{"id":772,"date":"2006-12-15T06:58:30","date_gmt":"2006-12-15T13:58:30","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=772"},"modified":"2007-01-24T15:16:27","modified_gmt":"2007-01-24T22:16:27","slug":"almost-famous-businessweek-on-excessive-buyers-agents-commissions","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/772\/almost-famous-businessweek-on-excessive-buyers-agents-commissions\/","title":{"rendered":"Almost famous: BusinessWeek on excessive buyer’s agent’s commissions . . ."},"content":{"rendered":"

Eagle-eyed Kevin Boer of Three Oceans Real Estate was the first to catch it<\/a>: BusinessWeek.com quoted me in an article on “supersized commissions”<\/a>:<\/p>\n

There’s nothing wrong with incentives, even sizable ones, if they’re disclosed and buyers fully understand what’s motivating the agents who are showing them around. But in many states disclosure is poor or inconsistent. In Arizona, for example, brokers who show houses are encouraged to sign agreements specifying how they’re compensated. But the agreements aren’t required.<\/p>\n

THE SKY’S THE LIMIT<\/b><\/p>\n

Also, they can be signed after someone has already fallen in love with a home and isn’t looking at the fine print. And the compensation can be explained as generally as, “3% and up,” meaning the sky’s the limit. Add it all up, and, “I don’t have to disclose to you how much I’m getting paid,” says Realtor Greg Swann, the designated broker of BloodhoundRealty.com in Phoenix, who says he voluntarily imposes stricter rules on his own agents. By offering extra-high commissions without informing customers, he says, “the builders are trying to bribe me to sell their houses.”<\/p><\/blockquote>\n

That whole section of the articles relies on BloodhoundBlog contributions<\/a>: Contributor Doug Quance and frequent commenter Dave Barnes both kicked in examples that were used in the article, but, alas, they were not mentioned by name.<\/p>\n

BusinessWeek Economics Editor Peter Coy first called me about last week’s Zillow.com news, and we talked in very broad terms about Realty.bots, disintermediation, the valued-added services a good Realtor brings to the table and commission structures in general. We’ve covered a lot of that here, so I sent him quite a few posts from our archives.<\/p>\n

The implication of the article is that buyer’s agent’s incentives are the rule rather than the exception, but, even so, I don’t think it is a bad idea to caution buyers about the risks:<\/p>\n

Advice to consumers: Start with the assumption that the nice person showing you around is not your ally. Ask up front how much the person would be compensated if you bought a place. If possible, sign a buyer-broker agreement before you start looking at houses. This guarantees that the agent is working Read more<\/a><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Eagle-eyed Kevin Boer of Three Oceans Real Estate was the first to catch it: BusinessWeek.com quoted me in an article on “supersized commissions”: There’s nothing wrong with incentives, even sizable ones, if they’re disclosed and buyers fully understand what’s motivating the agents who are showing them around. But in many states disclosure is poor or […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,4,17,6,5],"tags":[],"class_list":{"0":"post-772","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-blogging","7":"category-disintermediation","8":"category-interview","9":"category-marketing","10":"category-real-estate","12":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1453,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1453\/if-lenders-divorce-the-commissions-theyll-be-divorced\/","url_meta":{"origin":772,"position":0},"title":"If lenders divorce the commissions, they’ll be divorced","author":"Greg Swann","date":"May 21, 2007","format":false,"excerpt":"Jim Duncan issues a battle cry for divorced commissions:As a profession, we need to rid ourselves of Cooperative Compensation and the practice of the listing broker paying the Buyer's Agent. Cooperation between Brokers need not go away. In fact, without cooperative compensation, the practice of real estate representation will be\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17492,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17492\/making-the-case-for-my-manumission-and-yours-from-the-nar\/","url_meta":{"origin":772,"position":1},"title":"Making the case for my manumission \u2013 and yours? \u2013 from the\u00a0#NAR.","author":"Greg Swann","date":"November 19, 2020","format":false,"excerpt":"As mentioned, I am striving to extricate myself from the National Association of Realtors. It's the speech code that's put me off the reservation. Until lately the NAR has been a nuisance to me, but now it is an active menace. I would abhor thought police even if they were\u2026","rel":"","context":"In "Egoism in Action"","block_context":{"text":"Egoism in Action","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/egoism-in-action\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/11\/junior-moran-hrEJYRtBDrk-unsplash-1-320x480.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2202,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2202\/a-consumers-guide-to-the-divorced-real-estate-commission-cataloging-benefits-starting-with-a-complete-catalog-of-available-homes\/","url_meta":{"origin":772,"position":2},"title":"A consumer’s guide to the divorced real estate commission: Cataloging benefits — starting with a complete catalog of available homes","author":"Greg Swann","date":"November 10, 2007","format":false,"excerpt":"Part IV: Divorcing the real estate commissions will result in benefits not just for buyers but also for their agents and for the real estate market as a whole The National Association of Realtors is embroiled right now in a protracted anti-trust suit brought by the United States Department of\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2208,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2208\/a-consumers-guide-to-the-divorced-real-estate-commission-undermining-the-arguments-in-support-of-the-status-quo\/","url_meta":{"origin":772,"position":3},"title":"A consumer’s guide to the divorced real estate commission: Undermining the arguments in support of the status quo","author":"Greg Swann","date":"November 11, 2007","format":false,"excerpt":"Part V: Why arguments for the current method of compensating real estate agents and against divorcing the real estate commissions must fail As I write this, the National Association of Realtors is preparing for its annual convention, to be held this year in America's playground, Las Vegas, Nevada. This year\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":363,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/363\/buying-a-new-built-home-how-much-is-your-agent-getting-paid\/","url_meta":{"origin":772,"position":4},"title":"Buying a new-built home? How much is your agent getting paid?","author":"Greg Swann","date":"September 22, 2006","format":false,"excerpt":"This is me from this morning's Arizona Republic (permanent link). \u00a0Protect yourself from agent bonus fees by builders Are you buying a home? How much is your agent getting paid? If you're buying resale, the answer is probably 3 percent, and possibly even less, although there may be buyer's agent\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":547,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/547\/real-estate-commissions-one-size-does-not-fit-all\/","url_meta":{"origin":772,"position":5},"title":"Real estate commissions: One size does not fit all . . .","author":"Greg Swann","date":"October 17, 2006","format":false,"excerpt":"Northern Virginia Real Estate Guide has further thoughts on tailoring real estate commissions to fit the task. 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