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Answers (29)
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2728
(must admit I kind of chuckled when I read someone was trying to tell Mack what he "meant"........Mack is always clear as to what he means - and certainly doesn't need an interpreter)
:)
:)
- Mack McCoy
- Contributions:1111
No. I meant - why does the compensation model have to change?
We don't "need" the real estate sales industry, except that several million people a year still prefer to use us than to go it alone. The compensation model is different in other parts of the world, but it similar in other parts of the world, too.
There's a difference between talking out loud about alternative schemes and asserting a need for them. I'm interested in what this "need" that is being mentioned actually is.
We don't "need" the real estate sales industry, except that several million people a year still prefer to use us than to go it alone. The compensation model is different in other parts of the world, but it similar in other parts of the world, too.
There's a difference between talking out loud about alternative schemes and asserting a need for them. I'm interested in what this "need" that is being mentioned actually is.
- Caveat Emptor
- Contributions:500
All of these things that "have" to change . . . why?
no reason. we could just do away with the whole industry. between craigslist and zillow, we really don't need REAs anymore.
that is what you meant, right mack?
no reason. we could just do away with the whole industry. between craigslist and zillow, we really don't need REAs anymore.
that is what you meant, right mack?
- Mack McCoy
- Contributions:1111
All of these things that "have" to change . . . why?
- Caveat Emptor
- Contributions:500
I'd give a TU for Caveat Rei Arcana's last response if it worked.
except the part of the appraisal to be shared with the buyer, seller and both lending institutions. if shared means that it's a shared expense.
nah, I meant the malarchy where 1 buyer has to pay for 2 separate appraisals for 1 property because there was a problem with the first lender who doesn't want to release the appraisal to the second lender.
or that garbage where an buyer requests an appraisal and a bank intercedes and the appraisal comes back "approved for 260,000" rather than @ 264,000 or 284,000 or whatever.
if I had a say, i'd say that the buyer has to pay cash for it, up front in order for the deal to work, but I say that mostly because the 0% down mentality of today's market needs to change and that opinion is political (i almost said and not practical, but i caught myself.) its rather off topic though.
________________________
Why is a listing agreement for a specified percentage of the sales price instead of a specified dollar amount?
because then agents could compete on price. I'll take such and such a fee, well i'll take 20% off of that. the root cause is america's collective math phobia where 3% is a "theoretical" number and $4000 is a real one. what? you gonna haggle over .24%? anyone in the mortgage industry would, but that's another matter.
I've said it before and I'll say it again. the NAR has the whole thing wrapped up in a nice little bow. eh?
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@ socal (abridged)
1) But the EBA should be doing this research already.
and of course using this standard bears not even a hint of Conflict of interests?
2- the whole racket of the buyer's agent being paid for by the seller would probably qualify as a conflict in ANY other financial or legal scenario out there. like using the MOB's attorney.
3a- solved by making the payment governed by the EBA(agreement)
2b- solved by making the payment governed by the EBA(agreement)
3-I think the majority of consumers will not bother to ask which compensation model is being used.
except the part of the appraisal to be shared with the buyer, seller and both lending institutions. if shared means that it's a shared expense.
nah, I meant the malarchy where 1 buyer has to pay for 2 separate appraisals for 1 property because there was a problem with the first lender who doesn't want to release the appraisal to the second lender.
or that garbage where an buyer requests an appraisal and a bank intercedes and the appraisal comes back "approved for 260,000" rather than @ 264,000 or 284,000 or whatever.
if I had a say, i'd say that the buyer has to pay cash for it, up front in order for the deal to work, but I say that mostly because the 0% down mentality of today's market needs to change and that opinion is political (i almost said and not practical, but i caught myself.) its rather off topic though.
________________________
Why is a listing agreement for a specified percentage of the sales price instead of a specified dollar amount?
because then agents could compete on price. I'll take such and such a fee, well i'll take 20% off of that. the root cause is america's collective math phobia where 3% is a "theoretical" number and $4000 is a real one. what? you gonna haggle over .24%? anyone in the mortgage industry would, but that's another matter.
I've said it before and I'll say it again. the NAR has the whole thing wrapped up in a nice little bow. eh?
___________________
@ socal (abridged)
1) But the EBA should be doing this research already.
and of course using this standard bears not even a hint of Conflict of interests?
2- the whole racket of the buyer's agent being paid for by the seller would probably qualify as a conflict in ANY other financial or legal scenario out there. like using the MOB's attorney.
3a- solved by making the payment governed by the EBA(agreement)
2b- solved by making the payment governed by the EBA(agreement)
3-I think the majority of consumers will not bother to ask which compensation model is being used.
- SoCal_Engr
- Contributions:5661
Issues I see with a base-plus-incentive approach...
1 - As others have noted, what price would drive the incentive? "List" could be anything from "priced to sell", "priced at market", or "priced by an unrealistic seller". On the buy side, a mutually acceptable target would have to be determined for each property. But the EBA should be doing this research already.
2 - EBAs don't work listings and don't control listing agreements. Since the listing agreement identifies the commission percentages...
2a - If the base-plus-incentive is less than the specified commission, some mechanism needs to be able to rebate the delta to the buyer.
2b - If the base-plus-incentive is more than the specified commission, the buyer needs to pony up cash. May be problematic, since buyers are conditioned to having the commission payed within the transaction.
3 - Given a choice between a new compensation structure, supported by a small segment of REAs, and a "conventional compensation" structure used by "everyone else" - I think the majority of consumers will choose the latter.
Most telling? No one pushing the EBA model has posted an opinion, and all the non-REA input is from "the regulars" - so this topic is not #1 on the consumer-hit-parade.
1 - As others have noted, what price would drive the incentive? "List" could be anything from "priced to sell", "priced at market", or "priced by an unrealistic seller". On the buy side, a mutually acceptable target would have to be determined for each property. But the EBA should be doing this research already.
2 - EBAs don't work listings and don't control listing agreements. Since the listing agreement identifies the commission percentages...
2a - If the base-plus-incentive is less than the specified commission, some mechanism needs to be able to rebate the delta to the buyer.
2b - If the base-plus-incentive is more than the specified commission, the buyer needs to pony up cash. May be problematic, since buyers are conditioned to having the commission payed within the transaction.
3 - Given a choice between a new compensation structure, supported by a small segment of REAs, and a "conventional compensation" structure used by "everyone else" - I think the majority of consumers will choose the latter.
Most telling? No one pushing the EBA model has posted an opinion, and all the non-REA input is from "the regulars" - so this topic is not #1 on the consumer-hit-parade.
- Mack McCoy
- Contributions:1111
Rather than speculate, I'll say, we don't know.
Typically, sales, margins, and mark-up are percentage-based, rather than flat-fee. Escrow fees are usually a combination of a base fee plus a percentage. Loan origination fees, a percentage. Auction houses are not flat-fee operations, and their rates are much higher than real estate brokers.
Typically, sales, margins, and mark-up are percentage-based, rather than flat-fee. Escrow fees are usually a combination of a base fee plus a percentage. Loan origination fees, a percentage. Auction houses are not flat-fee operations, and their rates are much higher than real estate brokers.
- Dan, "the_country_hick"
- Contributions:4691
A question in line with the tone of this thread.
Why is a listing agreement for a specified percentage of the sales price instead of a specified dollar amount?
If a seller knew they were going to spend $x amount when a sale came and each agent and broker knew they would get $x amount the sales price would not affect the commission at all. The seller would have zero confusion when figuring out what a sale at any price would net them. This approach would remove all doubt what it would actually cost to sell or what an agent would net from a sale of a given property.
Thoughts?
Why is a listing agreement for a specified percentage of the sales price instead of a specified dollar amount?
If a seller knew they were going to spend $x amount when a sale came and each agent and broker knew they would get $x amount the sales price would not affect the commission at all. The seller would have zero confusion when figuring out what a sale at any price would net them. This approach would remove all doubt what it would actually cost to sell or what an agent would net from a sale of a given property.
Thoughts?
- Mack McCoy
- Contributions:1111
What is that "need" for a change?
- he can do this
Yes, every system can be gamed. As a practical matter, if a buyer can find an acceptable property in their financial comfort zone, it's easier for an agent to put a deal together than if their acceptability range bleeds into their maximum affordability range.
This idea that agents have enough mastery of the psychology of buyers that they'll keep attractive properties out of their sight until they beg to be shown more expensive properties is fantastic. As in, ridiculous.
- he can do this
Yes, every system can be gamed. As a practical matter, if a buyer can find an acceptable property in their financial comfort zone, it's easier for an agent to put a deal together than if their acceptability range bleeds into their maximum affordability range.
This idea that agents have enough mastery of the psychology of buyers that they'll keep attractive properties out of their sight until they beg to be shown more expensive properties is fantastic. As in, ridiculous.
- ConnieK_Oklahoma
- Contributions:2896
I'd give a TU for Caveat Rei Arcana's last response if it worked.
except the part of the appraisal to be shared with the buyer, seller and both lending institituions. if shared means that it's a shared expense.
appraisals are to measure risk to the lending instiution at the request of the buyer to ask for the loan, the type of appraisal required varies based on the already known risks of buyer's income and reserves, etc. it should be they buyer's expense. the part about no information on the contract price is definitely something I agree on.
except the part of the appraisal to be shared with the buyer, seller and both lending institituions. if shared means that it's a shared expense.
appraisals are to measure risk to the lending instiution at the request of the buyer to ask for the loan, the type of appraisal required varies based on the already known risks of buyer's income and reserves, etc. it should be they buyer's expense. the part about no information on the contract price is definitely something I agree on.
- ConnieK_Oklahoma
- Contributions:2896
i think that there is need for a change.
the problem is that any argument one can make for setting up a new model and requiring it to work a certain way is in conflict with free market. and trying anything new has to be done by a brokerage and understood by others and workable so no matter what I think is a good idea- it won't work unless others thought it was too.
from a buyer's perspective...a new commission model is a good idea- but where do the funds come from...the lower you get the negotiated price the more you get paid? money doesn't fall from the sky to cover that. it doesn't make sense that someone will pay you extra to save them money on the purchase- this is no savings, or that a seller will pay extra and drop price. but it also doesn't make sense that i can show a $300k house one time to a new customer, it's the only one they look at, and make a good commission and then work like crazy for the customer looking at the $70k house, show them 20+ homes, visit it 4-5 times and then make far less. that model gives agents an incentive to pass off that buyer and not advertise as hard for that seller- so clearly the model doesn't serve those people well. there are plenty of agents that won't take that attitude, and will work hard for that small sale but eventually those agents find they work hard for little pay and could make more for less elsewhere or they can become the agent that only occasionally helps that $70k customer because they just don't fit the business plan. either way...the model doesn't serve the buyer's objective- it still serves the seller best.
again...don't have an answer but would like to see a model that wasn't so one sided.
the problem is that any argument one can make for setting up a new model and requiring it to work a certain way is in conflict with free market. and trying anything new has to be done by a brokerage and understood by others and workable so no matter what I think is a good idea- it won't work unless others thought it was too.
from a buyer's perspective...a new commission model is a good idea- but where do the funds come from...the lower you get the negotiated price the more you get paid? money doesn't fall from the sky to cover that. it doesn't make sense that someone will pay you extra to save them money on the purchase- this is no savings, or that a seller will pay extra and drop price. but it also doesn't make sense that i can show a $300k house one time to a new customer, it's the only one they look at, and make a good commission and then work like crazy for the customer looking at the $70k house, show them 20+ homes, visit it 4-5 times and then make far less. that model gives agents an incentive to pass off that buyer and not advertise as hard for that seller- so clearly the model doesn't serve those people well. there are plenty of agents that won't take that attitude, and will work hard for that small sale but eventually those agents find they work hard for little pay and could make more for less elsewhere or they can become the agent that only occasionally helps that $70k customer because they just don't fit the business plan. either way...the model doesn't serve the buyer's objective- it still serves the seller best.
again...don't have an answer but would like to see a model that wasn't so one sided.
- Caveat Emptor
- Contributions:500
actually there are solutions.
ban agents from giving financial/legal/investment advice of any kind without separate licenses, make them responsible for the illegal advice they do give, bar them from advertizing as "negotiators," "representation," force them to define a CMA to a certain standard so that they aren't arbitrarily off by 20% from one agent to the next and make them responsible for accuracy. forcing an REA to be bonded, not just licensed and making that bond attachable when they violate the law.
require an appraisal to be shared with the the buyer, seller and both lending institutions and require that the appraiser not be given any details on the transaction already taking place, perhaps even moving it to the initial listing of the home.
ban agents from giving financial/legal/investment advice of any kind without separate licenses, make them responsible for the illegal advice they do give, bar them from advertizing as "negotiators," "representation," force them to define a CMA to a certain standard so that they aren't arbitrarily off by 20% from one agent to the next and make them responsible for accuracy. forcing an REA to be bonded, not just licensed and making that bond attachable when they violate the law.
require an appraisal to be shared with the the buyer, seller and both lending institutions and require that the appraiser not be given any details on the transaction already taking place, perhaps even moving it to the initial listing of the home.
- Caveat Emptor
- Contributions:500
So, what would your solution be? Or, are you saying there is no need for one?
there is no solution. all agents, buyers agents and sellers agents are in the business of casting a net and reeling in the catch of the day. the one thing that an agent desperately wants (buyer and seller) is for the deal to go through. which means oddly enough that the ListingA's incentive is to get their client to come down on price as quickly as possible to meet a buyer's offer and your BA's incentives are to get you to come up as quickly as possible to meet the Seller's offer.
while acting as your "fiduciary" agent, both sides are playing their client to keep the deal from falling apart, that's their goal. which is fine(unless they use fiduciary without the quote marks, not fine). presumably the seller's goal is to sell his house. Its the buyer's goal to buy a house. both sides have parameters and limitations to be observed, and presumably the agents are aware of and respectful of things like existing mortgage debt or maximum monthly payment because those things also align with their goals of facilitating getting the deal done.
the real conflict arises when a buyer wants a payment of ~1200/ month but is qualified for ~1600. that's really the only time where a buyer's agent, exclusive or not, has a strong incentive to attempt to "fudge" your range. he can do this a number of ways. showing you over-priced one bedrooms that are squarely in your range, getting "frustrated," showing you a home that is just "a little outside your range." little tricks like that to get you "excited" about spending just a little bit more. where the difference between 1200/month and 1450/month is close to 1000 dollars in the offending agent's pocket and the chances of scuttling an "already done deal" are low
there is no solution. all agents, buyers agents and sellers agents are in the business of casting a net and reeling in the catch of the day. the one thing that an agent desperately wants (buyer and seller) is for the deal to go through. which means oddly enough that the ListingA's incentive is to get their client to come down on price as quickly as possible to meet a buyer's offer and your BA's incentives are to get you to come up as quickly as possible to meet the Seller's offer.
while acting as your "fiduciary" agent, both sides are playing their client to keep the deal from falling apart, that's their goal. which is fine(unless they use fiduciary without the quote marks, not fine). presumably the seller's goal is to sell his house. Its the buyer's goal to buy a house. both sides have parameters and limitations to be observed, and presumably the agents are aware of and respectful of things like existing mortgage debt or maximum monthly payment because those things also align with their goals of facilitating getting the deal done.
the real conflict arises when a buyer wants a payment of ~1200/ month but is qualified for ~1600. that's really the only time where a buyer's agent, exclusive or not, has a strong incentive to attempt to "fudge" your range. he can do this a number of ways. showing you over-priced one bedrooms that are squarely in your range, getting "frustrated," showing you a home that is just "a little outside your range." little tricks like that to get you "excited" about spending just a little bit more. where the difference between 1200/month and 1450/month is close to 1000 dollars in the offending agent's pocket and the chances of scuttling an "already done deal" are low
- Mack McCoy
- Contributions:1111
Well, that would be a reverse of a net listing.
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2728
oh please Connie - you think that's a good idea??
a "base commisson" with an "incentive" if the seller accepts less than list price???
less than what?
less than an inflated, overpriced list price?
less than a well priced, reasonable list price?
less than an under market value list price which encourages quick action on the part of other buyers and will generate a quick sale?????
Our commission should be dependent on whether a seller listed his home realistically or not...or based on how motivated the seller is to sell?
No, I think not.
a "base commisson" with an "incentive" if the seller accepts less than list price???
less than what?
less than an inflated, overpriced list price?
less than a well priced, reasonable list price?
less than an under market value list price which encourages quick action on the part of other buyers and will generate a quick sale?????
Our commission should be dependent on whether a seller listed his home realistically or not...or based on how motivated the seller is to sell?
No, I think not.
- Cindy Quinton, "Cindy Quinton"
- Contributions:1313
One would almost HAVE to admit that the current compensation model for buyer's agents is counter-intuitive at best. I mean the harder you work to negotiate and get your client the best buy, the less you make. Then again, I too have not one workable thought on how to "fix" the issue.
- ConnieK_Oklahoma
- Contributions:2896
soCal_engr
I don't disagree that change is needed and don't think your suggestion is a bad idea. just don't have enough suggestions to add to it
I don't disagree that change is needed and don't think your suggestion is a bad idea. just don't have enough suggestions to add to it
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2728
with such a teeny tiny percentage of EBA's in the country, chances are, the EBA a consumer may select has limited experience in many of the towns they claim to cover...that's a concern to me..........I'd want someone with a level of expertise in that area
.I just checked, and I was wrong, there appears to be 1 EBA office that "covers" ( I use the term loosely) all of "northern" NJ..........an area of 5 or 6 counties.......maybe hundreds of towns.........I bet that agent hasn't even been in some of the towns he says he covers.......just because you pay to belong to an MLS doesn't mean you know the town or area.... or have a sense of the nuances when it comes to pricing the town...or even know where the elementarty schools are.....or where the grocery stores are or what the commuting times to Manhattan are........etc
.I only work with buyers in towns I KNOW and have a familiarity with..otherwise, I will refer them to someone who does have that knowledge.......if you know NJ (and you don't) NO ONE can know all of , and be an expert in, Bergen County AND Essex AND Hudson AND Passaic......and, and and........no one can represent with ifrst hand knowledge what homes selling in those areas look like - whic street or area might sell for a premium.....in addition........it helps when you've seen some of the homes you might be referencing......
to each his own.....if someone wants to call themself an EBA, and work in the limited capacity, go for it.....but to imply or state that the consumer is better served by using an EBA is not a statement I agree with.
.I just checked, and I was wrong, there appears to be 1 EBA office that "covers" ( I use the term loosely) all of "northern" NJ..........an area of 5 or 6 counties.......maybe hundreds of towns.........I bet that agent hasn't even been in some of the towns he says he covers.......just because you pay to belong to an MLS doesn't mean you know the town or area.... or have a sense of the nuances when it comes to pricing the town...or even know where the elementarty schools are.....or where the grocery stores are or what the commuting times to Manhattan are........etc
.I only work with buyers in towns I KNOW and have a familiarity with..otherwise, I will refer them to someone who does have that knowledge.......if you know NJ (and you don't) NO ONE can know all of , and be an expert in, Bergen County AND Essex AND Hudson AND Passaic......and, and and........no one can represent with ifrst hand knowledge what homes selling in those areas look like - whic street or area might sell for a premium.....in addition........it helps when you've seen some of the homes you might be referencing......
to each his own.....if someone wants to call themself an EBA, and work in the limited capacity, go for it.....but to imply or state that the consumer is better served by using an EBA is not a statement I agree with.
- Mack McCoy
- Contributions:1111
Good point, Debbie!
It's a niche, and to me it seems like a difficult one to thrive in. You basically need to find clients who think that you're somehow slimy if you ever represent sellers and who haven't thought through that they're not going to find a broker at selling time that only deals with listings!
It's a niche, and to me it seems like a difficult one to thrive in. You basically need to find clients who think that you're somehow slimy if you ever represent sellers and who haven't thought through that they're not going to find a broker at selling time that only deals with listings!
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2728
of course you don't give EBA"s much thought Mack - no one does as, according to Wikipedia:
EBA firms amount to less than 1/2 of 1 percent of all real estate firms in the US.
So, it is a non issue, imo, and, truthfully, much ado about nothing.
To the best of my knowledge, there is maybe (and I might be wrong) ONE company (consisting of 1 agent) in (southern) NJ that is an EBA office, and from what I read on his website, he claims to cover a larger territory than he can possibly have expertise in.........so, imo, no buyer is being very well served by someone who is spread too thin in order to make aliving out of just working with buyers, no matter what title they have.
Give me an agent well versed in selling and listing homes anyday, and who covers and has experience a specifc area.
EBA firms amount to less than 1/2 of 1 percent of all real estate firms in the US.
So, it is a non issue, imo, and, truthfully, much ado about nothing.
To the best of my knowledge, there is maybe (and I might be wrong) ONE company (consisting of 1 agent) in (southern) NJ that is an EBA office, and from what I read on his website, he claims to cover a larger territory than he can possibly have expertise in.........so, imo, no buyer is being very well served by someone who is spread too thin in order to make aliving out of just working with buyers, no matter what title they have.
Give me an agent well versed in selling and listing homes anyday, and who covers and has experience a specifc area.
- Mack McCoy
- Contributions:1111
You know, I just don't give EBAs much thought. As I posted elsewhere, I think they'd be better practitioners if they represented sellers and learned what it was like on that side of the table, but, to each their own.
The real estate industry has, in my mind, evolved greatly from general sales jobs where the sole idea is to sell the most profitable items to whoever walked by the stand.
I think most agents are satisfied just to serve their clients.
The real estate industry has, in my mind, evolved greatly from general sales jobs where the sole idea is to sell the most profitable items to whoever walked by the stand.
I think most agents are satisfied just to serve their clients.
- SoCal_Engr
- Contributions:5661
"how's about.................. that's just plain silly!"
"oh, let me sell you an overpriced listing and take 20% (or some amount) from the "discount" I got for you."
"Do you really think that an agent representing a buyer is driven by the commission? And that the agent is trying to get the buyer to pay a higher price so that the agent makes more?"
So, what would your solution be? Or, are you saying there is no need for one? I can point out many other issues with the compensation approach I tossed on the table - issues with a bit more meat than "that is just plain silly".
I ask this question because one of the perceptions I have seen voiced on these forums has to do with the fact that commissions are directly tied to transaction price - and this causes some to question how a REA representing the buyer is incentivized to work for a lower price. Please note the use of the words "some" and "perceived". It's not necessarily what I personally believe, but it is a perception that is out there.
And, for those who are pushing the services of EBAs as being "more committed to the buyer's interests", it seems to be a reasonable topic of discussion. If the EBA business model is based on only representing buyers to avoid the appearance of "conflict of interest", then breaking from the old compensation model also should be addressed.
From the perspective of a consumer listening to the EBA spiel, it's a significant oversight. Then again, most consumers really don't care as long as they can't see the money leaving their pocket, so maybe it doesn't matter. As long as I can finance the cost, right?
"oh, let me sell you an overpriced listing and take 20% (or some amount) from the "discount" I got for you."
"Do you really think that an agent representing a buyer is driven by the commission? And that the agent is trying to get the buyer to pay a higher price so that the agent makes more?"
So, what would your solution be? Or, are you saying there is no need for one? I can point out many other issues with the compensation approach I tossed on the table - issues with a bit more meat than "that is just plain silly".
I ask this question because one of the perceptions I have seen voiced on these forums has to do with the fact that commissions are directly tied to transaction price - and this causes some to question how a REA representing the buyer is incentivized to work for a lower price. Please note the use of the words "some" and "perceived". It's not necessarily what I personally believe, but it is a perception that is out there.
And, for those who are pushing the services of EBAs as being "more committed to the buyer's interests", it seems to be a reasonable topic of discussion. If the EBA business model is based on only representing buyers to avoid the appearance of "conflict of interest", then breaking from the old compensation model also should be addressed.
From the perspective of a consumer listening to the EBA spiel, it's a significant oversight. Then again, most consumers really don't care as long as they can't see the money leaving their pocket, so maybe it doesn't matter. As long as I can finance the cost, right?
- ConnieK_Oklahoma
- Contributions:2896
So I would like to point out that in my mind EBA needs some definition.
I have seen some that use an Exclusive Buyer's Agreement which basically just commits the buyer to use that agent and if they don't use that agent they breech the contract and owe the agent a commission even if they buy from someone else.
however it does not commit the agent to act as a single party broker who works on behalf of the buyer to their benefit, they can still be a transaction broker with this agreement. (which seems like a stupid agreement for a buyer to sign- but that is fill in the blank one that I have seen ).
I assume for sake of this discussion you really mean to refer to this exclusive buyer's agent as a single party broker (which maybe has a different term in other states). Being a sinlge party broker DOES requires a written agreement between buyer and agent, HOWEVER it doesn't necessarily mean that it is an EXCLUSIVE agreement, meaning the buyer can drop that agent and go get another one.
they are two different agreements - at least here.
it's splitting hairs and I didn't address your original question. derailing is not my intention. but it is important to point out the difference as there may be buyers that sign a exclusive buyer's agreement who think they are getting a single party broker when they are not
overall existing compensation model stinks. it's possible to do nothing for a lot of money and do a lot of work for no money.
I have seen some that use an Exclusive Buyer's Agreement which basically just commits the buyer to use that agent and if they don't use that agent they breech the contract and owe the agent a commission even if they buy from someone else.
however it does not commit the agent to act as a single party broker who works on behalf of the buyer to their benefit, they can still be a transaction broker with this agreement. (which seems like a stupid agreement for a buyer to sign- but that is fill in the blank one that I have seen ).
I assume for sake of this discussion you really mean to refer to this exclusive buyer's agent as a single party broker (which maybe has a different term in other states). Being a sinlge party broker DOES requires a written agreement between buyer and agent, HOWEVER it doesn't necessarily mean that it is an EXCLUSIVE agreement, meaning the buyer can drop that agent and go get another one.
they are two different agreements - at least here.
it's splitting hairs and I didn't address your original question. derailing is not my intention. but it is important to point out the difference as there may be buyers that sign a exclusive buyer's agreement who think they are getting a single party broker when they are not
overall existing compensation model stinks. it's possible to do nothing for a lot of money and do a lot of work for no money.
- ConnieK_Oklahoma
- Contributions:2896
oh.
that makes sense.
I was guessing some really strange things- Estimating Buyer agent was the closest and could not really come up with a descriptive role for that.
how silly of me for not seeing that.
I have no answer/comment....(yet).
that makes sense.
I was guessing some really strange things- Estimating Buyer agent was the closest and could not really come up with a descriptive role for that.
how silly of me for not seeing that.
I have no answer/comment....(yet).
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2728
Exclusive Buyer's Agent
- ConnieK_Oklahoma
- Contributions:2896
in case I don't find the term somewhere else...what is an EBA
I'm trying to guess but would rather ask than assume.
I'm trying to guess but would rather ask than assume.
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2728
how's about a base commission plus an incentive-based commission that is driven by how much below list the house is acquired for
how's about.................. that's just plain silly!
how's about.................. that's just plain silly!
- blub blub blub
- Contributions:145
Do you really think that an agent representing a buyer is driven by the commission? And that the agent is trying to get the buyer to pay a higher price so that the agent makes more?
Seriously for every $10,000 the additional commission would be $250 to $300 and then that amount is split with the broker.
Really...that's an EBA's motivation?
Seriously for every $10,000 the additional commission would be $250 to $300 and then that amount is split with the broker.
Really...that's an EBA's motivation?
- Mack McCoy
- Contributions:1111
Well, "net" listings are illegal, and this is just the reverse - oh, let me sell you an overpriced listing and take 20% (or some amount) from the "discount" I got for you.
Can a REA be an EBA using the traditional compensation model?
What do other REAs think about a compensation model that effectively aligns the EBA's compensation to the overall end-objective of the buyer - a lower price? As a starting point, how's about a base commission plus an incentive-based commission that is driven by how much below list the house is acquired for?
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