I understand how you feel, yet you need to think of how you selected your last dentist, attorney or physician! Most likely it was not strictly based on their fee.
A good agent can probably help you net more money or at least cover the extra 1% in commission by
> increasing the level of exposure for your home.. And exposure = results
> getting the home to sell faster = less inconvenience and more money (since we are in a declining market)
> assisting you negotiate.. That alone can cover a 1% you are hoping to save
Finding the right agent (rather than the one who charges less) should be your task, and trust me it will pay off.
Best of luck to you
In a real estate deal, it is Really the seller that is protected by Both agents, which leaves buyers vulnerable.
Yes, finding homes is possible because of the signs and ads, but buyers cannot get into homes to see them without an agent to let them in, homes not listed with an agency cannot get the traffic of potential buyers because agents will not take buyers to homes that are not listed on the MLS (as there is no commission for them if their buyers choose such a home and commission is how they are making their living). Also, buyers do not have access to information determining the real value of a home, such as whether that home was listed, taken off the market and relisted, so that it appears it wasn't for sale as long as it really was. The way the system has evolved it is stacked in favor of agents at great financial cost to sellers and unnecessary cost to buyers by inflating the value of homes when they do not know the real scoop on the homes they are purchasing. The system ensures higher commissions for agents and it contributed to the ridiculously high cost of housing over the last 20 years. Now we find it crashing down around home owners' heads.
In the current market, with homes falling in value, if a seller's home is sold for what he or she paid for it, there is still a substantial loss because of the many thousands that must go to an agent. Under those circumstances I can understand a seller, such as JMdavis1, for instance, wanting to pay less commission. Afterall, $25,000-$50,000, or more, is a lot of money for individuals to just lose and especially so when it is over real estate commission instead the actual property itself.
Since agents and their brokers made out like bandits during the periods of escalating home values, taking much larger commissions than they'd taken even a year earlier in some markets for the exact same services, merely because the home owner's investment had dramatically increased in value, it would be ethical of the profession to accept lower commissions when home values have tanked and sellers are going to suffer substantial losses because of it, especially when the losses are due to real estate commissions preventing them from at least breaking even.
With some reforming of the system, including making it more fair to agents instead of so heavily favoring their brokers, more honest representation of how long homes have truly been on the market, more honest appraisals (which became a racket in itself, contributing mightily to the overvaluing of homes all over the country), both buyers and sellers Truly represented by their agents, and straight fees for services versus the percentage system, real estate agents would be much more popular.
As it is, surveys for quite a few years have shown the profession is unpopular with the public despite the public using their services because people feel they have no real choice. It doesn't have to be that way, but as long as agents are defensive and unwilling to examine ways to change the system, it will remain that way. In the end, if things get any worse, it would be the undoing of the profession. As we can see from posts around this site alone, there is a growing movement Away from home ownership because in our current social structure home ownership is no longer always the best use of our money, so doing something to improve the system would be a wise move for agents.
Finally, the remark about the person selling a home his or herself hiring a lobbyist was snide and unwarranted ( which means I won't be calling that agency when I move to Spokane), and get real, the association doesn't lobby to protect consumers, but to protect its industry.
I've bought three homes and sold two homes, and out of five agents, only one of them provided anything of value to me other than having the key to get me into houses to look at. I did almost all of the work, actually found the houses I bought by myself, and did all of the work when it came to selling except for providing the sign and website, which I could do myself just as well, but agents have sellers hamstrung by controlling the MLS and which homes are shown. Lenders will walk buyers and sellers through the paperwork if we request it, and lenders provide the appraiser. My agents were not actually representing me when I was the buyer, which is the norm, but merely showing me homes, thus they did not provide accurate information that served me well; so really, what value did they bring me? One agent, when I sold one of my homes, provided me quality people to get work done on the house (but of course, I paid for everything) and she was supportive and on top of things, but like I said, she is the only one. I don't think the amount of work even she put in, though, warranted over $25,000 in commission. Perhaps if the industry was more fair to both buyers and sellers, and less rapacious when it comes to commissions, real estate agents would be held in higher esteem.
Plus, the market is flooded short sale and bank owned properties with low prices. An individual can not compete or may not want to compete with these low prices to sell their home. But, they can compete and come out with money in the bank still. Make sure your property is show ready, ask a competitive price and offer a commission that will bring in the agents with their buyers. This combination is key - in today's market.
National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
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The point isn't that agents should work for free or be poorly paid, and it isn't that they can't provide useful services. Instead, it is that many do not do so, without consequences, and the system is rigged enough that most buyers and sellers use agents not out of true free will, but because there is no real choice if one wants to be able to market one's home so that many potential buyers will see it, and for buyers to get into most of the homes to even look at them.
Also a backlash against commission percentages grew when housing prices exploded and homeowners, the ones actually making the investments in the properties and improving them, were then required to pay that much more to real estate agents for doing the exact same work, whether doing so well or poorly, they'd happily done a year or more ago for half the amount, or even less in some markets. That raised the question in many consumer's minds about why real estate agents and brokers deserved $35,000 and more of the seller's investment profits rather than $15,000, for example. I think that is a valid question because the work of the agents didn't change, except to get easier in some markets where homes were selling like hotcakes. When the consumers are doing so much work to buy and sell while their agents are not, that unrest grows, especially since most of us do not get away with that on our own jobs.
The fact that consumers do not know that their agents are receiving only part of the commission because the rest is going to the brokers is the fault of your profession. It is your profession's job to educate the public about what you do and how it works.
You're right about lenders, escrow companies, and lawyers, but surveys show they are pretty uniformly disliked by most Americans (as are appraisers), so I don't think looking to those professions to justify the status quo in real estate is wise for your industry.
Like I've said, I had one agent I thought was great. I don't think her broker deserved such a large chunk of my profits and hard work, but I was happy to provide decent compensation to her because she provided what I really needed. It was actually a relief to pay an agent without feeling disgusted at paying so much for so little; to leave feeling satisfied and happy for both of us.
Polling surveys routinely list real estate agents as the least popular profession that American consumers hire (one survey actually showed real estate agents as more unpopular than lawyers, with lawyers coming in second). Therefore, if you work hard for your individual sellers and buyers, and you provide them good service that leaves them happy, kudos! And if you work at improving your industry, holding other agents and their brokers accountable, so that consumers don't just feel forced to hire agents but actually want to, then we could all be happier. Besides, it doesn't matter what profession it is we are talking about, the most ethical should work to improve their own for everyone's sakes.
You're wrong. I don't know for sure what You do, but I know very well what the five real estate agents I've hired for buying and selling five times did, and only one of them did squat, and that was when I was the seller. And why their brokers make those big bucks is beyond me.
For one sale and three buys, I worked Much harder than did my agents, and never laid eyes on their brokers. In fact, our very first home, we actually had to call the sellers directly to get things on track and close the deal because our agent was so uninterested he wasn't even trying! Selling same home, I had to make the agent fix his mistakes, and correct his shoddy marketing tools.
BTW, I sold both my houses within two months on the first one and in one month on the second (in late summer of 2006 just as the AZ market was crashing) for my asking my price both times, making no concessions, and it was because I knew how to compete for fast, easy sales once the sign went up. I'm a realtor's dream as a seller, even as a buyer since I do most of their work for them, so I know what to look for and recognize when I've got an agent actually doing something to earn part of that 6-7 percent of my selling price, or not.
Since I'll be selling again to move to Spokane in the not too distant future, I'll be sure not to contact you for buying help. I don't work with and pay people in customer service who are defensive rather than proactive to make things better. I'll be looking for an agent who is honest enough to admit there are problems in the field and makes an effort to show we aren't suffering from such problems again. Good luck with the career though.
And perhaps you'd be willing to add to the quality of the discussion by sharing specifically what you do for buyers beyond what I listed.
The answer is, no. Nothing even close. It is always negotiable, however, some agents will help you out by advertising that they charge lower fees.
No wonder you have no respect for what we do. You have no IDEA what it is we do.
Commissions and markups are, in fact, common forms of compensation for service providers. Lenders, escrow offices, law offices (you don't really think they're paying that paralegal $80/hr, do you), architectural and design firms, general contractors, virtually every form of sales person . . .
And, it's a service provided by actual real people, who, as independent business people, do not want to work for substantially less money. As for the popularity of the service, well, people certainly do have a choice, but they choose us anyway.
Real estate brokerage is not a public utility. The public does not have a right to unfettered free access to our services. There is a marketplace for our services, there are so many of us that you can't swing a snake without hitting one of us, and we do compete on price and on services offered.
Ever try to buy a nice piece of jewelry or art? Funny thing - you have to go through a salesperson, they won't tell you how long the item has been on the market, they may have unpleasant compensation structures with their managers, and the appraisal process is hardly transparent.
Oh, and the commissions are generally 'way higher than in real estate.
Six percent is actually a fairly low commission rate in many fields. Look around your house, practically everything you own had a higher percentage markup - except for the stuff you rescued from garage sales.
Real estate is one of the biggest-ticket items, so you might think it silly to compare the commission on selling a $400,000 house with, say, a $4,000 piano. As I've noted elsewhere, a $400,000 item from an auction house can come with fees of 20% on each side - the seller pays $80,000 to get the item sold, and the buyer pays $80,000 on top of the purchase price as a "buyer premium!"
Let's face it: the best price for the consumer is, free.
Oh, and, Babs: finding houses is easy. We post them on the internet, put arrows in the road leading to the signs in front of them. That you were able to "find them yourself" isn't at all remarkable - we're not hiding them, you know.
Although your economic or analytics make sense on paper or in type, I think you might need to consider the fact that it comes down to good old fashioned marketing and hard work to get a home sold in the SPOKANE market. We have alot of homes for sale and the competition is fierce. Without 24/7 marketing in every possible way, it's difficult to get showings. I still say it requires a professional to negotiate, market, and resolve all the things that may and can come up in a sale especially right now when in the final hour transactions are falling apart due to underwriting issues, appraisal problems (for lack of sales comparables, etc) inspections, etc. To state a REALTOR is only worthwhile in the time of a purchase...seems too broad as each market is different and truly refelective of it's condition.
Seriously, why must we defend our positions as Realtors all the time to justify the expense for the seller, the reality is this...you don't have to hire a professional, you do have the choice to do it yourself. Secondly, even if we did discount our commission, there would be still be an ongoing discussion for more services, more representation, and more results.
I wonder if doctors, accountants, lawyers, and other professionals are asked to discount their services?
Just sounding off...after 168 days of work...7 days a week, 24 hours a day without a break in order to take care of my sellers and buyers. I do this...because I care about my clients not how much money I will make. If you worry about the clients and their needs...the needs for monetary requirements seems to just flow and come back to you when you focus on the job and not the paycheck.
I personally give top notch service to all clients. I do know that full service brokers and agents generally spend more on advertising, technical development, staff development, & education to help the consumer, etc. I have personally had buyers get tremendous buys because they perceived the statistically documented practice of lower pricing to make up for less marketing and personal attention. There are a few limited service agents that give great service; but pretty soon you see them burn out. I object to the term "discount brokage" as the FTC has been ruling that term indicates that realtors have a set fee. A good business runs at a profit and studies have shown that to provide the level of service and expertise in the long run that the consumer needs; a mim of a 6% commission is necessary. This is my opinion supported by national statistics. I have sold homes listed by discount brokerages and not received any additional compensation from my buyer; because I was happy to see them get a dynamite deal. I certainly am not going to tell a seller that his price is low as that would be interfering with that agency. I personally have never had a buyer pay me additional compensation; however it is pushed in all the ABR etc classes. Consumers get the same data we get on the lower selling prices of limited service brokerages and on FSBO's. The consumer makes the choice of whether they want full service--and by this I mean advertising, personal web pages, color brochures, virtual tours and an agent that is available to take phone calls. BTW, Fannie Mae and Freddy Mac are now forbidden to pay less then 6% on a short sale; so the gov't has wised up even. You are right that the code of ethics as well as license law says we owe that fiduciary duty to clients. However, how do we prove a home is under priced--appraisers cannot even agree on value, it seems. So we go with the national stats and what we personally see when showing multiple similar homes to clients. They are going to choose the best value for them. As to the MS controlling our service level--all it controls is whether we put 6 pictures on the site as far as advertising goes. It is sort of like Nordstrom service vs. Macey's service. Macey's has outsourced their credit and depends on public sales, etc and are in trouble; while Nordstrom has created customer loyalty through top notch service. As a consumer, I would far rather go into a Nordstrom's then a Macey's because I know the staff is trained in customer satisfaction--rather then selling credit. Circuit City is out of business because of cutting service, thinking price would make the difference. They had the same product with the same warrantees, but the consumer went elsewhere. I personally switched from Circuit City to Best Buy when Circuit City got rid of their experienced people and outsourced their credit card servicing. Ethically, selling real estate is not just about fiduciary duty; it is as you said--treat others as you want to be treated. After meeting the criteria of the law and fiduciary duty, all we have is service. We are not a product as you said. I believe we are professionals and we need to come across to the public as such.
I believe the Code of Ethics demands better then the mim service level if we are to elevate the real estate profession. Finally I give my buyers and sellers a pledge of service guarantee. Again a buyer or seller needs to talk to more then one agent or get recommendations to know what to expect and how each agent works. We have many agents that do this as a second job and so are difficult to get a hold of and also do not keep up with education and do not know the inventory. A mim in my opinion would be someone who returns their calls and also has some advanced real estate education--ABR, CRS, GRI, CNS etc. Someone who is serious about real estate as a profession.
Would you be okay receiving care from a discounted dentist?
I wish you the best of luck in selling your home.
Refer to the first answer I wrote here.
I always bring up commission up front, because I always feel like it's the big elephant in the room that most sellers or buyers can be a bit bashful about asking. You should know, I appreciate it when the seller's ask! You need to have that conversation, and don't be afraid to ask any Agent.
Just remember, our commission can vary depending upon what LEVEL of SERVICE you want and need.
Just remember, and know what type of service you want and expect and hopefully you can find a great match!
Top 10 Volume Realtor, Spokane WA 2009, 2008
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Owner Assist Realty
You're wrong. I don't know for sure what You do, but I know very well what the five real estate agents I've hired for buying and selling five times did, and only one of them did squat, and that was when I was the seller. And why their brokers make those big bucks is beyond me.
JR: So you were happy with our listing agent. I prefer working as a listing agent. The reason I don't like working with buyers is that they are not always realistic, and they are seldom loyal. Perhaps you fell into one of those categories and that is why you had 4 agents who "did squat".
BF: For one sale and three buys, I worked Much harder than did my agents, and never laid eyes on their brokers. In fact, our very first home, we actually had to call the sellers directly to get things on track and close the deal because our agent was so uninterested he wasn't even trying! Selling same home, I had to make the agent fix his mistakes, and correct his shoddy marketing tools.
JR: I don't think you can say for sure you worked harder. I know I have 2 houses in contract right now, and I am working very hard to get them closed. I'm sure neither of my clients is aware of how much time I spend hounding THEIR attorney, THEIR bank and the buyers agent.
BF: BTW, I sold both my houses within two months on the first one and in one month on the second (in late summer of 2006 just as the AZ market was crashing) for my asking my price both times, making no concessions, and it was because I knew how to compete for fast, easy sales once the sign went up. I'm a realtor's dream as a seller, even as a buyer since I do most of their work for them, so I know what to look for and recognize when I've got an agent actually doing something to earn part of that 6-7 percent of my selling price, or not.
JR: That's great, that's how I sold one of my listings in 3 days last July in a tanked market, and another in 20 days this past August. In fact, that sale was the only condo that sold in that development in the last year and a half. There were 5 other condos for sale, some for over 2 years. Mine sold in 20 days because I did right by my seller and educated them about the market and what pricepoint to list at. Both of those sales were very close to asking.
BF: Since I'll be selling again to move to Spokane in the not too distant future, I'll be sure not to contact you for buying help.
JR: That's good because I work in NY. That said, I'd rather work for sellers. I KNOW I will eventually get paid even if the listings don't sell in 3, or 20 days.
BF: I don't work with and pay people in customer service who are defensive rather than proactive to make things better. I'll be looking for an agent who is honest enough to admit there are problems in the field and makes an effort to show we aren't suffering from such problems again. Good luck with the career though.
JR: Thanks good luck with your life too. I'm not sure where I said there were no problems in the field and I'm also not sure where you got the impression that i can change anyone other than myself. Oh I also don't work with buyers who lie.
BF: And perhaps you'd be willing to add to the quality of the discussion by sharing specifically what you do for buyers beyond what I listed.
JR: I try to avoid working with buyers. I'm an independent contractor. I can choose to work or not work with whomever I want, and I find that working with buyers is not the best use of my time. My time is put to better use working on getting listings.
I understand your concern to save money, but the bottom line after you sell is more important than saving in the hiring of a full service agency.
Understand, the 6% is generally split 4 ways. Listing agent/Listing Broker and Selling Agent/Selling broker. Therefore you are asking the person who you hire to market and negotiate the sale of your largest asset to take a huge pay cut.
I work very hard with my marketing plan, and incur a great deal of costs. Our agency puts an incredible amount of investment to be who we are in the marketplace.
If you like, I would be happy to meet with you and show you the listing presentation facts, and then you can decide where you want to cut costs.
There are discount brokerages you may want to consider, but I suggest interviewing 3 strong candidates before deciding.
Best wishes ~
I was just going to point out the same thing!
Basically, B&F, market and economic conditions are out of the control of real estate agents. All we can do is provide the service and the infrastructure to facilitate real estate sales, and we do.
The problem with arguing that real estate agents should be paid less because (of anything) is that the market simply doesn't agree. When the market agrees, agents will be paid less. Or more. Depends.
The very specific problem with arguing that real estate agents should be paid less because of the decline in values puts aside for a moment that agents do not get paid on a percentage of appreciation - if a owner realizes a large profit over a short period of time, say, between the release dates of the last two U2 albums, we do not get to charge more.
People make predictions, and they've been predicting an end to real estate brokerage "as we know it" since the first license was issued. At every "momentous" change in brokerage practices, regulation, or licensing changes - there have been some who forsaw an End To The Profession.
If, in fact, the gravy days are nearing an end, all the more reason to be resolute and keep those fees up, wouldn't you say?!!
The difference between us ultimately is that I, looking at these issues historically and from the very big picture, recognize that physicians, dentists, and lawyers (which agents continually use in analogies when the requirements for those professions are Nothing like that of real estate agents) are necessary, but middlemen in any trades transaction are Not necessary. They are actually an artificial layer that has evolved in most financial exchange trades. It is an extra layer of cost not absolutely necessary, which adds to the cost for buyers, sellers, and to the cost of homes, thus it is already being looked at critically by the public-not the usual complaining, but as truly a target for "reform" and putting an end to.
To buy and sell a house real estate agents are not a necessity of life; in fact, many people, those not involved in high stakes business property purchases and so forth but merely want a house, do not see much value from most real estate agents for the Many thousands of dollars out of their pockets (we don't say that to our real estate agent friends, though, because they will feel the same way you do and we value our friendships with them) and thanks to modern technology that has become more true every year. Therefore, at some point in the future if things are not brought under control, it will be agents our culture will view as expendable. It won't be lenders, appraisers, escrow offices and so forth, but real estate agents and their brokers.
Because the system works as it does now does not mean it has to or that it always will. I think that understanding is where we differ. It isn't my profession so I am not invested in protecting it, but those of you who are in it truly as careers (versus the far too many who get into it because it is easy to get started and they don't know what else to do with themselves) and are committed professionals would be looking ahead out of self-preservation.
For you personally, given your market and established reputation, I doubt you will be facing it, but those that follow very will might be.
Your business and accomplishments in Seattle are impressive. Congratulations to you.
Your complaint seems to be, agents charge too much.
Putting aside all of the valid socio-economic problems facing the middle class over the past thirty years - much of which I agree with you about, btw - the basic fact of life is that we real estate agents, as individual and independent contractors who rely on commissions as our sole form of compensation as sales professionals - are not going to lower our rates just so that our profession can enjoy more popularity.
- I said . . it could end up turning your profession on its head.
Or not. Or, the profession can get "turned on its head" even if we were giving the stuff away for free. Oh, wait, that would do it, wouldn't it?
JMD, there are agents who are going to continue to get top dollar for their services, regardless of how you feel about it. You don't have to hire them, you know.
And for all the noise about regulatory reform and anti-trust, et cetera, well, I think we agents are just going to deal with that when the time comes.
You are in Seattle. I am from the Puget Sound and I lived in Seattle and surrounding area in the 80s and 90s when Seattle home prices grew so expensive that most middleclass families could no longer afford homes in Seattle proper. I remember when people from out of state were buying homes sight unseen in old, established Seattle neighborhoods. That property values situation has not improved. Unless people bought early enough, only those with very high incomes can afford to own a home in Seattle itself. Even tiny condos downtown cost more than most people can afford, and that is Very different from the way it was when I was young.
Sadly for everyone, it didn't remain just cities like Seattle, San Francisco, and San Diego, but the entire market throughout most of the country ended up with spiraling home values that priced many out of the market and made others who could get in house poor, until it imploded. None of that has anything do with whether you are allowed to do anything. Consumers, including me, criticizing industry practices and agents lacking ethics also has no bearing on what you are allowed to do. Instead, it is a reflection of what real estate agents and brokers are facing when making choices.
I said that if agents do not find a way to make a living that is less oppressive to sellers in a tanked real estate economy, it could end up turning your profession on its head. The rumblings of consumer dissatisfaction started in earnest when home prices and profits shot up, as I stated before, and now that they're shooting back down, the rumblings are growing louder. For you personally, it looks like you cater to a relatively safe market of high income clients, given where you do business, but for most agents around the country, It seems practical to take a look at that and try to do something about it if they want to stay in that business, doesn't it? Why risk a consumer revolt against your profession?
It appears agents forget that middlemen are not actually necessary for the exchange of goods and services, and they are not necessary for the sale of homes. The system has been designed that way over time, but a new one could replace it. Humans manage to exchange goods even without salespeople. Salespeople are helpful as long as they provide more service than cost to the consumer. Then the public likes to work with them. If the cost is greater than what middlemen and salespeople offer though, then all bets are off.
Therefore, if you did charge 25 percent, that would do it. Remember, as you said, consumers do not Have to use agents to buy and sell homes. We do so only because that is the way the system has been set up, making it difficult to do otherwise, and as long as home values went up enough to cover commissions, sellers might not like it, but they were not going to hammer for a drastic change to the system. However, that lasts only as long as the public is willing to accept it.
If the industry made the mistake of thinking agent services are actually Necessary for the exchange of property, necessary for bringing buyers and seller together, rather than middlemen that didn't used to exist in property sales, and agents did start demanding consumers make up for the poor market through increased commissions, the public Would take their feet elsewhere while hammering their legislators for regulatory reform against the industry. Until that process was completed, the prices of homes would once again be artificially inflated to pay for agent commissions, distorting the market further and adding more fodder to the anti-real estate industry fire.
Since falling prices and a slow market is a real problem for agents, but sellers (and by extension buyers too, since homes cost more in order to pay agents) cannot continue to bear the cost alone, and it does distort the value of homes doing it the way we've been doing it, perhaps it would be better to make other professions of the real estate industry pony up and share the cost of paying agents, like lenders since they ultimately make the most off of home sales.
I understand that as real estate values collapse and the market slows it is difficult for agents. It is a little hard to feel too bad, though, because like physicians have done nothing to slow down their own participation in out of control health care costs, nor done anything to reign in insurance industries, and all the rest of us are suffering for it, the real estate industry was complicit in what has happened to our housing market. Homes just became too expensive, period, and it couldn't last. I think professions should be the guard dog not the fox in the hen house, including yours.
In the short-term, I benefited from this system I'm "complaining" about (I don't really considering it complaining but just stating how things are and how they are working, and could be improved). I lived in AZ, where some of the worst predatory real estate loan travesties and real estate agents flipping of houses in the country was taking place, not to mention out of control building that couldn't be sustained. My home's value doubled in the three years I owned it. I could see what was coming, sold it in the nick of time, literally, and got the hell out of Dodge. I left with a huge profit, but it shouldn't have been that distorted. Such distortion of the market, slowly increasing over 30* years until it the final explosion of it, put extra money in my pocket in the short-term, but ultimately it is costing ALL of us more, and creating loss for many, including agents who can't move houses like they should be able to in a healthy market.
Perhaps you are a broker and therefore especially offended by my remarks about brokers. I do not understand why real estate agents need brokers so much so that they have to pay them so much. Once a broker has enough agents, it seems to me they are sitting awfully pretty at the agents, and therefore the sellers' too, expense. But perhaps I don't understand something about that relationship (although, I've known agents who felt the same).
Finally, yes Mack, I DO pay some people I do business with more than they asked for and more than they charge, because I know they are working very hard and have less of a safety net than do I. Some people are working for companies I hired and I can see they aren't being paid like they should or treated as they should be, so I make sure I pay them extra in addition to whatever the company charged me. Also, when a person provides me a service I really appreciate, that makes my life better/easier in that moment, I will pay extra because so many others don't care enough to do a good job at whatever they are hired to do. Those who do deserve more. Regarding those without the safety net, I don't have to be told to pay them more, I just do it because it is the right thing to do and ultimately it will be better for my entire community. Communities do better when they are fair with each other and everyone has an equal or at least better chance at a fair shot. If my community is stronger, I am better off.
People use us because we provide value. Because we sell homes better than they can. They may not like paying for it, but then again, not many people really enjoy paying for anything.
Would you like to argue against the proposition that perhaps agents are currently being underpaid, that because market conditions are much more difficult that the ez-squeezie period of just a few years ago, that the level of compensation should be increased, rather than decreased? That maybe to find a buyer in this terrible market might be worth, oh, say, 25% commission? (I think we can do a better job than an auction house!)
Regardless of all the sins that contemporary capitalism is guilty of, the fact remains that, in a free society, agents are allowed to charge what the market will bear and are allowed to refuse to work for less.
I'm certain that the people you transact business with are suffering in this economy, do you help them out and pay them more than their asking price?
Agents were not taking 50 percent pay cuts, but 50 percent pay Raises. Sudden, dramatic RAISES. If you grasp the difference, then you are merely refusing to acknowledge it for your own reasons.
At the same time, you ignore what research has shown over and over: most people do not choose to use Realtors because they Want to, not because they find your services so valuable, but because they feel they have No Choice. Yes, they can try to sell on their own, or find an agent who will work for less, and try to buy on their own, but then they don't have an equal chance at finding and selling. Most buyers and sellers cannot connect without you, and you know it. In fact, that is the very same argument your industry uses to convince us we are safest working with you instead of going it on our own. It is even used in some of the posts below.
It isn't only agents, though. The entire industry, from all of those corrupt mortgage companies enticing people into scary mortgages they weren't going to be able to afford; to mainstream lenders not using their clout to put a stop to it because they too were making big bucks in the short-term; to appraisers somehow conveniently always coming in just over or right on the money with what the offers on properties were; to repeat paperwork fees and title insurance fees adding up to hundreds and sometimes thousands of dollars for what is really nonsense once it was all done the first time a property changed hands; to duplicate fees being charged by the new lenders, the lenders being paid off, and escrow offices when only one of them is going to process the form; to home inspectors doing a poor job while including all that small print in their contracts about how they are not responsible for anything they missed as well as a list of what they Won't inspect; to agents who do not try very hard to earn those commissions yet limit what their clients are shown based upon the commissions and splits, and who, because it was lucrative in the short-term, also did nothing to try to stop the out-of-control building and lending that ended up blowing it up for all of us.
That entire system evolving contributed to the cost of housing exploding so that babyboomers were paying 40 percent of our take home pay for housing while our parents paid only 17 percent of theirs; growing so out of control it's blown up in all of our faces: home owners, sellers, and real estate agents.
Unfortunately, despite all of those other parties involved, agents are the people buyers and sellers spend time with and actually see out front so you take most of the heat; and too many agents aren't that good at what they do or not very ethical, and the rest take the heat for that too.
However, what is becoming a Very Real problem for sellers and agents is that as values are falling on homes, many people are looking at paying Many thousands of dollars to agents that must come out of their pockets, because while everything changed and sales prices are no longer automatically substantially higher than the purchase prices were, affording agents those healthy commissions, and many aren't even equal to the original purchase prices, real estate agents still expect to get their same percentage commissions. It shouldn't be a surprise that people grieving their own serious financial loss resent real estate agents still expecting to make the same commissions as though their clients aren't already taking it in the shorts. A seller who can't even break even because they have to fork over $25000 or more out of their pockets instead of profit on the property is going to be resentful.
If Realtors do not come to grips with what has happened, how radically it is different than it was only four to five years ago, and make some adjustments, it is going to end up blowing up in your profession's face. It would be best if adjustments were made at the Real Estate industry level than just individual agents here and there because that would make your entire profession more popular with the public, better protecting your own futures.
I do not cite polls about consumer discontent with real estate agents (or lenders, appraisers, escrow companies, and lawyers) to offend you, but to be honest for the sake of valuable discussion versus the usual pat answers that come from many of these pages and real estate ads. I'm sorry if it stings, but I really would like to see changes that would benefit Everyone. I do want to hire agents to do the haggling and advice giving, but who will also look out for me whether I'm the buyer or the seller.
BTW, shop owners usually keep More than half of the high price they charge for an artist's work. There are so many creative people out there that there is plenty of selection.
What's "too often?" That we don't accede to your wishes? That's not from a lack of understanding, just a lack of agreement.
The fact that we're the best choice doesn't make us the only choice, and preferring to use us isn't cause for us lowering our fees.
And, I, for one, think that we're popular enough and liked well enough, thank you.
Perhaps if you took a 50% pay cut, you'd be more popular, too!
BTW: it's great that you buy direct from the artist, but that does limit your selection, doesn't it? I suppose an artist might reach more people if they had a nasty old gallery taking half of the sales price . . .
I guess this doesn't include me. I've only been an agent since the market tanked.
Out of the five agents I've worked with, the one whose services did benefit me actually had a contract with me that said either of us could let the other go at any time, and the fee was dependent on which of us actually found the buyer and whether the buyer had an agent. We worked well together, I was glad for her help and assistance, and with the contract we had, in the end I paid 2% less in commission while she actually earned 1 or 2% (I can't remember whether the normal commission at that time and place was 6 or 7%) more than she would have with a different sort of contract. It worked out better for both of us and made for a better relationship because of the flexibility and increased fairness to me, the seller.
Would you be able to update the Trulia community with your experience? Is you home sold yet?
Thank you for your comments. I can totally understand what you say. As a client, you may think like that but realtors must not do as a limited service broker.
Real estate regulationis and Realtor's code of ethics say that real estate agents and realtors owe fiduciary duty to their clients. Simply, fiduciary duty means that treat your client as treat yourself. This is the highest standard business relationship between two parites. That is equal to say limited service may have legal issues suck as malpractice and agent may lose the license and realtor title may be revoked. Gorvementys and Realtors association guide all the agents to be perform their full service to the clients. There is no any other legal choice like limited or partial.
The key probelm is the difference, the damage between DIY and working with an agent is very hard to be detected. That is why so many agents choose to be a liar, a cheater or a lazy person in the transaction. Consumers think about DIY or limited package because either they do not the difference which is hard to be detected or they find that many agents they know are liars, cheaters, lazy persons or just money makers.
Remenber, MS office has verious packages. Each package has the different quantity but the same quality. Real estate business is a service not a product. Real estate package is not splitable. All the items in the package are not counted by quantity only, but they are also counted by quality. Bases on what law and code of ethics say, In real estate, quantity and quality is the same things.
Please, allow me to say something to those real estate pros here. Real estate service is like jumping not walking. That means agents either donot take it or fully take it. They can stop or take a rest in any middle way where is called limited service.
Read my other writing, then you may understand more about me.