THE HONEST BROKER: COMMISSION BAIT AND SWITCH
BY: Diane Lott, Broker
One of the main reasons that I wanted to write a weekly blog was to provide education to the public regarding market conditions, but more importantly to provide the obligations and responsibilities of a profession that is supposed to be ethical and not mislead the public. Lately, I have seen multiple TV advertisements touting a 2% commission to sellers. However, if you listen carefully to the ad, it says, “Sell your home for as little as 2% commission. This leads the seller to believe that it will only cost them 2%. However, if you go to the website being advertised, there is a disclaimer that states this:
*Our agents will list for 2% and offer the typical Buyer’s Agent commission in your market ranging from 2% to 3%. The average Buyer’s Agent commission nationwide is 2.5%. If a buyer calls on your house directly without an agent, our agents have agreed to do the entire transaction for only 2% total. Homes under $150,000 will have a minimum list side commission of $3,000.
What does this ultimately mean? The ACTUAL commission that will be paid is a minimum of 4.5% or 5%. Is promoting a 2% cost to sell your home misleading? When they say that the seller can list for 2%, that is factual. The listing agent will earn 2% commission, but the obvious omission of how much the buyer’s agent will be offered is dubious and misleading.
This is a marketing tool to get the phone to ring only. When the potential seller acts on this promotion, they learn that the cost to sell their home is much higher than they originally thought. The only way that it will cost them 2%, is if the seller obtains their own buyer. The chance that the seller will be able to find their own buyer after enlisting the aid of realtors, is highly unlikely if not impossible. This is not exclusive to this company. I am seeing this type of advertisement becoming more widespread which is why this leads me to advise you, the public, that if it sounds too good to be true…it usually is.
Stay well and stay healthy!
Diane Lott, Broker
Owner: Paradise Found Realty
Paradise Found Realty, Inc. of Palm City
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