Agent Will

A few questions that I as a realtor and I’m sure you as clients have seem to just have no answer. At least no answer that is truly satisfying. Two questions that repeatedly pop up are:

Why do new project sales close on Fridays?

I have no idea. Maybe the project marketers saw no demand on Fridays and found it pointless to be open. Then again, they are open the other six days of the week and I would think Monday or Tuesday would be rather quiet. They are also only open from 12-5. Seems to me that more people would be available to view the showroom after 5pm. Aren’t the people who are buying these units working? I’d like to see them open on Friday and be open on Thursday and Friday night until 8pm when the majority of my clients are available. Stick this one in the “go figure” file.

Why do so many agents ask for 7% on the first $100,000 and 2.5% on the balance?

This only seems to happen in Greater Vancouver/Fraser Valley. I am told it’s a tradition. Seems to me this line of thought rewards the agent on the easily attained first $100,000 and does little to encourage a higher sales price for the Seller. Wouldn’t it make more sense to be a flat percentage or flipped where the first hundred thousands are a lower rate and the higher rate comes on the balance? Wouldn’t that encourage the Buyer’s Agent to get their buyers to spend more money rather than negotiate for big discounts? Though Buyer’s Agents have a fiduciary duty to represent their client’s needs above their own there is no denying the strong influence commission plays in the Buyer Agent’s mind. This also goes for the Seller’s Agent. A $10,000 difference is a lot to a Seller but on a 7&2.5 system is only about $125 to an agent. Now if that was $600 that might encourage more effort. I know what you are thinking. No, it should not affect the job they perform but I bet it would. (Aside: if you sign a Buyers Agency Contract specifying the amount of commission the Agent will earn make sure that it includes any extra to go back to you. In other words, if there is a bonus or a higher commission granted than the one you specified, well, that could get you quite a bit of cash back on close).

When I work with Sellers we do a flat percentage which just plain makes sense (and rewards the successful Buyer rep with more than the usual amount). I have found, though, that in marketing the property I have to I have to explain it a lot as I have learned far too many agents just do not get it here and do not like to see something unexpected. Once explained (how much simpler could it be?) they get on board.

One more really odd aspect of this traditional system is that often the Buyer side gets 46.5%. Why? Seems the agent that brings the buyer works harder, longer, and deserves more credit. That is exactly why I make sure the Buyer side does get more richly rewarded. Not only does this encourage more agents to show the property but also encourages higher sales prices and greater competition. This has shown itself true time and again. Though I should note that if you have too high a price on the property and are being inflexible you will not be able to sell it no matter what . You also will not get me as your representative. I simply will not represent properties that are far overpriced and inflexible.

One more note to add. If you call me up to possibly list your home and you ask me what my rate is I will not be able to give you an answer. The reason is I truly do not know until I see the property and see what your needs are to get it sold on your terms. The greater the work involved the higher the rate. The less work involved, the lower the rate. Make sense?