Ad #2 in the Newspaper*
* This Ad is fictional though based on a real newspaper ad
After you watch the Ad, scroll down
for the TRUTH.
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The Truth:
That $1995 fee does not include the Multiple Listing Service (MLS). It also does not include compensation to the agent working with the buyer. Of course, they'll tell you that's because they're marketing directly to the buyer, not to the agents. This ad looks deceptively like straight Fee-For-Service except for one little detail: they only get paid for results. Sounds great, but what does it really mean to you, the consumer?
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Well, you'll certainly get a sign in your front yard, but how much will they proactively advertise and promote your home for a reduced fee that they're not even assured of getting? What quality of agents work for reduced fees that are still contingent on the sale? This is classic discounting.
Here's the straight scoop: unless it's a seller's market with a shortage of inventory, your home needs to be listed on the MLS if you're going to get the exposure that ensures top dollar. The truth is that serious, qualified buyers (the ones you want) overwhelmingly work with an agent and this option doesn't bring your home to the attention of those agents. |
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It's also classic bait and switch. After you've had your home on the market for a month or so without MLS exposure, you're probably going to inquire if they provide MLS "for a discount." Of course they do! They will then offer you a discount commission (so much for the fee concept), but they don't take the whole hit themselves: they also discount the compensation offered to the agent bringing the buyer.
Now, it would be great if all agents were selfless souls who never looked at their compensation when showing homes, but this is one of the conundrums that today’s agent has: because few buyers have the cash available to pay their agent themselves, agents working with buyers have to depend on the compensation offered by the listing (called a co-broke in real estate lingo). Yes, most agents put their buyer’s interest first, but if they have a choice between a home offering the going compensation and the discount listing offering less, which home are they going to show? Surely not the discounted home.
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