Agent Will

There’s a certain property out there with a very certain, very high price tag attached to it here in Vancouver. It’s a one of a kind makeover that has generated a lot of press not just for its renovation and location but specifically for that price tag which is just shy of $20million. And there are very few people out there who would have the means to actually consider purchasing this place. Heck, I bet there are very few people out there with the big idea to even go and create such a place. And it certainly would take a very big thinking realtor with big connections to get it sold.

Let’s face it, with the markets in turmoil a lot of those with very deep pockets have other concerns right now than investing/purchasing what would likely be a part-time home. They have likely taken quite a haircut in the past few weeks. Even the most bullish would likely wait out the storm that is threatening economies on a global scale.

Sadly, I do not know these people, yet. Maybe I am very wrong. Maybe the Billionaires out there (or, at least those who I imagine would net at least 10million after tax) have no concerns whatsoever and would jump at the chance. Then again, I look at it from my perspective that if I were to spend that kind of cash I’d be much more likely to build something myself. I’d be like Trump; build a tremendous building and keep the top floor (or floors) for myself. Or maybe build an estate somewhere.

That seems to be the trouble the seller is having moving this property. You see, when you reach a certain level of investment required the investors tend to have an infinite number of choices. It definitely takes longer to find the perfect place for that discerning a buyer. So what would you do if you had to get this property moved? You could reduce the price but then, with all the press and attention, would you be able to stand the “difficult sale”, “failing to sell”, or “reduced” tag attached to it? Would you also maybe open yourself up to a market that will take you down even less? Perhaps.

The other option, the one they are currently taking, is to try and light a fire under every realtor they can get the word out to. And what encourages some realtors more than anything but money. It’s bonus time, baby! You see, even with the commission previously being about $215,000 (which is, honestly, too low when trying to draw on every possible lead and when the highly connected realtor in the US would likely want closer to 3%, or $540,000) it just isn’t enough.

So, the bonus. I have never seen anything like this. Maybe I am just naive. It’s bold. It’s dramatic. It’s $1,000,000*. Yes, One Million Dollars*. Wow. I’m speechless. Quick, get me the Who’s Who 2007 and a phone.

Seriously. I have no firm idea of whether this will work but I doubt it. The bigger question at hand, for me, is fiduciary duty. Seems to me that this is quite an extreme commission to earn, even for a property so obviously hard to move. Fiduciary duty is the honest approach any true client representative must take. It is the care and concern for the decisions that the client will ultimately make, not just now but also how that decision will pan out in the future. It is not the role of a functionary. If a home purchaser just needs a contract written without care for the client and without any input then why use a realtor? And that’s whole another can of worms; Realtors who only perform their functional duties and not their fiduciary duties giving the industry a bad reputation.

This million dollar issue (actually about 1.2million when we add in the original commission) is maybe beyond my grasp, for now. It’s beyond my experience. I have worked with million dollar properties before and have earned what I consider to be a fair and desirable commission on those sales. In each and every case I put my client’s needs above my own. I just feel that doing so will result in greater returns from happier clients who love my service and recommend me to their associates. Just to put this in perspective, say the home was average with an average price of $1million and the sale had a bonus of $50,000. I just do not see the fairness in accepting that all for myself. My clients are going to know about it. They have to as per the Real Estate Sales Act of 2006. I would feel happily obliged to give a fair amount back to my clients. Even better, I would rather reduce the offer price by the bonus amount and eliminate the bonus altogether. My clients are likely financing the bulk of the purchase price and there’s certainly no need to finance the bonus offered to me.

I see nothing wrong with increasing commission. I see nothing wrong with a bonus scheme. I do have to, however, cock my head a bit at one so large. It will be interesting to see how this pans out. I wish them luck on the sale and the bonus scheme.

*Of course, certain conditions must be met as per the email I received. I have no idea what they are but I can imagine that a cool mill buys a lot of conditions.