This has been discussed on another thread.
I could, however, adjust the amounf of my commission if I chose to do so, but I have a manager and company CEO who wouldn't be very pleased with me for doing that, nor would I be allowed to. Sometimes it sounds like agents here aren't accountable to anyone - I am!
So, that woild be a "no" on 2 counts for me.
Look, the bottom line is - any consumer can ask for, or try to negotiate whatever they want. It's their prerogative. I wouldn't get in an uproar over it....all you have to do is politely say no! And there may be those who will say, yes.............so be it.
We will continue to adapt just like any other business.
I think we all agree that selling a home isn't like putting something up for sale on Ebay - there's much more to it than just seeing photos and a virtual tour. I had a client call me in regard to a home he saw online - he was excited about seeing it until I told him the train was 2 blocks away, and he would definitely hear it. He couldn't determine that from the internet. Another client loved the online photos of a home, until I told her the rooms she didn't see needed a total overhaul - I preview all homes - I am my client's eyes and ears in the market. Our services and ability to walk a client through the entire home buying or selling process cannot be duplicated on a website simply by reading about it, so that personal touch will always be a significant part of the business. Buying or selling a home is often about emotions as much as it is about the price and terms.
The basic, full service business model - ie- a commission based - model may change over time - who knows. Only time will tell. There already are other models such as flat fee services for those who feel they fulfill their needs. It's about choice. Truthfully, given the choice, I'd prefer to get a salary with an override or bonus and a few benefits thrown in. This commission-based business can cause you to have a lot of sleepless nights ! I just was informed yesterday that my health insurance will go up 44% as of Sept 1 (from $458 to $661 per month!). Yup, a salary and benefits sure sound good to me - today, anyway!!!
But, and getting back to the original question.........At the risk of sounding like a turncoat to some - If an agent wants to discount their services, who are we, or who is anyone to tell them they can't or to chastise them for doing so? We're not some mob marching around with torches lit. We may feel "our" business model is the best - and I agree with that sentiment. But.... It's called free enterprise. We are independent contractors. I am not worried about how someone else is conducting their business - I am only concerned that I provide the best service posible for my clients.
As agents also know, buying or selling a home is more than just getting the contract signed - that's when the work often starts. This purchase is filled with emotion and uncertainty...it involves buyer's and seller's remorse and jitters - so far the internet hasn't touched on those aspects!
When the internet can reassure a client that they are doing the right thing, or clarify the process or help get someone over their emotional hurdle, and hold their hand - when it can "reach out and touch someone" - that's when I will start to worry!
Until then, I have to go and show a house now.............have a good day all!
$5,000 Total Commission - less
$2,500 to selling brokerage firm
$1,750 (70/30 Split with broker)
$1,312.50 (after 25% held for taxes)
$1,050 (after 20% put back into business)
30 hours worked with customer = $35 per hour.....
Now I tell them that really where the agent can make additonal money is to have both the buyer and the seller. But as we know the chances are really not in our favor that that will happen. I tell them that maybe 20% of time we might have both. BUT i go to say that I may work with 10 buyers but only 1 actually buys something. So the "X' amount of hours I put in with the 9 non-buyers are in essence for free and actually costs me money, with gas travel, time, brochures, etc....so that $35 per hour is out the window. They forget that our commissions is really averaged over buyers and non-buyers, listings that sell and listings that don't. Once they have a chance to absorb that they usually never bring up commissions again... :-)
I've been in the same scenario that Cindi has outlined about 6 times over the past 6 years. Most of my business (about 98% of it is full service) What I do if the buyer and seller have come to terms with a verbal contract but just need someone to facilitate the deal through a written contract ONLY, is to have BOTH parties sign a NO brokerage relationship disclosure which explains that I represent neither party and I am simply providing the service of assisting the buyer and seller with filling out the contract. I never touch the contract but have the buyer and seller fill in the blanks. This way I am protected, the buyer and seller get what they need and I charge a flat fee for my time. In this scenario I don't feel that I am whoring out our profession but have provided a valuable single service to a present and hopefully future customer. Of course I would not provide this time of service if I had worked with the buyer and showed houses, etc..and then they found another house that I didn't show them. In that case either the seller or buyer or both would bear the expense of my commission. If I provide full real estate services I expect to be compensated as such.
"It is much more than 15 minutes worth of work to write up the transaction." The 15 minutes was a quote from a Realtor in this thread (Matt Whitman) not me.
"Many people who have never worked as a Realtor don't realize what all is involved."
"The client must be convinced that he/she knows more than any licensed agent does anyway."
Assumptions about the person making the request based on what?
"Flat rate agencies are not always what they are cracked up to be." The same could be said of Realtors.
"There are no set commissions. Those are negotiable." True and the person making the request was negotiating and those who feel it is unacceptable are able to refuse negotiations but they step across the line when saying ... "Those agents that are willing to do that will eventually pay the piper! "
" Look, the bottom line is - any consumer can ask for, or try to negotiate whatever they want. It's their prerogative " Debbie is correct
and correct again... "all you have to do is politely say no! And there may be those who will say, yes.............so be it."
Not..... "but giving away our services and whoring out our profession is not the way to do things."
or "Those agents that are willing to do that will eventually pay the piper! Not worth it! And, you are right, no respectable Realtor would do that!"
@Debbie.. You deserve two (2) Thumbs up for the lines I borrowed from you. I'll give you one now and return later to give the other with one of my many multiple Anti-Realtor profiles...
Good post... interesting that she found a loan officer willing to perform yet she was still grinding for a better deal. Ultimately as a Realtor we have to decide how we want to run our business, what our time/effort/exposure is worth, and which client is worth our resources.
I can appreciate that it is frustrating to hear. Ultimate all you can do is wish them the best of luck, be glad that your not in the position of NEEDING to accept every "deal" that comes along, and move on to growing your business.
Lewis S. Bishop
Realtor & Certified Distressed Property Specialist
with Windermere Rowland Realty
COMMUNICATE via Cell/SMS 925-368-7738 | Fax 925-889-5550 | eMail email@example.com
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What I would like to say is that I LOVE flat rate brokers. They have gotten me about 10 listings in the last 3-4 months.
California home buyers/sellers have not seen their % transaction costs lower since the advent of the internet. Only difference is it seems we're now covering the paychecks for a far greater number of agents/brokers.
"Dunes, what I am saying is that unethical agents" I do not think we agree about what "unethical" means.
Cindi, The post/comments say a lot more of this ""giving away our services and whoring out our profession" than concern for the consumer.
Are there not those who offer these services already? Flat Fee/ Limited service, those who agree to provide services for a lower % . Are they all unethical/giving it away? Accepting anything less than what amount is unethical/whoring out the profession?
Do all Realtors refuse to shop Wal-Mart because they are unethical/whoring out their profession with all the lower prices and cut-rate services? Do you turn down lower costs in your phone service, insurance, office supplies, gas for the car, all because those people are being unethical/whoring out their services and charging less than others?
It is called Competition and those who shop Wal-Mart are aware of the quality issues, service issues, competition issues and yet....they make their choice as they will about services provided by anyone vs competitors prices.
The person in question is asking for one specific service and offering to pay for it, pay well if this is close to the truth.. "yes sir/ma'am, I would love to write that offer up for you and collect 25% (for 15 minutes of work"
You seem to be saying the consumer must buy all the services at the price you determine is fair or you will provide no services. That is your right but it does not make those who disagree with your take on it "unethical or whoring out the Profession"
So everyone who wants no part of it says no!
Are we worried about the poor consumer if the deal goes south or "giving away our services and whoring out our profession"
I really don't care to get into one of these long off the topic debates that drags on for weeks, where everyone gets mad and the posts get longer and longer as we try to pick apart what eachother has said.
My point was simple and I thought well supported. The internet isn't putting real estate agents out of business in droves and it has had very little effect on the average real estate commission. We can argue those points until we are blue in the face but neither will be able to "prove" the point. I stand by my statements as such.
Yes, the internet has been around for some time. However, just recently buyers and sellers gained access to MLS data that only Realtors had access to. I can go on some sites with advanced search options and see just about everything I want to know as a buyer, set up my own alerts as soon as a house comes on the market that meets my search, and lots more. The websites that put this information at my fingertips made it unnecessary for me to rely on an agent to do that part of the work. Part of that 3% commission you earn representing me used to be spent doing that research and finding those houses for me. If I'm able and willing to do my own research, why wouldn't I expect some of that savings to be passed onto me? I saved you time by filtering out all the houses that aren't interesting to me instead of wasting a whole day carting me around in your car.
Look how far the online real estate experience has come for a buyer in just the past two years. If you think the next few years won't change even more, you might be in for a big surprise.
Debbie, I like how you think and how you recognize clients expectations instead of ignore them - now if I were in NJ, I would hire you as my agent!
In these hard times, I'm seeing a lot of people discard their ethics. It's not a good thing to do.
The downside is that the consumer usually doesn't get a clear answer as to what services they are entitled to be carried out with the fees being charged. OR they misunderstand (for some reason or other).
I say, just make sure everything is on paper. You cannot do anything to retaliate unless it is in writing. Verbal/hearsay does not count.
We live in free-enterprise, free-will state.
I reiterate, YOU GET WHAT YOU PAY FOR.
The answer to your question lies in the perception that the agents, buyers and sellers who are taking part in these types of transactions have of real estate. If you feel that all an agent does is write up a 8-10 contract and then collect the thousands, you are happy to be a part of these transactions. My and your clients understand the difference every day.
I do find it comical that people still continue to talk about how the internet will destroy the "legacy" commission structure. Look folks, the internet is here and has been here for over 4 decades, commercially it has been available for nearly two decades. Can we all agree that if the internet was going to put the real estate dinosaurs our of business it would have happened by now.
In the end there are two reasons that it hasn't happened. First, the vast majority of people don't purchase or sell real estate often enough to feel comfortable to trust the internet with that much money. Second, real estate and the transactions that surround it are not commodities, not a single one is the same. Buying a flight to Mexico is easy to do online and the end result is almost always the same - a flight to mexico. Buying or selling a house online will never take place because it can't be commoditized.
Buying insurance online is an interesting example as well. You need only ask my neighbor who recently switched back to a bricks and mortar insurance agency after the policy they had purchased (and were saving so much money with) didn't cover some damage to their home. Sounds a lot like buying from an agent who is offering a 75% discount on their services.
I already responded to this thread at the beginning, but I saw your post, and wanted to comment further. This response may be a bit off the original question, but I think it goes to the changing world we live in as Realtors.
We already see how the internet has affected, not only real estate, but many other industries . Christy, your example of the auto insurance industry was a good one.
I also agree that we all have to adapt to a changing world. My company was one of the first in our area to start putting addresses for the public to see on our listings, and on Realtor.com. Honestly, at first, I was shocked - thinking.... well, now why will anyone call the office or contact the listing agent to see where the home is located if they already know? But, life went on, and we still get calls - even better ones than before. By the time I get a call from Realtor.com, for example, the buyer has already viewed the photos and virtual tour, mapped the home, and knows all about the area and schools, etc. Those showings are usually very good ones.
My company has also emphasized that consumers want information, and they want it fast. We supply that, and our new company website supports that idea. Fulfilling the consumer's needs is crucial to staying productive and ahead of the curve.
Perhaps down the road there will be more options regarding how our compensation is decided. We can't just cling to how we did things without being open to new possibilities.
Who would have ever thought that print ads would become the dinosaurs of today - but they have. Marketing dollars now go to the internet. I remember when I first started out in the business (1985), and up to the last few years, the most frequently asked question (by a seller) was how often, and in what newspapers their home would be advertised. Not so anymore....... Well, ok, so there are a few oldtimers who still ask that question, but not too many!!
Status quo makes us all feel safe, but change is inevitable.
However, I think Realtors and agents who are too worried about protecting the legacy commission structure and think that the only kind of agent a client wants or needs is a full service agent is sticking their head in the sand. Gen X and Millennials want OPTIONS people! If they ask for you to write a contract and that's it, why would you assume that they automatically want or need you to fully represent them? If it is not illegal in the state to offer a buyer rebate and to waive duties, then it seems very old fashioned to assume that the only service you can offer as a real estate agent is to hold our hand and assume we know nothing about the process. I like being an educated buyer, and I like knowing and controlling the process, and I like transparency. I spend a lot of my time researching and doing the leg work, and I want to be rewarded for that. Or at least have the option to save some money for doing the leg work myself. I praise brokers and agents who recognize this and give us buyers options if done in a respectable and transparent way.
Look at the business of auto insurance. Who ever thought that people would ever be able to go purchase their own auto insurance with the right kind of coverage without ever speaking to someone who is a professional insurance agent. Agents who didn't believe that people would have a good experience and would eventually come back to the brick insurance buildings instead of buying online to save a few bucks are out of business now. They had to adjust to the changing needs of their clients and the change in relationship between agent and client with the evolution of the internet and easy access to information that used to be only available to agents. I think the same thing will eventually happen to real estate agents that aren't willing to adjust to meet the changing clients needs and expectations.
I understood the question pefectly: As for the "gift card" request, as I understand it, the buyer does not have to pay income taxes. If they receive cash, then the broker would have to 1099 them. At any rate, there is nothing illegal about a "kickback", "rebate", "commission reduction", whatever you wish to call it. A company called "Inest" has been doing this for years. I am not convinced that there is anything imoral or unethical about the practice. I am sure that the laws vary from state to state. So the next time a buyer calls withy that request, send em to Texas, and have the contact me!!!!
ALL Real Estate commissions are negotiated in advance in New Jersey, and generally are paid for by the seller. The idea that a real estate agent should be asked to pay a buyer any part of their commission to WORK for that buyer is insulting and degrading, as well as being illegal. The fact that a buyer thinks that the work of their agent is done once a contract is drawn up indicates a total lack of knowledge about all the work that is involved after the deal is negotiated (often the lion's share of the work). That is something we need to do a better job of communicating to the general public.
These types of practices are engaged in all the time. Unfortunately, this is also some of the issues we have with our current lending environment. To discount your commission is one thing, to give a buyer a kickback after the sell is a completely different story and an agent that participates in this practice 9 times out of ten is doing so illegally.
Would I personally engage in discounting my commission to this level? It all depends. If someone called me out of the blue and asked me to write a contract for them on a limited service to close for 25% of my full service rate? Maybe I would. I would have a few variables to consider before agreeing to it and definitely stipulate exactly what I will do for that with any additional time being at a specified rate. I would not kick out the idea altogether. I would however make sure it is done legally. The "correct" way of doing this is to reduce the price of the house by the respective amount and reducing the cooperating brokerage commission to correspond with it - not by way of a kickback to the buyer.
I agree with you. In this market, I still provide excellent service to the consumer. I take this job very seriously. The clients become part of my life, not just for a quick sale but for life.
Century 21 Doug Anderson
1727 West avenue K
Lancaster, ca 93534
Before I was an agent years ago I considered listing my house with one of those services. How would I know? By trying to help very disgruntled consumers, that's how I know. Also, by talking with other agents who are not happy about having to do the work of both agents and not being compensated for such - but, they wanted to make sure everything was done right so they did the right thing.
Fred, if that is how you make your money that is fine. Some of us disagree, but isn't that great that we all have that freedom to have a difference of opinion?
Many people who have never worked as a Realtor don't realize what all is involved. It is much more than 15 minutes worth of work to write up the transaction. I can almost guarantee that it would become a very involved situation and the agent's E&O insurance will be on the line.
As a Realtor I try to do everything within my power to protect my client. In an arrangement like the one mentioned I don't believe that I would be able to adequately represent that client. The client must be convinced that he/she knows more than any licensed agent does anyway.
There are no set commissions. Those are negotiable. To set them amongst brokers would be price-fixing and we stay away from that. Negotiating a commission and offering a kickback are entirely different in my book. In this case, the consumer is not looking for a discounted commission (shopping at Wal-Mart rather than Neiman Marcus) but is looking for a kickback. The seller is the one that pays the commission. I am under the impression that this is a buyer we are talking about.
Flat rate agencies are not always what they are cracked up to be. The ones I am familiar with have an a la carte menu of services. Many times the consumer ends up paying more for these guys than a full-service agency. Also, when a seller lists with a flat rate company it is not unusual that the buyer's agent ends up having to do the job on both ends because some of those guys disappear after they have worked for 15 minutes placing the listing on the internet.
Because the ones that you give an inch to, try and take a mile. Once you except the cut in price, there will be things that come up that you can't say "oh that wasn't what you agreed to, you will have to get that done yourself". I know just to make sure it was done right, I'd be doing a whole lot more.
Back in the day, by which I mean, the last millennium, you'd scarcely ever hear of an agent getting a call like that. Once in a while, a prospective seller or past client might have a tenant or friend that wanted to buy the house, and they'd call you in to facilitate, but it was remarkable when it happened.
Buyers who "found their own home," out there in plain sight as it was with a big "FOR SALE" sign in front of it, usually dealt with the seller or their agent, and that was that.
Now, more of them seem to want to some of our help, which should be encouraging.
At least, that's how I take it.
Never have they asked for any part of my commission. I guess I am lucky, or possibly they know I am a professional that will negotiate the best deal possible for them and get them to settlement smoothly, legally and compliant. I do feel "guilty" for making all that money for little work, but as one colleague said to me...this is "pay back" for all those clients that ran me ragged for months on end only to decide not to buy at all!
Just this morning I was stuck in the checkout line behind this guy at the Wal Mart.
He wanted to buy $1,875 in Gift Cards, and the store only had $5 cards.
He was pretty upset, because he was late for the biggest signing of this life.
Oh? "you are a Loan officer"? I asked.
"I sure am" He answered. "and I am about to make 31/2 points on this loan, because of these Gift cards".
Thanks for a thoughtful and well stated response.
What you hear in pn line forums is not necessarily representative of full time, professoinal real estate agents.
We are too busy doing business to spend TOO much time here.:)
Have a great day- --and go help someone find a property!
1. It is apparent that you have the right to fill out and/or complete documents only if such documents are incidental to a transaction where the agent is acting on behalf of at least one of the parties.
2. The language also limits the agent’s right to practice law where the services are performed “WITHOUT CHARGE”.
This makes the Arizona real estate licensee a “defacto attorney” defined as:
adj. Latin for "in fact." Often used in place of "actual" to show that the court will treat as a fact authority being exercised or an entity acting as if it had authority, even though the legal requirements have not been met.
Agent in Calif