Concessions needed in this market

Re: 'Home-sale commissions too high, seller says' (May 5)

Dear Editor:

Not all agents and Realtors are created equal. Too many times homeowners choose to go with an agent who is content with putting a sign in the yard and only talking with their clients when it is time to lower the price or re-list the home. Most people don't realize that they can fire their Realtor and get a new one! If you go more than two weeks without hearing from your Realtor, then you have an agent who is lazy. Sometimes it is even reassuring for a homeowner to hear that there is nothing to report -- just knowing that your Realtor is being watchful goes along way.

Realtors resist lowering their commission for a couple of reasons. First, the larger franchises often frown on this and the agent has to justify this reduction in commission to their broker. Next, it is expensive to market a home effectively and if the home doesn't sell the Realtor is out this expense.

Further, if an agent lowers the commission, be sure they are still offering what the "customary" buyer's agent's commission is in the area. I have often been the listing agent and the one who spent more out-of-pocket money selling a home and made less than the agent who brought the buyers who had little or no out-of-pocket expense. This is part of doing business sometimes. But a reduction in commission is useless if it keeps other agents from showing your home.

Unfortunately, some Realtors will discourage their buyers from making an offer on a home if they stand to make less commission on it. This is not something that any company or broker should encourage. If a certain home is what is best for their buyers they should be encouraging them to make an offer regardless of what they stand to gain in commission.

Finally, often independent brokers will and can offer you the discounted commissions. These types of brokers don't answer to anyone besides themselves and are able to make wise business decisions based on what they ultimately stand to gain. An example would be when a seller agrees to purchase the next house using that same Realtor, it makes sense to help your seller sell quicker by reducing the commission (which should allow the seller to reduce the asking price) so they can benefit from the next purchase.

Plus, this Realtor should see this as an opportunity to build a deeper relationship with this homeowner and a great source for referrals. After all, word of mouth is still the best advertising for future business. Or perhaps the homeowner is selling in a particular area or neighborhood that the Realtor desires to specialize in, it benefits them to have as many listings as possible and be known as the go-to agent for that area when other homeowners want to sell in the future. There are several reasons that it can make sense for a Realtor to reduce their commission.

In this current market, concessions have to be made. The Realtor should make concessions; the homeowner should make concessions, and remember often the buyer is making concessions on the lending side of the transaction. This doesn't mean it still can't be beneficial to everyone involved as long as everyone understands what their ultimate goals are and what their tolerance for these concessions will be.

Gary Mattox
For A Good Home & Loan
Indianapolis, Ind.

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