{"id":1751,"date":"2014-09-17T18:36:18","date_gmt":"2014-09-17T22:36:18","guid":{"rendered":"http:\/\/dankrell.com\/blog\/?p=1751"},"modified":"2021-11-23T17:31:28","modified_gmt":"2021-11-23T22:31:28","slug":"retro-future-of-real-estate-buyers-like-representation","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2014\/09\/17\/retro-future-of-real-estate-buyers-like-representation\/","title":{"rendered":"Retro-future of real estate – buyers like representation"},"content":{"rendered":"

\"For<\/a>When I wrote about the future of real estate brokerage<\/a> seven years ago, I predicted that consumers would become increasingly reliant on the internet; while the process of selling homes would remain interpersonal. Once thought to free home buyers and sellers from real estate brokers, the internet has become ancillary to the home buying and selling process.<\/p>\n

Some real estate experts point to home buyers\u2019 perception of buyer agency as a reason for the integration of the internet into the buying process. The internet has become a prolific source of information that funnels buyers directly to listing agents. With information in hand, many buyers are seemingly ditching their agents when viewing homes; some thinking they can negotiate a sweat deal directly with the listing agent.<\/p>\n

Consider this 2012 anonymous post<\/a> from a popular real estate web site. The poster proclaimed to have fired their agent and on their own negotiated a $490,000 price, when a previous buyer backed out from a $515,000 contract. The poster stated that \u201cit makes financial sense,\u201d the rationale being that there is always a 6% commission built into the price. The post stated that the seller makes more money if there is no buyer agent to pay, even if the offer is lower; while also getting the listing agent to accept a lower commission.<\/p>\n

The post\u2019s rationale may seem ostensibly compelling; and if the tactic works, it most likely has nothing to do with commissions per se. The strategy of negotiating a better price based on commission falls flat when you understand how broker commissions are negotiated. Generally, commissions are negotiated between the listing broker and the seller before the home is listed; the negotiated commission is expressly stated in the listing contract. The commission belongs to the listing broker, not the agents. The listing contract is also specific to the amount of the commission to be split if the buyer is represented by a buyer broker. Trends in commissions vary; including variable commissions, which is an agreement to a reduced listing commission if the buyer is not represented.
\n(Continued below)<\/p>\n