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Sign into your accountReal Estate in Crisis: Is Nothing Better Than Something?
May 17 2016
Real estate is a fascinating industry when it comes to making choices about something versus nothing. Again and again, we see individual agents, brokers, associations, MLSs, and franchises make choices to get something when getting nothing may be the better strategy. I doubt that this article will have any change on the bearing of the industry, but in some small way it may influence one or more decisions today or this week by a few people.
Why Do We Sacrifice Long Term Success for Short Term Gain?
In our industry, people too often say "yes" to a bad deal. An example of this would be the business model where an agent will rebate their commission to a consumer. Why would a real estate agent accept a $500 flat fee for a transaction? Every one of us knows the hours of time and the level of training, tools, and expertise it takes to represent a consumer in a property trade. $500 is like accepting below minimum wage.
I understand the justification. We hear stories like, "Well, it's only this transaction," or, "We will make it up in volume." That is sheer craziness. Every time a real estate agent agrees to offer their services at a loss, they feed the beast that will overrun their fair compensation.
What I am trying to illustrate is that nothing would be better than something. Not accepting the loss on the transaction would be superior to accepting the $500. Whenever I make this assertion, I get no argument. Everyone agrees, but in agreement they deposit one caveat, "If I don't take the $500, someone else will."