Rain City Guide

Seriously, this whole “6% is sancrosanct” crap is just a joke and a misnomer.

Here’s the reality. It often takes 6% of WHATEVER to close it out, to make it happen, for all parties to accomplish the final objective.

Where does that 6% go? Depends on the sale price and the events that take place. I have never met an agent who isn’t an idiot who wouldn’t use a portion of that 6% to make it happen for their clients and themselves. This is the Dirty Big Secret that it takes new agents quite some time to learn. It’s Do As I Say and Not As I Do” talk. It’s BS.

Sure every new agent is trained to go out there and spout some BS crap, until they learn otherwise. Not sure why that is, but I am sure it’s pretty much always been that way. Sure Top Agents are smart enough to make business decisions, like when buyer and seller are 1% apart, and they are both at the end of their rope, and now it’s time to jump in there and make it happen for both of them before they kill each other and cough up the 1%.

When the buyer and seller are able to come together at time of offer, often they are both at the end of their rope. Seller is at “OK. I’ll accept that offer - but “AS-IS!” Buyer has stretched to the point where they don’t want anything to be wrong with the house. Then comes the home inspection. Buyer does the inspection and wants $1,200 worth of minor repairs. Seller says “what part of “AS-IS” didn’t you “get”?

The same agents who moan and groan about “discounters”, are the same agents who are smart enough to make a business decision and put some of that money into the transaction before all is said and done. I’m 99% sure that is where the “average commission is 5.1% comes from. That .9% represents money that came back into the transaction to bridge a gap between the buyer and the seller.

So what I am seeing is that when agents discount more and more up front, more offers don’t make it to the end, and more sales fall apart at time of inspection.

What if every seller and their agent put 1% on the side at the beginning “to be used as needed” and every buyer and their agent put 1% on the side “to be used as needed”. Wouldn’t that be better than cutting the transaction too short at the outset?

Take a property selling for $800,000. If there was a $16,000 set aside, 1% from each agent, very few homes would fall apart at inspection. Very few buyers would have to suck up problems with the house, the set aside being enough to make any repairs needed. There would be less erosion of property value in the marketplace, as homes would be brought up to speed at time of transfer, with all needed repairs made when houses change hands.

How many times do we go back to sell a property, only to find that the repairs called at the inspection when they bought it, are the SAME repairs needed when the same people turn around and sell it. Sometimes those same problems have gotten worse by that time. Wouldn’t everyone be better off if the repairs from the inspection were always corrected at time of property transfer, using a portion of the commission to make those repairs? Of course this is not new news. When I started in the business and was trained to do Seller Net Proceeds before the property went on market, I always had a number for “inspection repairs” in the mix before the seller signed the Listing Agreement.

Truth is, if you take it up front, you might not have it when you need it most, when you are trying to be successful during negotiations and escrow.

Sometimes “helping your clients be successful”, involves making sure there are enough commission dollars “in play” to insure that there is some money to throw at problems, as they arise during negotiations and escrow.