Buyers Market vs. Sellers Market – The Two Heads of Real Estate

by THE WAV GROUP on October 15, 2007

There is a great deal of elegance in real estate when property values are increasing and there are more buyers than sellers.

Ritzy Realtors listing homes, and dancing among the luxury cars, are courted and pampered by title reps and mortgage reps in what seems like eternal bliss.  Every home is re-landscaped and staged for the upcoming bonanza which will result in no open houses, and immediate offers as soon as the listing hits the MLS.  Sold in 4 days!Alas, along comes the dark cloud of the buyers market.  Sleet and dirt cover the luxury car, which is promptly traded in for something with better fuel economy as the lavish lister “goes green.”  Title and Mortgage thin their ranks and not a single doughnut can be found in a broker’s kitchen.  The glamour seems all but lost.  The hang over from the market past still shows the faint glimmer of the fresh cedar chips, now dry and brown.  The stager pulled out their trinkets after 90 days on market and the house floors are barron with a thin layer of dust – not even a footprint remains.

Alas comes along the vetran top producer.  “I have seen this all before and frankly I think it is refreshing!”  “I do great business in all markets because I have been in it long enough to have a solid list of clients.”  This agent who is in California (and shall remain anomyous) does 20 or more transactions a year and usually more than $50 Million in sales volume.  For her, there are always transactions to be found in the market because she always has clients doing something.

When representing buyers in a buyers market, her commission side is 4%.  In representing a seller in a sellers market, her commission side is 4%.  In a rough and challenging world where other agents are constantly cutting ther commission to get a transaction, she is increasing her commission.  Alas, her worst nightmare – a balanced market, or double-siding a transaction – In a balanced market she gets the standard 3% split – never budging below – “I never discount the quality that I bring to the transaction from my 20 years in real estate.”.  In double-siding, she charges 5% – always allowing “her clients” to win.  “When representing 2 friends (clients) in a transaction – I treat them like family and cut my service fee.”

This woman is beloved by her broker and her customers, an elite peer of other top producers in her office and in competitor offices.  She has never changed brokers.  Everyone else hates her – wonder why?

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