Monday, July 17, 2006

By Robert J. Bruss
Inman News

DEAR BOB: As a Realtor, I want to thank you for your recent item about the drawbacks of cutting home sales commissions below the customary rate in the community. My specialty is listings. I find working with buyers is much less productive (although I make exceptions for good referrals). I’ve been selling homes for 14 years and will “negotiate” the sales commission on expensive homes to remain competitive. However, I tactfully tell my sellers if I reduce my commission to 4 percent or 5 percent, the buyer’s agents will show my listings last only after showing the full-commission listings. Whether it’s ethical or not, that’s what happens. You might enjoy knowing about a recent full-commission, well-priced listing I had, which didn’t get even one offer after 60 days on the market. It’s a beautiful older home but on a very busy street. I suggested my seller raise the commission from 6 percent to 7 percent, with 4 percent to the buyer’s agent. She agreed. I held a well-publicized MLS (multiple listing service) “broker’s tour” with a deli-lunch and got 125 local agents to re-tour the house. Within the week, the house sold for nearly the full asking price. Raising the sales commission can sell a house in a slowing market –Sharon R.

DEAR SHARON: Thank you for your insights based on longtime sales experience. Too many home sellers focus on the sales commission, thinking they are saving money if they cut the rate.