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Imagine very newly licensed independent realtors enter the job market. They have to find a way to compete for business, and offer a very low fee of $500 (for example) to be the listing agent. No % of sale. $100K home or $400K home ... same $500 fee.
Would the buying agent ask hisher client to pay the rest of 3% purchase price?
Why aren't there a lot of hungry listing agents advertising low fees to attract clients?
Because the risk/reward wouldn't make it viable. Besides, nearly all new licensees are required to work under a licensed broker...and they have costs to cover, too.
Just sold my house and boy did my agent earn his fee. One, the house sold for $50,000 over what I would have listed it for on my own (although some of that was the seller just plain overbidding). But more importantly, he shepherded me through some tricky negotiations and repairs, to keep that high sale price. I would have walked away from my buyer had he not been so good.
$500 would be ridiculous. It's like writers who write online articles for $10- and the articles suck, I might add.
I considered going with a low fee listing agent, but he had such high volume, I couldn't believe I'd get the attention I wanted. Several higher volume agents also all seemed to suggest low listing prices, presumably to get things sold fast.
Imagine very newly licensed independent realtors enter the job market. They have to find a way to compete for business, and offer a very low fee of $500 (for example) to be the listing agent. No % of sale. $100K home or $400K home ... same $500 fee.
Would the buying agent ask hisher client to pay the rest of 3% purchase price?
Why aren't there a lot of hungry listing agents advertising low fees to attract clients?
Sorry, but this doesn't make sense for a variety of reasons.
For $500, I will enter your house into MLS. That's all. I won't run a CMA, I won't answer questions, I will not be involved in any way, shape or form. The $500 doesn't even cover my dues so that I can access MLS. In fact, I've offered to list a home for free for close friends/family (with the knowledge that they would pay the buyer's agent the going rate). Only one took me up on it, the rest went with full service brokers who would handle the whole transaction.
You wouldn't have to worry about the buyer's agent's fee, because when they see 0% commission in the MLS, you'll be lucky to get one or two showings.
Considering there is also a broker who has to be paid, the new agent would be lucky to not have to pay for the honor of working for you.
Would you be willing to work under the same terms? For $500, you will be available to take my calls all day, every day, seven days a week, you will run errands, you will wait at the house to meet people, you will work from your home, office and car when I want, you will make calls, keep notes, schedule appointments, resolve problems, enter negotiations, and keep a record of everything that occurred for 5 years. This will last anywhere from 30 days to 9 months.
I wouldn't hire anyone who placed so little value on their time, effort, and knowledge.
Imagine very newly licensed independent realtors enter the job market. They have to find a way to compete for business, and offer a very low fee of $500 (for example) to be the listing agent. No % of sale. $100K home or $400K home ... same $500 fee.
Would the buying agent ask hisher client to pay the rest of 3% purchase price?
Why aren't there a lot of hungry listing agents advertising low fees to attract clients?
Maybe because people need to feed their families and put a roof over their heads?
You wouldn't have to worry about the buyer's agent's fee, because when they see 0% commission in the MLS, you'll be lucky to get one or two showings.
If there were a licensed listing agent, with a listed home on the market, who charged only a small fee...0% commission... Is this post accurate in stating that most buyer's agents would refuse to show that home to their clients?
that's right. Most buyer's agents would refuse to show it unless it's a smoking hot deal.
And if they had to recover their fee from the buyer, they would cut their offer by that much, so you'll be paying for their commission one way or another.
The first answer is the listing agent would go broke in a hurry and be finding another job soon enough. Those who can't compete on skill compete on price instead. Many owners would rather have a skilled agent over a cheap agent. Do people higher the cheap financial manager or the skilled financial manager?
The second answer, specific to my state guidelines, is the buyer agent should show the property and inform their client they would be responsible for the balance of the commission owed. Real world, it wouldn't surprise me if some agents refused to show the property.
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