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The full commission $$$$$$$$$$$$$$ never leaves that one real estate company.
Sounds like an incentive to me.
A full candy bar is better than having to split the candy bar.
The point is that, as an agent, we don't make extra money for selling you a property listed by another agent in the company. For representing the buyer, the agent gets, to use your terminology, half a candy bar. Whether the other half goes to Joe from his company or Mary from another company is sort of irrelevant. There is no incentive to sell you a listing from my company instead of one from another company. And absolutely no incentive to not show you the listings from another company. It doesn't make sense, for most of us.
My buyers agent tried to convince me not to negotiate the price down. I did it anyway and it got accepted.
But I will always remember her saying "Isn't this down enough? You don't need to counter since it's right at your maximum price range, so it's already in your budget."
It really does strain you to buy at the very top of your budget, especially if comps show the house is already overpriced, but of course the realtor doesn't care about your financial strain.
The point is that, as an agent, we don't make extra money for selling you a property listed by another agent in the company. For representing the buyer, the agent gets, to use your terminology, half a candy bar. Whether the other half goes to Joe from his company or Mary from another company is sort of irrelevant. There is no incentive to sell you a listing from my company instead of one from another company. And absolutely no incentive to not show you the listings from another company. It doesn't make sense, for most of us.
Where does the Real Estate Company that employs the realtors make their money from ?
I am not too bright, but I would presume from sales by their agents.
Wouldn't the real estate company make more money where there is a 6% commission ( not having to be split with another COMPANY ) vs a 3% commission when it has to be split with a realtor from a different company?
I'm thinking there must be some incentive to keep your boss ( the real estate company who employs you ) happy with bigger commissions.
Where does the Real Estate Company that employs the realtors make their money from ?
I am not too bright, but I would presume from sales by their agents.
Wouldn't the real estate company make more money where there is a 6% commission ( not having to be split with another COMPANY ) vs a 3% commission when it has to be split with a realtor from a different company?
I'm thinking there must be some incentive to keep your boss ( the real estate company who employs you ) happy with bigger commissions.
But what if that listing agent's commission split is lower than one from another listing from another firm? Even if the split was the same, what's the difference to the brokerage? They would still get a cut from the buyer and seller side sale regardless.
You have it the other way around. Unless you're working for a company like RedFin, where you are a W-2 employee, it's the real estate company who is trying to keep you (the agent) happy. As an agent, it's our job to keep our real employers (our clients) happy. Sure, not all agents approach it that way, but by and large they do.
A smart buyer may want to inquire about commission splits and incentives to the agent.
We used to have local firms who raised the agents' compensation for selling an in-house listing.
I don't know if we do or not anymore, but it is quite fair for a prospective client to inquire if the agent receives added benefit from selling the in-house listing.
It is mandatory in NC for an agent to notify a client of any compensation that is offered or expected in addition to the amount set in the agency agreement. This disclosure should be done prior to seeing the home and MUST be done in writing prior to writing an offer.
That includes bonuses, "points" towards a cruise, opportunity to win a prize for selling houses, higher commission co-broke, escalation of commission rate for selling multiple homes for a builder, etc.
Great regulation, that was greatly opposed when first introduced.
The OP's situation reeks of potential agent self-interest. OTOH, maybe the agent just could not get access to the other 5 homes, procrastinated too late, etc. Stuff happens.
A smart buyer may want to inquire about commission splits and incentives to the agent.
We used to have local firms who raised the agents' compensation for selling an in-house listing.
I don't know if we do or not anymore, but it is quite fair for a prospective client to inquire if the agent receives added benefit from selling the in-house listing.
It is mandatory in NC for an agent to notify a client of any compensation that is offered or expected in addition to the amount set in the agency agreement. This disclosure should be done prior to seeing the home and MUST be done in writing prior to writing an offer.
That includes bonuses, "points" towards a cruise, opportunity to win a prize for selling houses, higher commission co-broke, escalation of commission rate for selling multiple homes for a builder, etc.
Great regulation, that was greatly opposed when first introduced.
The OP's situation reeks of potential agent self-interest. OTOH, maybe the agent just could not get access to the other 5 homes, procrastinated too late, etc. Stuff happens.
Great info ( as usual, Mike )
Thanks for the explanation including that there is a possibility that my hunch does occasionally happen.
The OP's situation reeks of potential agent self-interest. OTOH, maybe the agent just could not get access to the other 5 homes, procrastinated too late, etc. Stuff happens.
Yep, there's really no way to know what underlying factors were involved.
Thanks for the explanation including that there is a possibility that my hunch does occasionally happen.
To clarify:
When buying an in-house listing, the buyer may not have to be notified of a higher benefit to their agent. That is because the FIRM is the recipient of the commission, and the firm does not receive a higher commission. So in that case, that disclosure was excluded from the regulation.
Of course, an ethically scrupulous agent would not hesitate to disclose a bit of self-interest if they were expecting to receive a higher payment.
My buyers agent tried to convince me not to negotiate the price down. I did it anyway and it got accepted.
But I will always remember her saying "Isn't this down enough? You don't need to counter since it's right at your maximum price range, so it's already in your budget."
It really does strain you to buy at the very top of your budget, especially if comps show the house is already overpriced, but of course the realtor doesn't care about your financial strain.
What an idiot.. that is just ridiculous.. I think I woulda had to fire her on the spot.
Where does the Real Estate Company that employs the realtors make their money from ?
I am not too bright, but I would presume from sales by their agents.
Wouldn't the real estate company make more money where there is a 6% commission ( not having to be split with another COMPANY ) vs a 3% commission when it has to be split with a realtor from a different company?
I'm thinking there must be some incentive to keep your boss ( the real estate company who employs you ) happy with bigger commissions.
Real Estate Agents are not employed by the company. We are independent contractors. It is up to the company to keep US happy! Otherwise, we leave that company and go to another company.
And, it isn't up to me to SELL a buyer their home. It is up to me to assist them in finding it and assist them in negotiating it and assist them in getting to closing.
I am NOT going to comment on your second statement because I am a sweet southern girl.
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