I posted this comment about 6 months ago on Active Rain:
We are blown away on a daily basis by how many Realtors in our area are still discounting their commissions. Thankfully (and predictably) most of the discounted brokerages have gone out of business however there are still a ton of agents from respectable companies that are listing their co-broke commissions at 2.5% or 2% or less! We can tell you with an absolute level of certainty that these agents are doing their clients a huge disservice.
With levels of inventory where they are there are plenty of properties for buyer's agent to show where they will get their 3% commission or more. We also know from our own margins (and those of top producing agents we network with) that if an agent is discounting both sides of the transaction you cannot spend an appropriate amount on marketing properties to get them sold.
At the end of the day these are in many cases wasted listings and wasted space in the MLS. Unfortunately it is the client that suffers. They spends six months or more listed without a sale and when the next Realtor comes in and tells him their service will cost more, they get ever more frustrated than they already are.
In our listing presentation we use a 26 page seller book & marketing plan and a full CMA it takes anywhere from 60 to 90 minutes and rarely is there a discussion on discounting a commission. When it comes up we explain we do not discount, have never discounted and could not offer the level of service we do if we did discount. In the past year we have not lost a single listing due to commissions and we sign over 90% of the sellers we sit down with.
If you are considering discounting, bulk up your presentation. Make yourself more valuable in your own eyes and the client's and get paid what you are worth!
Today as we sit here in South Florida in one of the toughest markets in the country there are still agents who are discounting commissions. Does anyone have a decent explanation for this?
Alex Charfen
www.charfenteam.com
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Desperation--Ignorance. Nothing else explains discounting. In Southwest Broward County, I'd say properties are declining at a rate of 2/3%-1% monthly. Homesellers need to understand that, in this declining market, they need to sell quickly. I tell my sellers that I want to see their listing go pending ASAP. Signing on with a discounter wastes precious time & will ultimately cost the seller considerably more than if they sign on with a full service realtor.