Spring Mailbag

Over the last few weeks, we have had several new questions as well as a few instances of similar questions being asked by multiple readers, so here we go with our spring mailbag.

Q: Why is an agent who sells a $1,000,000 home versus a $500,000 in theory paid twice as much assuming both properties offer an equal commission split?

Why would I trust a buyer’s agent, when the more I pay for a home, the more they make?

A: We can walk through an example, but we’ll have to make several assumptions. The first assumption is that the listing agent is offering a commission split of 2.5%, and that the buyer’s agent has an 80/20 split with their brokerage, meaning the brokerage keeps 20% of the commission earned by the agent. If I have a client interested in purchasing, say, a $450,000 home, my goal/job is to get them the best deal possible; why? If I can get a $450,000 home for my clients for $430,000, they save $20,000 and my commission is impacted by about $400 ($450,000×0.025=$11250… $11250×0.8=9000) and you can do the same for the $430,000 amount and get $8,600. I would much rather my clients have an extra $20k, especially since they are keeping me in business, rather than an extra $400 in my pocket. Anyone who hires me to help them purchase a home is someone I want to help get the best deal possible, because if I can get them a good deal, they will be far more likely to refer my services to others or use my services themselves again, and that is how you build/maintain a loyal client base.

Q: I am selling my home by myself and am not getting many showings from agents, do agents try and not show For Sale By Owner homes?

A: There could be a couple issues at play here. First, where are you advertising your home as being for sale? As a licensed broker, I check the MLS daily, but I check the syndicated sites (Zillow, Homes, etc….) less, as there are not a lot of FSBO homes to begin with in Bend (645 in Bend MLS, and 12 FSBO on Zillow as of this writing). Another factor that many FSBOs don’t consider is that from a liability perspective, it can get a little sticky dealing directly with the owners of a property. Most of these owners do not know all the details of a transaction or all the accompanying paperwork, so the buyer’s agent is doing a lot more work since they are not working with a listing agent. Furthermore, most of these owners seek the advice of the buyer’s agent, despite the agent not having any agency with the seller, so therefore have no duty to look out for their best interest or provide them with any advice/guidance. The other issue and most likely factor is the price; oftentimes homeowners have inflated expectations of what their home is worth. Bend is a very desirable place to live and people are searching for places to purchase by looking all over various sites online. Feel free to reach out to me directly if you would like some professional advice on your sale!

Q: Which of the following towns will see the biggest increase in population growth in the next five years: Madras, Prineville or La Pine?

A: Great question! All three places offer something a little unique and likely is a personal choice. Those that prefer cooler, more mountainous environments will obviously prefer La Pine, whereas those looking to farm or ranch will prefer Madras or Prineville, depending on specifics. If I were to guess I would select Prineville, but all three towns have great potential, not to mention lower price tags on single family properties.

This article appears in Source Weekly May 16, 2024.