.
He balked but it was his argument that struck me: “In my opinion it is the seller who hires and agent to make the sale and they should pay any commissions.”
We can argue that the argument is based in the days of sub-agency when only the seller was represented in a transaction and that it has no place in todays’ world of buyer agency. Except this was coming from a client who understood quite well who I was representing in the transaction and still felt it was up to the seller to offer the commission to make the sale.
Oh … and was the second client in a week to tell me the same thing.
(Before you go there, my explanation of agency is pretty good. At least as good as anyone can make a rather tedious subject.)
The above attitude could be a by-product of years of training the consumer to believe it’s the seller in a real estate transaction responsible for the commission. But this wouldn’t be the first thing to fall into such a category. Buyers ask us how long homes have been on the market, an arbitrary figure, because they’ve been taught over time to ask. Buyers make their purchasing decisions based on days on market, a thoroughly arbitrary number that’s indicative of next to nothing.
But maybe … just maybe … not everyone’s interested in being educated in what’s supposed to be important to them. Maybe they believe what they believe for a reason, and there’s validity to that belief.
Just something to think about.
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