Good idea…

Great post yesterday on BusinessWeek about offering a commission discount on standard service, with upside for the agent if the client sells her house above the asking price. You pay more for better service at a restaurant, so why not pay more for better real estate service?

We have been trying to figure out what we would charge for an online listing service, so Dean Foust’s post couldn’t have come at a better time. To avoid creating a commission incentive for an above-market price, the commission bonus could be based on a premium above a value set by a third-party, such as the tax assessor’s office or a home-valuation Web site. Thoughts? As always, let us know…

Discussion

  • http://None Double Aces

    Whats the current timeframe to move redfin data to other areas? That’s probably the most important topic of anyone visiting your site…

  • http://www.orelrealty.com Jorge Orellana

    very interesting post…

    I’m reading yours posts . I wrote in spanish please help me . my webblog is the first in Spanish .

  • Kent

    Using the waiter analogy, the agent should get an additional fee if the buyer feels the service was deserving, not if the home sells above a certain price. The opposite should apply as well, which means if the agent provides poor service, they should get a reduced fee, despite the sales price.

    In addition, a home price is usually outside of the realtor’s hands. If the market is on fire, similar to the Southern CA market during 2003, then an agent could do nothing but put a sign in the yard and the house would have multiple bids within the first 24 hours. Do they really deserve more fees at that point?

    I’m not sure I understand about the charges for an online listing service. Is this for agents only? Regardless, values are arbitrary no matter what third party you use. Two appraisers can value the same house independently and walk away with two different, but correct values. I would have to know more about the service you’re wishing to charge for to recommend a pricing index based on service.

  • http://www.bubbleinfo.com Carlsbad Jim

    I like the idea of increasing commissions and incentives – I’m happy to earn my way, and be rewarded when I provide exceptional service.

    But let’s be clear.

    The commission gimmicks and web gadgets are beneficial and will help stimulate the market place, I’m all for that.

    But unless you have great salespeople – the ones that know how to put a deal together – you won’t have many, if any sales.

    When the market gets tough, it’s too easy to stay on the fence, as a buyer or seller. You think it’s going to be better tomorrow.

    Only a great salesperson can turn ‘tomorrows’ into ‘todays’.