You know I can do simple math, right?
Here's the scenario. We have some pockets around here where home go for much less than the area average.
And it takes about the same amount of work (sometimes more!) to sell an inexpensive house as it does a high priced home.
And some buyer agents resent the lower commissions. So some listing agents try to prop the commission up by offering a flat fee.
But when does this commission structure get in the way of properly representing a seller's best interests?
Here is what it says in the agent comments of a local listing:
Buyer Broker compensation will be either 3% or $2,000 - whichever is higher.
The home is listed at $89,000.
Well, let me trot out my trusty 5th grade math. $2,000 divided by 3% equals $66,666.67. That means for the commission to slip under $2,000, the sales price of the home would have to be less than $66,666.67.
So - if I had a buyer interested in this home, what do you think I would tell them to offer? Certainly nothing more than $66,666 - as it seems that the owner and his/her agent have already had discussions about what they might accept and how to handle commissions at that level.
To publicize this is to undermine your seller! No savvy buyer's agent is going to ignore this simple math! So you just pretty much guaranteed that this home will not get offers in the $80's or even $70's.
We have a fiduciary duty to our clients. Publishing something that says, "Buyer Broker compensation will be either 3% or $2,000 - whichever is higher," is the same as writing, "I know we're asking $89,000, but we'll take $66,666 or less!"
And who would ever advertise that?
Comments(17)