I have been in the Real Estate industry for 32 years. During that time, I have consistently heard from Agents that their brokers simply take too much of their commissions. Over the past three decades, many changes in Brokerage models have come about. In almost every instance, it has been disguised as a benefit to consumers as it will reduce the cost of the transaction. That assumes that if the agent receives more they will pass that savings on to the consumer. Nothing is further from reality. By making it about the dollars the agents can earn, it harms the consumer because agents simply facilitate transactions in the simplest way to “get the transaction closed” so that they can get paid. Simply reducing the cost of the transaction is NOT the key to benefiting the consumer. The key is to greatly improve the professionalism of the agents representing consumers. This will never be done by providing agents more commissions without requiring that they improve their professionalism. Are they going to use the additional dollars received to educate and train themselves to be better at representing properly their clients or customers interest? Does the broker really care if its only about the number of transactions done? The whole real estate distinction between a “client” and a “customer” demonstrates the inability of the industry to understand their responsibilities to their principal in a transaction.
What agents should be looking for is a brokerage where education and doing things right is a focus. One who knows the clients interest are first. It should have qualified staff people who can assist in every element of a real estate representation. It should have systems in place to facilitate the review of transaction documents on a timely basis to ensure accuracy and obtain digital signatures. The brokerage should be monitoring the changes in laws, delivery systems, and the practical barriers to properly completing transactions and protecting the client’s interests. The pressure from consumers to reduce commissions is due to their belief we are nothing more than a scribe writing out a transaction on a prescribed pre-printed form. Sound familiar? How many of you if you were legally wronged would search out the cheapest attorney you could find versus the best available? If they were the least expensive, would you complain when that attorney didn’t get the result you hoped? What would you expect from your client?
We need to be creating brokerage models that enable Brokers to increase professionalism and value to the public, not models that claim to benefit the consumers by reducing transaction costs. Providing ongoing education and individualized quality representation is going to be necessary to avoid being priced out of the market by a faceless technology company. Let’s analyze what we pay our brokers by what we receive from them and how that benefits our clients by helping us provide professional representation!
Just a thought!