Why Pay Commission to a REALTOR®?
Guest column by Jim McCaughan, Past President, BCREA & FVREB
During my career I have heard many versions of these two questions: "Why should I pay a REALTOR® to sell my property?" and "What do I get in return for the commission I pay?"
Many sellers believe that their REALTOR® puts a sign on the lawn, an ad in the newspaper and then waits for the property to sell. Generally, nothing could be further from the truth!
When a seller signs a listing contract, the REALTOR® makes a commitment to help their client obtain the highest price, in the shortest time with minimum inconvenience. A good REALTOR® gives valuable advice, expert guidance, and great value.
The REALTOR® provides objective and accurate information about current market value, allowing the seller to select the appropriate listing price. In many cases they can offer expert advice on staging the property for maximum appeal to potential buyers.
When listing a property, a REALTOR® is trained to represent the seller by making sure the property information is accurately and attractively presented to the marketplace. This includes careful compliance with provincial and federal regulations such as thePersonal Information Protection Act, the Real Estate Services Act and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) money laundering reporting requirements. The REALTOR® ensures that required disclosures are made at the appropriate times.
Once a listing is signed, the REALTOR® begins the expected marketing process which includes putting the property on the Multiple Listing System®, installing a sign, writing appealing print ads, creating feature sheets to leave at the property and holding open houses. In addition, many REALTORS® feature the property on one or more Internet websites and displays the listing at mall kiosks and at open houses for other agents. Giving the property maximum exposure can be expensive but it is part of the commitment of the REALTOR®.
Much of the work of the REALTOR® is done quietly behind the scenes. REALTORS® invest time and energy in activities like qualifying potential buyers, arranging and tracking showings by cooperating agents and obtaining and sharing feedback from other REALTORS®. Many sellers take comfort in knowing that their REALTOR® will handle all inquiries seriously and do their best to ensure that only serious qualified buyers will view the seller's property. This provides a measure of safety and security.
REALTORS® are also trained to provide accurate advice and valuable assistance when dealing with the significant complexities of tenant-occupied properties, estate sales and foreclosure transactions.
One of the areas where a REALTOR® provides the greatest value to their client is negotiation. Handling objections and tactfully representing the seller's best interest is an important skill which REALTORS® obtain through specialized training and personal experience. Writing an enforceable contract and negotiating a legally binding agreement are important services which are often taken for granted by the general public until there is a problem. Then this great REALTOR® value quickly becomes evident.
Another generally invisible service is managing the transaction after acceptance of the offer and during the buyer due diligence period. This consists of arranging inspections, scheduling appraisals, obtaining strata documents (if applicable) etc. Sometimes this also involves handling real estate turbulence which includes things like appraisals lower than the sale price, problems discovered in a property inspection and other unexpected challenges. The experience and guidance of the REALTOR® and their broker can usually overcome these challenges.
The final job of the REALTOR® is to do everything they can to ensure the smooth completion of the transaction. This includes monitoring the conveyance process, confirming payment of the sale proceeds to the seller and a timely transfer of keys to the buyer. Selling or buying a property is a significant decision for most people and the complexities are sometimes not well understood until problems arise. A good REALTOR® has the training, expertise and experience to assist clients to achieve their desired results.
Probably the most amazing aspect of the tremendous value REALTORS® provide is Guaranteed Results. The seller pays nothing unless they receive an acceptable offer. There are very few other professional service providers who are prepared to demonstrate their confidence in their ability to produce results for their client in this manner.
Jim McCaughan has been a REALTOR® for over 30 years and is the Managing Broker of Landmark Realty Corp. He is the Past President of the BC Real Estate Association and was the Chair of the Real Estate Council of BC. Jim has served as the President of the Fraser Valley Real Estate Board and the Chilliwack & District Real Estate Board.