Tuesday, May 27, 2008

The difference is the difference

In the real estate business there are many hidden differences between companies that you should know about, as they could affect what price you get for your property and how easily you sell it.
One major difference is their policies when doing business with each other, specifically the showing of your home to other company’s clients
Some companies have a “stand down” policy which means that during the first two weeks your home is listed with them, they’ll keep the listing to themselves by discouraging salesmen from other companies bringing their buyers along.
They do this in two ways:
(1) By refusing to allow salespeople working for competing real estate firms to show buyers through properties that they have listed.
(2) By not paying the other company the 30 percent share of the commission that would be considered normal practice, but instead offering only a token buyer referral fee of say, 10 percent.
Now this still sounds like good money – maybe $1600 on a sale of $400,000. But what you have to remember is that the salesman gets only a portion of that amount – maybe $800. So any salesperson will ask themselves, “Why would I take my buyer to a listing where I’ll only get $800, when I could take them to one where I’d get paid $2400?”
Of course a company with that sort of policy will give all sorts of reasons for it, but the reality is they simply want to keep as much of the commission “in-house” as they can. But unfortunately, it’s hardly a policy that is in your best interests.
The same problem occurs with the so-called discounter, “hold-your-hand” type real estate agencies. Even if the discounter does pay the competing company 30 percent, it’s a 30 percent slice of a much lower commission.
Moreover, it will also result in 15 percent of a much lower amount for the salesperson, which isn’t exactly going to fill them with enthusiasm for selling your property.
So here’s the thing to remember: When you’re choosing a real estate agency and salesperson, if you want more buyers (and who doesn’t?), make sure the company you choose encourages other agencies to want to do business with them
It’s in their best interests to do so – and it’s certainly in your best interests too.

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