Agents Willing To Lower Their Commission Might Not Be Best To Sell Your Home
Have you ever heard the phrase “You get what you pay for?” Well, this doesn’t just account for material things, like clothes and cars. It also comes into play when choosing the right real estate agent to find you a new home or sell your existing one. There are plenty of ads on the television and radio touting agencies who will sell your home for a reduced commission. While the usual commission for an agent in St. Louis on the listing side is six percent with 2.7 percent shared with the buyer’s agent, some brokerages are now going lower in the hopes of securing more buyers and sellers.
*(This is only an example. there is no “set” commission, as it is always negotiable)
While some clients are thrilled at the prospect of saving some money on commission when selling their home, others would rather pay the higher commission for a better level of customer service. In most instances, it boils down to “Caveat emptor,” or for us not versed in the Latin tongue, let the buyer beware.
For example, an instance in our office recently cropped up where an agent was aggressively pursuing a listing, doing all the right things by calling and staying in contact with a prospective client. When the chips were down on the table, the client ended up going with a different brokerage who simply offered a lower commission. Now I don’t particularly know the client’s motives, but it appears from all outward signs that the commission was the overriding stumbling block in choosing an agent.
Is this the right play or should the client have chosen differently?
That isn’t for us to say as real estate advisors, as all clients have the right to choose whomever they want based on whatever criteria they want.
But a note of caution is needed here. When an agent offers a significantly reduced commission from the norm in the industry, it lays their negotiating position right out on the table. To quote Brian Buffini, who is a renowned figure in the real estate industry,” if this other Realtor that you had in here today was willing to discount their fees and throw their money away, just think how quickly they’ll throw your money away not just in the initial phase of the transaction but in all the negotiations that take place during the transaction.”