Today I was approached by a seller that I have had many years of communication with however there has been no actual deal that we have opened and closed together.
Here is how it goes. I will refer to this person as Jack. On and off for the past 3 or 4 years I have had a few dealings with Jack. Many times as a buyer of a new home for him and his wife. I have showed them 2 bedroom condos and 5 bedroom semi-luxury homes. Prices ranging from $120,000 condos to $500,000+ homes.
Jack and I have also talked about doing a lease option on one of his investment homes which was a previous model home in an exclusive area of Las Vegas. None of these deals have ever worked out.
Then a few days ago I was approached by Jack that he was considering selling his home. He wanted a certain price point which I thought was a little above market even though it was a former model home from the year 2000. I was excited to hear this even though we are beginning to go into the slower holiday season for real estate in this area and the fact that the home is tenant occupied until later November thus making showing arrangements difficult or non-existent. Thus, starting off with three strikes already against me: 1) above market price; 2) wrong season to be selling a home around $500,000; and 3) not able to see the interior.
There are ways around the aforementioned strikes. I could use pictures from prior to the tenant’s moving in and say that the current condition of the home is the same as previously, which is a true statement. And possibly talk about all of the upgrades to warrant above asking price. Okay, that does make my job more difficult, but okay I am open to taking on a challenge.
Then today comes around. I call Jack about meeting up to gather pictures, possibly take a tour of the home to see its current condition, and possibly to talk nice with tenant to see if it is okay to show the home with a 24 – 48 hour notice. Some tenants can get temperamental when they are in the middle of packing.
Then comes the topic of commissions. First of all Jack wasn’t to concerned with the Buyer’s Agent commission — I guess he thought buyers pay their own agent on all transactions. Then when we talked about a 5 – 6% standard commission he was flabbergasted. He wants me to list the home for 1% and also only give the other agent 1%. I guess he has seen to many signs on the road about Discounted Brokerages that offer to list at 1%.
Now I don’t know about you but 1% is a difficult pill to swallow. And to have the other agent also see 1% on the buy side will make many agents not only not show the home, it will also cause them to lash out against me. I have had agents who have called and asked if the commission was for real on other deals (not 1% ones) and essentially just spit at me on the phone or laugh.
I get it that in today’s technology makes things a lot easier for the listing agent. However, as a duty to my craft and industry I do find this request to be insulting and demeaning. I take it that sellers are not aware of the costs for every real estate agent out there. They are not aware that there are fees the agent must pay to their brokerages (flat fee for some and percent commissions to others). There are fees to hire a transaction coordinator whose sole purpose is to ensure each transaction is done effectively and accurately. There are fees that agents must pay annually for the use of the MLS. There are fees we pay to the Board of Realtors. There are fees that we must pay for maintaining our licenses. There are fees for advertising, marketing, putting a sign in the yard, etc. etc. etc.
This post is not about complaining and all of that. To me it is about respect for the industry. As a listing agent I want to get the Seller, like Jack, the best and highest price possible. For the buyer’s agent I know they are wanting to get the best deal (lowest price or best terms) for their client. Our job as professional Realtors is to do more than just list your home. If that was the case then hire a discounted brokerage. See what they have to offer and go with them.
If you want a professional service then be willing to pay for it. In some cases principles matter more than money.
The purpose of this blog post was to get focused on what I should say to Jack. This is a multi-year (non commitment to any dealings yet) relationship. I have even helped show his son some homes for sale (which he decided to rent another place for at least a year).
I could react with an emotional response yet that would not be professional. A professional behaves above their current emotional thoughts. A professional is a professional through and through.
My take on this is to renegotiate the terms Jack is offering with what I feel is a fair middle ground. If he takes it, then so be it. If he refuses then off to greener pastures with people who do take action.
Thank you for your reading.
Realtor, Speaker, Author