Commissions negotiable at Agent Invitation
Site lets consumers propose services, fees
By Inman News, Monday, April 13, 2009.CORRECTION: This story has been updated with a correction. Consumers using the site do not initially propose the commission amount they are willing to pay.
A new Web site aims to help consumers and real estate agents negotiate discounted commissions by allowing consumers to send anonymous queries to three agents asking them to propose the services they would provide and the commission they would charge.
Agent Invitation claims agents using the site will be willing to work for reduced commissions because they will save on referral fees and marketing expenses, and because consumers seeking discounts may agree to forgo services like print advertising.
"This eliminates part of an agent's costs because clients approach agents -- it goes right to their e-mail inbox for free -- and that savings can be passed to the consumer," said Agent Invitation founder Don Stewart.
Agents often pay 25 to 35 percent of their commission to other agents or referral companies, the company says, and 10 to 30 percent of their commission revenue goes to advertising and self-promotion to attract new clients.
Agent Invitation does not charge agents for referrals or for inclusion in the site's registry, although they can post an agent profile on the site for $29 a month. Instead, consumers pay $99 to send anonymous invitations to any three agents they are interested in working with. The agents don't have to be in the site's registry.
Because the consumer has demonstrated he or she is a serious buyer or seller by paying the fee, and because several agents are competing to land them as clients, "agents will think hard about what commission fee would be fair and reasonable to get the job done for you," the company claims.
Sellers provide an estimate of their home's asking price in their invitation, and the site offers a commission calculator to help consumers and agents try different commission structures. Agents respond with a proposal that includes the services they would provide and the commission they would be willing to work for.
Once they have received the proposals, consumers choose the agent or agents they would like to meet with in person, and Agent Invitation releases their contact information.
After transactions are completed, consumers are asked to provide a "STAR rating" for the agent they worked with and to share comments to help guide others in the future.
--Katie Ramsey
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Submitted by Larry Whited Sr. on April 13, 2009 - 1:15pm.
This is a great idea except for the $99 cost to the home owner to use it. I don’t think home owners will pay the $99.
Home owners can make a few phone calls or email a few agents from a Google search and have several agents at their front door in 24 hours with deferent reduced commission plans.
Great start on a novel idea with lots of upside potential.
Larry A. Whited, Sr., CRB, CRS, GRI
President & Founder
www.maxUnet.com & www.WebMLS.net
A Virtual Real Estate Franchise System
** Virtual Is the Future **
P.O. Box 757
West Chester Ohio 45071
Direct - (513) 543-2727 Fax - (513) 297-7497
Submitted by RK Ruthman on April 13, 2009 - 2:27pm.
Having a reasonable charge for individuals to request commission submission is probably a good idea. Why? Because it would deter agents from randomly submitting requests to find out who is charging what.
Submitted by Michael Erdman on April 13, 2009 - 2:44pm.
RK, I assume your objection to agents submitting requests is that it would be wasting the responders time, right?
Submitted by Don Stewart on April 14, 2009 - 5:34am.
Larry, Michael, RK - the $99 charge for the buyer or seller is meant to help qualify that that the client sending the invitation will really hire an agent, and the agents that receive the invitation should take them seriously.
If it was free it's likely that many invitations may not be from people that sincerely intend to hire an agent in the very near future.
We could return the $99 to the client when they tell us they have met with or hired one of the agents included in their invitation. By that time we will have kept our promise to the agents that the client is sincere - they have met with and/or hired an agent - and the service was free.
Submitted by Don Stewart on April 19, 2009 - 5:26am.
I just want to clarify a bit of the original article. In the fist paragraph Katie says:
"A new Web site aims to help consumers and real estate agents negotiate discounted commissions by allowing consumers to send anonymous queries to three agents detailing the level of service they seek and the commission they'd be willing to pay."
Almost right. The consumer does not suggest any level of commission that they would be willing to pay. They outline the services they need, the approximate value of the purchase or sale, and make a case for why they think an agent may be able to work with them for less than the local "usual" commission percentage to meet their specific needs. It also says that if an agent thinks that charging the "usual" percentage commission is fair and reasonable in this case then they should propose the "usual" percentage commission.
The thought is that if consumers understand how commissions work, and can review a few agent proposals before that meet with any agent face to face then they can make a good hiring decision for them based on many important factors, one being commission.
It does shift a bit of power from the agent to the consumer. The agent knows how to "overcome commission objections" in a face to face meeting.
So, you are free to propose any commission for your services that you think is fair and reasonable to meet the clients needs - including the "usual".
Submitted by Matt Carter on April 20, 2009 - 3:25pm.
My apologies Don -- the error in the lead paragraph as originally published was introduced (by me) in editing, and was not Katie's mistake.
Submitted by Don Stewart on April 21, 2009 - 6:21am.
No troubles Matt - I did not know the best way to let you folks know about the mistake - we all make them. Thanks for following up.