It seems to me that your real question is not about who makes what. Help me out if I am reading this wrong. I think that what you are asking is who does what, who can you hold accountable, and who exactly are you hiring to perform which job(s)? I wasnâ€™t sure if you were saying the rent-a-desk agent was from the big company, or that was a different agent. Nonetheless.......
When you hire a buyers agent, you are relying mostly on the agent and only minimally on the company, providing all goes smoothly in the transaction. The company and the broker do not have much hands-on involvement in most buyer transactions. It is the agent who will perform most of the services in traditional brokerages. There are exceptions, particularly in new business models.
When you hire a sellers agent, you might rely mostly on the agent, or dually on the agent and the company to varying degrees. I think this is the heart of your question. How do you know from one situation to another? The commission split may not provide an accurate answer, and her is why. Take three different rent-a-desk agents (as you call them.) One rent-a-desk agent has two assistants and maintains a four figure monthly ad budget. Her assistants have computer, graphic, and real estate experience. She has a storage shed at her home with a complete inventory of signs, riders and she owns 15 lock boxes. Weâ€™ll call her always ready Anna. Another rent-a-desk agent is a one man show with only basic computer skills. He produces basic brochures, has no ad budget, and has two signs that he rotates between his listings as he signs them. Weâ€™ll call him always behind Bob. Then, there is agent number three, always charging Cathy. She works alone, without an assistant, and is a truly amazing one person army. She is organized with systems in place and an efficient use of all the latest tools. All three agents are 100% commission split agents who pay only desk fees, yet the value each brings to the table is vastly different. Bottom line: The commission is not the telling secret of performance and results.
Letâ€™s not forget the agent who works in a traditional brokerage with a shared split and shared expenses with their broker. This agent relies upon her brokerage firm to provide lockboxes, signs, marketing support, advertising support, and more. Items such as tours, floor plans, and brochures may fall to either side of the table, broker or agent depending upon the company.
I think your point in knowing who you are hiring is valid. I just think commission doesnâ€™t answer the question. You could make a list of specific questions to ask. There are no right or wrong answers, as it pertains to who does what. Your confidence will rise or fall based upon how the agent delivers the answer. Do you feel confident that the tasks will be done and done well.? Do you feel confident that you will be represented well? And my final point is that even if the company does everything for the agent, you still need to have a sellers agent who will be able to represent your interest well, knows the inventory, and negotiates the best contract for you.
As an aside, I am a Broker, and we do most everything for our agents so that they may focus their energies on knowing the inventory, and being with customers and clients. Our office staff provides a tremendous amount of hands-on support for agents. Some agents utilize that benefit more than others.
I think you can ask anybody anything if you want to, including the commission split between agent and broker. Whether they feel comfortable to answer your question is one thing, and how you learn and interpret their answer is another thing.
However, I will strongly advise against taking somebody's numeric answer and use that either for or against the person or his/her service.
There are so much into the commission splits and how each company charge and/or what they pay for their associates. Unless you have a very complicated chart and do a thorough interview, getting down to the details, you won't be able to know how the commission split has to do with the service you are getting.
The companies might or might not pay or charge their Realtors - E/O insurance, printing, open house signs, desk charges, internet presence, Txn coordinator, first rate website, great feeds and placement on the internet site, the company's affiliates; locally, nationally, and internationally (my company is local but we are affiliated with Luxury Property Portfolio and several large relocation companies), the quality and placements of the ADs to attract buyers; training (marketing and contract), support , .etc. ... marketing support, .., the list can go on and on..
So, itâ€™s difficult for anybody to understand what they are getting just by the commission split level.
For newer agents with lower commission split levels, it does not mean they wonâ€™t be the hardest working agents for you, and as a matter of fact, they just might because the serious ones want to get started and built a great real estate career.
I think what you really need to consider is not the commission split, but interview them to find out the exact service you will be getting from the Realtors. That's why we do listing presentations. I offer service and value to my clients, whether it's from me, personally or through my affiliation with my company; and thatâ€™s what your realtor should do for you.
Don't confuse how much your agent shares with the house for the value you are getting. As long as the rate charged to you is competitive, does it really matter how it gets chopped up? The value is having an experienced and highly productive agent representing you to ensure that you command the highest price that the market will yield for your home. I assert that the majority of such agents have outgrown the standard line company.
1. The big fee splitting company does national advertising. giving the agent name recognition beyond their own name. 2. The big name company has referral sources such as relocation departments, and mortgage divisions to divvy out incremental listing opportunities to its agents. 3. Big companies have extensive training programs for their agents.
Experienced agents benefit less from these features as they 1. Have built their own personal reputation 2. Have built their own referral networks 3. Have found less expensive and more detailed educational opportunities.
Many people feel more comfortable with a brand name. Oh it is OK to ask about fees. and it is ok to walk (before you sign a contract) if you don't like their answer.
I am NOT a real estate agent, but I know the industry extremely well. I agree with Paul and thought about bringing that up in my last post. But from your original question, I felt your comfort level with the individuals you talked to was more important and I wanted to make you aware of the next step when it came to splitting fees.
So, let me name some names for you since I'm not an agent and I don't have a vested interest. Most Century 21 offices and their agents probably AVERAGE a split of about 50/50. Most ReMax agents pay a fee to the company and keep 100% of their commissions. When you interview in YOUR area, see what market share and level of experience ReMax has verses Century 21 verses the company and agents you are talking with. According to Remax's web page "no one in the world sells more real estate." According to Century 21's web page "one of the most recognized brand names in the world." (By the way, C21's brand recognition is probably #1 in real estate but their claim of "one of" includes all industries and brands such as McDonalds). Both companies are franchises which mean that they are independently owned an operated but follow company procedures. My guess is that 99.9% of the time your agent at either of these companies are independent contractors which mean they are their own bosses but have to follow company procedures.
Now, I just used a privately held company (I won't name names here) because they said they used the "team" approach. I had two agents, the luxury agent and the Broker-in-charge all come to impress me and see the home. In the end, when a different agent holding the open house did more harm than good, the Broker-in-Charge basically said that all the agents are independent contractors and he had no control over them.
Finding an agent is a very personal decision. You have to have that right fit. The rent-a-desk agent that you talked with wasn't a right fit. But I don't think it was because of the rent-a-desk arrangement. I hope this helps you. Let me know if any of this needs further clarification.
I think thatâ€™s a perfectly reasonable question to ask. But there is a much bigger picture to focus on when asking this, and that is that despite the fact that the agent keeps 100% of the commission, they are also responsible for 100% of the costs of servicing the listing. Whether an agent pays these costs to their company or directly, they are still being paid. I wouldnâ€™t be concerned too much about this anyway, because your listing contract is actually with the â€œcompanyâ€ and not the individual agent. BTW, I am not an agent who keeps 100% of the commission.
Also, if I were to interview agents again to sell a million dollar home, I would make sure the agent OWNED a million dollar home. I asked many agents how many million dollar homes they had sold to get an idea of their experience level in this upper bracket. But I don't think that was enough. It's a whole different mentality. An excellent agent will not be afraid to tell you how successful they are.