Recently some friends from interstate sent me a message saying they required my ‘expertise’ on a real estate matter. The flattery of referring to you as an expert is a powerful tool in getting you to respond, even though you know the advice will be free. I’m always happy to help a friend in need.
It turned out the advice they sought was about whether or not to pay a real estate agent the agreed commission for a sale he facilitated on their property within the last couple of weeks.
As a former detective, investigative negotiation is in my blood, so I commenced to peel back the onion and get to the heart of the story and help with their ‘dilemma’.
My friends had listed their home for sale with this agent in the latter half of 2013 and it seemed their motivation to sell was a little tepid. By all accounts the agent made good on his service promises and produced potential buyers and eventually negotiated a deal, that went to contract. Sadly that contract failed due to some issues with the building inspection. Nothing major, but a stalemate ensued and negotiations broke down. This happens. Dust off – move on.
The sellers then decided that the planets were not aligned and they were not prepared to continue marketing the property. They told the agent they would sort out the issues raised and revisit selling it in a few months. All agreed.
Agent says he will keep in touch and looked forward to working with them again.
Fast forward a few months and the agent called my friends to say that he believed he had a buyer that was the right match for their property if they were now ready to sell. They decided the time was right. So they signed an agreement and negotiated a discounted commission with the agent to be paid should this particular buyer go through with a purchase.
The buyers took a look, made an offer and by all accounts a pretty good deal was put together. All parties happy, and time for my friends to start the new chapter of their life.
So, where was the dilemma? Great price, straight up deal, time to pack and move.
Oh, no. The following question was asked that required my expertise – “Do you think we should ask the agent to discount his commission because this was a really easy sale?”
Ok. I am the champion and advocate for home owners who would rather sell their own home and save serious money. I am passionate about helping people sell their homes privately, but this question disturbed me a little from a purely professional point of view.
My first reaction to this question was a question of my own, “What about the efforts of your agent during the previous sale attempt?”
That drew a long pause, with the response, “Yeah but the actual sale was easy, he didn’t have to do much”.
Here, I went into ex-detective mode – “Did the agent get you a deal at or beyond your expectations?” “Yes.”
“Are you happy to move on?” “Yes.”
“Did you agree on a commission rate when he approached you with these ‘one-off’ buyers?” “Yes.”
Just pay the man. He did his job, you agreed on what he was to be paid and a re-negotiation of his commission now will sour a very good deal.
After a little more grumbling, it was agreed they would simply finish the deal as it had been planned and be grateful for the result.
This raises a very valid point. If you are looking to sell your home or property, you must decide from that very moment – will I hire an agent and be prepared to pay the commission, or will I sell my own home and save some money?
You cannot deny a good agent, who does a good job, their right to payment of an agreed commission. There is an alternative if you don’t want to be faced with this financial burden – sell it yourself.
This decision is one to make right at the very start of your sale process, not when the ink is drying on a contract of sale.