A few months ago I get a call from an agent wanting to know if I would like a referral with a 25% referral fee. I say sure and she proceeds to tell me that it would be a listing and sends me over the paperwork. Now, I take the listing agreement for 5% with a 2.5% co-op. I listed the beautiful house in a great neighborhood for around $400,000. The seller bought the home about a year and a half ago and could only afford to pay 5% commission.
Everything is going well and I'm getting great feedback. Then I get a call from an agent that said it fits the customer's needs and they would like to show it. The only thing is that there buyer is a referral and that they have to pay 25% for the referral fee. The next thing the agent asks me is why am I not offering the standard 3% co-op and I'm doing a dis-service to my seller. The agent goes on and says that if I don't give them the standard 3% that they will not be showing the home. I proceed to tell the agent I didn't realize that 3% is standard and wouldn't it be a dis-service to their customer if they did not show all the homes that fit their customer's needs. Well, the agent gives me their number and tells me to call back if the seller will agree to pay 3% co-op.
The way I look at it is that 2.5% of $400,000 is $10,000 in commission I think that's a great paycheck. Now, if I showed my customer a home that was at 2.5% co-op and it was the second or third one of a list of 20 home and they said to me we seen enough we want to write an offer on this one. I think that's great I would not be driving around the rest of the day looking at houses and it would give more time to prospect for more business.
Well, the end of the story is that the seller is only going to pay 2.5% and that the agent never showed the home. Three weeks later we had a contract on the home from another agent and everything went smooth with the closing. The selling agent was so happy that she found her buyer a home that the 2.5% co-op did not matter to her. That's the way things should be you should look out for your customers best interest.
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