Conversation in 2004, 2005, 2006:
Agent: "We charge 6%. 3% is paid to the Broker who sells your home, and we retain 3% for our efforts on your behalf."
Seller: "I have people lined up to list and sell my home and they all tell me that they will do it for 5%. You aren't worth 6%."
Conversation today:
Agent: "Our standard commission structure is 6%. 3% is paid to the Broker who sells your home, and we retain 3% for our efforts on your behalf. I would like to suggest however that you offer an incentive to the Broker who represents the buyer to better position your property and give you a better chance to sell. We would list the property for a 7% commission, pay 4% to the Broker who brings the buyer and we will retain the 3% for our efforts on your behalf."
Seller: "I am not going to pay more than 6%. I want to pay 5% like I did two years ago."
Agent: "Two years ago, did and could get away with a reduced commission. Today is a new day. The market is much different than it was two years ago. In our market, in your price range there are currently 65 properties that I would define as your competition. In the last 60 days only 5 have sold. That means that 60 did not sell. That is not a very good ratio. If you want to position your property in the market to have a better opportunity to sell, you have to offer incentives to the agents that are working with buyers to show your home. One sure fire way to do that is to offer additional compensation to those agents. I highly recommend that you list the property and offer 4% to the selling broker. We will retain the 3% please sign here."
Seller: "That makes sense, where do I sign?"
Today I am seeing a trend where sellers are recognizing that more commission is the answer not less. Considering the current market conditions, incentives to agents are proving to be effective in producing results. In fact even many of the bank owned properties are offering bonus dollars to Brokers representing the buyer because they are seeing the results.
If you are an agent looking to increase traffic to your listings, consider presenting this concept to your sellers. If you are a seller looking to get the property sold, discuss this idea with your agent. The more you can do to get your home on other agents "show list" the better off you will be.
Remember the old saying... you get what you pay for.
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