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A surgeon is not a sales person and conversely a real estate agent is definitely not a surgeon. Maybe you can fill us in what a surgeon and a real estate agent have in common that you used them for comparison purposes?
I think they both charge for their services, only the surgeon charges more. But then again, I could be wrong.
Let me say upfront that this is a tricky question, and I am expecting some acrimonious remarks - and so be it.
My question is - if I am in the market, looking to buy a house of approx. 500k, should I negotiate with my realtor to share his commission with me, 50-50? I am told by friends in the west that it is a common practice in that part of the country, but is this the case here as well? Not having any experience, any advice will help....
Thanx for looking...
You can, but why would you?
Wouldn't ity be better to simply hire a Realtor that was worth what he was being paid?
...One other piece of clarification if I may. Real Estate as a profession is quickly (maybe not quickly enough) moving AWAY from being a sales job. In my view, I don't sell people anything but ME. More and more they are finding the house they want themselves. In the cases where I am showing them multiple homes, I haven't found a need to do anything more than provide access and information. However, where I believe that I do add value is in managing the transaction and getting it to close. Coordinating the players, communicating and educating my clients when necessary about the steps in the process and the decisions they need to make, solving problems, putting them together with other professionals in related industries to help them solve problems...and at the end of the day sitting with them at the closing table. My job is to make the transaction CLOSE, and if it looks easy to my client, then I did my job well. Real Estate as a profession is about service...not sales. That is where I add value.
Dave, if could just add another point onto the excellent points you've made.
With people who are considering relocating to a different state, they have the ability now to locate homes on Realtor.com, and also locate a Realtor in the city where they plan to relocate, and communicate easily with that agent. The realtors can be invaluable for relocating clients if they know how to determine the clients special needs in relocating.
I'm currently doing this for 4 relocating buyer clients. They tell me what they want in a home, what they desire in an area, and then they send me mls numbers for homes they've located. From those sheets and from their features list, I'm able to learn very fast what they want.
Then I go and preview those homes and scout the community. A home is never exactly what is shown in the photos, and naturally it's difficult to tell what the community is like without physically seeing it.
If they are able to visit prior to moving, then it's perfect. One of the 4 buyers I'm working with came out recently and we drove through the communities and saw the houses she chose to view. They were very close to what she wanted, but the communities were not quite right.
So we looked at more communities and she found one that she loves. She went back home, and now I'll limit my search to the specific community and send her the sheets. By driving the area I'll always find homes that don't show up in the search criteria for some reason.
After finding the right home, we'll enter into the next service phase that Dave discussed.
I also want to state that I'm 100% in agreement with Dave that this is not a sales job, the title sales agent notwithstanding.
When I go on a listing presentation, I do not use any standard sales techiques, memorized scripts, or closing techniques. When I go into the sellers home I will have done my homework, and know a lot about the home and the area, and will be able to show my homework to the client, so they know what they're looking at and why.
I listen to what the seller has to say about their home and their unique selling situation. Then I describe my services including my market plan, from top to bottom. I have a polished power point presentation, and I show the slides in it that make sense during the normal conversation. I don't have the seller sit and have me go through an entire power point presentation that they aren't interested in seeing. But if they do want to see it all, I'll certainly show it.
I make sure that I understand what the seller needs, and make sure they know that I understand their needs, and I make sure they understand and need the services that I offer. If they don't need my full service at my full fee, then I will understand and they can hire someone else. However, most of the people who call me are not looking for a discount. They are looking for someone whom they can trust to do the best job for them.
If they have another agent scheduled to come, I never pressure them to close with me now. And I have several reasons for that.
Since I offer a high level of service, and my presentation shows that, I have sufficient confidence that I'll win the bid over 80% of the other agents, so that I don't have to use those typical sales techniques. This way, the client I sign up will never be able to say that I coerced them into signing, or used high pressure sales tactics. They will choose me because they feel I'll do the best job.
My conversion ratio of appointments to contract is very high, because I'm prepared.
Here are the secrets to a high coversion ratio, and this is FREE information:
being prepared
being on time
being highly professional
knowing the business,
knowing the current local and national market,
not misleading the seller about any aspect of the market...
not misleading them about their house value,
knowing your skill levels,
showing them that you'll give 110% of your efforts to them
having an agressive marketing plan in writing
being able to instill trust in the minds of the seller,
and then knowing that I will follow through with every promise I make,
Seems like after reading all the variations of this theme, the best thing to do would be to contact a real estate attorney or the Real Estate Agency in the state where you wish to structure this type of deal.
Each state has their own set of rules and regs to follow... and differences in enforcement levels. I'm in Oregon... Our laws are on the strict side.. it is illegal in this state to give any of our commission to any unlicensed person for any reason.. or for any person, unlicensed or not, to give anyone a "finder's fee", kickback, or anything of value... over $25.00, I believe. Yeah, really! The only exception, as was stated, would be if it was agreed upon on HUD statement at closing, by all the parties involved.. including an attorney.
Let me say upfront that this is a tricky question, and I am expecting some acrimonious remarks - and so be it.
My question is - if I am in the market, looking to buy a house of approx. 500k, should I negotiate with my realtor to share his commission with me, 50-50? I am told by friends in the west that it is a common practice in that part of the country, but is this the case here as well? Not having any experience, any advice will help....
Thanx for looking...
Personally, I wouldn't waste my time. History has shown me that anyone coming to me and the first thing they mention is the commission, is a nightmare to deal with. No offense, as I don't know you personally.
If you find a Realtor that takes that deal, you'll get what you pay for and may actually end up losing money on the deal because you'll get one that's not very seasoned in negotiations or making a deal work.
I have been watching this interesting discussion from the sidelines, and its time now to give my update. I have been in the market looking to buy a home for about 2 months now, working with two realtors. Based on that limited experience, I can say that realtors really do not help negotiate at all. I had to do my homework, and the best help I could get from the realtor initially was to ask them info on things like days on market and previous sale price - and that too I do on my own now, thanks to the wealth of information available on the internet. To the best of my understanding, both of them try to push me to get into the deal, w/o doing any homework.
And that was what got me thinking - if I have to do all the research anyway, why should they be making money off me, w/o sharing it with me - and before someone says - "Oh, but you do not pay for the realtor, it is the buye who does" - let me tell you - it is MY money that the buyer is paying to the realtor, it is built into the price, and it comes out of MY pocket. So, after thinking about it, I spoke with both of these guys, and laid it out flat - "any bonus you get, comes straight to me, no questions asked, and we split the commission, 50-50". And guess what, they agreed. And I think they did the smart thing, as if they had said no, I am certain that there are people out there who would have jumped.
I have been watching this interesting discussion from the sidelines, and its time now to give my update. I have been in the market looking to buy a home for about 2 months now, working with two realtors.
Why were you working with two realtors?
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Based on that limited experience, I can say that realtors really do not help negotiate at all. I had to do my homework, and the best help I could get from the realtor initially was to ask them info on things like days on market and previous sale price - and that too I do on my own now, thanks to the wealth of information available on the internet. To the best of my understanding, both of them try to push me to get into the deal, w/o doing any homework.
First it sounds like there was no real communication, or a meeting of the minds, between you and the realtors. Sounds like you didn't have very good realtors.
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And that was what got me thinking - if I have to do all the research anyway, why should they be making money off me, w/o sharing it with me - and before someone says - "Oh, but you do not pay for the realtor, it is the buye who does" - let me tell you - it is MY money that the buyer is paying to the realtor, it is built into the price, and it comes out of MY pocket.
If you ask the seller who pays for the realtor they will tell you that they pay for them. You pay for the house. It is now their money. They pay the commission with their money. The reason why sellers sell fsbo is so they don't have to pay the commission. They also don't want to give that to the buyer. It is their money. So no matter how you view it, the seller pays the commission.
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So, after thinking about it, I spoke with both of these guys, and laid it out flat - "any bonus you get, comes straight to me, no questions asked, and we split the commission, 50-50". And guess what, they agreed. And I think they did the smart thing, as if they had said no, I am certain that there are people out there who would have jumped...
Again I don't understand. What is the bonus? And how is the commission being split 50/50 when there are two agents plus you?
I also don't understand why you would work with two agents, and why you would continue working with them if they weren't doing anything for you. And if they would give away their commission I can understand why they can't negotiate for you.
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State Rules Vary
Interesting discussion! And here is my update...
