Worth the $6 million sales commission?

Can you really sell ultra-luxury property for-sale-by-owner? Ask any full-service luxury agent this question and the answer will probably be a resounding, "No." Yesterday, however, USA Today reported that Ron Baron, founder of the Baron Funds investment company, paid a record $103 million for a residential property in East Hampton, N.Y. The price is strictly for the land and it supposedly sold without an agent.

Clearly, this was a "discreetly marketed" property, which many ultra-high-end sales are. The owners want absolute privacy about the transaction and rely on personal spheres of influence to push the sale rather than going public and listing. There's nothing unusual about commercial or industrial properties of this magnitude being sold directly without an agent. At this level, there are only limited number of players. In terms of residential real estate, however, this is unprecedented.

The typical arguments those of us on the full-service side make is that we can market the property internationally, we can provide better exposure throughout our national and international brokerage networks, and we can help the seller negotiate a higher price. The question in this case is whether these services and the potentially higher price are worth a $6 million commission. Clearly in Baron's case it was not. It will be interesting to see whether the Blixseth estate at Yellowstone Club or any of the other $75+ million listings follow suit.

--Bernice Ross, RealEstateCoach.com

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