Brokerage Commission - Why Should it Be Paid?
Many a time clients and friends ask why commission must be paid when the agent receives 2% in any case: "Surely for a few meetings I do not have to pay brokerage fees of 3-4 salaries" or "What in fact have you done for me? you only made two telephone calls? i answer genially that for all 100 propositions only 2 are finalized.
In fact, behind the scene much work is carried out, of which the client is not always aware.
Real Estate brokerage has become more and more professional and complex over the years.
26 years ago (1983, when I opened Society offices) work was simpler, properties were more close at hand, there were two national newspapers and one local paper.
Advertising of properties was in these same newspapers.
Distribution of flyers was also carried out.
Today things are totally different, properties arrive from many sources: From written media: Yedioth, Ma''ariv, Ha''Aretz, Globus, DeMarker, The Town and other local press.
Internet: Homeless, Yad2, WINWIN, Meds, and many other smaller sites.
Cooperation between real Estate agents: properties arrive from collaborators in different offices in and out of town.
Personal contacts: from the close surroundings, acquaintances, past clients or to sum up through long-term good reputation.
Each of the above 100 properties for sale, need to be examined, photographed, classification of details and continuing follow-up regarding price must be organized.
Why must we carry out a follow-up regarding price? Usually the asking price of someone selling his apartment in the beginning will be several thousand shekels more than the true value, this is called the "success method" (if he succeeds, he succeeds, if not, then he does not).
The role of the real estate agent in this case is to continue surveillance on all the 100 apartments advertised in all the various media as listed above and more, in order to see when each apartment reaches its realistic price, a process that could take one to several months depending on rate of sellers'' comprehension of the realistic price of his apartment.
The price of the property itself is comprised from many parameters listed below in order to make some sense out of all the information: location of property, floor level, total area, air flow directions, rear or front of building, elevator, parking, building condition (renovated, maintained well, preserved building) apartment condition, apartment design, ceiling height, square or narrow and long, number of renting tenants in building, number of apartments in building, if there are divided apartments in the building, noise/quiet, close to environmental health disturbances (cellular antennae, electric transformers, sources of noise) etc.
Following examination of apartment value and when it reaches a realistic price, we notify our clients, either by telephone or email with pictures of property and details.
If the client is interested in the property we arrange a visit or several visits to the property, if he is satisfied with that he sees and the price ± appeals, we generally arrange a meeting in the office between the apartment owner and the client in order to mediate between them and to reach some basic understanding in regard to the sale.
If there is success the deal passes to the lawyers of both property seller and buyer, a ''critical'' stage'' in which we must gather up all our best Real Estate mediation powers and skills in order for the lawyers exchange legally correct contracts without "clever" legal jargon.
In the eyes of some clients, the Real Estate agent's work can be summed up by a half hour meeting in the apartment in question and another half hour in the office.
No interest is taken regarding what real estate work may occur behind the scene, or to the experience and professionalism of the agent concerning his ability to discover an appropriate apartment at a realistic price, his ability to mediate and tie the sides for closing the deal.
fact - for every deal that is finalized, brokerage fees are due and deserving, as it is obvious that the agent did his work properly and this I emphasize, even if the agent/ Real Estate office worked well and correctly as described above yet a deal did not materialize, the results testify, there is never even a worthless agora.
The Real Estate profession is amongst the few professions that only profit from total success even of the client surveyed 20 apartments then changed his plans and did not want to buy anything, or bought a property from another office, there is no compensation or payment less than when signing a contract, even if the agent was most efficient.
Think, for example - if you only pay the driving teacher for the lessons if you pass the test.
This way you can learn with several teachers and just pay the last one if you pass.
Sounds unrealistic J in Real Estate agency it works like that.
If we imagine in theory, all the agents going on strike for a year, what would happen? What a state the buyer/seller would be in.
Just to receive a professional opinion in regard to the value of each property would cost thousands of shekels.
In regard to the apartment owner: a property owner wanting to sell his apartment can know the value of his apartment in a short time and not drag it out over several months if he goes to the Real Estate agent who can advertise his apartment to specific clients who are already listed in the data store in the real estate office from earlier advertising via the media as listed above.
The agents have experience with these clients after showing them other properties and have learnt exactly what they want.
Every apartment arriving at the office of professional agents is photographed, and the details sent to clients in the country and abroad, the agent solely handling the property usually cooperates with other offices in Israel and abroad which widens the scope of the advertising power and focuses on the property in question.
To conclude: only the person with time, ability, skills to see hundreds of apartments, from all the many advertising sources, to follow-up of price decrease over a period of months and examine to see what is relevant, what is not and to know professionally if the value of the apartment is worth the price asked, may save himself the services of the real estate agent and the relevant commission.
In fact, behind the scene much work is carried out, of which the client is not always aware.
Real Estate brokerage has become more and more professional and complex over the years.
26 years ago (1983, when I opened Society offices) work was simpler, properties were more close at hand, there were two national newspapers and one local paper.
Advertising of properties was in these same newspapers.
Distribution of flyers was also carried out.
Today things are totally different, properties arrive from many sources: From written media: Yedioth, Ma''ariv, Ha''Aretz, Globus, DeMarker, The Town and other local press.
Internet: Homeless, Yad2, WINWIN, Meds, and many other smaller sites.
Cooperation between real Estate agents: properties arrive from collaborators in different offices in and out of town.
Personal contacts: from the close surroundings, acquaintances, past clients or to sum up through long-term good reputation.
Each of the above 100 properties for sale, need to be examined, photographed, classification of details and continuing follow-up regarding price must be organized.
Why must we carry out a follow-up regarding price? Usually the asking price of someone selling his apartment in the beginning will be several thousand shekels more than the true value, this is called the "success method" (if he succeeds, he succeeds, if not, then he does not).
The role of the real estate agent in this case is to continue surveillance on all the 100 apartments advertised in all the various media as listed above and more, in order to see when each apartment reaches its realistic price, a process that could take one to several months depending on rate of sellers'' comprehension of the realistic price of his apartment.
The price of the property itself is comprised from many parameters listed below in order to make some sense out of all the information: location of property, floor level, total area, air flow directions, rear or front of building, elevator, parking, building condition (renovated, maintained well, preserved building) apartment condition, apartment design, ceiling height, square or narrow and long, number of renting tenants in building, number of apartments in building, if there are divided apartments in the building, noise/quiet, close to environmental health disturbances (cellular antennae, electric transformers, sources of noise) etc.
Following examination of apartment value and when it reaches a realistic price, we notify our clients, either by telephone or email with pictures of property and details.
If the client is interested in the property we arrange a visit or several visits to the property, if he is satisfied with that he sees and the price ± appeals, we generally arrange a meeting in the office between the apartment owner and the client in order to mediate between them and to reach some basic understanding in regard to the sale.
If there is success the deal passes to the lawyers of both property seller and buyer, a ''critical'' stage'' in which we must gather up all our best Real Estate mediation powers and skills in order for the lawyers exchange legally correct contracts without "clever" legal jargon.
In the eyes of some clients, the Real Estate agent's work can be summed up by a half hour meeting in the apartment in question and another half hour in the office.
No interest is taken regarding what real estate work may occur behind the scene, or to the experience and professionalism of the agent concerning his ability to discover an appropriate apartment at a realistic price, his ability to mediate and tie the sides for closing the deal.
fact - for every deal that is finalized, brokerage fees are due and deserving, as it is obvious that the agent did his work properly and this I emphasize, even if the agent/ Real Estate office worked well and correctly as described above yet a deal did not materialize, the results testify, there is never even a worthless agora.
The Real Estate profession is amongst the few professions that only profit from total success even of the client surveyed 20 apartments then changed his plans and did not want to buy anything, or bought a property from another office, there is no compensation or payment less than when signing a contract, even if the agent was most efficient.
Think, for example - if you only pay the driving teacher for the lessons if you pass the test.
This way you can learn with several teachers and just pay the last one if you pass.
Sounds unrealistic J in Real Estate agency it works like that.
If we imagine in theory, all the agents going on strike for a year, what would happen? What a state the buyer/seller would be in.
Just to receive a professional opinion in regard to the value of each property would cost thousands of shekels.
In regard to the apartment owner: a property owner wanting to sell his apartment can know the value of his apartment in a short time and not drag it out over several months if he goes to the Real Estate agent who can advertise his apartment to specific clients who are already listed in the data store in the real estate office from earlier advertising via the media as listed above.
The agents have experience with these clients after showing them other properties and have learnt exactly what they want.
Every apartment arriving at the office of professional agents is photographed, and the details sent to clients in the country and abroad, the agent solely handling the property usually cooperates with other offices in Israel and abroad which widens the scope of the advertising power and focuses on the property in question.
To conclude: only the person with time, ability, skills to see hundreds of apartments, from all the many advertising sources, to follow-up of price decrease over a period of months and examine to see what is relevant, what is not and to know professionally if the value of the apartment is worth the price asked, may save himself the services of the real estate agent and the relevant commission.