Wonder why your lonely Scottsdale rental property is suffering from a lack of showings?
Because your agent is offering the sales force a half-eaten ham sandwich as compensation, that’s why.
In an open, competitive market, I hope it goes without saying that all commission rates are negotiable. There is no such thing as a “set” fee or a “going rate.” Sure, there are market directed norms to which some adhere, but the payment arrangement is always uniquely established between a seller/landlord and the chosen representative. That bit of anti-trust housekeeping out of the way, I will unabashedly state that your rental property is not getting any traffic from cooperating agents because the profit margin has largely been excised from the leasing spectrum.
Altruistic tendencies aside (yes, it’s true, our REALTOR hearts do beat, even if two sizes too small), most professionals I know have already abandoned the rental arena completely. The downward pressure on cooperative compensation for a leasing agent (the guy who actually produces the tenant) has essentially rendered the Scottsdale rental market nonviable as a money maker for agents at present. As if to flaunt that truth, some enterprising souls adept in the art of self-sabotage have driven stinginess into a new ravine. Schlepping around prospective renters for several days, if not weeks, does not compute when the incredible potential bounty waiting at the other end of the rainbow is a mind-blowing $75 and an expired gift certificate to Arby’s.
Why not just mug me for my clients in the driveway? It will save everyone time.
Some of us diehards still believe in working the rental market as a means of servicing clients, even though it is often tantamount to Real Estate pro bono work. I’ll generally trade the meager paycheck for a chance to solidify a relationship with a future homeowner and referral source, but it can be difficult to justify the time expenditure when business is brisk, compensatory coupons to the dollar store notwithstanding.
When you consider the liability that comes with a role in the transaction, the portion of the fee that goes to the agent’s brokerage (you didn’t think he got to keep the entire $10, did you?), taxes, gas, etc, it is not unusual for the lucky leasing agent to be well out of pocket by the time the dust settles.
But don’t cry for me, Argentina. REALTORS are not a sympathetic bunch, of this I am all too aware. I simply advise you not to cut off your nose to spite your sales force’s face. When you select an agent to list your Scottsdale home for rent, make sure to ask what portion of the total compensation is being offered to a tenant-procuring colleague. If it doesn’t sound like a livable wage to you, it will sound like gulag pay to those who are intended to be incentivized by it. Perhaps the listing agent has to short-change the co-broke to keep the total fee you are quoted down, or perhaps the intention is to actively discourage showings from other agents via the miserly offering. Either way, you are more likely to witness a Doors reunion with the original lineup than a cooperating agent with a credit-worthy tenant in tow until you address the shortcoming.
It’s a free country and a free market. Structure a fee schedule with your choice in Real Estate representation in any manner you see fit. Just remember to leave a glass of milk and cookies out for Santa if you expect a tenant in your stocking.
The crumbs ain’t cutting it.
“If you don’t eat your meat, you can’t have any pudding! How can you have any pudding if you don’t eat your meat?!!”
– Pink Floyd, Another Brick in the Wall (Part 2)