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When You Hire a Realtor(R) on the Cheap, Many Times You Get What You Pay For

By Brenda Mullen

Real Estate Broker/Owner with RE/MAX Associates 574299

August 21, 2012 11:59 PM

When You Hire a Realtor® on the Cheap, Many Times You Get What You Pay For

I have a buyer client who needed to sell her home in another State. She has had numerous issues with the agent that she chose and the way her transactions have gone. She got her home under contract fairly quickly the first time around, but it fell through at closing because of some issues that, although probably unavoidable as it was a buyer breach, she should have been much more informed about by her listing Thinking about money

agent. The second transaction is finally making it to closing, but when she was supposed to close, they had another buyer breach of sorts, to which my buyer is paying for just so she can get to closing and buy her home here.

Now, oddly enough, she is working through a reputable Broker but she went with this particular Realtor® because the agent was doing it "cheaper" than the other reputable Broker she interviewed. Her initial thoughts in hiring a Realtor® were that most of us charge too much for what we do and although she wanted to go FSBO initially, she some how knew she didn't have the time or energy to figure out how to sell a home by herself. However, she was going to hire a Realtor® as cheaply as she could.

Conversation went like this the other day as she was lamenting about her second transaction and asking me what was going on. "I should have just hired the other Realtor®" "I feel like if I had, I would have had my home sold already and been able to move on".

To which I replied, when you pay for a Realtor®, you do pay for the functional things we do, but the biggest reason you pay for a Realtor® is guidance and representation of your interests. If you hire a Realtor® based on price...many times you get what you pay for.

Now, like my friend Charita Cadenhead who just wrote a fabulous post on FSBOs and Limited Service Brokers, I am not bashing any of that. I am also not bashing a Realtor® who reduces their commission for what ever reason. I have done so myself. This post is about hiring someone to sell your home simply because they are cheaper because you think you are saving money. I am not sure that my buyer client would have received better representation if she had hired this particular agent for more money. I simply cannot know that. The mishaps in the sale of her home elsewhere may have been just Murphy's law X 2. Maybe the agent simply was a victim of that too....

Again, all I am saying is that when you hire a Realtor® on the cheap....many times you get what you pay for.

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Alan May

Jameson Sotheby's International Realty - Evanston, IL

Home is where the hearth is.

I don't believe in the statement "you get what you pay for". Unfortunately, you often don't even get that... But I agree, that hiring a Realtor (or anyone else, for that matter) based solely on what they charge, is a mistake.

Aug 22, 2012 12:11 AM

John McCormack, CRS

Albuquerque Homes Realty - Albuquerque, NM

Honesty, Integrity, Results, Experienced. HIRE Me!

Selecting a Realtor strictly on the bottom line price may not be in a sellers best interest and may in fact cost that seller more money at days end. Normally IF I do reduce a commission something is removed from the equation. Of course I'm speaking of a marketing tool or such not my fiduciary duties.

Aug 22, 2012 12:17 AM

Brenda Mullen

RE/MAX Associates - San Antonio, TX

Your San Antonio TX Real Estate Agent!!

Hi Alan-That can be true also. There are many factors in hiring an agent and although price may be considered, it should definitely not be the deciding factor IMO.

Hi John-Rare is the time where I reduce my commission. I just work too hard for it IMO and by the end of the transaction, my clients have no problem with the fee I charge. However, like you, if I do reduce it, my fiduciary duties remain.

Thanks so much for stopping by all!

Aug 22, 2012 12:33 AM

Kevin & Cindy Kenagy

Premiere Property Group, LLC - Salem, OR

Helping people buy and sell their homes.

Being on the lending side of things, I see both sides of this. It is sad when you are paying top commission and the realtor calls and asked how I should write this offer up. Then as we move forward the borrower has a hard time getting calls back. My opinion is you need to have a great referral base. The ones just like in our industry will eventually work themselves out of a job.

Aug 22, 2012 12:39 AM

Peter Matyko

Keller Williams Realty Advantage - Oviedo, FL

Keller Williams Realty

The old saying you get what you pay for can be true. We are all human and sometimes personal decisions can in the way of business decisions. Not always but at times.

Aug 22, 2012 12:41 AM

Brenda Mullen

RE/MAX Associates - San Antonio, TX

Your San Antonio TX Real Estate Agent!!

Hi Kevin-That's a whole nother story. Of course hiring an agent should also be based on competency, trust, and a host of other things. My premise is that when you hire simply because they will charge you less...then many times you are guaranteed to have issues.

Thanks for stopping by!

Aug 22, 2012 12:43 AM

Brenda Mullen

RE/MAX Associates - San Antonio, TX

Your San Antonio TX Real Estate Agent!!

Hi Peter-I think it might be a safe bet that most of us like to save a buck or two..however, doing it with Real Estate can often times cost you more money in the long run :)!

Aug 22, 2012 12:44 AM

Charita Cadenhead

eXp Realty - Birmingham, AL

Serving Jefferson and Shelby Counties (Alabama)

Exactly Brenda. When is comes to unrepresented sellers and hiring based on price, consumers limit their rtae of successful transactions right out of the starting gate. And on top of that, people often want to takes short cuts but when you think about it, who would know more about them than a knowledgeable Realtor(R)?

Aug 22, 2012 01:29 AM

Jerry Newman

Brown Realty, 210-789-4216, - San Antonio, TX

Texas REALTOR, San Antonio Military Relocation

Hi Brenda. Price should never be the only consideration when hiring an agent, but I know it is the No. 1 concern for most consumers. I know if I lower my fees, I may omit a service or two that I would normally provide for full commission.

Aug 22, 2012 01:35 AM

Andrea Bedard

Thompson Company, REALTORS® 240.593.2860 - Silver Spring, MD

Fluent in Real Estate & German, M.A. ABR ASP CIPS

Hi Brenda, perhaps we have not done enough to show the public that we earn every penny of the commission (most of us anyway) ... I don't mean "we" as in you and me but as a professional organization. As long as consumers think that hiring someone at a discount will lead to the same result, we've not done enough.

On another note, I can only imagine how aggravating this must have been watching from afar!

Aug 22, 2012 03:19 AM

Brenda Mullen

RE/MAX Associates - San Antonio, TX

Your San Antonio TX Real Estate Agent!!

Hi Charita-I totally agree with you :)!

Hi Jerry-There has to be a darn good reason for me to lower my fee, and there isn't that many. Those clients who pick an agent only because of price usually end up paying more in the long run IMO.

Hi Andrea-It is very frustrating as I know what I would do if I were her listing agent, but I'm not and the home isn't in Texas..so it's really hard to figure out. On another note, I completely agree with you that we don't do a good job of lettng clients know just how valuable a full service Realtor can be to them with the sale of their home. We must do better.

Thanks all for stopping by!

Aug 22, 2012 06:40 AM

Tammy Lankford,

Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA

Broker GA Lake Sinclair/Eatonton/Milledgeville

I'm having "issues" of this nature right now. Two different listings in my area listed with an out of area non full service and well.... if I can't get showing instructions then have they saved anything?

Aug 22, 2012 07:11 AM

Brenda Mullen

RE/MAX Associates - San Antonio, TX

Your San Antonio TX Real Estate Agent!!

Hi Tammy-They certainly have not...they saved themselves a buyer I guess..not sure that's what they wanted though lol :)!

Aug 22, 2012 07:16 AM

Jane Peters

Home Jane Realty - Los Angeles, CA

Los Angeles real estate concierge services

I think you always get what you pay for. The same with buying a home. You have to pay for the one you want. Money is not saved by cutting corners. It generally ends up costing you more.

Aug 22, 2012 08:38 AM

Brenda Mullen

RE/MAX Associates - San Antonio, TX

Your San Antonio TX Real Estate Agent!!

Hi Jane-Me too...and I agree completely. Cutting corners usually costs you somewhere and generally in the ole pockebook! Thanks for stopping by!

Aug 22, 2012 09:07 AM

Eileen Hsu

Douglas Elliman Real Estate - Manhattan, NY

LICENSED REAL ESTATE SALESPERSON

When making such a large purchase where a mistake can cost you in the thousands or tens of thousands of dollars or even more, a real estate purchase is when you want the most expert opinion as possible.

Sep 03, 2012 09:13 AM

Brenda Mullen

RE/MAX Associates - San Antonio, TX

Your San Antonio TX Real Estate Agent!!

Hi Eileen-Most definitely :)!!

Sep 03, 2012 11:11 AM

Terri Poehler

Realtor - Coral Springs, FL

Coral Springs Real Estate Agent

People don't know what they don't know. Everybody knows it's easy to get a real estate license, what they don't know is how hard it is to STAY practicing.

Sep 11, 2012 10:10 PM

Brenda Mullen

RE/MAX Associates - San Antonio, TX

Your San Antonio TX Real Estate Agent!!

Hi Terri-Too true..we put a lot of hard work in and we need to do a better job of letting the general public know what we do and why we are worth so much :)!

Sep 12, 2012 12:18 AM