Impassioned discussions about commissions

Below is a response to a blog entry that I placed on my blog in Active Rain where we are discussing use of Realtor.com. There is a lot of passion, opinion and misinformation out there. The whole topic of agent commissions comes up every few years and seems to be quite the blaze right now fueled with discussions about limited and full service brokers, the introduction of new business models like Redfin and Zillo as well as the one sided 60 minutes show.

In my opinion where 60 minuets went wrong was in airing such a one sided view, they lost creditability. Consumers have more options available to them today than ever before. More options means a better experience for home buyer and sellers.

You can see by the below post this ladies frustration, I hope I did an adequate job responding:

THE LISTING BELONGS TO THE HOME SELLER - WHO WANTS TO KNOW WHAT YOU SPENT HIS 6% ON, IF ALL YOU WANT TO DO IS FIND A WAY WHERE YOU CAN MAKE MORE MONEY FOR YOURSELF, AND NOT FOCUS ON GETTING EXPOSURE TO MARKET HIS HOME TO THE MOST QUALIFIED SELLER IN THE SHORTEST PERIOD OF TIME FOR THE HIGHEST PRICE POOSSIBLE. STOP THINKING THESE ARE YOUR LISTINGS. YOU WERE HIRED TO DO A JOB. FOR A LOT OF MONEY. MAYBE YOU SHOULD FOCUS ON THAT.

SO THE SMARTEST THING YOU DID FOR YOUR CLIENTS TODAY IS TO NOT ADVERTISE ON THE SITE WHERE THEY ARE SPENDING ALL THIER TIME... LIGHTS ON - BUT NO ONE IS HOME.

06/01/2007 by MARY RIGGIO


Mary, Thank you for your comments. Your message in caps tells me you are very frustrated with the process and perhaps have had a bad experience. You touch on several important issues, lets see if I can address them.

1) "THE LISTING BELONGS TO THE HOME SELLER - WHO WANTS TO KNOW WHAT YOU SPENT HIS 6% ON," I think sellers are always entitled to know what they are getting for their money. Agents should be prepared to meet or talk with their sellers on a weekly basis to cover things like marketing/advertising, showings and showing follow up, homes that have sold in the past week as well as new homes that are now competing with yours.

2) "IF ALL YOU WANT TO DO IS FIND A WAY WHERE YOU CAN MAKE MORE MONEY FOR YOURSELF, AND NOT FOCUS ON GETTING EXPOSURE TO MARKET HIS HOME TO THE MOST QUALIFIED SELLER IN THE SHORTEST PERIOD OF TIME FOR THE HIGHEST PRICE POOSSIBLE." The focus of any listing agent is to help the seller accomplish the goal of selling their house in a time frame and at a price point comfortable to the seller. If the home does not get sold everyone looses. Good agents spend a tremendous amount of time and resources in marketing. Personal marketing as well as property specific marketing. This helps build traffic and momentum which leads to more people seeing more homes. Real estate is like any other business. We are in it to make a fair profit. When profit margins are cut too thin something needs to give, and that is typically service.

3) "SO THE SMARTEST THING YOU DID FOR YOUR CLIENTS TODAY IS TO NOT ADVERTISE ON THE SITE WHERE THEY ARE SPENDING ALL THIER TIME... LIGHTS ON - BUT NO ONE IS HOME." Not all listing are on Realtor.com. A consumer who thinks so is being short changed. The reason why it is important for the listing broker to own the listing data is because we need to bring our knowledge to bear when deciding where to place our listing information. Realtor.com is a case in point. How angry do you think you would be if you had just done a price reduction but it does not show up on their website for a few weeks. This is true with many "third party" websites. They do not have to answer to the department of licensing for accuracy of information. All they care about is having valuable content which will drive traffic to their site so they can charge more for banner ads.

Like any other business relationship. You should choose an agent you trust, who is knowledgeable about the prcess and who shows good judgment and offers good advice. When you choose the right person the rest will fall into place.

Attention + Sevice + Tools + Knowledge + Enthusiasm + Reputation = Value

06/01/2007 by Frank Wilson

3 comments:

Anonymous said...

I saw most of that 60 Minutes special - it definitely did seem one sided, but I think the focus of the story was supposed to be on 1 company in general, which is why they got so much attention.

If 60 minutes was smart, they'd do a follow up and allow real estate professionals to have their say. There are pros and cons to both ways: hiring an agent, or going through a discount brokerage. But I think as long as real estate agents stay out in the public eye with all the things they do for their clients, the majority of consumers will stick with using an agent. As an agent it's your job to keep your current and future/potential clients well informed so they never have to question why they hired you.

As for Realtor.com and that whole thing...well, I'll just keep quite on that front.

Tanya
Real Estate Assistant
Home Value Hunter

ChipNoirD said...

I completly agree. You really do have to be careful, but yes, choose someone you trust. Realtor can be pretty handy. I'm new to all this, but its help a heck of a lot.

http://greatermichiganrealestate.com/

Evergreen and Conifer Real Estate said...

I saw that 60 minutes article - Redfin was I believe highlighted. That realtor seemed like a deer in headlights when the question of justifying commissions came up! I know from personal experience that I work more hours than are probably healthy to make a living. Thanks for bringing up those points.