I posted a blog question on a Realtor 2 Realtor message board asking for listing agents to defend why they should receive the same 3% commission for selling a house that a buyers agent, who arguably, does a lot more work.
I did not receive but one response and the agent mentioned that one could argue that because the agent listed the property they simply deserve it because without the listing there would be no sale. He did however say my theory held some water and not to back down on it.
I asked in the post what tangible marketing techniques did a Realtor who works for a large broker have that were so much better than any agent who can list there property on the MLS, granted they both have equal skills in running comps, pricing properties and handling negotiations. As I said I didnt receive any answers.
Basically my theory is this.
The past 10 years has brought drastic changes to Real Estate. 10 Years ago buyers had to go to agents who had access to the information where as it wasn't as readily available to the average joe as it is now. Now whether you list with a large agent or a small agent your property is going to be on the MLS. Realtor.com and many other large name sites pull directly from the MLS database. Individual Realtors can pay a monthly fee to have there listings placed higher on Realtor.com and sites such as that.
Also any home listed on the MLS will be searchable through any of the large name companies websites as well, ie Remax, Century 21. Combine this with the fact that most buyers who are serious will end up working with a buyers agent. This agent will send them everything that matches their criteria in hopes of making a sale. They do not care who list the property as long as they get there 3%.
So the very bottom line is that what will end up selling your home is the price and how it is priced for the location. The agents expertise does come into play here, but it doesnt take a large name broker to teach someone how to compute and translate numbers.
Unfortunately for these big name brokers it is hard for them to list for 4% and give 3% of it to a buyers agent because they have large name brokers behind them. The large name brokers take anywhere from 50% to 30% of each commission.
In the old days the brokers were needed to help advertise as it was expensive via print, radio, tv and other mediums. However today with internet publicity an agent with technological savy can reach his or her targeted audience for a fraction of the cost. Knocking away the need for a large name broker thus a considerable increase in the amount that the individual agent takes home on each deal.
In the past year I have personally heard of two national Real Estate firms who are backing the mass majority of their advertising budget, one is backing 100% of its ad budget out of traditional ads and placing it all on internet advertising.
Have a good Weekend
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