Every so often I get a call from a home seller asking me a variation of this question:
What will the commission be if I find my own buyer?
It could be a seller client or someone considering listing their home with my company. Typically, the discussion that follows reveals that the questioner
- either wants a complete exemption from commission because it is “their” buyer or:
- a steep discount because they think most of the work is now done.
This shows a fundamental lack of understanding of the role their broker plays in the sale of their home.
To backtrack: In 2004, a person could make an offer on a home, get it accepted, and get a mortgage in 30-40 days without much effort or hand holding from their agent. I know this firsthand; I was a loan officer from 2001 until about 2005 when I started my company. It was so easy to get a mortgage back then that it was almost scary- there were no income loans, no documentation loans, and all sort of other programs that required a pulse and little else. If a person liked a home and wanted it, you sent them to the mortgage broker down at the corner, left them alone, and they moved in 60 days later. All that was needed for a house to sell was a person that liked the place.
Since the housing downturn, the pendulum has swung the other way. Banks are so cautious and strict in their underwriting that even seemingly well qualified people have a hard time getting to the closing table. The scrutiny from bank underwriters not only borders on suspicion, sometimes it feels like they are looking for an excuse to avoid lending the money.
In this climate, finding the buyer is just the beginning of the work. Not only are the banks more cautious, buyers also proceed with far more trepidation and hesitation than they ever did in years past. Even when people simply love a house, I have seen deals implode over draconian underwriting or buyers who have gotten spooked over a seemingly easy to fix problem on the seller’s side, such as an open permit or high radon reading.
Today, an accepted offer is anti climactic. Once a buyer makes an offer, we have to navigate an obstacle course of home inspections, attorney haggling over contract verbiage (which can drag on for weeks here is lawyer happy New York), appraisal issues, title concerns, commitment conditions, challenges to get a clear to close and a ton of other possible “gotchas” that we often doubt a closing will happen until all parties show up.
No sane person dislikes saving money. I sure don’t. But if a seller has a cousin or a neighbor they run into at the store who expresses an interest in their home, they should immediately refer them to their agent and ensure that the deal has the best chance of closing. You never as a seller want to compete with your own agent. It is tempting for some to think that they can “save” by bargaining their agent to a lower (or no) commission by procuring their own buyer. But the skill set that it takes to carry that buyer over the finish line is far more than most regular folks possess.
There are rare cases when a seller might have a solid buyer lined up where an exclusion could be negotiated for a reduced commission IF the buyer is a quick knockout punch. But the sort of prospect who can truly close quickly with no time on market or the associated expenses is rare. Often the the seller is seduced by mere interest, as if it were 2004 again and all they need do is send their prospect down the street. In this day and age, that doesn’t occur much. In a transaction the magnitude of selling a home, the best thing to do is have your professional do the job, and rest assured that you are getting what you paid for.
If you want a do it yourself project, build a go-cart. For real estate, use your broker no matter where the buyer might come from.
What is it About Real Estate Agents and Dogs?
It is my view that an inordinate percentage of real estate agents are dog lovers. Canine devotees. Poochophiles. And they aren’t just dog owners, they rescue them adopt them, and give them foster homes. When I peruse Facebook, I can bet that the people who are posting about a dog that needs a home are real estate licensees.
My very non-scientific observation in my 44 years is that a higher percentage of real estate people are dog people than any other occupation I know. Their dogs were always in their print and home magazine ads, they are on their web pages, in their cars, and often in their offices. They love their dogs. Actually, I should say WE love our dogs because I am one of them. We own a rescued 90 pound purebred German Shepherd who is a big goofy loveball, thinks I am the cats meow the greatest guy in the world, and adores the children. Before Max we had two yellow labs, Logan and Bella, and Logan was also a rescue who was nursed back from heartworm and near death.
I was around dogs when I was a kid. That’s my excuse. Do dogs cause people go go into real estate, or is it something else that causes the canine mania in so many of my colleagues?
I actually think that the dog things does go hand in hand with a love of homes. Dogs make a house a home. They bring love and warmth, companionship and warm fuzzies. And when you are all about a home, a dog is not a far leap.
But I think it is deeper than that, and I think what I am about to say should make our profession proud. We have compassion. By and large we are a benevolent group. Sure, there are some crummy, mercenary shazbuts in our ranks but overall we’re a home loving (often dog loving), softed hearted crowd. If we weren’t we wouldn’t be so devoted to our furry family.
Reading so many blogs and listening to my own team of agents, we lose sleep over our clients. We mother hen. We worry. We SO want them to win. We invest our selves and our efforts in a happy outcome for them. We literally bet our income we can make a difference for them. The public might think that all we see is a commission, but that’s the minority. When we look at our clients, we see a noble mission. Is it any wonder that so many of us see the same when we look into a dog’s eyes?
That’s my theory- any other ideas?