There are certain practices that listing agents engage in that are, well, less than ethical. Like, inflating the situation, failing to explain dual agency, misleading consumers about commissions.
To put it simply: Your listing presentation makes me look bad. You state that if your clients don’t pay you a certain amount, you won’t be able to pay a buyer’s agent enough, and if you don’t have a large enough payout, local real estate agents won’t show the home.
Besides, there isn’t any rule that says the seller needs to pay more so that the buyer’s agent can be paid more. The listing agent can always take less and pay out more.
That has never been true for me. I have worked with homebuyers in many price ranges with commissions in the $1,000 to $20,000 dollar range. Ethical buyer’s agents put the needs of their clients first and help them with the purchase — including homes that are for sale-by-owner where there isn’t any commission offered.
You tell your clients that anyone who will sell your house for less than “X percent” isn’t a full-service agent. That is just another myth I need to dispel when I meet with prospective homesellers.
There are indeed agents who provide full service for a lower price. There are also plenty of agents who charge high prices and provide little service.
In your listing presentation, you mention how you network with other agents in your company to sell houses. You never mention that advertising homes internally can lead to dual agency and accusations of fair housing violations.
There are some things you don’t tell your prospects upfront, like, for example, that they will pay a large fee in addition to your commission and what that fee is for.
After you talk to them, they are convinced they need to have open houses, even during a pandemic. If they only knew that open houses are more for agents as a way of prospecting and that most houses are sold without ever being held open.
Then, you set yourself apart by showing them the colorful flyers you will leave in their house that will only be seen by the people who tour it.
Homeowners are also told how much traffic the company website gets and how that will help advertise the house. They are never told that their house will be on your company website no matter who lists it. I have added that to my marketing materials along with screenshots.
So many homebuyers and sellers believe in a kind of mythology about how to sell a house, and we all promote those myths with advertising and client presentations.
This year, houses have been selling fast and for over the asking price. Some agents are taking all the credit for those multiple offers and quick sales. I’m sure they worked hard — but I’m not sure they have bragging rights.
As housing is becoming more and more expensive, we are all holding the line and telling consumers that if they pay us, they will save money or get more for the sale of their house.
It’s true that we do provide a useful service because selling real estate is complicated. But we are also adding to the price of the house.
Sure, we can say the seller is paying it, and that’s alright. We can also say that, since the buyer is bringing the money to the table, the buyer is paying it.
The truth is: Buying or selling a house is expensive. For people who are not wealthy, buying and selling more than once a decade is ridiculously expensive. It’s usually best to leave that fact out when pitching our services.
Some consumers believe that selling real estate is easy money, and that’s one of the reasons why we are seeing an influx of new licensees. No one has told them that with fewer houses for sale and because there are so many agents, it isn’t easy to get those listings.
Speaking of getting listings, there are more companies than ever cold-calling and sending emails about all the sellers they have in my area who are looking for a real estate agent. It would be hard to throw a ball and not hit a Realtor in my neighborhood.
I honestly feel sorry for anyone who can’t find an agent and has become a lead, waiting somewhere to be sold to a real estate agent. We all need to reach out to those people.
Things are starting to get real as more folks get real estate licenses, while at the same time, fewer people decide to sell their houses.
The best thing we can do for our businesses and for each other is to be honest about the services we provide, how we work and even how the industry itself works. We need to promote our services without suggesting that the competition is greedy, incompetent or unethical.
There are many people who believe that buyer’s agents will refuse to show a house because of a low commission payout. They are getting that impression from real estate agents who continue to tell sellers they need to pay more or agents won’t show the house to buyers.
If I caught an agent steering buyers, I would file an ethics complaint. Steering makes me look bad, too.
Teresa Boardman is a Realtor and broker/owner of Boardman Realty in St. Paul. She is also the founder of StPaulRealEstateBlog.com.
