There are so many things going on in even the most “normal” — and I use that word with great hesitation — real estate transaction, that you just shake your head in disbelief whenever you really stop to think about how it all works.
Let’s start with the listing presentation
A “listing presentation,” in case you’ve never had the privilege of sitting through one, is a meeting between sellers and prospective real estate agents hoping to be able to list the seller’s property for sale. Sometimes, a seller schedules several such meetings with competing real estate agents.
During each presentation, the prospective listing agent tries valiantly to convince the seller that no one else is as capable of selling the property in question. Hopefully, the rules of decorum prevail, and the seller will choose wisely.
While getting a seller to choose me, I’m really working toward getting that seller to not choose anyone else. All those other agents are my competition, and my job during the listing presentation is to win the listing.
Here’s where the real estate business gets odd
As soon as I get the listing — because, c’mon, why wouldn’t I? — all those competing agents — those competitors (said with a sneer) instantly become allies.
They become potential “cooperating” agents.
Wait . . . what?
Yep, it’s true. All those other agents that I just spent all that time trying to convince you to not hire — those competitors — are now on our side. Statistically, there’s a pretty good chance that one of them will be bringing your property’s buyer to the closing table. Moreover, when that happens, I’m going to split my fee for selling the house with that very agent.
I’m going to pay my competitor.
Wait . . . WHAT???
But I’m not. I’m going to pay my cooperating agent for assisting me with getting the house sold. There’s a reason it’s called the “Co-op fee,” and not the “competing agent’s fee.”
You see, the real estate business is way too big for any ONE person to handle. Even the agent who “owns” a neighborhood doesn’t get ALL the business in that neighborhood. The agent might get the lion’s share of the listings, but chances are, other agents are representing the buyers. Remember, it takes both a buyer and a seller to make a sale.
In most transactions, the buyer and the seller each have an agent. Each of those agents has two goals: take care of their respective clients, and get the house sold. In order to do the former, the agents need to compete. To successfully complete the latter, however, the agents must cooperate. Since getting the house sold is the common goal of all parties, it is imperative that everyone cooperate at the highest level.
But since we are by nature competitive, agents want to know who “won” the transaction. In other words, who actually sold the house? Was it the buyer’s agent, who brought the ready, willing, and able buyer? Or was it the seller’s agent, whose listing agreement and marketing plan made the property available to the market in the first place? Trust me, many, many (ahem) discussions have been held on that subject right there.
Another way the real estate business is odd
So, here’s another way the real estate business is just an odd duck: every transaction counts as two sales. One sale is the seller’s side, and the other sale is the buyer’s side. That little oddity came about as a way to finally put to rest the nearly constant argument over which agent was actually responsible for the sale.
Who said that competitors can’t compromise?
Randall Brennan, REALTOR
Certified Negotiation Expert
Certified Investor Agent Specialist
Certified Military Housing Specialist
So what’s next? Take your pick.