There shouldn't be a system where an agent is paid more if they work harder not smarter.
It may also create headaches for you when the owner requests an itemized list of expenses and then wants to dispute each one with you at the closing table.
Cap at 3 percent. And, what happens if everyone switches to buyer representation?
It might not be that attractive to the seller who just wants to float a high price.
It might shake out the same as commission only. Has anyone tried it?
Buyers and sellers want options.
It matters not if these options are better, pedatory, a total waste of time, more costly or the greatest thing since sliced bread.
They want to feel they have a choice.
This is one of the BEST 'no choice' options i've heard in ages.
The sole value of presenting this option (in, optimisticly, 97% of situations) will be the consumers flat out REJECTION.(there's more later)
This response (rejection) sheds a more intense focus on the value a professional really brings to the table for home buyers and sellers.
The educaton process that must follow the question, "How long do you think it will take?" wll allow professionals to properly focus on the 90 day market. Those interested in an 'hourly' structure will be motivated and clearly ready to pull the trigger. A macro-focus on the 90 day market is highly profitable.
This if very close to the 'RED FISH" (deliberately misnamed) model.
Prepay for service.
HOWEVER...what makes "RED FISH" work is the reality it relies on the conventional compensation model to create the revenue for the rebate. It can not stand on it own premise. I like to refer to these situations as a truth married to a lie.
The versions of this model I have used worked very well for those who understood it was a pay-as-you-go propsition. Those who participated DID make decision quickly, were focused on their goals and worked within the budget THEY established. This truly created a 'No Touch' consultation environment for me. This model would triple an agents bandwidth.(think about that a minute)
The conclusion was this model creates an environment where the buyer pressured themselves into making a decision. Now what can go wrong with that?
Although the Buyer Elite Plan still exists, the vortex of uncertainty surrounding the current real estate market has made this option unappealing to buyers at this time. They simply do not know how to budget for such competive situations.
As a listing agent, you can bet the compensation stucture will be modifed to accomadate and anticipate such arrangements. Imagine all MLS listings showing $1 compensation to buyers agent.
Now that could REALLY be exciting. Think about it,,,,everyone (buyer and listing agents) WILL, in all dimensions, receive a bump in compensation. Exactly the opposite of what the consumer perceives. That is choice I LIKE!