Shortsighted, cut rate representation

Understanding the hidden costs of discount commissions

Recently a close friend told us that she had hired another agent to sell her home. We don’t expect to be hired because we are friends, but we were a little bummed that we didn’t have the opportunity to compete for her business. As elite area experts, we have exceptional market knowledge and deep experience. Why not at least interview us?

The agent is willing to discount the commission and it accounts for a lot of money. We love you, but we can’t ignore the savings.

Are all agents created equal? Is there truth to “you get what you pay for?”

There are important flaws with this thinking:

  1. Misplaced focus on the fee, versus the net. A big discount does not mean that you will NET the most money. Homes are not commodities with fixed prices. Preparation, staging, marketing, exposure, negotiation, and myriad nuances contribute toward the actual sales price. And all agents are not created equal. The best agents significantly boost the home’s value, especially in a crazy market with wide price variability. Prices can easily swing $50,000 based on execution. Good representation more than pays for itself.
  2. Area expertise matters. Does that agent know our neighborhood?  Will they price your home appropriately? We routinely see out of area (and inexperienced) agents dramatically underprice properties. Then, after sparking a bidding war, they brag about “selling the property for $100k over list price.” Does that make them a good agent? Definitely not. Often the most qualified, serious buyers avoid those properties. Also, if a property is marketed at a lower price point than it should be, the serious buyers who can pay top dollar may not even see it!  Sure, the house will sell, but poor pricing often leaves money on the table and encourages frenzies that do not actually NET a higher price.
  3. Give us a chance to competeWe understand that some people don’t want to do business with friends, but we are professionals who have a lot of experience keeping these lines clear. If you had musician friends who were actual rock stars, would you avoid them because you are friends? C’mon, we know a lot about real estate. Even if you don’t hire us, you will make a more informed, better decision.

In the end, we will not let your business decision interfere with our friendship. We are happy to discuss commission and help you understand what you get for your money. If that doesn’t persuade you, we are satisfied. We just don’t want you to choose cut rate representation without talking to us. We really do want what is best for you.

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