Why are there bad agents?
Sometimes, I will give the off-topic comment some room to breathe here. Here’s one that needed some oxygen.
This one was inspired by my entry about how poor communication can leave a property sitting on the market. I wrote:
"If the property isn’t being shown, it isn’t going to sell. Period."
Melonrightcoast commented:
Rona,
Do you think that this would change if the pricing system for agents changed? I am curious what your opinion is about this. It seems to me that the current system tends to foster "bad" agents. I think if more agents refused listings that are priced too high and more sellers did their homework about the agent's competence, it would help get rid of the sellers that are not really interested in selling their home and the agents that are not doing a good job at marketing/selling their listings.
So instead of a %commission, sellers would pay a flat-fee to agents to list the property and then a flat-rate "bonus" once the place is sold. Ditto for the buyers agents, paid for by the buyer. As a buyer, I think that would go a long way to helping eliminate MY distrust of buyer's and seller's agents because it is in the agents' benefit to get the highest price, to the detriment of the buyer. And as a seller, I would have to be very serious about selling and I would be sure to check on my agent to make sure they have a very good sale history, etc before I paid them any money.
This comment is confusing to me.
Most of the time, I hear that consumers distrust agents because agents on commission have an incentive to get the job done – not to get the job done in their client’s interests. The faster the better. Treat ‘em and street ‘em…. I don’t usually hear the flat-fee as a quality control tactic.
The commission system encourages agents to turn down unrealistic clients. No sale, no pay. The hourly system encourages accepting anyone -- get paid to get nothing done. In the commission system, agents who don’t return phone calls accomplish nothing and get paid nothing. If the hopeless buyers and sellers paid an hourly rate to show their overpriced houses or drive buyers around to houses they can’t buy, there would be more incompetent agents showing and driving around.
Because agents work on spec, for commission, we have a disincentive to take on the hopeless seller or buyer. It wastes our time and we get paid nothing. Nothing accomplished, nothing paid is a good way to watch the unproductive fail. That’s why agent drop-out hangs at about a third every year.
The problem is that they stink up the business while they are failing out.
As for the argument that consumers would research their agent if they were paying him/her by the hour…horse hockey! If you don’t have the brains to check out the agent before asking advice on a several-hundred-thousand-dollar decision, you won’t do it before you pay them by the hour.
I find this argument for fee-for-service bogus. Do you have a better one?
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