Caveat Venditor is the latin term for Let The Seller Beware. Here is an interesting phenomenon that is gaining popularity amongst some money hungry Realtors.
The dreaded "marketing fee", a.k.a. "admin fee", is gaining popularity as some opportunistic Realtors capitalize on the strength of the housing market to gouge their colleagues. How does this work? Basically, the Realtor in question charges the seller a commission to market their property, then charges the agent procuring an offer a few hundred dollars for the marketing of the property a second time. In essence, the Realtor makes money on both ends of the sale, most of the time without the knowledge of the seller. When listing a property, the seller negotiates a commission for their agent to market and sell the property. As part of this negotiation, a Co-Operating Agent's commission is set out. How would you feel as a seller when you find out that not only did your agent get paid what you had negotiated, but then he/she took a portion of the other agent's fees to boot? As more Realtors get away with this ludicrous cash grab, more will try. It is often the inferior Realtors, ones which sell only three or four homes per year that rely on this type of activity. However, recently more and more top agents are bringing themselves down to this level. Sad, but true. Agents now charge $188, $288 and even up to $500 for this "marketing fee" which often is just a quick cash grab. With this type of thought process, should co-operating agents be able to charge for the gas expense to bring clients through your property? How about the administration expense to have an offer typed for your home? That wouldn't be fair. So then, how is it that some Realtors believe they should pass their expenses to market your listing or to run their business off to a third party? This is happening and sellers need to be aware as it could end up costing you a deal for your home. How can a seller protect themselves from such behaviour from their agent? 1. Ask your Realtor if they will be charging other Realtors a fee when they bring buyers forward. Many agents will refuse to pay this fee and you could be missing out on serious offers if all your agent is concerned with is to pad their wallet with a couple hundred dollars - on top of what you have agreed to compensate them. 2. If your Realtor says they do charge this fee, remind your Realtor that you are paying them for their services and as part of the listing agreement, marketing the property, all expenses related with that, and their office administration cost is the sole responsibility of your Realtor.
3. Check the "Broker Full" version of your listing to make sure your Realtor is not cheating you by adding this fee to the listing without your knowledge, thereby potentially having you miss out on serious buyers. The Realtor's desire to make a hundred dollars or two could cost you thousands as Co-Operating Agents shy away from giving a portion of their well-earned commission away to your Realtor. It is your Realtor's obligation to pay for the marketing of your property, as per the Listing Agreement, and that is what you are paying them for. For your Realtor to charge another party for the same service you have already paid for is wrong. Your Realtor's focus should be on providing you with the best service possible and generating enough interest to get your home sold. If their focus is on earning an extra dollar or two by double charging for fees that should have been part of their offering, you need to re-evaluate your choice and go with a professional that takes pride in their high level of service, and has the respect of their peers for providing fair compensation.
Caveat Venditor - Let The Seller Beware! Asif Khan, ABR
Member of Re/Max Hall of Fame
Re/Max All-Stars Realty Inc., Brokerage
905-888-6222
The dreaded "marketing fee", a.k.a. "admin fee", is gaining popularity as some opportunistic Realtors capitalize on the strength of the housing market to gouge their colleagues. How does this work? Basically, the Realtor in question charges the seller a commission to market their property, then charges the agent procuring an offer a few hundred dollars for the marketing of the property a second time. In essence, the Realtor makes money on both ends of the sale, most of the time without the knowledge of the seller. When listing a property, the seller negotiates a commission for their agent to market and sell the property. As part of this negotiation, a Co-Operating Agent's commission is set out. How would you feel as a seller when you find out that not only did your agent get paid what you had negotiated, but then he/she took a portion of the other agent's fees to boot? As more Realtors get away with this ludicrous cash grab, more will try. It is often the inferior Realtors, ones which sell only three or four homes per year that rely on this type of activity. However, recently more and more top agents are bringing themselves down to this level. Sad, but true. Agents now charge $188, $288 and even up to $500 for this "marketing fee" which often is just a quick cash grab. With this type of thought process, should co-operating agents be able to charge for the gas expense to bring clients through your property? How about the administration expense to have an offer typed for your home? That wouldn't be fair. So then, how is it that some Realtors believe they should pass their expenses to market your listing or to run their business off to a third party? This is happening and sellers need to be aware as it could end up costing you a deal for your home. How can a seller protect themselves from such behaviour from their agent? 1. Ask your Realtor if they will be charging other Realtors a fee when they bring buyers forward. Many agents will refuse to pay this fee and you could be missing out on serious offers if all your agent is concerned with is to pad their wallet with a couple hundred dollars - on top of what you have agreed to compensate them. 2. If your Realtor says they do charge this fee, remind your Realtor that you are paying them for their services and as part of the listing agreement, marketing the property, all expenses related with that, and their office administration cost is the sole responsibility of your Realtor.
3. Check the "Broker Full" version of your listing to make sure your Realtor is not cheating you by adding this fee to the listing without your knowledge, thereby potentially having you miss out on serious buyers. The Realtor's desire to make a hundred dollars or two could cost you thousands as Co-Operating Agents shy away from giving a portion of their well-earned commission away to your Realtor. It is your Realtor's obligation to pay for the marketing of your property, as per the Listing Agreement, and that is what you are paying them for. For your Realtor to charge another party for the same service you have already paid for is wrong. Your Realtor's focus should be on providing you with the best service possible and generating enough interest to get your home sold. If their focus is on earning an extra dollar or two by double charging for fees that should have been part of their offering, you need to re-evaluate your choice and go with a professional that takes pride in their high level of service, and has the respect of their peers for providing fair compensation.
Caveat Venditor - Let The Seller Beware! Asif Khan, ABR
Member of Re/Max Hall of Fame
Re/Max All-Stars Realty Inc., Brokerage
905-888-6222
Posted via email from Markham Real Estate Today with Asif Khan
No comments:
Post a Comment