To say that ALL agents are worth the full commission would be a lie, but it is also a lie to say that every doctor, lawyer, or mortgage professional is worth their industries average fees. I don't see this as an industry issue but more of an agent issue. The question isn't whether or not real estate commission rate are too high, the question should be, "Where can I find an agent who is worth the money and how will I know?"
Good listing agents are worth their weight in Gold! I think it is far more difficult to be a great listing agent than a great buyers agent because, at least in today's market, it is easier to find a home than to find a buyer. Above average listing agents need to be;
1. A marketing geniuses, both online and offline,
2. An expert in staging,
3. An expert in negotiating and
4. They need to be experts in the markets they serve so they can price the home correctly in order to balance the sellers financial and timeline needs.
The best testimonial a listing agent can get is, "They sold our house fast and at full price!"
It costs money to deliver the best home search technology to their buyers. A good buyer's agent, someone who is definitely worth the commission, must provide a buyer with at least these three components;
1. Access to technology to help the buyer find the right home, (idx broker reciprocity mls site)
2. Superior negotiating skills and
3. Superior knowledge of marketplace. (i.e. city, neighborhood, schools, etc)
The best testimonial a buyers agent can get is, "The found exactly the home we were looking for and got the sellers to drop the price!"
It is critical that every agent be able to answer the question, "What is my competitive advantage in the marketplace?" or "What do I do as a listing agent or buyer's agent for my clients that totally justifies my compensation?" When you can answer this question in a way that is relevant to a home buyer or seller, compensation will never be an issue.
At the end of the day one of the best ways for any agent to prove their value in their market place is with agent recommendations/testimonials. I'll be the first to admit that I hate asking for testimonials, even when I know I have exceeded expectations, so before anyone goes off on me about how this is an unfair measure of value because not every agent is comfortable asking for them, let it be known that I am not saying it is easy. Agentopolis tries to help address this concern by being online and making it easy for agents to simply email their past clients with a link and a simple request, versus having to call each one and ask. (Although the top agents tell me that this call for a testimonial is where they generate a number of their referrals)
Threats by Refin, Zillow and others to change the Realtor profession into that of a hourly wage factory worker makes great news stories but I for one don't think it will create a wholesale change in the industry. The bottom line is that the Internet is changing the way people buy and sell homes but the fact is that the Human Side of Real Estate is not going away anytime soon. People will continue to do business face to face with people they like and trust so my advice to consumers is find a great agent to help you buy or sell your next home and be glad you are only paying 6 or 7%.
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