Buyer Beware! That is the old adage that helped form the current real estate industry and designate the overall representation of realtors in a transaction. This consists of a listing agent representing a seller and a selling agent representing a buyer. “Buyer Beware” was a term used back when buyers did not have representation, meaning it was up to them to investigate. Nowadays, it seems to me that the term should be used to vet realtors with a discount firm.
The traditional brokerage model has been under fire for over a decade now with plenty of tech companies looking to transform the industry. Clearly, we all know about the big real estate portals, some whose business model seems to change every so often. I am happy that technology is making it easier and more efficient for realtors and their clients to conduct business. Technology is a tool, but let’s be clear, it will never replace a good agent!
Here is another adage for you: “You get what you pay for.” When I see some of these larger discount brokers, I cringe, because the bar is set so low for those agents. Discount agents get compensated not by a successful transaction. Rather, they are on a base salary and get a lower bonus fee for a successful transaction. So where is the motivation to excel, grow their business, learn new skills? I don’t think it’s there.
I was recently in a failed transaction with a discount agent representing a buyer. This discount agent offered up a sloppy purchase agreement to begin with, loose on terms that simply would not be considered. We ultimately tightened up the contract and ratified. The agent was prohibited to “kick-in” into making the deal work, which was a limiting factor during negotiation. In the end, the communication was mostly one sided, with me reaching out to the other agent to track the buyer’s progress. This ultimately stalled out and failed.
Good realtors make their living on commission earned, and as such they are highly motivated to excel in their profession. Quality realtors add so much knowledge and experience within a transaction that clients are happy to pay for the fee, because oftentimes it actually saves them money when all is said and done. Clients often realize that working with a professional will guarantee the best representation and the smoothest execution of all the moving parts associated with listing a property, ensuring the highest values possible.
In the end, maybe my rant is just a reflection of my annoyance with wasting time and energy on a failed transaction. Unfortunately, it happens and it’s a part of our business. What irks me is that I take my fiduciary duties seriously, always giving the best advice possible. I’m not sure that some of the discount firms and their agents take their fiduciary duties as seriously as I do.