Throwing the Runner-Up a (Very Hollow) Bone

It’s not uncommon for homeowners, in the course of interviewing agents to list their home, to be deadlocked between two (or more) agents.

What then?

To sew up the listing, I guarantee that at least one of the agents will promise that, if the homeowner hires them, they’ll give the other agent’s clients “first crack”at the home once it’s on the market.

That way, if Agent #2 “brings the buyer,” they can still split the commission with Agent #1, giving the former a substantial consolation prize.

Solomonic, right?

Not exactly.

Hollow Bone

There’s no mistaking the two-fold appeal of this “gesture”: 1) it makes the first agent look especially fair, even magnanimous, towards their rival; and 2) it lets the conflicted homeowner “off the hook” for passing up another agent they may have sincerely liked — without feeling guilty about it!

In fact, however, such a pitch is invariably an empty gesture — and the Agent making it knows it!

Here’s why:

The best way to attract a Buyer for any given home is — big surprise! — to list it.

After all, the listing agent’s name is on the sign in front of the home, on MLS, on the postcards marketing the home, etc. Plus, they’re the ones hosting the Sunday open houses.

Of course, the listing agent is also the one hosting the Broker Open, when all the other local agents tour the new listings.

Statistically, the odds are vastly greater that another agent will be representing the home’s ultimate Buyer.

Infinitesimal Odds

That’s because even a very busy, very established agent is likely working with at most 8-10 Buyers at a time.

In turn, each of those Buyers is likely to screen an average of 60-80 homes online, and ultimately tour 12-15 of those before deciding which home to buy.

So, out of approximately 26,000 homes for sale metro-wide, the universe of homes any agent’s clients are likely to be interested in seeing at any given moment is . . . perhaps 120 (8 x 15). And that assumes there’s no overlap between any of the clients.

If you like statistics, that’s less than .5%.

For those reasons, I focus my listing presentation on what I’m going to do for the client — not my competitors if I’m hired.

It’s also the case that a Realtor promising to let the runner-up have “first crack” can just as easily have that argument used against them: after hiring me recently, the first thing the client did was request that I call the other Realtor to make sure any of their Buyers were first in line.

P.S.: Alternative Math. If the foregoing statistics are too complicated, consider this: in my experience, the odds of any given showing leading to a purchase are about 1 in 10 (10%). Now assume (optimistically) that the odds of any given house being suitable for a Buyer I’m currently working with might also be 1 in 10.

Combine the two, and the odds of my having a Buyer for any given home are less than 1-in-100 (1%).

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.
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