Mary B. and her husband are about to make a life-long dream come true. Their kids are grown and the couple is looking forward to moving to another part of the country where they plan to launch a start-up business and eventually retire. Mary B. knows several Realtors, but she would prefer to give her listing to her friend, Ann J.

Ann J. is a savvy businesswoman and a fairly new Realtor. She joined a top-flight traditional firm which offers full service only, catering to the well-to-do neighborhoods in central and north Dallas. Mary B.'s home is in east Dallas, which also has many fine homes, but the price ranges are not nearly as high as the other areas in Ann J's farming area.

Mary B. is an experienced seller many times over, and is preparing her home with updates and clean-ups to fetch top dollar. She is aware that Dallas is still in a "seller's market," and has watched numerous homes in her neighborhood sell within a week or less. Average sales for the whole neighborhood are about a month or less. Prices have risen accordingly, and she is keeping up with what the homes are selling for in her neighborhood. She is aware that there are a few stragglers that are not selling, due to unrealistic pricing, lack of features or other reasons that fail to meet the comparables.

As she gets closer to selling, she has learned that alternatives exist to paying full-service fees, and is interested in exploring them before giving the listing to Ann J. She is confident that she can net more money if she reduces the commission paid to a Realtor to market her home. She feels that the market momentum is in her favor, and that she does not need the extensive services that a full-service firm offers. She believes that the home will sell quickly and easily and that a reduced fee to the listing broker is more than fair. She knows that her home has a lot of drive-by traffic and that a broker will not need to pull out the stops to advertise her home.

Mary B. thinks that the MLS listing, a sign in the yard, and an ad or two in the paper should do the trick. She does not expect her agent to even host an open house. She has estimated that the commissions to sell her home will be in the neighborhood of $12,000. She is aware that if she reduces fees to the selling broker, that agents might not be willing to show her home, so she places more value in keeping this side of the commission at market levels. However, she does not see comparable value on the listing side - not in the current seller's market. She has said, "Why should I pay my agent $6,000 to sell my house in a week?"

In initial conversations long before preparations to sell began, Mary B. mentioned that Ann J.'s entry into real estate was "perfect timing" as she and her husband planned soon to sell their home. Ann J. feels she has already been promised the listing, and is resentful that Mary B. is considering lower fees. She feels that Mary B. doesn't have enough respect for what she can do to get the home sold. She has already told Mary B. that her fees can not be reduced - that her firm is a full-service firm and that Mary B. may well be cutting her marketing plans too close to the bone. Ann J. believes that she can support her claim with some comparables that homes are not selling as quickly as Mary B. believes they are. Also, in order for Mary B. to meet her goal of moving in the next three months, Ann J. says the home should be listed now.

Meanwhile, Mary B. and Ann J. have yet to sit down for a listing presentation, but feelings are beginning to change on both sides as these friends assess each other in a new light. Mary B. believes that she can not meet her financial goals without every penny she can muster. She feels that Ann J. is not listening to her needs but is only concerned with her own commission.

Ann J. feels that Mary B. doesn't understand the true costs of doing business and that she is trying to take advantage of the friendship to get reduced fees. She wants Mary B. to understand that she also brings the buyer, even if indirectly through her marketing efforts, and that there are many more costs and time expenditures associated with getting a home sold than Mary B. realizes. She believes that Mary B. is overconfident and will not meet her goals in time.

Because of her difficulty in getting her friend to negotiate fees, Mary B. has decided on a surprising new strategy. She plans to interview a number of top agents in her area, and tell them that if they bring her a buyer she will pay four percent commission and will thereby get her home sold without either listing it or going FSBO. Mary B. feels this strategy will accomplish two things - she will get her home sold for the reduced fees she is seeking, and by avoiding listing the home with anyone, she hopes to avoid a confrontation and further hurt feelings with Ann J.

Will Mary B.'s strategy work? Can this relationship be saved? What would you do if you were Ann J. to save the sale and her friendship?

Published: April 26, 2000

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