By: adam howard
Submitted: 2010-08-15 23:05:20 | Word Count: 641
Realty commission is that the means in which land agents are paid for the services they provide. They receive a share of the value received for the property. Effectively, the real estate agent needs the vendor of a property (the seller) to sign over to the $64000 estate agent a part of the property being sold.
Another manner of trying at it's to mention that the $64000 estate agent, through the wording of the listing contract, effectively has his name added to the title deed of the seller's property, so that the important estate agent becomes a part-owner of the property. When the property sells, the important estate agent receives a payment that represents his share in the vendor's property.
Most readers will bear in mind of the arguments in favour of land sale commissions, therefore I will not discuss those here. My focus is on the ways that in which the sale process will be skewed against all parties involved, when the motivation to win a commission takes precedence over more necessary considerations.
Commission is a "winner-takes-all, loser gets nothing" situation. This increases the pressure on the $64000 estate agent to secure a sale. Time is also a problem. If the important estate agent cannot secure a sale inside a time acceptable to the seller, the vendor may take the property off the market, or away from the real estate agent's agency. This will end in a total loss for the real estate agent.
[ advertisement ]
Finally, the seller becomes an obstacle between the important estate agent and his commission goal. In order to receive payment for his share of the seller's property, the $64000 estate agent should receive an provide to purchase among the available time, however the offer should be accepted by the vendor. If the vendor decides that the offer isn't acceptable, then the important estate agent loses.
So as to win the gambling game that is assets sales, the important estate agent could attempt to tip the percentages in his favour - and there are many ways in which this may be done.
At the listing stage the real estate agent could use improper means that to win the listing contract. These include over-quoting on valuation, and giving dodgy sales figures.
Throughout the sale process the $64000 estate agent may be tempted to inform potential purchasers things that are untrue. I have seen many sale contracts with clauses designed to safeguard realty agents against the results of false statements. Known as "porkies clauses", they invariably state that the purchaser acknowledges that any information provided to the purchaser by the $64000 estate agent is provided on the understanding that the purchaser will not be counting on it for any purpose.
When a purchaser has submitted an supply, and also the purchaser cannot be convinced to increase her offer, the important estate agent might be tempted to pressure the vendor into accepting what would well be unacceptable. Observations, like "the market has softened" or "the market has spoken to us" are utilized by land agents to convince vendors that the important estate agent's high estimation of value will now not be relied upon, which the seller ought to now accept what the seller believes is an unacceptably low offer.
For some years currently, I have been arguing that realty services should be provided on a fee-for-service basis.
I will explore the replacement of property sale commissions with a fee-for-service structure more in future articles.
Author Resource:-
Adam has been writing articles online for nearly 2 years now. Not only does this author specialize in Real Estate Commission - A Corrupting Influence
You can also check out his latest website about
Virtual Dedicated Server Hosting Which reviews and lists the best
Fully Managed Dedicated Servers
