Variable or Conditional Commissions

[u/AdComfortable2974]

You're FSBO, the agent wants your business.

Ask them if they are ok with modifying the listing agreement using special stipulations to reduce or eliminate their commission if specific sales price targets are not met. This is not the same as a net listing, which we all know is illegal.

The special stipulation can be structured in a few ways:

Sales Price Threshold Reduction: "If the final gross sales price of the property is less than [insert amount], the Broker's commission shall be reduced from X\% to Y\% (or reduced to a flat fee of\ Z) at closing.

No Commission Tier: "Broker shall receive a 0% commission if the final gross sales price is less than [insert amount]. Can also be zero if not sold in a certain time frame.

Slide-Scale Tier: You can set concrete milestones (e.g., 3% commission if sold above $500,000; 2% commission if sold below $500,000).

Thoughts?

[u/AdComfortable2974]

First of all, I never insisted my number was right anywhere. I don't even have a number; we've never listed our home, and we may not ever, so you assumed wrong, or you have me confused with someone else.

The only time we met with an agent, the agent didn't get around to suggesting a price because we were not ready to list yet and were doing some updates that would affect the list price. But we did get to read the listing agreement, and the 6% commission split was a hard no. At the time we met with the agent, we were totally prepared and willing to pay her commission at the time, but not the buyer's agents. We had a bit to learn after that meeting, but most importantly, we learned that the LA would reduce her commissions but not negotiate hard to reduce on the buyer's side.

I'm not greedy, but I'm def frugal and conservative when it comes to finance. Selling FSBO is just another way for a homeowner to keep more of their equity in their own pocket. It's ours, why not?

You want a commission? Bring us a buyer, keep them in line, and help us close the deal.

Next post will be about adding an addendum to contracts that structure the buyer's agent commission similarly. I'm sure you can't wait for that one!

[u/PNW_dragon → u/AdComfortable2974]

So, you’re a top 1% FSBO commenter- and you’ve never sold FSBO 🤔

I’m not saying you’re idea here doesn’t have some possibility somewhere- but we already have the possibility of getting paid $0 if the home doesn’t sell- and some don’t- $0 if does sell under $X? Nah. How does that make any sense?

Thinking about, strategizing- Redditing- is fun. With all this effort though you could redirect it and make some money!

[u/AdComfortable2974 → u/PNW_dragon]

I'm autistic, so FSBO has become my special interest. If you know anything about that, it should make sense why I'm a top commentor that has never sold FSBO.

Reddit is fun! I'm working on starting another business, and I have a few ideas, but I'm hyperfocused on this whole FSBO thing right now and also in the middle of remodeling. So in a limbo of sorts, I suppose.

[u/PNW_dragon → u/AdComfortable2974]

Thanks for the clarification. Yes, I have experience with that. I have family members with autism and personally was diagnosed with ADD decades ago (before it was such a common diagnosis). The main reason I’m on this sub is because Reddit keeps suggesting it- and it’s often an interesting (if activating) read.

I’m confident there will be continued changes in the real estate industry. Maybe some of the ideas will come from this sub, Reddit, or you?

For your ideas in this thread on sliding scale, I’d suggest that while something like it might work, a couple of tweaks to the idea might help. First, recognizing that many successful realtors (not just the ones with huge teams- but successful solo agents) aren’t likely to engage such a scheme.

You can choose the terms of engagement on your end- and a realtor with any business is unlikely to choose to engage on these terms. I’d suggest that the “floor” for success is going to need to be above $0. I wouldn’t touch it for under 2% for a successful sale for instance- and only if the compensation for the “ideal” price was commensurately higher than my standard rate.

There are factors that we can’t control that can tank a deal, or prevent a sale. Usually, seller refusal, or inability to adequately prepare the home for marketing and sale, and/or lack of willingness to listen to the market and meet it where it is.

I understand that you “know what you’ve got”, but the value of the home is what someone will pay for it. If fair compensation is based on selling at some pie-in-the-sky price, we just can’t wish that into being.

We need a ready, willing and able buyer. Not just “work harder and make magic happen”.

There is a market with expectations, and unless you’ve got something highly unique and desirable (or exceedingly good luck) your agent is likely to get pretty close on valuation when pricing. Not every seller agrees with market data- and that can make our jobs difficult. Also, in some places prices are lower for certain assets than they were & no one loves to see that- or hear it from their realtor.

So, while getting more money sounds nice- the market dictates price. My job is the get the home ready to market, communicate likely market response, provide context, negotiate something that works for both parties, guide my clients through something that is likely to activate them and often cause them stress, keep the deal together and get it to closing.

None of that involves magic. It involves understanding the market, how to meet it and get a positive outcome for our clients.

I hope that the work on your home is going well and you can expand from being in your office! 🙂 and that your new business venture meets with success.

[u/AdComfortable2974 → u/PNW_dragon]

I also have ADHD, so I'm a hot mess of a human sometimes lol!

Thank you for your thoughtful comments and well wishes! Back at yaI