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Restricting competition, that is any group, including of reators, getting together to price fix or standardize prices is illegal federally. Many states also have anti-trust laws. The broker’s challenge is to avoid even the impression of price-fixing. Hinting to prospective clients that there is a “going rate” of commission or a “normal” fee implies that rates are, indeed, standardized. The broker must make it clear to clients that the rate stated is only what his or her firm charges. Not what is the going rate in the area.
Often what you pay in commissions is in direct relation to how much work your agent puts in, especially on a lower end home...it does cost the same for all the marketing etc.
Some agents do lots and some do very little - when I was doing lots for my sellers, I wanted to be paid more than someone who was doing very little. I was also good at getting my sellers the best possible price with the least amount of hassle because of my experience and all the effort I put in.
Personally I think it is a weird business practice, but it isn't illegal. I don't think it is unethical because she was totally upfront about her business practices. You had a choice to pay her fee or not.
Lower priced homes can either have little marketing for a lower commission or pay more and get better marketing.
To the OP, I would be very turned off by the listing agent trying to force their own buyers agent on you. I am of the opinion that I pay you for a specific job, and what I, or you, do outside of that specific contract is none of your business...its really that simple. It sounds to me like this particular agent was being greedy - but at least she was upfront about her greed and you did not have to read the fine print and be caught off guard about it. I would look at the agreement and see what other "junk" fees may have been included in that listing agreement.
As to the rest of the comments on the cost of marketing a low priced home....I really would like to know what all these agents who are "marketing" their listings are doing. If your "marketing" is simply putting it on the MLS and taking $200 worth of professional photos, and having your clients stage the home nicely, I dont call that marketing....that is your job, its what you are paid to do. I keep hearing about all of this "marketing" that is so expensive, but I never ever see it. Even on $2,000,000 properties, I never see anything than an occasional print flyer to others in the neighborhood.
When I enter my listings into the MLS, in my area, its automatically propagated to nearly every feed in existence, whether I want it to be or not. I pay no fee per listing, I pay nothing to have it exported to zillow, realtor.com, or any other feeds.
My entire investment in a listing is the sign out front, my supra box, my MLS fees, and my time....
I don't believe that mailings work - I actually think realtors use them to advertsie themselves, not their listings. So exactly what is all of this "marketing" everyone keeps talking about. Is it the 90 seconds it takes to make a facebook post or a tweet? I mean really? I do not see the cost of selling a low end house to be more than a high end house...
Granted Ive only been doing this a couple years, but I've done the same exact thing for the $100K listing as I did for the $850,000 listing, and everything in between and all have sold fast! Granted I am in a great market, but still, exactly what is this high cost marketing that is eating up all the profit on the low end listings?
To the OP, I would be very turned off by the listing agent trying to force their own buyers agent on you. I am of the opinion that I pay you for a specific job, and what I, or you, do outside of that specific contract is none of your business...its really that simple. It sounds to me like this particular agent was being greedy - but at least she was upfront about her greed and you did not have to read the fine print and be caught off guard about it. I would look at the agreement and see what other "junk" fees may have been included in that listing agreement.
As to the rest of the comments on the cost of marketing a low priced home....I really would like to know what all these agents who are "marketing" their listings are doing. If your "marketing" is simply putting it on the MLS and taking $200 worth of professional photos, and having your clients stage the home nicely, I dont call that marketing....that is your job, its what you are paid to do. I keep hearing about all of this "marketing" that is so expensive, but I never ever see it. Even on $2,000,000 properties, I never see anything than an occasional print flyer to others in the neighborhood.
When I enter my listings into the MLS, in my area, its automatically propagated to nearly every feed in existence, whether I want it to be or not. I pay no fee per listing, I pay nothing to have it exported to zillow, realtor.com, or any other feeds.
My entire investment in a listing is the sign out front, my supra box, my MLS fees, and my time....
I don't believe that mailings work - I actually think realtors use them to advertsie themselves, not their listings. So exactly what is all of this "marketing" everyone keeps talking about. Is it the 90 seconds it takes to make a facebook post or a tweet? I mean really? I do not see the cost of selling a low end house to be more than a high end house...
Granted Ive only been doing this a couple years, but I've done the same exact thing for the $100K listing as I did for the $850,000 listing, and everything in between and all have sold fast! Granted I am in a great market, but still, exactly what is this high cost marketing that is eating up all the profit on the low end listings?
I pay for presale home inspections on my listings ($325-$600) and I stage them. Doing a vacant staging for a $155,000 listing today as a matter of fact. Just because you don't do it, doesn't mean that other agents don't actually PREP and market their properties. To do an open house in my area costs $300 to properly advertise it. A proper facebook ad runs about $50. Online floor plans, property websites, etc...there is a lot of actual real marketing that is done.
In my experience low end homes need more prep work which is more of my time managing that. I take it you don't help your sellers prep their homes, and it sounds like your market can bear you not doing that.
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