Do you think flat fees for real-estate agents give the proper incentive?

Question

For example, if the fee is 6%, the agent only gets about 1.5% before taxes (after splitting the commission and giving some back to the firm, lik REMAX).

So, if he/she has an offer that is $10,000 too low for you, the agent loses only $150 (and saves a lot of time and effort) but you lose about $10,000. What incentive is this for the agent to hold out for a higher price?

Do you know any agents that are both a) good and b) negotiate a sliding fee?

Answer 1

I think it could go both ways, as far as developing unmotivated and motivated realtors. Flat rate gives an expectation and also give better ability to forecast, rather than wondering if the person will think it is too much. on the other hand for those who want a little more, this set rate might stiffle growth and cause disinterest. Hope this is clear.

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Answer 2

Most real estate agents will work with you if you tell them before you sign agent sales agreement. Have it stated if price goes below a certain amount then % of commission drops. Not all agents will do this but you can find that out up front just ask. About the flat fee, a % is a basic flat fee they can't collect more than what your signed agreement says, if you mean to set an exact amount then no you don't get more of an incentive cause they won't work as hard because there is no incentive to make more. You will also find that real estate agents will set the price high so that there is room to play with, the best way to find out is to do your own research, go down to your local assessment office and find out what homes sold in your area that compare to your home and what price they sold for, its not that hard to do the city assessor will help.

Answer 3

The incentive to try and get our client the higher price is a happy client. I will negotiate for every last penny just to make my client happy. Its not all about the money like people seem to think.
By the way, agents at remax keep 95% of the commission. SO we get more than the 1.5% you speak of.
RE Agent,
Remax