The difference between RE agents and other professionals like lawyers/accountants is the latter must be a top student and spend many years in school and write difficult several exams and prove knowledge of their study area, whereas anyone from any background can do a correspendance course in real estate and get a license in the mail. Assessing property value is a bit of an art and simply having a RE license doesn’t make you a master of that art.

Personally, I would rather split the commission with a run of the mill agent to list on the mls than pay 5% for an all star, extra money in my pocket is more valuable than great service IMO. Then again, you do get what you pay for so it’s all about your priorities.

I don’t doubt that amongst the thousands of real-estate professionals in the GTA, who are accredited and tested, there are many unscrupulous, lazy and un-motivated agents. In the same turn, there are many lawyers, accountants and financial sector “professionals” who could also be painted with such distinction. Professional is a term used to designate a persons profession, not their efficiency or your characterization of their field.

As to a listing agents value, I believe and again I can draw on personal experience, is highly valuable and one needs to consider their role in the sale a bit more closely then just plopping it on MLS – a rather crude, one dimensional analysis. I will give you two examples of how my family has both benefited from an excellent listing agent and how we lost a lot of money from a “mediocre” one. I believe that this will help illustrate the dollars and cents, to a difference of opinion on a listing agents “worth”.

In situation A) we have a listing agent who had my grandparent’s home in Lawrence Park. The time had come for them to sell their big old home and downsize into something that met their needs at the time. They had the unfortunate timing of listing their house in the mid 1990s after the bubble broke, but not entirely before the market had recovered. So, their agent listed the house in the seven figures and it sat on the market where it received good interest and they solicited a number of offers, none were close to their asking price, with a discrepancy in the hundreds of thousands of dollars. My grandparents, armed with their pride and “knowledge” of the market and what the neighbours got for their house a couple years back decided, “no” we’ll hold out for “our price”. Well the house sat, got re-listed and eventually sold six months later when they had enough and were just looking to move on. The offers they got when it initially listed were about 25% higher then what they eventually sold for…25%!!

Had their agent been able to reason, present the facts and work with their client to see that it was in their best interest to take the lower offer, given the market, my grandparents would have had hundreds of thousands more to show for the sale of their house. Was it the listing agents fault? Not necessarily. My grandparents fault? Partially, but I believe a better agent could have handled the situation differently.

In situation B) we have a similar story, with a much different outcome. My parents are now ready to sell and move to the country, away form the hustle and bustle of the city. One additional bonus is that they get to sell their house in Leaside for hefty profit, in a hot market and move to a low cost jurisdiction – score! So, they interviewed a bunch of agents, got references and settled on someone from Bosley, not David, but another very good agent.

Now here is a case that should support your assertion, that all you have to do is list the property on MLS, put your feet up and accept offers. At this time, houses in Leaside were selling way above ask and money was tossed around like nothing - if you had a 10ft square boulevard, you were going to get multiple offers and someone was going to build on it. Well that’s what our agent did, put it on MLS…on and of course circulated the property to his and his brokerages clients, many of whom were developers or affluent professionals looking for just such a property. His initial value was attracting the right people to see the house, not just Bob and Jane who search MLS from their cubicle and turn Toronto into a veritable “open house Sunday” scavenger hunt.

So 7 days are up and my parents, who “attractively” listed the property, with the advice of their agent, are ready to accept offers. And here is where our “listing” agent helped extract $200K above a listing price my parents were happy to get. I am sure David can be much more articulate about the art of negotiation, multiple offers, sign backs and what not, but it essentially comes down to pairing a couple buyers off and getting them to blindly bid up their offer until there is no more to be had. There is risk involved for both parties and having the very best agent working for you, with years of experience and acumen pays dividend that you can very much qualify. Our agent worked the offers back and forth and got a tremendous return for my parents, he got every dollar that was there to be had and perhaps more.

One further point on this, the eventual buyer’s first point of contact with our home wasn’t MLS, but through the professional network-grapevine of agents who have clients with specific demands and deep pockets.

Just as a seller’s agent is more then a chauffer the listing agent is more then a monkey posting on MLS.

You are also passionate about posting comments on my blog, which is why I will moderate any post you make, regardless of its content.

That’s what blogs are for, right?

And how much do agents really market their properties? Aside from listing on mls and maybe the agent’s personal web site, how much exposure is the average property going to see? If I’m a listing agent, I can simply post it on mls and let someone else do the leg work selling the place. Sure, I can put ads in the paper or online, do flyers or direct mail, but it’s not expected. Top agents do this stuff, but most run of the mill agents do the bare minimum, and why not, it’s easy money.

I’m not denying there’s value in using a RE agent, but lets not overstate the importance of listing a property on mls. If I were a selling agent who spent countless hours & gas money ferrying clients to different viewings only to have to split HALF the commission with a dude who merely posted the listing & relayed the offer. I don’t know what the right answer is to compensation, but the current system seems unfair to the selling agents.

Not to say all agents are cowboys, but I’ve dealt with many who had a shameful lack of basic real estate knowledge and to think some people rely on these people for advice is frightening.

And David, I’m not beating up on you, obviously you are passionate and professional about your work but unfortunately not representative of your field. Your blog is awesome and I enjoy your perspective even if I disagree.

The previous owner was apparently “Jon Voight,” although that Jon spelled his name “J-O-H-N.”

For the most part I would assume sellers don’t know the real value of their home - they may know the ballpark or what their neighbour’s sold for, but they hire a professional to determine what the market will yield for their asset. This would play heavily into the marketing of the property. If a seller pressures their agent into listing too high, the exposure for their property is going to be diminished because people will be less likely to see it. Without a solid offering price and listing strategy the owner could be costing themselves untold amounts.

Further, a listing agent could offer a lot of value in this market by offering (if they are honest and looking out for their clients best interest) a dispassionate perspective when the offers come in. Perhaps the offers are less then they hoped for and they may be tempted to hold out for their asking price, but as I have seen from personal experience, taking a guaranteed lower offer can often be much more lucrative then holding out and eventually getting much much lower as the market deteriorates or the listing becomes stale.

I know its going to be difficult to swallow when I am on the selling side and have to pay the commission, but I know that hiring a professional to negotiate, market and shepherd me through the largest financial transaction I will make, is a sound investment.

I’ll go ahead and disagree with you, Fidel.

A listing agent who “sits back and waits for somebody else to make the sale” isn’t doing his job. Whatever happened to MARKETING a property?

At the end of the day, I’ve out-negotiated agents, and in my early years I had been severely out-negotiated by top agents. If you think that all agents are created equal when it comes to the bargaining table, then you are sadly mistaken.

If you’re a listing agent, and a cooperating agent brings you an offer for $425,000, how do you get them to come up to $475,000?

It all has to do with your negotiating skills, persona, and experience. And as my post was intended to show, these are quite often a function of image…

And so very true….

SO? Which car did you get?

Cheers
Dave

Only BMW doesn’t have a 2009 325XI. I think you mean the 328XI, but it starts at $42,500 so I don’t know about these prices you’ve quoted. The margins

I know people who use the same tactic with real estate agents, they call several up and take the guy who chops most off their commission.

And David, I must disagree with you on this:
“I told him it was 100% due to the agents listing the property.”

At the end of the day, it’s the owner who sets the price and the owner who decides what price to accept. It has nothing to do with the agents listing the property. The listing agent simply inputs the details into mls and sits back while another agent shows & eventually makes the sale. If anything, the selling agent is 3/4 of the work for 1/2 of the pot.