I have another column in the newspaper tomorrow beating up on buyer’s agent’s commissions, so this seems an appropriate moment to make a confession:
I don’t think it makes a damn bit of difference.
This is the fifth column in this series, running every other week because the editor hated all the complaint calls from Realtors and brokers. I get quite a few calls, too, almost always line-blocked and anonymous. What’s interesting is that I have never had a call from an ordinary reader on this topic — not even when I’ve talked about huge commissions at new home subdivisions.
We’ve been advertising the idea of rebates on buyer’s agent’s commissions in various ways for weeks now. I can measure every inbound click generated by these ads. Net consequence: Crickets chirping. Realtor.com hasn’t been totally underwhelming, but one of the two magazine ads has drawn not one single click-through. The second best performer is the button on our web site. The uncontested champion: The button on BloodhoundBlog. Even so, total interest, scattered and mild, has not resulted in one closed client. We’ve closed on buyers, but not on anyone who showed up to find out more about rebated commissions.
People can be excited by the idea once it is explained to them, but it has to be explained in detail, and even then some don’t get it. Either the idea that buyer representation is “free” is nearly ineradicable or people really don’t mind financing all those extra thousands of dollars.
Jeff Brown foresaw all of this, but I’m from Missouri. Even now it is astounding to me that people would not be more rational about huge sums of money.
Sellers pay attention, and the promotion we do to sellers makes tracks. Talking to buyers in a way that would make sense to a seller has done nothing for us. I don’t claim that this idea cannot work, nor that the way we implemented it was without fault. I’d be interested to hear from anyone playing with similar ideas. My take, for now, is that offering a hard-headed — as against soft-hearted — benefit to buyers is a wasted effort, at least in the early stages of the process.
Tomorrow’s column is extreme, so the phone calls may be very vigorous. But however exercised the Realtors and brokers might be, I don’t think any of this makes a damn bit of difference to ordinary people. Simply amazing…
Technorati Tags: arizona, arizona real estate, compensation for buyer representation, phoenix, phoenix real estate, real estate marketing
Rick Burd says:
Hey, Greg. What are trying to do? Ruin it for all the greedy ones? Tell me you’re not actually looking out for your clients’ interests. I mean, isn’t that just something Realtors give lip service to? Anyhow, I love your style; I’m sure most agents are angry, upset, spiteful, etc. at you for being such a rebel. But, I’ll bet you sleep better at night than they.
I don’t know if this helps, but when I was a realtor, I found most people didn’t give a hoot about percentages; that’s just some vague, indecipherable concept to them. However, when I told them I would give them back $3000 at closing (is that legal?), then they were all for it.
November 10, 2006 — 9:25 am
Kevin Boer says:
Give it time.
November 10, 2006 — 3:52 pm
Jeff Turner says:
Can’t believe there aren’t more comments on this. I’m commenting to move it closer to the top of recent comments. As a stupid consumer, today’s reading revelations are making my head spin.
February 2, 2007 — 3:47 pm