Are You A Bargain?

By
Real Estate Agent with (512) 786-8300

The subject of commissions, is one that is often discussed in the real estate world. Consumers have their opinions of what a real estate agent should be paid. Real estate agents have their opionions, of how much the service they provide is worth. Sometimes those two opinions are similar. And sometimes, well, let's just say, they aren't. The purpose of this post isn't to open that can of worms yet again. This post asks a different question. Are you a bargain?

 

Outperforming Your Contract

It's natural for people to discuss money and compensation. Although it can be a touchy subject, it's one that has to be addressed. One of my favorite high profile examples of pay, is the money professional athletes are paid. For years, I would tell people that Michael Jordan and Tiger Woods are two of the most underpaid individuals on the planet. That statement drew strange looks and spurred debate, until I explained myself. Way before Tiger Woods decided to implode his personal and professional; life, he signed a 40 million dollar contract with Nike Golf. The only problem, is, there wasn't really a Nike Golf, as it was a fledgling division of the powerful athletic company. Mediocre products, and little share, of the extremely lucrative gold market, was the state of affairs at Nike Golf prior to Tiger. Over the years, Mr. Woods won many high profile tournaments, draped in Nike gear, and hitting Nike golf balls. As he enjoyed success, the company grew to a yearly revenue of three quarters of a billion dollars. Mr. Woods, simply put, was a bargain, not just for Nike, but any corporation who hired him.

Although we don't talk about it often enough, I think our goal as real estate professionals is to outperform our contracts and our commisions on every transaction. From the moment we meet with a client, we have the oppurtunity to be a bargain. Helping a buyer find the right home, in the right neighborhood- at the right price, can bring years, even decades of happy living. Suggesting that buyer explore all lending options, may save tens of thousands of dollars over time. And helping buyers avoid mistakes is just as important as finding the right home.

Sellers have even more variables, to benefit from the help of a knowledgeable real estate professional. The way a home is priced and marketed is vital to a successful transaction. How that contract is negotiated is also important. But a real estate agents worth, is often determined when things to sideways. That repair list seems like it won't end, or as we have witnessed in the current market, financing and appraisal issues pop up. The fact is, these items do come up, on the buyers and sellers side, and a real estate professional does a great job of making these problems go away. A good real estate agent is a value. A great real estate agent is worth their weight in gold.

I don't think the subject of real estate commissions and compensation will ever go away. Frankly, I don't think it's a debate to engage in. The only question to ask yourself as a real estate professional, is, am I a bargain?

Posted by

Scott Hayes

Austin Real Estate Agency

Extraordinary Service, For Extraordinary People

Direct: 512-786-8300

www.austinrealestateagency.com

Comments (70)

Marshall Brown
Mid America Inspection Services, LLC - Fargo, ND
BSEE, CHI

As a home inspector I always tried to exceed my clients expectations. I did this by making certain that the information I provided was clearly explained and that a distinction was made between things that should be addressed with their agent, things that help the home last longer and perform better and things that might improve the performance and comfort level. I always wanted my clients to walk away pleased with my efforts if not always with the property. My son, also a home inspector, has Incorporated this as his business philosophy too.

One of the self help writers, W. Clement Stone, I believe, used to say that "There are acres of diamonds in the extra mile." That extra mile lies beyond the point where your competitors stop.

Oct 26, 2011 05:49 AM
Steve Albin
JustListedKnoxville.com / Signature Homes - Knoxville, TN

 " The way a home is priced and marketed is vital to a successful transaction. How that contract is negotiated is also important. But a real estate agents worth, is often determined when things to sideways. That repair list seems like it won't end, or as we have witnessed in the current market, financing and appraisal issues pop up. The fact is, these items do come up, on the buyers and sellers side, and a real estate professional does a great job of making these problems go away. A good real estate agent is a value. A great real estate agent is worth their weight in gold."

That is your job  regardless [ri-gahrd-lis]  of the price you are being paid!

Oct 26, 2011 06:03 AM
Karen Crowson
Coldwell Banker Residential Brokerage - Rancho Bernardo, CA
Your Agent for Change

That statement is made clear after closing, when the buyer or seller have seen the transaction through with you to the end. I've had more than one client say, "Is that all you'll get paid?" when they look at the HUD1. That comes after seeing the countless hours it may have taken to actually make it to the finish line.

Oct 26, 2011 06:05 AM
Andi Grant
310-508-4354 | FirstTimeHomeBuyerRealEstate.com - Los Angeles, CA
Helping 1st time buyers and home sellers in LA!
Well written post Scott, I love the Tiger and Michael analogies. They have changed the face of these companies and made it desirable to others to want to use product.

I've seen some agents tell their client every single alarming twist and turn just so that they know how they have "saved" them. All it does to the client is make them stress needlessly. If they had a choice they would pay more to not have had the stress. With valiant effort, I want my client's experience to appear seamless and when others are talking about how stressful their transactions are or were, they tell them their agent is/was awesome. I will tell them some things afterwards as they marvel at how I didn't blink when behind closed doors I blinked, twitched, gagged. In terms of making others believe in my product and how I will save them money for the great end result with as little stress and trauma to them, yes they are getting a steal.
Oct 26, 2011 06:24 AM
Jennifer Chiongbian
Specializing in all types of Manhattan apts & townhouses - Manhattan, NY
Real Estate Broker - NYC

Great post!  Sadly, so many people treat their most important and valuable investment like a bottle of discount ketchup.  I always believe that you get what you pay for! 

 

Oct 26, 2011 06:33 AM
Kate Akerly
Kaminsky Group - Manhattan Beach, CA
Manhattan Beach Residential Sales

I've wondered before if it would be possible to demonstrate with data that a great agent is in fact worth the money.  How much are you paying for convenience and customer service vs. representation that can be broken down into dollars and sense?  It's a very difficult question that I've only been able to answer annecdotally.  I'd love to find a better answer that can be used for pitches!

Oct 26, 2011 06:34 AM
Carolyn Roland-Historic Homes For Sale In Delaware and S. Chester County PA
Patterson-Schwartz Real Estate - Wilmington, DE
Carolyn Roland, GRI, CRS

Having recently closed a transaction with a listing agent who spent a lot more time telling her clients about how great she was, and seeing how little she actually did to help the transaction along, it can be disheartening. The good news is that my buyers saw through it all and can't say enough about how good a job I did. I didn't have to tell them how well I did, they SAW it for themselves.

Oct 26, 2011 07:14 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I amazes me how people will want to save a half a percent on a commision but will loose tens of thousands because the home is listed poorly to save money.

Oct 26, 2011 07:35 AM
Brad Baylor
ERA Coup Agency - Milton, PA

This is a timely subject for me, because I just got the questions thrown at me today during a market analysis presentation to a potential client.  He told me he had another agent coming in and he would be asking him the same thing, and would be going with the agent that gave him the best "deal."  My reply to that was that sometimes, you get exactly what you pay for.  I've already explained to you what I can do to help your home sell, and since he was familiar with the rural area we live in, I laid this one on him:  "There's an old Amish saying - If you want good quality oats, expect to pay a fair price.  But if you can settle for oats that have already been through the horse, well, they come cheaper!"  He nearly fell over laughing, and I think he understood what I was getting at.

Oct 26, 2011 08:30 AM
Gene Donohue
Only Way Realty / UpstateHomeSeller.com - Greenville, SC
Flat Fee Service...Exceptional Results!

If they ask in the initial consultation if I would consider lowering my commission then I didn't do my job in explaining the value I will bring to the transaction.  Now granted I work on the buy side and the seller pays the commission, but the money paid out at then end of the transaction is really my buyers and we explain that to them up front.  When they ask about lowering the commissions it pops up an orange flag bordering on red and this may not be a client I want to work with.

Oct 26, 2011 09:44 AM
Jacqueline Drake CRS
Jacqueline Drake Realty - Saint David, AZ
Southeast Arizona land, farms & horse properties

I charge more than some of my competition on land listings. I am aware that my marketing efforts far exceed that of my competition. If you consider the lack of marketing by many agents their fee is high even though less than mine. Basically you get what you pay for in most cases. Experience has value in a transaction and it is difficult to put a dollar amount on it. My favorite comments have been that I made the transaction easy for my clients.

Jacqueline Drake CRS

Cochise County AZ

Oct 26, 2011 12:34 PM
Beverly Femia
BlueCoast Realty Corporation - Hampstead, NC
Broker Realtor Stager - Greater Wilmington, NC Are

Whatever that number is on the HUD is not what most agents will be taking home.  It's a valid question, one we all should ask ourselves and, if the answer is ever no, it's time to do something else. 

Oct 26, 2011 03:21 PM
Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Scott,

You cannot always be super-agent, but often we save people from costly mistakes, get them extra proceeds from their transaction, or find them just the right home in addition to a great investment. I am sure many here have made people millions in combined extra income. Well worth the price of admission!

Oct 26, 2011 03:25 PM
Theresa Bonin
RE/MAX Valley Properties - Green Valley, AZ

I'm a true believer you get what you pay for and in my opinion I am worth every penny of the commission the seller's pay given all that I do for them in an effort to sell their home. 

Oct 26, 2011 04:28 PM
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Great great great post.  Love it.  That's really all I have to add. -Kasey

Oct 26, 2011 06:43 PM
Joshua Stein
Coldwell Banker Preferred - Conshohocken - Flourtown, PA
Homes For Sale - Montgomery County

Sadly, few people know much about value these days. To them, value is spending the least amount of money on a product or service.  However, even though something else might require a larger investment on their part, they could be getting an immeasureable ammount more in return. 

Oct 27, 2011 12:26 AM
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Scott,  Great post!  Yes sellers have the opinion of what we are worth and we have the ability to change that in the transaction!

Oct 27, 2011 12:38 PM
Michael Singh,Broker
Singh Real Estate - Corral de Tierra, CA

Yes I am a bargain,  thanks for the perspective

Oct 27, 2011 06:54 PM
Kristine Ginsberg
Elite Staging and Redesign, LLC - Short Hills, NJ
NJ Home Stager

Scott - great question and this can easily be applied to home staging. That said, I am definitely a bargain and go above and beyond for my clients. Needless to say most of my business comes from word of mouth and referrals! I'd much rather be a bargain than an overpriced anything! Congrats on a well deserved feature and making us all think a little more about the service we bring to our clients!

Oct 31, 2011 01:37 PM
Sylvie Stuart
Realty One Group Mountain Desert 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagsta

After each transaction, your clients know your worth because they have seen how hard you worked for them and that you did "outperform the contract". Your reputation can say a lot to prospective clients, but you're right, the debate probably will never go away and isn't a debate to engage in. 

Feb 27, 2012 09:56 PM