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Real Estate Services
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Scenario 1: Confused Over Commission
Some unrepresented buyers — particularly first-timers — mistakenly think they’ll have to pay the commission if they use a buyer’s agent, says Jo Anne Souza, a sales associate with RE/MAX Visalia in Visalia, Calif.
Souza speaks from experience. Recently, she met with an unrepresented buyer who demanded to know her commission in an attempt to lower the purchase price. Even after she explained that her commission would be paid by the seller, the prospect wasn’t satisfied. He made a disparaging remark about real estate practitioners being “rich and greedy” and walked away.
“You’ll always have reluctant buyers who really don’t know how things work,” Souza says. “Lately, it seems to be a lack of trust.”
Indeed, after years of not-so-flattering media coverage about how some real estate professionals profited from the real estate boom, it’s not surprising that consumers have a skewed view of how practitioners get paid, Staines says.
The solution: “I truly believe it’s an education issue,” Staines says. Address the commission issue upfront with potential buyers, just as most practitioners do with prospects at listing presentations.
Scenario 2: Looking for Savings
Other unrepresented buyers have some experience in the real estate market — because they’ve bought or sold a home in the past — and intend to negotiate a better deal by shaving off the commission that would normally go to the buyer’s agent.
Limited-service Web sites such as BuyOwner.com, which target FSBOS, also are also making their pitch directly to buyers who don’t mind doing the legwork that’s usually done by a real estate practitioner, such as scheduling open houses, researching comparable home prices, making an offer, negotiating, and coordinating the closing.
But will cost savings really result? Paul Purcell, a partner at Braddock & Purcell, a New York real estate firm and consultancy, says that’s certainly not a given. He warns that buyers shouldn’t make the assumption that they’ll get a better deal from sellers just because they’re not represented by a real estate agent.
“Why would the seller ever pass on savings to them?” he says. “The sellers don’t know them, and they’re not going to give a bargain to buyers [rather than pocketing the savings].”
Another thing to stress with unrepresented buyers: time is money. If they have a full-time job, a busy family life, and other commitments, it may make the most financial sense to have an experienced professional handle all the details involved in a home search, making an offer, and closing.