Above is a picture that appeared in the West News Magazine…some of the top agents in my office were featured.   I was proud to be included in this group.   This is a representation of some hardworking real estate agents. And its because of these hardworking  agents that leads me to my topic this month.   Discount/gimmick brokers.   I am particularly sensitive to radio/TV adverts from other real estate outfits.  You often hear about “4%” commissions if you list with “x”….or if we don’t sell your home we’ll buy it…or if we don’t sell your home in 30 days we will pay you $5000.   The last one actually has the audacity to state they “don’t use gimmicks”…Riiiight.  We agents are often up against these discount brokers and For Sale By Owner’s.  Often, people  think they are saving money in commissions by not hiring an agent or going with the lower commission broker.   

Lets be clear – any reputable company with properly trained agents will not discount the value of their agency or their agents.   I am affiliated with Coldwell Banker Gundaker who happens to be the number one company in the St. Louis area.   I went to Coldwell Banker Gundaker’s real estate school as I prepared to get my license.  They invest in the training and continuing education of their agents.   So not only does CBG properly train agents, they also support them in learning the newest contracting issues, ethics, and also brings in people to teach the latest in technology.   The other piece here is that Coldwell Banker Gundaker brings power to its agents and by extension, their buyers and sellers.  By power I mean corporate presence and reach.   When you list or buy with a CBG agent you are not just getting a properly trained and supported agent, you are getting the positioning of your property online that CBG brings to the table.   You are getting the best national relocation reach as well as international reach so buyers from around the country or even abroad will see our listings first.   As an agent, my listings automatically go to the head of the class in terms of exposure on line.   This what your commission buys.   That, and the best agents in the business if I do say so myself.

The For Sale By Owner is a particularly frustrating situation to be in as a buyer’s agent. I often wonder why a seller is happy to have buyers come with their agents to purchase their home but they don’t think having their own representation is a good idea!   Ultimately most homeowners have no clue how to read or understand a sales contract, they don’t have the proper counter offer documents, nor do they know how to read and respond to an inspection notice.   They are completely unaware of deadlines and legal ramifications.   Unless one is an attorney,  having an agent is important because the pitfalls can be great. Many FSBO’s engage a transaction broker who for a small fee or 1% of sale price will put your home in the MLS.  How hard do you think someone is going to work for you for a small fee?   How much online exposure do you think your home will get for $100?  And even if you do get a contract how much will they be available to you for advice and contracting issues?

I had a buyers who were wonderful (they know who they are ) and found a home that was FSBO.   As their agent, I wanted them to have the home they wanted so we wrote an offer which was accepted.   Long story short, I only had a fiduciary responsibility to my buyers.   But I ended up helping the seller too – even though it really wasn’t my job.   I had to coach the seller on how to deal with inspection notice issues etc.   We closed successfully but I did the work of the listing agent too.   About 3 weeks after closing I noticed the property was still showing in the MLS as pending….I called the transaction broker that did nothing to help the seller and they asked me for a copy of the closing documents.   I told them to call the seller.   They didn’t even know the sale had closed.

So the next time you hear the gimmicks from the discount brokers remember, they are “buying” your listing so they can grab buyers from showing your home…then they will go to a home that is listed for the going rate  and happily collect the commission from another seller .   They are banking on volume so they will have enough business to hedge against their “gimmick” whatever that may be.  Don’t be fooled – statistics show those who sell with an agent get higher prices for their homes.   They also avoid costly mistakes from not understanding procedures and deadlines.   Don’t go cheap with the sale or purchase of your largest asset.   If you think it’s expensive to hire a professional, imagine what it will cost you to hire an amateur!