Understanding Real Estate Agent Motivation

I was surfing around some real estate web sites on the internet hoping to come up with today's topic. You see, posts on the Tallahassee Real Estate Blog are usually based upon reader questions (or questions from our customers at Joe Manausa Real Estate), but today I had nothing standing by.

I came across a question posted on Trulia that I think might provide some interesting insight for some people who are trying to sell a home in Tallahassee. The question was about getting more agents to show a home that is already one the market, and asked:

Do agents look at the commission %? If you saw a house that had 4% instead of 3% would you show it more?

This simple question actually brings up quite a few key points that homeowners should know when trying to sell a home. The reason that I think it makes a great discussion point is that currently there are 146 responses to this question at Trulia, and I suspect there will be more to follow. So folks over on Trulia have a lot to say about this, so I'll chime in with a few points of my own.

Is This A Buyers Market Or A Sellers Market?

The first thing that comes to mind when I read this question is that some homeowners are thinking they should consider a discount broker. Without being rude ... Are you kidding? It has never been more difficult to sell a home in Tallahassee than right now, do you really want to hire somebody who is willing to cut their fees? Here's a quick analogy for you ...

Hiring good help is always relative to the task at hand. I wouldn't pay $1,000 per hour for an attorney to help me with a speeding ticket. I'm sure there are plenty of "discount" attorneys who could help me with that problem. But would my thoughts change with different legal problems? What if I'm being sued by somebody for hundreds of thousands of dollars? Sometimes it is worth it to hire the best.

So, back to the question of what type of market we are in. This is obviously the strongest Buyers' Market we have seen in at least the past 20 years. If you need to sell a home in Tallahassee, then you are crazy not to hire the best real estate company in Tallahassee.

Are Real Estate Agents Money Motivated?

I'm not so sure that this question needs to be answered, but I will for those out there who live in fantasy land.... YES! Real estate agents are paid on commission. In the simplest form, that means they only get paid when they sell a home. You want them to sell your home?, offer to pay them. You really, really want them to sell your home? .... offer to pay them more!

Does this make real estate agents bad? If you think yes, then you most likely do not rely on money to take care of you or your family's needs. You see, real estate agents need money to take care of all of their needs just as the rest of our society does.

But understanding real estate agent motivation is your advantage over other home owners looking for a discount brokerage. In our current market, less than 20% of the homes being listed are actually selling. You can stand-out from the crowd by offering more money for your home than your competition is offering. New home builders do this all the time. When they have inventory they are trying to move, the first thing they do is offer more to real estate sales people to get them sold.

Current Market Conditions Dictate Wise Choices

If you want to sell a home today, be smart. Work with the best and then use every technique available under the Sun! A great real estate brokerage company will know how to get your home sold and will have a list of things that you can do to help your home stand out against the abundance of competition that you will have in today's real estate market. There is no reason your home cannot sell if you follow the advice of somebody who knows what to do.


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#1 By Joshua at 7/11/2017 3:48 AM


I would be interested in seeing actual data of homes that paid higher commission rates and the amount of time it took to sell them. Is this type of data readily available?


#2 By Joe Manausa at 7/11/2017 3:48 AM

Hey Joshua, great idea.

Unfortunately, market time is not available (I've written on this specific issue multiple times in the past). The measure of market time is only based upon the time it takes for a listing to sell. If the property was previously listed, it doesn't go into market time. Also, if somebody were to change commission mid-stream, it would not be reflected in market time.

I will look into the other side of the question. I might be able to do a study on commission rates versus sales success, but again, the data will be skewed by all the homes that failed to sell plus any homes that changed commission mid-stream. Let me ponder on this for a bit ...

Great question and thanks for providing the feedback.

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