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I can see where your coming from, but isnt most of what you have stated will be the responsibility of the buyer or things the listing agent would have done anways if the buyer had an agent or not (negotiating repairs, supply documents to lender, check if the intial contract is filled out correctly...etc.)? If the buyer cant live up to the contract, he/she will face the consqeunces and the listing agent/seller can take choose to take legal action or not. The only "real" extras in your post that the lsiting agent would have to do is opening the door for inspection, appraisal and walk through.
No the listing agent and the buyer agent share the work to navigate the transaction to closing and thus share the commission. It's a partnership with skilled agents blocking out all of the emotion and dodging the landmines that lead to to a successful outcome. You fail to realize that if a seller takes their home off the market for three to four weeks during the best selling time of the year and the incompetent buyer (or buyer agent representing the potential buyer) fails to deliver as promised, the seller stands to lose thousands of dollars and additional carrying costs while qualified buyers go elsewhere and their house goes back on the market again. Most sellers and buyers don't get this concept, it's our job as agents to coach them through it.
No the listing agent and the buyer agent share the work to navigate the transaction to closing and thus share the commission. It's a partnership with skilled agents blocking out all of the emotion and dodging the landmines that lead to to a successful outcome. You fail to realize that if a seller takes their home off the market for three to four weeks during the best selling time of the year and the incompetent buyer (or buyer agent representing the potential buyer) fails to deliver as promised, the seller stands to lose thousands of dollars and additional carrying costs while qualified buyers go elsewhere and their house goes back on the market again. Most sellers and buyers don't get this concept, it's our job as agents to coach them through it.
I completley agree that it is "shared" work and you are helping me make my point. Whether it is an agent who completley sucks or an unrepresented buyer, a listing agent will still be doing roughly the same things (aside from having to be there for inspections and appraisals). The listing agent would still need to contact the buyer agent to make sure all documentation is done, deadlines are being met, negotiating etc. A subpar agent will still get their share when the deal is done, even though the other agent might be doing most of the leg work. But thats how the business is. However, if a buyer chooses to be unrepresented(not arguing whether thats a right thing to do or not), why should the listing agent keep all 6%? Since its shared work, shouldnt the unrepresented buyer receive some compensation or discount?
Not at all. The value of the property should influence the buyer's offer amount.
Of course the value should be the driver. But a buyer must consider other things as well. For example:
The difference between the value of the house that is being sold by a realtor versus the same exact house being sold FSBO is roughly the commission. That extra difference is a value to be shared by the buyer and seller through each party having an agent giving advice. If I as a buyer choose to go solo, why am I paying extra when I dont get anything out of it?
FSBOs tend to be higher in price, not lower. Agents tend to close deals. So, when those tendencies are realized, the agents probably save you money and get the deal done.
I completley agree that it is "shared" work and you are helping me make my point. Whether it is an agent who completley sucks or an unrepresented buyer, a listing agent will still be doing roughly the same things (aside from having to be there for inspections and appraisals). The listing agent would still need to contact the buyer agent to make sure all documentation is done, deadlines are being met, negotiating etc. A subpar agent will still get their share when the deal is done, even though the other agent might be doing most of the leg work. But thats how the business is. However, if a buyer chooses to be unrepresented(not arguing whether thats a right thing to do or not), why should the listing agent keep all 6%? Since its shared work, shouldnt the unrepresented buyer receive some compensation or discount?
We agree that some agents don't earn their fee. But two wrongs don't make a right. The seller hires the agent to market their home and navigate buyer through a successful transaction at an agreed upon rate. The agent assumes all of the marketing expenses and all of the risk in selling the property in the hopes of getting paid a fee either a percentage of the sales price or a flat fee. Agents that list these homes in the local MLS agree to co-broke or share that fee with another cooperating agency, that is the marketing power that agents bring that true FSBO's can't match. Some agencies go further and "syndicate" those listings on dozens of other web sites to cast the widest net in the hopes of attracting a buyer. That is how you discovered the house, through the marketing efforts of the seller's agent. The agency has done what it was hired to do, produce a ready, willing and able buyer. The seller sees the value and agrees on a compensation model. The buyer is not party to that contract, does not share in the risk, time and marketing expenses and is not entitled to the fee that the seller has agreed to pay to the listing agency.
FSBOs tend to be higher in price, not lower. Agents tend to close deals. So, when those tendencies are realized, the agents probably save you money and get the deal done.
Im just making a general assumption about the differences in the prices. I know its not an exact science. But assuming the negotiated price is right on, the unrepresented buyer is still paying for something they aren't getting anything for.
We agree that some agents don't earn their fee. But two wrongs don't make a right. The seller hires the agent to market their home and navigate buyer through a successful transaction at an agreed upon rate. The agent assumes all of the marketing expenses and all of the risk in selling the property in the hopes of getting paid a fee either a percentage of the sales price or a flat fee. Agents that list these homes in the local MLS agree to co-broke or share that fee with another cooperating agency, that is the marketing power that agents bring that true FSBO's can't match. Some agencies go further and "syndicate" those listings on dozens of other web sites to cast the widest net in the hopes of attracting a buyer. That is how you discovered the house, through the marketing efforts of the seller's agent. The agency has done what it was hired to do, produce a ready, willing and able buyer. The seller sees the value and agrees on a compensation model. The buyer is not party to that contract, does not share in the risk, time and marketing expenses and is not entitled to the fee that the seller has agreed to pay to the listing agency.
I Agree with mostly everything you said. That's why if I was an unrepresented buyer I would never ask the listing agent to give up their share of the commission cause without them marketing it I wouldn't have found the house. But I feel that still entitles the listing agent to only their share and not both sides of the commission.
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