Now you have choices: March 2010 Archives

Our roundtable panelists today are Ron Stuart, Merv Forney, Mollie Wasserman and Brent Fraizer, and the moderator is Mary Pope-Handy.

Mary: Do you do an "initial consultation" prior to showing homes? What is involved in your first appointment?

Brent: Yes, I do an initial consultation prior to working with a buyer. It is the same process for ANY potential client. A needs analysis is performed 1st, a service proposal is prepared along with a customized Smart Plan. All of this is reviewed during the initial consultation.

Mollie: If a buyer is not willing to sit down for an initial consultation, I won't work with them. To me it's like asking a doctor to prescribe medication without an office visit. I'm a consultant, not a tour guide.

Ron: Yes, I do not take on a Buyer client without a qualifying interview. Even before consulting days I insisted on at least an hour with the Buyer before looking at properties. First, I make two points with them. One, this isn't about selling you anything; it's about helping you buy wisely. Secondly, part of representing you is to treat our business together in strictest confidence.

I then tell them we have two main areas to cover: (a) my gaining a thorough understanding of their needs, wants, likes, dislikes, financial capacity, timing, etc. and (b) making sure they have a good understanding of the process including such things as agency, financing, closing costs, sourcing and showing properties, contracting and how I can be paid.

Merv: Absolutely. I do an intense initial appointment to make sure that they are serious buyers.

There was a post this week on Active Rain from an agent explaining how when asked, he will not cut his commissions. By weeks end, there were nearly 200 comments to his post, some agents cheering him on for his stand, others arguing the opposite, some comments from lenders, appraisers, and home inspectors arguing for and against.

But of the 200 some odd comments on the subject of cutting commissions, only two brought up the idea that maybe there is a choice other than cutting or not cutting commissions - from ACRE® Ron Stuart and myself.

Here's what I said:

The problem with discussing commissions as payment for services is that the consumer doesn't buy the reasoning. If it's a million dollar home, can you honestly say that you do four times as much work as you do on a $250k listing? We, in the industry defend it because what we make on an expensive listing makes up for all of the work we do with homes that don't sell and buyers that don't buy. While that makes perfect sense from our vantage point, you can't blame the seller for saying "What's in this for me? Why am I subsidizing the deals that don't close?"