Real Estate

Why do condo developers need "VIP agents" to sell units when units sell themselves??

  • Last Updated:
  • Jul 5th, 2018 8:44 am
[OP]
Sr. Member
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Jan 21, 2017
719 posts
199 upvotes

Why do condo developers need "VIP agents" to sell units when units sell themselves??

I understand back in the days when pre con condos were tough to sell, it is important to use your commission driven sales force to unload the units.

however, in today's environment, why do developers use them at all and pay them 4% commission??

by environment, i mean, people lining up days before the sales opening with hopes of getting a pre con condo unit (dt toronto). when it is such frenzy, why bother using agents at all?

why not give that 4% back to the end user?

just curious from a business model stand point.
2 replies
Deal Addict
Mar 27, 2004
3736 posts
1213 upvotes
Toronto
Bc this wasn't always the case, it wasn't that long ago when condo market was quite slow. They need agents to do all the marketing and legwork , it saves the developer from having to spend this money.
Full-time Realtor
Deal Fanatic
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Oct 9, 2008
5647 posts
2192 upvotes
Thornhill
Small developments in hot markets certainly will 'sell' themselves. However, the role of the VIP agents in larger developments are to bring in seasoned RE investors rather than crowds lining up outside of 'sales'. Seasoned RE investors know exactly what they want, have little to no financing issues and don't need very much 'hand holding' allowing the developer to focus their resources on other things. There is also very little overhead to the developer for these types of VIP predeveopment sales as their payout structure to VIP agents are setup in a way that basically pays out commission only when larger sums of money from clients come in at different stages of the deal moving closer and closer to closing, then finally closing.

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