You are in Thailand and I am roasting here in Mira Mesa while my 18 month old throws pieces of tomatoes at me. Needless to say I am jealous.
Powayseller –
Good post above. When I take a listing one of the very first questions I get is what should we offer the buyers agent. My standard answer is to offer what the majority of your competitors are offering. Before you guys jump all over me, I know that is not a great answer. So I get on the MLS and show the client what all the comps in his neighborhood are offering. In most all of the cases the norm has been 2.5%. Now I have had a few clients that asked me to list 2.0% and I did that. Now one thing I do for all listings is tell the seller that if I represent the buyer I will do so for only 1%. ANYONE selling thier home should make sure the listing agent does this.
When I do represent a buyer I would be a liar if I said that I wasn’t happy bigtime when that cbb is a 3.0 verses a 2.0 but I never discourage or don’t show the listing. Like you said, the consumer is SO EMPOWERED now by access to information. More often then not my buyers are sending me MLS numbers they pull up rather then the other way around.
Now my life is so busy that no I never show a buyer a place that he didn’t seek out even if they are paying 10% commission. Nor would I talk a buyer out of buying a home that is only paying a very low commission. So many of my leads come from referrals that I really try to focus on what the buyer wants, not what is best for me. Now when I rebate a buyer I do have a baseline of what I need to make on the commission. For instance I like to make sure I at least get 1.5% commission. So if someone is offering only 2% commission then I will only rebate that buyer .5%. If they are offering 2.5% then that buyer will get a full point.
Now this is just me, and unfortunately many people in my industry feel I devalue the profession overall by acting in that manner. If the median home was 250k I would agree.
I will tell you though while being a listing agent I have had many clients who want to offer a low cbb like 1% and I will decline the listing. My bread and butter does rely on the traditional large brokerages and it is not in my best interest to alienate them. For people who don’t want to pay out a competitive CBB I advise to call Jeff Karchin or even do a FSBO.
There have been ugly cases as well. I have on more then one occassion received calls from buyers agents saying, we really like your listing but we are looking for a bit more CBB. That is just lame. I politely tell them that I will forward that request to the seller and I do.
So to summarize, I do in general agree with your statement. I do not feel there is any hard data that shows the higher commission yielded better results or faster sales. Yet I do feel that the most competitive way for me to market the listing is to offer a CBB in line with everyone else. I just don’t have the hard data to back it up. So far I have never recommended anything over a 2.5. I have done a few 2.25 and a few 2’s.
I will say this… 2 years ago you would go to brokers tours and there would be 20 or 30 people pitching the home and a hundred buyers agents. Now it totally reversed. The pitch sessions now take 90 minutes and there are TONs of listing agents all pitching to each other. More evidence of a saturated market.
