How real estate works in Athens
Agency
Years ago the seller was king. The agent that listed with the seller worked exclusively for him and so did all of the other agents in that company. Any agent working with a buyer from another company was a sub-agent of the seller. Basically speaking, everyone represented the seller in some way or another.
Buyers over the years were confused. That agent patting their kid on the head and telling those great jokes really wasn't on their side. After a buyer made an offer on a house the agent working with him might get a phone call from the selling agent. The seller's agent might ask "Hey what do you know about this buyer. I don't think the seller wants to budge on the price." The answer might be, "This is going to be a second home" or "He drives an 80 thousand dollar car, he can afford it!" As you might expect, over the years, there were more and more conflicts from the way business was done.
Fortunately today agents have to inform buyers that they have options. An agent can act as a buyer agent, seller agent, dual agent or a transaction agent. A transaction agent represents neither party and a dual agent represents both parties. I know agents that say they can represent both. You do have to ask yourself if it is possible for someone to get the best price and terms for both a seller and a buyer on the same house! Hmmm...
Representation has become so important to the real estate industry that some companies require that agents have to be a buyer agent or listing agent and can't be a dual agent. There are even safeguards in place if an buyer agent shows a property that is listed by another agent in the same company. What they do in this case is the company's broker designates the listing agent as the seller's representative and the buyer's agent as the buyer's representative. All of this agency disclosure is part of a standard Purchase and Sale agreement.
Nuts and Bolts (The Money Trail)
Real Estate starts with the seller. This is probably why the industry originally catered so much to the seller. First the seller signs an agreement to sell a particular property. The commission in this agreement is usually between 5% and 7% and up to 10% for land and commercial property. Also there is a provision that specifies how much of the commission is shared with any other agent that brings a qualified buyer to the table that purchases the property. The Real estate market wouldn't work if the commissions were not split this way. There would be no reason for any other agent, company, or even an agent in the same company to make any effort to sell that property. Also the seller would be dependant only on one person's resources instead of the combined resources of all agents in the area and actually other agents across the country to sell their property.
Another important point is that the agreement to list property is actually made with the Real Estate company. The company is paying for the office, it's employees, equipment rental, phone systems, internet service, insurance, advertising, franchise fees, seminars,and lots of other things.They also carry the lion's share of the liability and due to the nature of the business there is plenty of that. To support all of this they depend on a portion of the commissions that are made selling property. Therefore many companies have a policy on what their agents minimum charges can be. Other expenses for the agent are signs, advertising, SEO, web site and maintenance, local, state and national real estate dues and memberships, continuing education, and transportation.
The Listing agent markets property in many different ways. They often pay for advertising that history has proven doesn't get results. They do this usually to please the seller. It is easy to see the seller's perspective. He doesn't want any stone unturned when it comes to moving his property. However it really is better to let the agent spend their time and resources where they are more effective. Getting seen in all the right places does get expensive. Enhanced or featured listings on the better sites costs extra and that is on a per listing basis.
The selling agent or buyer's rep, as the expression goes, is where the rubber meets the road. They often schedule around 5 to 7 houses to view in a day. The agent has experience knowing how far apart to set up each viewing based on where the houses are, time of day and traffic. Some houses are vacant and some may be occupied. You need to be on time because people in occupied houses schedule to have someone keep their pets or make arrangements to be somewhere else so the house can be shown. Showing land may take the agent and his client through 2 counties in one day. So while a Buyer agent may save some on advertising expenses, they are making up for it at the service station.
Showing property does not begin without lots of planning. Buyers depend on their agent for guidance to help them make the best possible home buying decision. The buyer agent may preview several houses before recommending them to a client. Sometimes they take pictures of features of interest or may call the client while at the house to field questions. They provide valuable feedback and help the buyer weigh the redeeming features of a property against it's flaws. Now that you know that the cost of a buyer agent is built in to the commission anyway, what are you waiting for?
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Mark Arnold