Commissions are under pressure in the real estate industry, what are you as an agent doing to earn them? Yes, we said earn. We’re going to discuss that. That is Shana Acquisto. So she happens to be a real estate broker and a luxury one. And then nonetheless, yeah, I do a decent job, like, you know, just barely above average. I’m shooting for me, too.
And what we’re going to do is we’re going to discuss that fact that we can’t actually discuss the commissions and or the percentages. So we won’t know that. We’re going to talk about how you as an agent can be providing value no matter which side you happen to be on during the transaction. We’re going to talk about differentiating yourself. We’re going to talk about showing and demonstrating all that value to your client. And it’s super easy to discount super, super easy, but it actually doesn’t help your client. So let’s go ahead and start at the top, Shana.
All right, so you guys know that you can’t talk amongst other agents about commissions, right? That you don’t want to get involved in that. If someone hears about that, they could turn you in. You could be in big time trouble. So it’s considered price fixing.
So we’re not going to discuss the actual amount, but rather what we’re going to do is discuss the fact of you. Is an agent providing as much possible value in showing the client that you are worthall of that? And I do think a lot of you are seeing now that, you know, the realtor commissions are the first thing that people want to cut. They think the market is great.
And I don’t really feel that I need to pay that full commission that you’re that you typically charge. Same with the builders. Right. And we’ve talked about this before about how it’s it’s really hard. You know, I get calls from our agents and they’re, you know, did you see the commission offered in this? This is ridiculous. It’s like 50 cents, literally. So it’s not good. And so we can sit here and complain about it or we can try to do something about it, which I think we need to you need to do something about it. It’s really early choice.
So we’re I think a lot of this comes from recently is No. One technology advancement and the pushing down of the whole brand of realtor or agent or what that means. So a big national company, Zillow, is now identifying local agents as not realtors or agents, but as local guides. And what they’re saying is we’ll set you up with a guide so a guide gets paid a different amount. You might take a guide fishing, you might take a hunting guide. You might have, I don’t know, whatever that happens to be. Right. And they get paid a certain amount.
They’re not they’re professional at what they do, but they’re trying to change the word and change how consumers view that they want to take this search to be the primary item, not the person they want to make their national brand the brand, not the realtor with the R right as the brand, but as this guide actually guiding you. Are they looking out for your best interest? Are they working hard to get you top dollar for your property or to get you into a property if you’re a buyer?
I don’t know. They just want to have that person show you around. You know what I mean? And introduce you to the property and they want to turn it into just simply a person who’s opening the door or providing you a key or giving you access. Right. Meeting you and making sure they protect the property. We obviously see it is very different that the realtor provides extreme value. They have local market knowledge, right. They have the best interest of the client at heart.
They have all these different fiduciary duties, which you guys all know very well. Right. And right now, the reason it comes to mind the most is when prices jump up, then all of a sudden you look at your same property and let’s say your home was worth three hundred thousand dollars before and you go ahead and you multiply that number out by a percentage. So in your mind, you can just go ahead and do that. And then you think about what that amount is and you’re like, OK, fine, I was all right with paying the realtor that commission. Now, what happened is my property went up in value and it’s now worth a higher number.
So let’s say that time evolves and it becomes worth five hundred right now. All of a sudden you do that same math in your mind and you’re like hot. That agent’s not doing any more right in their mind. And there a challenge. Then imagine that the market goes up again and now we’re at a much higher number than five hundred, you know, now times past and market conditions and whatever. And now we’re at seven hundred and fifty thousand for this same property.
All of a sudden the person said, whoa, whoa, whoa, wait a minute. Into me. It always felt like somebody was willing to allow you to make a certain commission until the digit became one more digit. And as soon as it rolled from being four digits to a five digit number, they became like allergic to you more. They felt the realtor was worth that much, but not, you know, just like that became a problem when there became one more digit on the total commission.
And if you look at the flip side, they were happy way back making selling their home for three hundred and now they’re seven fifty. So wait a second. So, you know, I’ve heard several times that I just don’t I don’t have it to to pay. You know, we just there’s not enough net that we’re going to get to pay you your commission. What? You were fine at three hundred now at seven hundred. So that really doesn’t make sense. And I think it’s just a perception of what realtors do. Right.
So you do have to provide value and we’ll talk about that in a minute. But something you can do in these situations when you’re at a listing appointment is say, you know what, I’m going to show you something. If your home sells for less than this and you accept an offer for less than this, I’m fine with with the with the this price, this commission, if your home gets sold for above that, I’m going to take that and they’ll probably like, OK, and they’ll agree. Right. But I think you have to show them on on paper also.
You actually like. Yeah, but you can’t do that. You can’t have a variable commission. Yes you can depending on the price.
You can have it in your listing agreement. Then if it sells for X, so, you know, the variable commission in the in the MLS would be different, right? That means variable if you sell it versus somebody else. So if you if you sell it and you’re representing both sides, then you’re going to take a discount because you’re you’re you’re doing that. Mm hmm. What are you laughing at?
I’m outside my door. I’m outside my depth. I don’t want to comment and say if we can change commissions based on what the property sells for.
Well, let’s let’s verify it and we’ll get back to you on that. Yeah, we will. And so this isn’t like my personal thing. It’s just like and I’m not sure thing. And I don’t want to dive into specifics on commissions. I want to talk in generalities. So let’s retract what we currently just said, OK, if we could retracted not discussing that. But I do want you to provide values, OK? Right.
And I want you to show and demonstrate that to the client with what you have. Right. So you have to provide value. You have to show that you’ve been to the local school, that, you know, the items that, you know are the hike and bike trail is that, you know, all those different items are looking at it from a buyer’s perspective. Right. And make sure you do that. It is super, super easy to go in and say I’ll discount it. But then what happens is you don’t really give your all to the client.
And that’s where the real problem is through. So I think we’re done with that. Give me the escape hatch and get out of here. So we’ve been working for a while, guys, and we have something to show you off.
