Which agent deserves to earn more $$ - the listing agent or the selling agent?
You’ve probably heard of Bob Massi – the Property Man. On this morning’s show, he interviewed a Scottsdale, Arizona agent named Erin O’Connor about flat rate listing fees.
One home seller they spoke with said she had used Erin many times in the past, but this time it was on a flat rate basis and she was thrilled with the money she saved. She paid a commission of $22,000 rather than the expected $36,000.
She went on to say that the service was no different.
Back to Bob and Erin - The two of them seemed to agree that the buyer’s agent deserved the lion’s share of the commission, because he or she “does all the work.”
The episode really got me thinking about who does what and who spends what. (I’m probably missing a task or two, so feel free to add to my lists.)
The listing agent, provided he or she is doing a good job, prepares a CMA with some care. (Yes, I’ve known some who do no more than run a program similar to that on Zillow, but I’m not thinking about them.)
Then, the agent spends time, money, or both on good photography. Then they write an enticing description for MLS and other venues. Some hire a stager. Many post about their listings here on Active Rain, then link to a variety of social media accounts. Many send Just Listed cards to the neighborhood, then bring the listing to the attention of top buyer agents and possibly to a list of their own buyers.
And then there’s gathering the information about the property that buyers and their agents want and need: Everything from HOA agreements, to zoning, to permits, and on and on. And what about problems with the title – isn’t it the seller’s agent who digs in to clear up issues? I recall spending days chasing down the right people to correct errors such as a paid-off loan that was never recorded.
The buyer’s agent may have to show a dozen homes before finding the right one for a buyer – and some buyers never do find that right home. So he or she is spending time and money as well.
The buyer’s agent should also verify that the information provided by the seller is accurate. In our small town, a huge lawsuit resulted from the fact that a listing agent blatantly presented a property as commercially zoned when it wasn’t. That information was splashed across a 4' X 8' sign posted on the property. The buyer's agent relied on the listing agent's information, and he lost the lawsuit, even though buyer’s agency didn’t exist in those days.
The gentlemen noted that it was the buyer’s agent who attended inspections, appraisals, final walk-throughs, etc.
The gist of the conversation was that the buyer’s agent did all of the work between offer acceptance and closing.
I’ll admit that it’s been many years now since I was licensed, but I never found that to be the case.
Neither man mentioned the fact that:
- Both agents are involved in the negotiations after an offer is made. Both are involved if further negotiations are necessary after the inspections.
- Depending upon the clients, both agents do a lot of explaining, hand-holding, and generally staying in touch with the clients.
Bob and Erin also discussed the fact that commissions are based on the price of the home – and that “that isn’t fair.” They said it takes no more effort to sell a $600,000 home than a $300,000 home.
Do you find that to be true?
Now I’m curious about what everyone here things of Bob Massi’s advice – and especially about today’s topic.
I’d never seen the show before, so don’t know if he’s usually reliable or usually all wet. From what I’ve heard, he gives a lot of consumer advice about making offers, asking for repairs, etc.
Erin said he’s getting a lot of blow-back from other agents in the area, but that clients love it. He’s in your neighborhood Anna Banana – have you heard about it? Is he taking the market by storm because he’s offering a flat rate fee?
No fair courtesy of Clare Bloomfield @ freedigitalphotos.net
Scales courtesy of renjith krishnan at FreeDigitalPhotos.net