By far the most frequently asked question that we get is “Will other agents show my property if I list it with 2 Percent Realty?” Often, people ask this question because they’ve heard something to that effect from a well meaning friend (who’s never used us before) or from, heaven forbid, another real estate agent from a more “traditional” brokerage. The concern is born of the fact that, because we charge less commission overall, we offer less commission to a buyer’s agent. To sell that $600,000 property, we will charge $6950, and out of that, we offer $3000 to the Buyer’s agent. The concern is that, if an outside buyer’s agent stands to make a total commission of around $9000 by selling the listing down the road from ours, then that agent might try to dissuade his or client from buying our listing to make a larger commission down the road. The question is, is there any merit to this concern? Will our listing be shown by other agents? Do our listings sell like all the other listings out there despite the difference in commission?
First, let us answer the questions succinctly, and then we’ll go into more detail. Do other agents show and sell our listings despite the commission difference?
The answer is yes – absolutely, unequivocally, without a doubt – yes. Our listings are shown and sold by agents from more “traditional” brokerage all the time, and we are constantly putting deals together with those agents for the sale of our listings. This is not something you need to worry about at all, despite what you may have heard.
First, let’s consider things from a buyer’s perspective. If you are a buyer looking for your next property, what do you most care about? Presuming you are like everyone else out there, you’re probably looking to ensure that the next property you buy meets your criteria – i.e., you want that next property to have your desired square footage, lot size, layout, the level of finishing, etc. You want that property to be in the right neighbourhood, close to the amenities you have targeted. Perhaps most importantly, you want that property to fit within your budget. We’re sure you can come up with a few more requirements you might have. However, we’re fairly confident that nowhere among that long list of requirements you’ve put together is anything such as “I need to make sure that the next property I buy will pay my real estate agent a total commission of X.” In fact, we’re fairly confident that this would never enter your mind. The bottom line is that you will look to buy the property that best suits yours and your family’s needs and budget for the next decade or two, regardless of whose name is on the listing, whose smiling face is on the MLS sheet, or how much commission the listing agent is offering to your agent. This is obvious.
Given that to be the case, you will want to see every relevant listing on the market before you make your decision. Sure, you may rely on your agent to send you new listings on an automatic property search, but as you, like everyone else on the planet, have full access to this new thing called the “internet,” you have access to the same amount of active listings as your agent does. So, even though you may be working with your agent full-time to find a property, you are still scouring the web, MLS, Realtor.ca, and all sorts of other sites hoping to find that one property that’s perfect for you. Whether your agent points out that 2 Percent Realty listing to you or not, you will see the property advertised one way or another, and before you go and write an offer on the property down the street, you will ask your agent to take you to see our listing. Your agent must follow your instructions as your fiduciary, and show that property to you. The odds are high that if you like our listing better than the neighbour’s down the road, you’ll write an offer on our listing. If you like the property down the road better than ours, you’ll probably write an offer on that one instead. But, dollars to doughnuts, it’s a safe bet that the amount of commission involved in the transaction won’t play a role in your decision on what property to buy.
We see this every day, and we have for years. Here’s the relevant statistic: every year, approximately 80% of our listings are sold by agents from other brokerage bringing their buyers. That statistic is approximately the same regardless of what brokerage you list with; i.e., if you list with a brokerage charging a more traditional commission, approximately 80% of the time, your listing will be sold by an agent from a different brokerage bringing the buyer. The point is that, despite the fact we may offer less commission to buyer’s agents, the same proportion of our listings are sold by outside agent as pretty much everyone else. Our brokerage falls within the industry average. Why? Again, it all comes back to what the buyer does and doesn’t care about. The buyer is in the driver’s seat – not the buyer’s agent. The buyer usually cares about the property and the price – not the commissions involved. The buyer’s agent may care about the commissions – but they are not the ones who make the decisions – the buyer does.
Of course, we don’t dispute that the buyer’s agent would like to get paid more money – sure. Who wouldn’t? But the point to grasp, and the corresponding reality, is that they agent does not make the decision about what properties the buyer wants to view and consider, and ultimately what property the buyer decides to purchases. The buyer makes that decision. End of story.
That all said, agents are the fiduciaries of their clients, which means they have the obligation to act in the best interest of their clients, not in their best interests We can tell you from years of experience doing this, that most agents, regardless of brokerage, take this obligation seriously. So, despite the fact that we offer less commissions, we are constantly getting showing requests from agents from outside brokerages, and we are constantly putting deals together with these same agents. And, we generally have a great working relationship with these same folks.
The bottom line is this: if we list your property, you can have every confidence your property will be shown by other agents and will be sold for all it’s worth. You’ll likely just walk away with more money in your jeans when it’s all said and done.