PETALUMA CALIFORNIA - PETALUMA Homes and Real Estate For Sale

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If you've ever sold a piece of real estate using the services of a broker, you must have noticed that the brokerage fee was a sizable chunk of the transaction. And you may have questioned whether the compensation paid to the broker was reasonably related to the service provided. It's a good question, one that isn't always easily answered.

Our own National Association of Realtors tries to explain why we're important using TV and radio ads. These spots offer specific examples of tasks performed by Realtors so that you, the busy client, can 'live your life.' Frankly, these ads make me wince with embarrassment. They suggest that you should pay us thousands of dollars because you can't be bothered with delivering a document to the title company and we're happy to do it for you. In fact, the most visible activities of the real estate agent are things that most people could do for themselves, from sticking a sign in the lawn to placing an ad in the newspaper to opening a door for a prospective buyer. If I were evaluating the process based on the NAR radio spots, I might be very tempted to try the do-it-yourself route.

I much prefer the message of the Century 21 television ads. In one spot the buyer shows up at the seller's door offering twice the asking price in cash, even brings coffee and lemon squares to sweeten the deal. And the tag line: 'If selling your home were this easy, you wouldn't need Century 21.' Here the suggestion is that there may be some serious pitfalls to going it alone, that perhaps there's more to the game than meets the eye.

The particulars of the broker's service that really matter are less tangible than for-sale signs and brochures. Thoughtful counsel about buying and selling decisions, equipping the client with the right questions to pose to legal and tax advisors, productive use of informal networks of real estate professionals, careful explanation of contract clauses and procedures, sound guidance in negotiating price and terms, effective communication with other parties in the transaction ' these are some of the areas where the broker makes a difference, a difference that is often greater than the broker's fee.

But aren't those commissions awfully large? Indeed they are, and once in a while an attempt is made to introduce alternatives, usually a 'fee-for-service' plan, a kind of à-la-carte schedule for the client. Oddly enough these ideas fail to catch on not because brokers resist them. On the contrary, most brokers would love to be compensated for their time and expense. It is the consumer public that largely rejects the notion of paying for an agent's hours and out-of-pocket costs.

Most folks seem to prefer what has become known as 'traditional' brokerage; that is, the agent speculates time, energy, and resources to obtain a result for the client. And the client owes the agent not one dime until and unless the desired result is achieved. How many kinds of services can you engage on that basis? Since the agent is paid for an outcome and not for time and tasks, the fee may be earned whether the result is obtained within days or years, whether it's a breezy sale or a prolonged nightmare, whether it costs the agent a pittance or a fortune. People still find that to be a pretty good arrangement.