Ruthless, Other/Just Looking in 60558

Should the Real Estate Industry change away from the commission structure?

Asked by Ruthless, 60558 Sat Aug 11, 2007

I'm not talking about "discount brokers" or "standardizing fees". I'm talking about the conflict of interest that agents are paid a percentage of the sales price. The agent has a "fiduciary responsibility" to their client yet the amount of their pay may conflict with the client's best interest. Discuss...

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Most agents are concerned with solving the puzzle, satisfying the client, and building repeat and referral business. Any compromise is service or standards will compromise the overall satisfaction of the client and adversely impact future business.

I don't see that any compensation program other than commssion that would motivate an agent to be on-call 7 days a week. Although the average compensation for agents is actually quite low, the range can reach to near poverty to quite comfortable. An agent is paid on results and success, not for time invested or efforts extended. The successful agent brings an entrepreneurial spirit to the table that accepts the risk, the hours, the stress, and uncertainity. Only a commission structure can compliment the work hours and lifestyle demands of the real estate agent.
3 votes Thank Flag Link Sat Aug 11, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
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The real estate industry has already changed drastically in the past few years and there is more to come. Just like the travel agents and stock brokers commissions have dropped so has real estate but not at the same rate. I have been a Realtor for over 20 years and never understood how the real estate industry gets away with their practices. It is the most consumer UNfriendly industry and most Brokers and agents want to keep it that way. In answer to your question... yes it is about time the real estate industry has been forced to change and with more consumer education more change willcome.
Web Reference: http://www.haydenoakley.com
5 votes Thank Flag Link Sat Aug 11, 2007
Just a quick word on outfits like Redin. Discounters compete with discounters. Full service agents compete with full service agents. There have always been, and always will be discount brokerages. I will never believe that the potential savings on commission will ever outpace the profit lost by not utilizing the services of an experienced full service agent, but that is beside the point. What brokerages like Redfin charge has absolutely no bearing on my fee. I will never secure the business of the person who ultimately decides to employ one of these companies. My potential client is the one who realizes that any compromise on service and expertise for a lower fee is far more likely to hurt than to help. In Scottsdale, my competition are top flight agents with Re/Max, John Hall, Equitable, and fellow Realty Executives. Within this grouping, my fees are highly competitive. Help-U-Sell, Flat Fee Realty, Zip Realty, etc duke it out with each other at the other end of the spectrum. If they charged six dollars and a ham sandwich to sell a house, it would not impact me in the least.
5 votes Thank Flag Link Sat Aug 11, 2007
I'm not a fan of the "standard" 6% commissions and think that more flexibility will creep into the system now that the internet has enabled the average home buyer to do so much more of the research on his/her own. Consumers realized the benefit of Expedia and Orbitz in bypassing travel agents for cheaper travel arrangements. And I believe services that are popping up such as http://www.zillow.com and http://www.redfin.com will eventually foster more competitive pricing among agents. Don't get me wrong, I know buying a home is not the same as an airplane ticket and I think there's value in getting good advice, but I think the margins are a bit steep.

The NYTimes had a good article on this topic back in September entitled, "The Last Stand of the 6-Percenters?"

http://www.nytimes.com/2006/09/03/business/yourmoney/03real.…
5 votes Thank Flag Link Sat Aug 11, 2007
I am posting the link of Nadel's polemic for destroying the current commssion structure. It is 66 pages with over 400 footnotes so be prepared for a long read. He is thourough, logical, well researched and documented. He makes me uncomfortable. By the end of it, you will understand what we up against.
4 votes Thank Flag Link Sat Aug 11, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
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Paul, perhaps this should be a different thread, but I'll answer your question here.

I currently only have two clients who hire me by the hour. These are both long term clients who have used me multiple times over the years. They trust me to charge them only for the hours that I work. I trust them to pay me what I charge. They almost always pay less than they would have paid for a commission. They know it's a good deal for them and it works well for me also because I am paid for what I do.

I have just begun to offer the hourly rate in a more formal way to all my clients.

I am not going to discuss my hourly rate here...but it isn't low. It is equivalent to what you might pay an attorney.

I have been in the business for 16 years as a sole breadwinner for a family of 6. I work hard and I know my business. I'm not sure I would feel comfortable charging by the hour if I were a brand new agent.
Web Reference: http://www.valleymarket.com
3 votes Thank Flag Link Wed Aug 22, 2007
Jumping in late on this thread...

In my practice the consumer has an alternative to the commission structure. I serve and bill as a consultant when that is the most appropriate choice for my client/customer.

We - our industry - continue to foster the idea that agents are available 24/7, provide free service and consultation. Look at our websites and marketing materials. The industry screams Call Me for a FREE... Click here for a FREE report on..... fill in the blank. A homeowner calls because they are thinking of selling. In the initial interview we determine selling is not the best strategy for them. Out the door we go with no listing agreement. We provide community tours to buyers thinking about moving to our area. The list goes on. And, then we complain that we are underpaid professionals.

Let's get honest here. The commission structure asks the seller to compensate us for the hours we worked that were not compensated by other buyers and sellers. They are paying a premium for our risk. Is it any wonder they think our commissions are too high?

As a professional Realtor it is my responsibility to set standards of practice that compensate me for my time and expertise. The reason the consumer does not ask their doctor, lawyer, accountant about the fee structure is because the doctor, lawyer, accountant has conditioned the consumer to a recognized standard of practice. They all bill for their time.

It is really quite simple to determine my hourly fee, explain to a potential client that I bill for my time and, if hired to provide "fiduciary responsibility" that the client can choose to compensate me via a percentage of the purchase price or a block or hours with an upfront retainer.
3 votes Thank Flag Link Tue Aug 21, 2007
Ruth, at times I would agree with you that the buyer should be responsible for the buyers agent commissions. However, when we look at the the final HUD we see that the buyers, in general, are already paying fee after fee. I believe it would significantly impact our industry if the agents were paid by buyers. The straw that breaks the camels back can come in some strange forms.

As for a conflict of interest...I don't believe it is. I'm in this industry for the longhaul. By negotiating the best price for my buyer clients I ensure that they will come back to me when it is time to sell. Beyond that, negotiating the best deal for my clients is the most rewarding thing that I do!

Bottom line, YES there are agents out there that don't represent their clients best interest. As a consumer you must interview agents and judge their character. If you interviewed me I believe you would see the twinkle in my eye when you mention negotiations!!!

Chris Tesch
RE/MAX Bryan-College Station
Web Reference: http://www.ChrisTesch.com
3 votes Thank Flag Link Sun Aug 12, 2007
Hi Ruth,
I noticed that you asked for feedback on the subject of the buyer paying the buyer agent fee. May I suggest that you post that as a new question and thread. Trulia members who have already addressed this thread, or read it may not follow it into the next segment. I think it is an excellent point of discussion, and would gather more attention and feedback as a new post.
Deborah
3 votes Thank Flag Link Sun Aug 12, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
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Ruth:

I may be a minority, but I feel the real estate brokerage industry is one of the most competitive on earth. If someone want to pay ZERO to list a home, they can do so through a brokerage firm like Iggy's House--who will also rebate 75 percent to buyers. They are Redfin's keenest competitor.

At the other end of the spectrum are contingency based professionals who who are paid only upon the successful closing of a transaction.

Some people prefer expert guidance and full support in a transaction. while others prefer to do it themselves. There are real estate professionals at each end of the spectrum, and at all points in between.

There is room for all.
3 votes Thank Flag Link Sat Aug 11, 2007
Roberta Murp…, Real Estate Pro in San Diego, CA
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I don't see it that way, Ruth. I can understand that perspective from the consumer, but to a respectable agent, future business is equally or more important than the current deal. There is no way that my clients come back to me or refer their friends and family if I don't put their interests first. As for the difference in commission on the sale of a home listed for 500k versus 510k or 520k, it really is peanuts in the grand scheme of things. If an agent is really conflicted about doing what is right for the client versus making another few hundred bucks ... wow, is all I can say.

Further, I don't see a change from the commission structure anytime soon. I don't think it would be in anyone's best interest. It is a lucrative industry for those who excel. It has to be given the uncertainty and expense involved. If you chase away these top notch agents, and subsequently discourage the best and brightest from entering the profession, it turns into amateur hour (more so than it can currently be). The last thing this business needs is less professionalism.
3 votes Thank Flag Link Sat Aug 11, 2007
J. R. questions how... Marty refers to the key and I'll add to the answer of how as well. Tracking hours is a fairly simple part of the relationship you develop with a client in a Consulting Environment. Generally, as Marty indicated, once a potential client understands the transparent approach to the choices (Commission percentage based or Hourly Package based) many will still choose the Commission percentage approach. Those who choose the Hourly services billing approach have a transparent view of the various tasks that are tied together and the various packages you are offering, right from the beginning. We (ACRE) do not believe in MLS Entry Only or a Limited Services type approach.

You are presenting the potential client with a service package description that has a custom built hourly package based on their needs. You as an agent spend a significant amount of time evaluating your tasks (fiduciary or functionary) and how much energy and time these take, in a usual transaction/client relationship environment. Once you have evaluated the various tasks (Research - CMA Preparations through marketing, negotiating and all services through a successful Sale on to closing on a listing side of the transaction) you can predict the hours and base your package on that detailed history. The same goes on a buyer side.

In the event you are working with a situation that will not end in a buyer buying or a seller selling, you do need to accurately keep track of hours. Once you enter into a relationship with this client, there is a trust element involved. It is most likely that there is an automatic trust level minimum from the beginning as ‘experienced’ REALTORS do business by referral and someone who referred you creates that minimum trust from the start gate.

Most professionals would never even consider over billing as my rights and privileges and a Broker are not worth so little that I would ever consider the risk and consequences of a violation of the law or Code of Ethics.

There is a Wealth of information and Q & A at the Consulting Site Listed below should you thirst for more info.
2 votes Thank Flag Link Wed Aug 22, 2007
I do agree that there is an inherent conflict of interest. I have been trying to find other options for years. Recently I discovered ACRE and took their training.

The interesting thing for me is that since I have begun to offer clients a choice of paying a commission, a fixed fee or an hourly rate, they have chosen the commission. It gives me a chance to explain why the commission is what it is and how I can afford to work for less if I know I'm getting paid for what I do whether the house sells or not.

All my clients have voiced appreciation for the choice and have chosen the commission structure. I am currently working with two prospective clients that I think may choose the fixed fee route.
Web Reference: http://www.valleymarket.com
2 votes Thank Flag Link Wed Aug 22, 2007
When I ask for a price reduction, it is not because I'd like it to sell so I can get paid. It is because comps are less, and there are no offers at the higher price. As for "discouraging" a low offer, it is not in an effort to discourage any offer, it is an effort to get a HIGHER offer. We can encourage a higher offer, but if it isn't forthcoming, the low offer should be submitted. In this market any offer is an opportunity to negotiate. I have heard anecdotal accounts of agents refusing to submit offers, but if I had an offer, an agent REFUSED to submit it, I would approach the agent's broker and complain.
2 votes Thank Flag Link Tue Aug 21, 2007
As a long time REALTOR and one who remains on the front edge of change, I am willing to answer this question and charge you with thought process it will generate. A commission is and has been based on a percentage or flat fee basis for years. Many in our industry are looking at, and now working with, a new business model. A Real Estate Consultant has taken the challenge and is now offering the public, in many markets - the number is growing daily - a Transparent alternative to a Commission based on a selling price. The public has long questioned what the Commission is based on. Hence the alternatives you have seen in the market place. Real Estate Consulting is not a discount brokerage, MLS entry only or Limited service approach to business. ACRE Consultants are full time professionals who value their time and are willing to expect and do get paid for the job they do – not if they succeed as in the traditional commission structure of the past and one many still use.

A Real Estate Consultant (ACRE – Accredited Consultant in Real Estate) has the professional skills and knowledge to put together various packages of services, paid for by the buyer or seller of real estate, some up front and some in part throughout the transaction or employment relationship. The payments are based on our time involved and skills needed to accomplish the job we have been hired to do – Sell the Property or – Find a Property. Many of the Consultants within the ACRE Organization are hired to give advice and/or recommend a course of action that may not involve the sale of property. Many people need advice about their real estate investment or personal homes and are glad to pay for that advice. It is not a pay if you succeed system. Much like attorneys, business consultants, engineering consultants and the like… we bill based on an hourly rate structure commensurate with the job we are doing. Our clients respect our knowledge and experience and area glad to pay us for it.

You can find out more about this by going to review the consumer site located at:
http://www.TheConsultingTimes.com.

Thank you for Asking this Question! We love to share our business.

BIll Holt, RE/MAX Ocean Realty, On The Outer Banks, NC - Bill@obxmls.com
2 votes Thank Flag Link Tue Aug 21, 2007
Interesting discussion...

Back to the original question of whether sellers should pay for the buyer's rep...

Ultimately the buyer is paying for it all - buyer side and seller side! The real estate transaction fees are wrapped into the price of the house and paid for via the buyer's loan and down payment. Unfortunately, we as an industry continue to hold onto the idea that the seller is paying us, when in actuality the fees are paid by the buyer over the life of their loan or with the cash they paid.

Think about it -
2 votes Thank Flag Link Tue Aug 21, 2007
I feel that the discount brokerage firms are the ones that are more likely to break fiduciary responsibilities, because they simply don’t have the resources (time or $) to provide all of the services as a full service agency. Also, I find they are less motivated to pay extra special attention to the client, as they need to make their living (earnings) based on a quantity theory instead of the quality of it. I started my career in a discount firm and realized it wasn’t the way I wanted to practice my business, and that’s when I moved to a full service agency.

Melissa B Mancini, Realtor, CBR, GRI
2 votes Thank Flag Link Sun Aug 12, 2007
Most people that own houses have good enough credit that they would not want to mess it up by having bill collectors calling them. Most people are happy to pay what they know they owe.

Bottom line...most people pay their bills.
Web Reference: http://www.valleymarket.com
1 vote Thank Flag Link Wed Aug 22, 2007
Barbara:
This post was NOT about reducing or renegotiating after the fact commissions paid. It was about restructuring. Should agents be paid a full service flat fee? Should seller's agents only charge for their portion to the seller and the buyer negotiate what commission they pay their agent. Should they be paid on an hourly basis? You said, "Why should we change are method of being paid when the clients are already trying to change it." Exactly, that's the point. If the clients are trying to change it, does that mean it should be changed? I still go back to my best answer choice from Deborah (closely tied with Paul and several others) that commission motivates the agents and reputation is more important then earning a little more at the expense of your client.
Ruth
Web Reference: http://www.oak-park-il.com
1 vote Thank Flag Link Tue Aug 21, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
When I posted this question, it was mostly for discussion. The conflict of interest comes when a buyer's agent discourages (or illegally refuses) to present a low ball offer (or seller's agent discourages or refuses to present it). Or when a seller's agent keeps pushing for a price reduction because if it doesn't sell, the agent doesn't get paid at all. The seller doesn't care that the agent is spending time and money, the seller just wants his asking price.

I'm deleting one of my posts on this because it was in response to "why" I am asking these questions. The post was partly venting and partly filling in the agents that I had been having discussions with over several different topics. So sorry if Kaye's response doesn't make sense now. The one thing I will repeat from that post is:

Mostly I'm playing Devil's Advocate for the consumer even though I agree with many of the agents. I'm just trying to wake up the agents who get stuck in their standard responses.

Thanks for all of the great input.
Ruth
Web Reference: http://www.oak-park-il.com
1 vote Thank Flag Link Tue Aug 21, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
If a seller offered me an upfront fee for marketing and a bonus for selling, I would be very interested.

So far, it has not happened.
1 vote Thank Flag Link Mon Aug 20, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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Personally I don't think there is a conflict between percentage and fiduciary duty. In a traditional arrangement the more the seller gets the more the realtor gets, so they should be aligned. If there is a conflict it is that the incentive is not the same. If the agent is on a 50/50% split, what does an extra $5000 in sales price earn the agent? I would think this amount is significant to most sellers, but the reward to the agent is minimal financially. One idea might be bigger up front fees by the realtors with lower back end percentages. I'll guess though given the choice, most sellers would opt for the no money up front, I'll pay when it sells, even if it is more, versus the other way around.
Web Reference: http://www.teamlynn.com
1 vote Thank Flag Link Mon Aug 20, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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Intersting. I think I am going to like getting to know you better. Good Luck with your house!
1 vote Thank Flag Link Sat Aug 11, 2007
Ruth,
Who is paying you to ask these questions? You are quite a jewel. Are you sure you are not in the business already? You have a strong sense of what is going on in the market and what should be going on. If you are not considering getting your license why?
Web Reference: http://carriecrowell.com
1 vote Thank Flag Link Sat Aug 11, 2007
Jim,
I read the article that you referenced. The seller still paid the full commission, the buyer got the refund for the buyers agent. This does not really benefit the seller. If you were to reduce the commission because buyers are acting as their own agents, then the buyers would not be able to get this money back. It simply would not be available. I am not saying it is a bad deal. I am wondering what they call the cash back, as it is not lawful to pay an unlicensed person a commission.
Web Reference: http://carriecrowell.com
1 vote Thank Flag Link Sat Aug 11, 2007
Ruth,
What most consumers see is a 6% commission on 100,000 is $6000.00. Seems like a lot of money. What consumers don't see is 1/2 of that goes to the buyers agent, leaving $3000.00. The broker takes a cut anywhere from 30% to 50%. For the sake of argument lets say it is a 60/40 split. So the $3000.00 looks more like $1800.00. Now out of the $1800.00 the agent gets, he has to pay about 23% self employment tax and all of his expenses not limited to but including cost of producing flyers, advertising, open houses, website fees etc. The actual dollars to an agent is no where close to the $6000.00 that the seller paid in commission fees. I hope this helps those in doubt realize how an agent gets paid. And that they actually earn their commission.
Web Reference: http://carriecrowell.com
1 vote Thank Flag Link Sat Aug 11, 2007
There is no other way to do it without
0 votes Thank Flag Link Thu Dec 8, 2011
This is so complex- when the seller drops their price 20,000- the commission for the agents is only reduced by $400 while the seller loses 19,600. You may want to sell- but sometimes you can't. We took our house off the market because the price our agent wanted us to reduce to would have left us with no net profit to put towards a new house. It's such an emotional, stressful process and you have to keep clear head when dealing with $$
0 votes Thank Flag Link Mon Jul 19, 2010
Marty wrote:
They sign a contract on how they will pay before the work is done. Then when the work is done they are billed and they pay the bill. This is the same way most professionals charge for their work.
~~~~~~~
Thank Marty. I used to charge that way too when I freelanced as a graphic designer, but I was billing major corporations. I did not work for mom and pop outfits because I liked to be paid. This is why I asked. I'm happy you have had no trouble collecting.
0 votes Thank Flag Link Wed Aug 22, 2007
I am curious, what do you charge per hr.?
0 votes Thank Flag Link Wed Aug 22, 2007
Hi JR.

They sign a contract on how they will pay before the work is done. Then when the work is done they are billed and they pay the bill. This is the same way most professionals charge for their work.
Web Reference: http://www.valleymarket.com
0 votes Thank Flag Link Wed Aug 22, 2007
While there may be hacks who need that last $750 (3% of $25k) It may help to consider that most agents have a desire to stay in the business and act as I do to get "bragging rights" after a closing. With the easy access to information available today the ability to determine the value of a home is very high for buyers desiring not to overpay and the seller who's agent is looking for the last dollar has a good agent. If you are a buyer going to a sellers agent...bad idea. lot's of god agents out there, go get one.

I'm sure that many here will agree with me when i say I thrill at getting a new high price per square foot in a tract (for a seller) or getting a new low (for a buyer)...just one more reason to hire someone who has a decade or two in the trade. We're well into the referral part of our book of business and succeed by adding clients who are already aware of our style.
0 votes Thank Flag Link Wed Aug 22, 2007
And you collect this upfront as a retainer? And refund the balance if they decide not to buy? OTherwise, how do you collect?
0 votes Thank Flag Link Wed Aug 22, 2007
A question for the ACRE agents: how do you track your time? How do you prove your time to your client? I've always been an independant contractor and worked as a freelancer for YEARS and I never entered into an hourly pay agreement with a client once I was experienced because I worked faster and more accurately than any other freelancer and felt that I was penalized (I was!) if I charged by the hour. A crack agent, who is a great negotiator and communicator and time manager would be paid LESS than a newbie who has difficulty getting their point across, and is not as assertive. Also, is there a time clock? Seriously, do your clients take your word for it that it took you an hour to write out and mail 300 postcards or what?
0 votes Thank Flag Link Wed Aug 22, 2007
Barbara:
This is Paul's post from earlier:

"Just a quick word on outfits like Redin. Discounters compete with discounters. Full service agents compete with full service agents. There have always been, and always will be discount brokerages. I will never believe that the potential savings on commission will ever outpace the profit lost by not utilizing the services of an experienced full service agent, but that is beside the point. What brokerages like Redfin charge has absolutely no bearing on my fee. I will never secure the business of the person who ultimately decides to employ one of these companies. My potential client is the one who realizes that any compromise on service and expertise for a lower fee is far more likely to hurt than to help. In Scottsdale, my competition are top flight agents with Re/Max, John Hall, Equitable, and fellow Realty Executives. Within this grouping, my fees are highly competitive. Help-U-Sell, Flat Fee Realty, Zip Realty, etc duke it out with each other at the other end of the spectrum. If they charged six dollars and a ham sandwich to sell a house, it would not impact me in the least. "

I hate to say it, but from your quote, "work 24/7 for a reduced commission and in this market there could be other more lucrative jobs." it sounds as if it is time for you to find a more lucrative job because I think working 24/7 is burning you out.
Good luck,
Ruth
Web Reference: http://www.oak-park-il.com
0 votes Thank Flag Link Tue Aug 21, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
After reading some of the posts ,I am really confused. If the seller lowers the price of the home, it is decision. It is obviously to get an offer, not to lower the commision paid out. We, as agents continue our agreement to market the property and provide the services agreed with our client.
0 votes Thank Flag Link Tue Aug 21, 2007
If the client cannot afford the market value of the home, he should not buy it. Our commission is determined when we have the listing agreement signed. After that, the amount of the commission paid out comes from the listing office. If you want to work for your client and establish an amount that he wants you to get paid, that is up to the buyers agent to try to work out.The amount that the seller agreed to pay the listing office remains the same unless there is another agreement reached. Why complicate the complicated system???
0 votes Thank Flag Link Tue Aug 21, 2007
Doesn't what you are saying mean that agents will try to get you the HIGHEST price? That's a good thing isn't? In reality, though, most of the sales I have made have not varied that much from the asking price to have made that much of a difference in what I earned.
0 votes Thank Flag Link Tue Aug 21, 2007
Ruth.. Sounds as if the broker in question was not very upfront with you when he took the listing. Having been in the business you know that a good agent never has "fiduciary responsibility issues". They work for the best interests of the client at all times and would never dream of letting personal issues conflict with the interest of the client. A good agent is often not paid enough and a bad agent is always paid way too much..

Personally I wouldn't mind seeing some changes in fee structures but seriously doubt it will happen. As inefficient as the commission fee may appear it ultimately works and everyone understands it. When people talk about a new structure what they want is for agents to reduce their fees not change how they bill. Most of the time this happens through marketplace competition. I know fees in CA are lower then in other areas because of competition and the price of homes. These are basic market forces at work.
I agree with Roberta below.. the real estate market is very competitive.... especially in CA. What I would like to see are tougher standards to obtain a license. I think better regulations would ultimately lead to better agents and better service for everyone.


.
0 votes Thank Flag Link Tue Aug 21, 2007
Kaye Thomas, Real Estate Pro in 90266
MVP'08
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Interesting questions and discussion. As a consumer what you suggest of feel comfortable with? I know conflict of interest has been discussed and as acting as a fiduciary.
0 votes Thank Flag Link Sun Aug 12, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
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Wow! I really liked hearing everyones comments. It's just one more sign that the really quality agents are the ones participating on this forum. I feel like Tevia from Fiddler on the Roof, "On the one hand..." Nothing said was really a surprise to me but the conviction was. I know referrals are the life line of the superior agent but when the average person has 5 to 7 years between home sales, I didn't think the pay structure would be impacted by referrals.

I did spend 20 years in the Travel Industry and trying to sell multi-million dollar clients to pay me instead of the airlines paying the travel agency was an interesting challenge. But I think the best 2 points made were:
1) Full service and discounters aren't really competing against each other
2) Commission motivates an agent to be on call 7 days a week / Salaries are a desk job

But don't you think the BUYER should pay the Buyer's Agent's commission instead of the Seller splitting the commission? Discuss...

I love this forum!
Ruth
Web Reference: http://www.Oak-Park-IL.com
0 votes Thank Flag Link Sat Aug 11, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
Conflict of interest? It's the seller that pays the commission in a transaction. It is in our best interest to negotiate the highest possible price on behalf of our seler. It benefits us both. On a commission basis, the incentive is for the agent to more creative with marketing to bring folks to the table. The longer we have a listing, the more $$$ it costs us. I also wonder how long the good Realtors would stay in the industry if we went to another structure - like salaries. Then it becomes just another desk job.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Sat Aug 11, 2007
Cindi Hagley, Real Estate Pro in San Ramon, CA
MVP'08
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No. All of the big companies have launched some type of "a la carte" model. All have decided to discontinue this model. It doesn't work for real estate companies. Good luck with the sale of your property. Take care, Jon
Web Reference: http://www.bowenboston.com
0 votes Thank Flag Link Sat Aug 11, 2007
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