Quote:
Originally Posted by tedquick
Without exception my goal was to find a price and terms that were satisfactory to both parties. I honestly do not ever recall a "bad" experience.
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here is the conflict which you don't present:
A transactional broker want to get a commission to pay your bills, so your motivation is a completed transaction, regardless of differences in price. Your position is starting point $0 for no transaction or $XX,xxx for a completed transaction, so the quicker the sale, the quicker you can move on. .
The Seller's motivation is the highest price, so that people can pay higher taxes
The buyer's motivation is the lowest price, so that the mortgage payment is the lowest possible for 20-30 years. .
So the outcome for the seller or buyer is listing price vs 0-3% higher or lower. . depending upon viewpoint, a much smaller difference from their starting point.
From your position, 6% commission on 3% difference is immaterial between $0 and $paid commission.
Using your motivation, you can easily talk both parties to a mid price, so that you can get paid sooner, without much difference in your payment, yet the goals of neither party were satisfied.
There have been several behavioral finance / economic studies showing that a transactional agent's motivation was to get a transaction, not to get the best for both the buyer and seller. I have seen this in action:
independent appraisal of house ahead of time: $150,000
Listing agent appraisal: $175,000
After 30 days, Listing agent is frantic about lowering the price to get a sale, she had to get the sale done after 30 days!
Final Sale price: $149,000
Could the seller have gotten $175,000? doubtful, but 30 days is a very short period of time to assume that even a majority of buyers have been notified and could arrange to have a showing. Daily life gets in the way.
So, never, ever, tell a broker when selling that you have a time frame to sell, never say nor type that you are a motivated seller. . . golden words to a transactional broker who just wants to the get the sale done to get paid with little impact on the final commission.
That's the conflict which underlies the transactional broker versus independent agents.
former but still finance guy