What do you charge?  What are your fees?

For sellers, see our brief essay:  The Dinosaurs and The Children

For buyers, the real estate agent is most often compensated by the seller.  While this is typical and traditional, this is not always the case.  Regardless of the firm and broker you engage, be sure to have a clear discussion of fees before you get started.

I bought some stock last week and sure enough, my stockbroker charged me a commission.  If I am selling my real property, why am I expected to pay the commission for the buyer?

For better or worse, there is one primary answer to that question:  It's always been done that way!  Customary, traditional - call it what you will.  It's a holdover from the days when all agents represented the seller and the buyer was always unrepresented.

Is it required?  No.

But like it or not, the way to think about this is as a marketing expense, like any other.  Coke and Pepsi are not required to market their products - legally, ethically, or otherwise.  Yet, no doubt, they would argue that marketing is a required cost of doing business.  As the seller, you are certainly not required to pay the buyer's agent.  But remember, neither is the buyer.  While real estate may not be the most transparent marketplace, believe it or not, it is subject to the laws of competition like any other.  As the seller, you are competing with other sellers who, yes, are typically paying the buyer's agents.  If you do not, the buyer will pay this expense, themselves, and simply include it in the "gross cost" for your property, which they will, of course, compare to others.  Therefore, as a marketing expense, we encourage you to offer competitive compensation to the buyer's agent.

I am considering using a discount broker.  What should I know beforehand?

Discount brokers only quote prices for the "list side".  Sounds like a deal, right?  Well, "$499 and we list for you" is really $499 PLUS whatever you decide to pay the buyer's agent.  What you have to understand is that most of the work in any real estate transaction is done AFTER listing.  So for a discount listing, the bulk of the work is done by the seller, yourself, and frankly, since you don't do this every day, primarily by the buyer's agent.  In fact, much of what was formerly done by the listing agent is now involuntarily hoisted upon the buyer's agent.  We strongly urge you to make it worth their while.  Note, so do the discount brokers - they all encourage you to pay the buyer's agent.  Why?  because they have already captured the easy money.  Why should they do any real work?

Here's what the discount brokers do NOT want you to know:

Often, by the time you compensate the buyer's agent, you could have hired a full-service firm for the same price.

But the discount broker offers a premium "full-service" package...

Yes, they do.  But again, quoted for the list side only.  The above statement is even more true!

Here's our question:

Regardless of the package or broker you select, shouldn't we begin this six-figure transaction process with a direct, aboveboard, completely honest discussion of the costs involved?

I am considering using a traditional agent.  What should I know beforehand?

Well here we could easily focus on the obvious high overhead and high cost to the client.  But most of our readers are fully aware of this situation.  Let's move on to something more interesting....

The real estate business is in many ways, counter-intuitive.  To quote Mr. Churchill, It is a riddle wrapped in a mystery inside an enigma.

An example is in order.  Traditional real estate agents want you to believe that they are great at selling houses.  Don't believe it!  What they are really good at is selling themselves to potential clients with the illusion that they are great at selling houses.  For these agents, real estate is a one-dimensional business:  Self-promotion.  Agent-centered marketing is blatantly self-serving, and from a client-goal perspective, almost totally ineffective.  And yet, it is the client who ultimately pays for this subterfuge.

Many quite successful agents are not so great at the details of brokering real estate transactions.  But they are excellent at converting potential clients into clients.

Here's what traditional agents do NOT want you to know:

They spend more of your money on self-promotion than they do on marketing your property or brokering the transaction.

How are we different:

Our multi-dimensional approach combines authentic client-driven real estate marketing with unmatched broker integrity, education, experience, competence, and professionalism.  Our goal is to provide our clients with superior representation and a distinct competitive advantage throughout the entire real estate transaction process.

For Buyer's Agents:  Yes.

We strongly encourage our seller clients to offer competitive compensation to any buyer's agent from any firm.

For Listing Agents:  Most Often.

If a non-client seller offers competitive compensation to our firm, as the buyer's agent, absolutely.

However, today an ever increasing number of sellers are opting to offer buyer's agents something less than competitive compensation, or even no compensation.  In this case, our buyer client is forced to add this expense to their calculations.  Our buyer clients will decide if they are willing to do this.  If not, we will attempt to negotiate a reasonable fee from the seller.  But let us be perfectly clear, if the seller is not paying and the buyer is not paying, we will not cooperate with either the listing agent or the non-client seller.  Odds are, we will not even show your property.

Doesn't that disadvantage your buyers?  Not a bit.

On the contrary, because we leave the choice to our buyer clients, it places our buyers on par with the non-client seller.

Make no mistake about it, whether we represent the buyer or the seller, we fiercely protect the interests of our clients!

Will Brick and Garden Real Estate manage my residential rental property?

No.  Property management is a unique business and is best handled by a firm that specializes in that area of real estate.

BG

BRICK AND GARDEN REAL ESTATE