Entry by Donna Janovsky

An Example for Value of ACRE(r)

  7 Comments

I received this article today from NAR and thought I would share this because to me it confirms the value of the ACRE(r) program for real estate agents. http://ypnlounge.blogs.realtor.org/2011/03/15/to-cut-or-not-to-cut-your-commission-that-is-the-question/.  

7 Comments

Interesting article Donna. Me thinks that the agent could have had a new buyer client by offering some choices in how he was compensated. And since he was paid for his time and expertise he wouldn't have 50% "fat" to give back to his friend.

is someone going to post and inform this young man about ACRE?

 

How about you Denyce? You're one of the best!

This is a perfect example of how screwed up the commission structure can be... and WHY the public has trouble understanding our "value."

Is this young man saying that he would refuse to represent a $1M buyer because the commission is too low (it would be 50% of the commission on a $2M house)? Or a $500,000 one? Or a $100,000 one? Is the skill set and time investment required that much different for a $2M house versus a $1M one? Or even a $1M versus a $100,000 one (which carries with it its own challenges and obstacles)?

I think he's not cutting his commission as a matter of "principle" Jennifer. But I agree with you - because his compensation is based on the value of the house versus the value of his services, this "principle" is weird!

Well, I was on my way to take a much-needed little mid-afternoon nap, but this article really fired me up. I can't help myself - watch my blog for an upcoming rant!

I know things vary from state to state, but even with the commission system in Arkansas, if the home is listed with a real estate company and is in the MLS, a buyer can have his own agent at no extra cost to him. The seller is paying a commission to his "listing" agent. Many buyers think they can get a better deal if they are working with the listing agent. But what listing agent do you know who will give up a "double dip," especially on a $2M property? The friend of this guy probably didn't get a better price because he was unrepresented; the listing agent just got a bigger check and this guy got the shaft from his "friend."

The buyer would have been better off working with a buyer agent who would have represented his interests in the transaction. And in this case a friendship would have been saved. Bottom line is that we have a big job to do to educate, not only other agents, but also the general public. Mollie's book is a start, and so is ACRE.

This page contains a single entry by Donna Janovsky published on March 17, 2011 2:02 PM.

Fees vs Commission was the previous entry in this blog.

Thanks ACRE! is the next entry in this blog.

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