Honesty and integrity of flat-fee agent-assisted FSBO

[alex]

Hi, I was just wondering how a seller using the flat-fee agent-assisted FSBO, can be absolutely certain that all correspondence and voice mails which are initially sent to the assisting agent are forwarded to him/her immediately? After all the flat-fee is very small and there's little to no incentive for an agent to spend time screening calls and answering emails (or using his secretary's valuable time) when he can focus on units which will bring him a full commission. What's to keep the assisting agent for doing one of the following things for example:

(a) If the buyer comes w/o a broker, the assisting agent can try to convince him to get a broker and refer him to one of his fellow co-workers. Then, when he finally forwards the email, the buyer now has a broker in place with the same firm and the seller must pay commission as per RLS. The assisting agent may also get a kickback from his fellow broker in the process. Win-win for everyone except the seller.
(b) If the buyer comes w/o a broker, the assisting agent can offer his services as a buyer broker and show him other properties, telling him that the listing is currently "under contract" or that "the owner is not reachable at the moment", or any other excuse to delay. Thus he can make more money for himself by hijacking a potential buyer, even if temporarily.
(c) Up-selling his own personal exclusive listings before forwarding the correspondence.

I realize that some of these (especially (b)) could be illegal since it's technically lying, but dishonestly among brokers is not something new. Can anyone care to comment on this? I would be interested in signing up with Hauseit but I'm a bit concerned with the potential lack of transparency, honesty or integrity of the assisting broker and his overall motivation in all this. With the 1% commission this is not such an issue anymore, but the flat-fee offering feels almost like a free-lunch.

Thanks
Alex

[HauseitAdmin]

Hi Alex, thank you for these questions. Please remember to check out our Agent Assisted FSBO FAQ (link to product page below). For example, regarding the timing and method of receiving inquiries which are passed along by the front desks / executive assistants of our partner brokers:

Our partner brokers employ front desk secretaries who answer phone calls and take messages during normal business hours. Messages, emails, texts and automatically transcribed voicemails relating to your property are relayed to you promptly and within a commercially reasonable amount of time. The phone number associated with your listing will be the main office line of one of our partner brokers. For obvious reasons, it is not possible to change their main office number to your phone number unless you wish to become the listing agent for all of their listings. All jokes aside, the level of responsiveness of our partner brokers is leagues ahead of industry standards where full commission listing agents don’t have any obligation to keep their seller updated.

Regarding your other questions:

a) This does not happen because it is protected against in the flat fee listing agreement.
b) This assumes extremely unethical behavior, and is against the broker's fiduciary duty to the seller.
c) Inquiries are handled by executive assistants who handle all inquiries in the same manner.

Alex, these scenarios you describe generally assume the most unethical of behavior, much of which would also be against the broker's fiduciary duty to treat customers fairly. Needless to say, this is not how we nor any or our partners operate, as evidenced by our years or service in New York and our reputation.

We understand that this service may not be for everyone, and we encourage you to check out our full service listing option instead, or we'd be happy to refer you to some other full service brokerages and even competitors. Good luck!

[aslan]

After reading this exchange, I first want to applaud the Hauseit team's very polite and restrained response. Alex, my humble advice is this. If your starting assumption is that someone will break the law and act in the most convoluted way possible, then you should probably go another route.

Also, I'm pretty sure businesses aren't required to take on customers. It's a free country, for businesses as well. If you're rude and disrespectful to someone trying to help you, that's not a protected class!

[alex]

Thanks for the prompt reply! First let me say that there was nothing disrespectful in my post as aslan seems to infer and it certainly was not my intention to discredit anyone. I was merely asking some questions and clarifications which I'm sure lots of people also have in mind. I'm not assuming people do such things, I was just questioning the level of interest and motivation for a broker to participate in the flat-fee program. Surely there's something in it for them too, they're not running a charity. And this by no means has anything to do with Hauseit's ethics which I was not challenging - all their reviews are 5 stars. When you come to choose between a small flat fee and 1% (which is a big difference especially for the high NYC prices) it's quite normal to want a clear understanding of the process involved. It's a 6 month commitment and every seller wants to make sure they know what to expect. Otherwise why engage?

Just as an FYI, about half-way down in this post on Trulia, Lauren asked a very similar question. Clearly i'm not the only one to ask.
https://www.trulia.com/voices/Home_S...in_NYC_-867877

[HauseitAdmin]

Thank you Alex for your kind response! No offense is taken at all. We totally understand that many customers want to figure out as much as possible when it comes to such an important life transaction.

Regarding your question of what's in it for our partner brokers, especially if they are only taking a flat fee for the Agent Assisted FSBO product, please check out our FAQ section on our Agent Assisted FSBO product page. The FAQ section titled "Why Would Your Partner Brokers Work For Less?"

With 50,000 licensed real estate agents in the NYC metro area alone, there’s no doubt that there’s plenty of excess capacity in the industry. Even the most connected of agents will always be open for new business.

Regardless of the commission structure, new listings are always beneficial to brokers for a variety of reasons. For example, more listings mean more brand prestige and an easier time of attracting new recruits and clients. New clients might generate additional referrals and reviews and so on.

However, traditional agents will never sacrifice their ability to earn full commission by openly discounting their services. Why would they permanently haircut their ability to collect 6% in commission by becoming a discount broker? Considering that the vast majority of business for traditional brokers comes from referrals and networking, permanently reducing one’s pricing makes zero sense for experienced brokers.

That’s where we come in. Experienced, traditional brokers can connect with discerning customers who would have never paid full commission in the first place. Consumers who do their research get to save on commission while traditional brokers get new clients without compromising their reputations or their ability to charge full commission elsewhere.

[alex]

Thank you!! I really appreciate your openness in this matter!