On the face of things, estate agents do earn vast amounts of money on deals that they conclude and there are a growing number of people who refuse to accept the situation and are insisting that agents lower the percentage of commission before they will sign a mandate to sell. There are, however, an increasing number of agents, who believe that their services are well worth the money and who refuse to market a home for cut-rate commission.
Most of us have heard the stories involving an obscene amount of money being handed to an agent who in actual fact did very little. After all, the property was only on the market for a month and the agent only bought one buyer to view the home. The property, according to sellers in this category, sold itself and all the agent did was spend 15 minutes or so pointing out the obvious features. It would be a scandal if it were true. However, nothing is as simply as it looks and although luck does sometimes play a role when selling a home quickly, this is the exception rather than the rule.
The commission argument has been fought for years and disputing an amount when listing a property is one thing; arguing about the amount once an offer has been submitted is quite another. Every mandate has a section that discusses the amount of commission payable in the event of a sale. Under the Consumer Protection Act (CPA), an agent has to go through and explain every aspect of any contract pertaining to the sale, including the amount owed to the agent once the property has been sold. The time to dispute the percentage of commission payable is at that stage, before the work has been done and not after the fact, regardless of the price eventually achieved for the property.
It is this aspect of timing that appears to be complicating the issue. Sellers traditionally want to get a certain amount in their pocket after all the relevant fees have been settled. When a lower offer is presented one of the first expenses a seller will attempt to cut is the agent’s commission, in order to maintain the amount they were intent on getting. Unfortunately, many agents do not agree with such a drastic step because, in their eyes, they have already done the work and without their services they believe that there would have been no sale. They may have a point.
Successfully marketing any home costs an agency money. Advertising costs, fuel and telephone expenses, to name a few, all form part of the equation. While many sellers may believe that this is solely the agency’s concern, in actual fact the above factors play a significant role in determining how quickly a property is sold and at what price.
Although this is not cast in stone, a good agent will seldom, if ever, cut their commission and for good reason. Good agents get results; they know their markets, know their stock and perhaps most importantly know their buyers. Matching a home to a buyer may seem like a simply exercise, but it reality, it is far more difficult than it appears. There is an art to selling and property sales are no different.
Good agents work hard and consistently get results – regardless of the state of the market. This is why it is so important for sellers to choose agents who have a solid selling record. They are out there literally pounding the streets finding the buyers that elude other less-successful agents. There are, of course, agents that do not do their job properly and often do not warrant the high commission that they charge. In cases such as these, sellers should consider moving on and finding an agent who can do the job properly for the agreed commission, rather than attempting to cut commission only to find that they are attracting the wrong sort of agent for the job.
With that in mind, sellers should be wary of agents who are all too willing to cut their commission. Good agents know their worth and armed with that knowledge are unlikely to offer a lower price for the services that they render so much better than their less-successful counterparts.