We constantly get a lot of grief from other real estate agents who criticize our commission structure. Since home prices remain relatively high in Seattle, we believe in charging lower real estate commissions than are currently charged here, yet offer the same level of service that you can get from another full-service agent.
The other day we were working with a listing agent on the purchase of a new construction home for our buyer. When we informed her that we are sharing some of our commissions with our buyer in the form of a rebate, she said “Shame on you! Why would you do something so stupid? It is agents like you who are undermining our profession and making it difficult for the rest of us to make a living.” In a recent conversation with a former colleague, one of our agents was called a profanity and told that we are “hurtful to other agents and hurtful to the real estate industry”.
While I realize that commission rates are a contentious issue in our industry, I fail to understand why other agents would need to use profanities or belittle us to argue their position. From our perspective, we simply want the ability to set our own fees based on what we think it takes to provide service and turn a profit. We are able to set our commissions with home sellers directly, but when our client is a home buyer, our compensation has already been set by the home seller in their listing agreement. If we think that the compensation we receive is too high, we simply use a rebate to reduce our compensation and bring it in line with what we would like to charge. We’d prefer that we didn’t have to give a rebate, but until buyers are able to set the compensation for their buyer’s agent, we are stuck. Greg Swann from the Bloodhoundblog has been rallying agents to support this idea of the “divorced real estate commission”, which puts the decision of buyer’s agent compensation in the hands of the buyer and seller’s agent compensation in the hands of the seller, as it should be.
No one faults a consumer for shopping for the lowest insurance rates, cheapest stock trading fees or lower banking fees. We believe that the same sort of competition should exist in the real estate industry and fail to see how this sort of competition can be “hurtful” to other real estate agents. We were founded on the belief that we could provide full-service real estate brokerage for less than what traditional companies charge. It remains to be seen if we are successful, and we will tweak our business model based on results and customer feedback. We also remain committed to professional interaction with other agents, despite the controversy of our business model. We are certainly open to debate about our business model, but wish that the debate could remain professional and not degenerate into name-calling, profanities and berating.
