TheBreeze
“They want you to pay as much as possible so their commission will be higher.”
I don’t think this is the case and I believe the author of Freakonomics does a good job dispelling this myth.
Realators want the transaction to go through. The incremental difference of getting an extra 50K to them is meaningless. They want to get paid. The difference to you is a lot. Think about it. They hold out for a client to pay an extra 50000 they get paid 1500 (3%) and you get an additional 48500.
That is why it would be advantageous as a seller to first baseline what you feel a home would move for. Say 5% below current market is 500K. Realtor finds person does paperwork they get a flat fee of $500. They move it at market rate they get %1000. Now if they are good and start to be salespeople they get paid for what they sell over the market. Sell for 50K over market I’ll pay the 1000 + 5% on the first 50K over market. Get 50 to 100K over market I’d bump it up to 10%. This incentive system would weed out the people who can earn their keep vs those who can’t.
The way I see it if they can get 100K more than I think I could I would be happy to pay 10 and collect 90. It is a different approach and it wuld need fine tuning but it would align their interests with yous. As it stands today there is not reason for a sales agent to want to get you a higher price. Their interest are in getting the home sold for wahtever they can.
