Here is a “rant” about the.... hmmmm how do I phrase this.... "trick"? that some, not all, real estate agents pull that just peeve me to no end. I am of the opinion that unless “secret bonuses” are fully disclosed to the buyer in writing...they are unethical. The risk for steering buyers for an agent’s personal gain is overwhelming.
When you make contact with a Real Estate Agent about buying property, you give them your criteria. They go to their computer and plug into their local MLS to start pulling up properties that meet your criteria - price - square footage - location etc. What they also see is the percentage commission that they will make...also known as the co-broke. (This is the amount or percentage of comission that the listing broker has agreed to share with the selling agent) These commission splits can cause you to miss out on seeing your perfect home because the agent decides which properties to show you and many times will do so based on their own personal benefit. Here are a few of the dirty little secrets - the thoughts that go through the agent's mind when choosing which properties to make you aware of...yikes!!
1. If an agent has the choice of showing you a home that has a co-broke of 1% or 4%, which one do you think they will choose to show you? Could it perhaps be the one that they will make the most money from?
2. Many companies push their own listings first....this is because they make more money...both the buying and selling end...again, greed can seriously affect your finding your perfect home. This is even more true with large real estate companies...the organizations really push on their agents to sell their Broker's listings first....even give incentives to do so in many Brokerages.
In a sellers market with a ton of choices and inventory...this is an even more rampant practice...most agents are pretty lazy and don't want to have to actually search for the best property for your needs...they will talk with other agents within their own office and ask them about their listings and push those properties first. (future post coming on why the future of commissioned agents is in danger)
3. Selling bonuses - these "little" (NOT!!!) incentives are included in the listing description you do not have access to. These are marketing tools used by listing agents to get other agents to show their homes first. And they work - to the benefit of the agent selling you the home. I have seen selling bonuses as high as $20K on some properties...wow...you do the math. And, this is on top of the co-broke commission they are receiving.
Also, in many instances, the agent will talk the seller into raising the price they intended to list their home at so they can offer this incentive. The seller thinks it is a great idea not realizing that they are going to get stuck paying a higher comission becasue they are now having to pay a comission on the selling bonus too. Who is the biggest winner in this situation..your agent. You just paid too much for the home and your agent just pocketed your overpayment and did not disclose it to you.
It is my opinion that this bonus money should go directly into the pocket of the buyer instead of being used to bribe buy side agents. At the very least it should be required to be disclosed to the buyer in writing. The agents and seller are aware of it...why not the buyer...hmmmm. And, if the listing agent is also your agent acting as a transaction broker in the state of Florida...they could receive a whole years salary on just one sale and you get a property that was in the agents best interest not yours. I feel that undisclosed bonuses are unethical.
So now that you know how Real Estate Agents can be persuaded by greed on which properties to show you, I have some remedies for you. Use these questions when working with an agent to make sure you are seeing what you need to see, not what the agent wants you to see. Ask them:
1. Are these all of the properties currently for sale that meet our criteria?
2. Are any of these properties listed by you (the agent) or your Company?
3. What is the co-broke commission on this property?
4. Are there any types of selling bonuses for you the agent or me the buyer on this property?
Now, real estate agents are not required to disclose this information to you, but if they are honest and truly interested in helping you find the perfect real estate for your needs, they will not hesitate to answer these questions. If they do have a problem answering these questions...I suggest you find another agent...pronto. How can you avoid only seeing what an agent wants you to see?
Do your own homework.
MLS access is available just about everywhere these days. If your agent tells you "that house is not for you", ask to see it anyway...you are the only one that can determine if a property is right for you...in other words, make the agent earn their money, make them show you the property if you really believe it fits your needs. You take control. After all...you are the customer!!!!
This is my rant for the day...stay tuned....
Comments(0)