So, what do you do to justify your high commission?

Hi folks. I have been reading and participating in a very heated debate over at the BloodhoundBlog today. It seems, a consumer has chimed in, and is asking us to explain what it is we do, to justify our high commissions, when the consumer is now able to find all the information they need, to buy or sell a house, on the Internet. Well, if you take the time to read the discourse over at the BloodhoundBlog, you will see that this debate definitely took a turn for the worse. Mr. Candybags is slamming Reel-toors (his term)and Realtors are slamming Mr. Candybags. Amusing and sad at the same time. Amusing because I love reading a good slam fest and sad to watch Realtors avoid answering the question.

So let me ask it again here. What do you do, to sell a property, that justifies receiving a x%  commission? Why would the consumer want to hire you and pay your fee, when they can find all the information they need on the Internet (disintermediation)? What can you say to justify your commission?

Well folks I am here to tell you, you best be prepared to answer this question. And you best have a better answer prepared than your 25 step marketing plan and access to the MLS. This will not cut it in this day of disintermediation and discount, web based, Real Estate agencies. If all you can bring to the table is your marketing plan you will find yourself either out of business or drastically reducing your commission to be able to compete in this market.

So, what do we do? Well, here's what I do. I build value in something that the consumer cannot access over the Internet. "Broker Bryant, that's pretty vague, can you expand upon that?" Of course. I thought you would never ask.

First, all people want to feel good about themselves and their decisions. You can provide that. You can help people decipher all the information that they have available. You can help them apply this information to their situation. Together, you and the consumer can come up with a game plan that will help solve their problem. You can be a trusted advisor.

Secondly, you can be a calming force. Selling or purchasing a home can be one of the most stressful things a person ever goes through. You can remain calm and help them through this. This can be achieved by constant communication and by constantly being there for them when they need to be reminded of why they are selling or buying. When the going gets tough, you can be there for them. You can let them vent their frustrations, on you, without taking offense. When they are all done, you can get them to return their focus, on the end result.

Thirdly, you can be their friend. You can have honest and sincere, care and concern about their situation. You can lead them down the right path without placing your commission in first position. You can make them and their situation feel important to you. This cannot be faked. It must be genuine care and concern. Folks can, tell the difference.

My point here, is to understand that folks' emotional needs cannot be satisfied over the Internet. As Realtors, we need to position ourselves, to be the one person, that will take the time to make sure that their emotional needs are met. If you can achieve this, I can assure you, that your business will take off and your services will be in high demand. And the consumer will be more than willing to pay the price for this kind of service. Quit trying to sell them something, they can get over the Internet, for less money.

So that's it. Broker Bryant's crash course on overcoming disintermediation. Did I make you feel good? Did I give you a solution to the problem? Did I present it in a calm and informative manner? If so, I will mail you my bill. I take Master Card, Visa and Amex.

"Hey TLW, the mall opens at 10:00 and I got me some more of that money coming in. Have fun and buy me something nice. I wear JUMBO."

So, what do you do to justify your high commission?

 

143 Comments on So, what do you do to justify your high commission?

"The Lovely Wife Here"

Ya'll should check out this DEBATE at BloodHound. This was just incredible. I am still dismayed by what I read. The sad part was watching no one step up and answer the question. I mean really. Answer the question. If you avoid the question we all look unprofessional. Everything you do out there reflects our industry as a whole. I gotta tell what I read today was really bad. There is even an individual in there who refers to the use of diplomacy as a "lovefest"...I was pretty surprised by that comment.

Broker Bryant=Hubby...You said you were going to shop for your own clothes this time. I tell you now, you are. You are going with me and you're going to like it...Jumbo...You owe me lunch.

TLW "The Lovely Wife"...Still Shaking My Head...ROAR!

11/10/2006 04:54 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

And two more reasons, as I point out in this entry on my primary blog. 

11/10/2006 05:02 PM by Carol Williams Wenatchee Real Estate (TopPropertiesRealEstate.com)

Well, I'll match my 30 years of real life experiences against these computer valuations any day.

And, as we know a bot putting a price on something better be selling to another bot!

Information without the footnotes will probably cause some sellers to sell too low and other sellers never to sell. The interpretation of the data...that's the secret.

Having seen the competitive homes on the market; having sold some of the homes in the area; makes our knowledge more valuable than any computer program.

11/10/2006 05:20 PM by Eileen Landau, ABR, CRS, e-PRO (Realty Executives, REALTORS)

Yea, that's quite a discussion, or reel-tooorrrr bashing episode.  It is sad that some people feel that we don't do anything to earn our money.  There's times I've felt like saying that to a doctor or a lawyer but it wouldn't get me anywhere and I usually go to other professions for the simple reason that they do know more about their job than I do.  It would be interesting to know why Candybags hates realtors so much.

I appreciate the reminder that we need to be on the ball and able to justify or charges. 

11/10/2006 06:37 PM by Cynthia Sloop, Realtor Indianapolis Real Estate (Carpenter Realtors (Lic. in Referral))

Broker Bryant - I am not going to start up again here on your blog. Both yourself and your wife were courteous enough to at least give my question merit, which is 1000% more than anyone else was capable of doing over on that ridiculous (and ridiculously named) Bloodhound blog. Mr. Censorship himself cancelled my last posting. It wasn't really obscene. I just referred to Shannon Hubbard as Old Mother Hubbard and I called her website "stinking" and "looking as though it were designed by a 10 year old". That's all. I am discouraged. I really hoped that the discussion could progress to a point far elevated from where it began. However, needless to say, I am more discouraged with reel-tors than ever before. I also included some interested links with my last post which most REALTORS (notice the spelling) would've found interesting and thought provoking. I say, if a person is going to dish it out, they should be able to take it. Sometimes we all can learn a lot from other peoples' POV, even if it were not necessarily our own. Some of my co-workers were following along with that e-conversation and really finding it enlightening. Especially the informative comments from the investment realtors. We did get a feeling of people knowing what they were doing there for a second. Too bad we didn't get much (other than neenah-neenah-neenah type comments) from the others hanging around uselessly on that blog. Especially Old Mother Hubbard. But that's OK. I got my answer. It was pretty much what I thought it would be and it pleases me to know that it really won't be long now.

11/10/2006 06:50 PM by Candybags

Cynthia, I guess Candybags got himself banned from the Bloodhound. I actually read his last post that was deleted and it was real beauty. Nothing but expletives and insults. Oh well, I tried to turn it into an intelligent conversation.

11/10/2006 06:52 PM by Bryant Tutas-Tutas Towne Realty, Inc

Hey Candybags, Thanks for stopping by. At least I was able to get something to blog about from the BloodhoundBlog today. Interesting stuff. It is unfortunate the conversation took the tone that it did. I only have one rule on my blog and that is that we debate the topic and respect the person. This is the only way to get to the bottom of things. Deal? Other than that, feel free to hang around and comment as much as you like. Who knows maybe we both will be enriched by the discourse.

11/10/2006 07:03 PM by Bryant Tutas-Tutas Towne Realty, Inc

CB...No expletives okay...I am right here. "The Lovely Wife"...

11/10/2006 07:07 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

I would add that in addition to the items listed above, there's a special benefit that can be added by a live person telling you things you may not want to hear.  It goes back to being a trusted advisor-a true advisor will be blunt with you when required and allow you to see the tree in the forest.  Emotion clouds a lot of vision.

11/10/2006 07:11 PM by Leigh Brown Charlotte NC Broker/Owner (RE/MAX Signature Properties)

Experience and Negotiating Power can not be bought on the internet...only a fool would think they could.

Now, Bryant you didn't mention a heart...remember the Senior Lovely's...you have to have an awfully big heart! Which reminds me...any update on them?

11/10/2006 07:21 PM by Sacramento Real Estate and Luxury Homes, Assoc. Real Estate Broker,Gena Riede (Remax Gold, Assoc Broker)

Golly-maybe I should have read that dialogue earlier...what an interesting discussion!  And he does raise some excellent points that others weren't willing to address.  Excellent reminder to be on TOP of our game at all times, learning and changing, so we can indeed earn our living!  Thanks BB and TLW for holding up a high standard.

11/10/2006 07:24 PM by Leigh Brown Charlotte NC Broker/Owner (RE/MAX Signature Properties)

You ask: "Why would the consumer want to hire you and pay your fee, when they can find all the information they need on the Internet (disintermediation)? What can you say to justify your commission?"

Aside from the things BB mentioned, my answer is:

Experience & knowledge, plain and simple.  Just as a few others have commented here, years of experience and the knowledge gained from them can make the difference between finding a way to make a deal come together and seeing it come to fruition (closing) or having it fall apart.  Local market knowledge is also very valuable.

11/10/2006 07:24 PM by South Florida Real Estate • Leanne Paynter (HomesCo.com)

Gena...Here is a link for an update...TLW...

CB...This link should also interest you. This is the elderly couple that we told you about...Some very nice folks here helped us to help them...Please have a look. I do hope you will return here for more "discussion" of your question. You know I thought your question was valid and went unanswered. That was wrong. "The Lovely Wife"...

11/10/2006 07:32 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

 

Damion Flynn, correctly stated it when he said "The majority of people that sell their home by themselves have said they will NEVER do it again." From the Lending side of things , I have heard this more than one time.  Not only from someone that has sold their house on their own as well as from some that tried and then ended up with a Realtor.

When someone who is selling and buying a home comes to me to get pre-qualified for a loan, I tell them, there is a reason why a Realtor gets paid what they do.  You are about to find out first hand what that reason is.  After you have found this out for yourself, give me a call and I will refer you to a Realtor that will get it done for you.

Trying to sell your house over the internet is as much of a mistake as going to the internet for a Loan.

 

11/10/2006 07:43 PM by George Souto (McCue Mortgage Co.)

Well, CB does raise a lot of interesting points,

However, the point that I wondered at was his listing agent "worked her ass off and got the house sold at market price" and all for 1%!!

Kind of a paradox, isn't it? He/she suggests that Realtors don't do much yet they work their asses off.

Bottom line is he does not want to pay a fair compensation for all that work.

11/10/2006 07:51 PM by Karen Hurst ~ Real Estate Broker ~ Warwick ~ Rhode Island (Storm Realty LLC)

Sorry Broker Bryant, but that whole thing on the bloodhound was too long so I skipped a lot after the first paragraph.  The question is valid, however.  What do we bring to the table?

I've been reading Gary Keller's book The Millionaire Real Estate Agent and he makes the same point that CB was asking except he frames it somewhat differently.  Gary says a good agent inherently knows the value they bring to the transaction.  I inherently know, but I don't often list them.   I could go through many of my transactions and describe how I have saved my clients money equivalent to my commission or protected their interests in ways that they did not even know they were vulnerable to.  I take representing my clients or acting in their best interests VERY seriously.  Real estate is not a game to me.  It is a challenging, ever changing career which requires my creativity, intelligence, experience, and training to maneuver through.  Sometimes I'm the one who stands as a buffer between irate clients, taking insults that would have caused my clients to walk from an ideal property.  Sometimes I prevent my clients from walking from a good investment property because I am willing to cover for the incompetence of the agent on the other side of the transaction.  I keep my clients information confidential, no sharing of anything because that can be used to the other side's advantage.  I am even tempered when necessary, steady when my clients are too excited to negotiate.

My own relative almost caused me to leave the business.  He did it himself and thought he'd gotten a good deal.  He gave away $20,000 of lakeshore land because he didn't want to bring an agent in to represent him.  He to this day does not know how badly he blew it because I will never tell him in order to keep peace in the family.  He was the buyer so he didn't even have to pay a commission.  He bought a lake level home with a wood foundation (no basement) that had just been replaced.  Why?  because it rotted.  They replaced it with wood.  Hmmmm.  Oh, guess what?  The furnace is only 7 years old!  What a deal.  The furnace was sealed in the attic and had never had a service call, cleaning, or filter change in 7 years!  He didn't ask for an inspection, nothing.  I could go on and on with the list but the worst was giving away 23 feet of lakeshore in a high end suburb of Minneapolis.  He gave it away.  But he got a $2,000 price discount because he didn't have an agent!  He doesn't know how much he cost himself in the end.  Before close he asked us to loan him money because he was short for the down payment.  It would be a "gift".  He said he'd pay us back after the close by putting it on one of his credit cards.  Do you know how to spell fraud?  I kept my mouth shut because he knows everything, but what he doesn't know cost him a bundle!

I have other examples as well of ways I've benefitted my clients.  The first thing I hope CB was aware of was that the listing agent's commission is split 4 ways: an agreed upon portion is paid to the buyer's agent's company (this amount is called the cooperating broker's compensation and varies by area and company but is a significant amount) which is split between the buyer's agent and the agent's company; and the listing company keeps their cut of the listing side.  Essentially the commission is usually split 4 different ways: listing company, listing agent, buyer's company, buyer's agent.  The whole chunk does not go to the listing agent or I could have retired after my first listing!

11/10/2006 08:00 PM by Bonnie Erickson (The Realty Matrix)

Great response Bonnie, It really is the intangibles that we do that folks don't get. The deals we have kept together because we kept the seller from making a rash decision based on emotions. But you know, they will never get it unless they have been through it with us OR our previous customers tell them about us. And that is the bottom line, getting our past customers to tell their friends and acquaintances how we held their hand through the transaction and got it closed. So my goal, is to make their experience with me, unforgettable. That's how you succeed in this business.

And Karen, there are some people that will never be satisfied. That's why I choose who I will work with. If they don't trust me, I move on. I read things from other Realtors, talking about their customers going behind their back and to me, I just don't get it. My sellers would never do that. Trust is a two way street.

 

11/10/2006 08:19 PM by Bryant Tutas-Tutas Towne Realty, Inc

High commissions, what high commissions?  How many other purchases or sales comparable to the one or few-per-lifetime size range of a home can someone, for a one time minimal percentage fee (2 1/2% - 3% for their side's guy), get a lifetime of good sleep at night from?! 

So someone wants to save 3% as an FSBO (assuming they are at least smart enough to pay a buyer's broker, so they are only saving that fee on their side of the deal) - the average FSBO (per NAR recent study) sells for 16% below the comparable REALTOR represented deal!  Let's see...$500,000 home sale value x 16% = $80,000 lost on average - but they saved $15,000 in commissions (not to mention took and made 400 phone calls and got 75 signatures per Damon Flynn above)...good for you Joe FSBO!

The most rediculous thing is when a buyer decides they don't want a broker, so they not only get taken by the smart seller who hired a REALTOR, but they give that smart seller's broker a double fee, since that REALTOR now doesn't have to pay half of the fee out to the buyer's broker.  It seems to me that if these cut-out-the-agent crowds were so educated they might realize that mistake?  Some of them, though, think they're pretty smart, so they get $2,000 back and end up with the wood foundation and the never-inspected furnace in Minnesota, right Bonnie?

Since most of the world still uses agents I would think the exposure of the MLS alone is worth 5% or 6%.  But then, I guess that's exactly why no FSBO wants to ever do it again without an agent, after getting 16% less than they should have and having their place on the market for two years to get there...

By the way, Candybags, whatever lousy excuse for a REALTOR/broker/agent/whatever you unfortunately had (more than one?) experience with, that/those are the only ones that are going to be disintermediated.  Like you, I can't wait for them to be out of the business either.  Don't let the one bad apple spoil the whole bunch, though.

Thankfully, I don't deal with small deals so the clients I have worked with throughout my career are not just smart enough and wealthy enough to hire or not hire anyone they want to (or don't want to), they are also smart enough to realize that the amount of time it would take out of their own lives to do what others do all day every day is penny wise and pound foolish.  I may be a Realtor, but I hire other Realtors for my own deals outside of my market, and for my client's outside my market.  If I do this for a living and I know it's worth hiring local expertise, why wouldn't someone that manages a chain of stores for a living, or sells cars, or whatever. 

Hiring a REALTOR is just outsourcing.  Every company in America does it for their corporate real estate department.  If it was so smart not to use brokers (what we call ourselves in the corporate world) I think companies like IBM and GE and Mercedes would have figured that out by now, or maybe you can send them a candygram with that great idea and see if they'll pay you something for what you think they'll save?

11/10/2006 08:28 PM by Gabriel Silverstein, SIOR, e-PRO (Angelic Real Estate)

First, let me be among those to thank BB & TLW for adding some sanity and respect to that Bloodhound boxing match!

I wholeheartedly agree with CB about the need for stricter educational requirements, as I wrote in an AR blog entry not long ago.  It is one of my major pet peeves. I would lobby right along side CB for changes in that legislation!  I can only suspect that somewhere along the line CB or someone he knows was a victim of an inexperienced agent about which he rants.

I have a whole lot to say about the "What Do We Do To Earn Our Commission" discussion. But, I know CB wouldn't pay me anything for it, so I'm saving it for my next prospect.  

11/10/2006 08:30 PM by Carol Williams Wenatchee Real Estate (TopPropertiesRealEstate.com)

Bryant is right on the money (no pun intended).  Mr. CBags while not the most pleasant individual asks a question that many would prefer to keep buried.

11/10/2006 08:52 PM by Tony Marriott, Associate Broker, CRP, CLHMS, CRB, CRS ~~ Phoenix Arizona (Keller Williams Realty Professional Partners)

Don't forget that we are the cushion between buyers and sellers.  Without us there would be a lot of valuable time wasted with unnecessary law suits.  In other words, we are also their time managers with dates, times, schedules and especially keeping them out of law suits.  There was a lot of great feedback here and I've learned a lot.  Great write "broker Bryant".  Thanks!!!

11/10/2006 09:00 PM by Kengo Ueno (R) eCertified, ABR (Prudential Locations LLC)

Tony...My point exactly...Why is it buried...Good question. Sounds like you even read the Bloodhound post...Good...TLW...ROAR!

11/10/2006 09:07 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

Houston... We Have  A Problem!

whew! What a couple of posts!! I read through the BH posts, and MAN!! Boxing match? No way! How about a bar fight! I was about to run for cover ... then I read the BB and TLW posts.

Thank You. Sanity DOES exist.

CB does express an opinion that others out there have. There is no question there. I may not agree with the "way" that he/she put it out there, but if it riled so many feathers, there MUST be truth in it... sad but true.

BB- you pointed out (here? there?) that you save your sellers Days on Market... What a WONDERFUL value point! I would wager that you save them MORE (in mtg pmts) than they pay you in commission (at the end of the day). Right? And I happen to know that unrepresented Sellers DOM are SUPER HIGH- especially here.

Furthermore, and most importantly... in the world of CB... Reel-Tors need to prove that they are Realtors. I guess guilty until proven innocent? Backwards, but let's face it... we (Realtors) are in the TOP 5 of sales people that the public hates to do business with. So, I guess the "Guilty until proven Innocent" factor is quite prevalent. We ALL need the public to understand that we ARE worth our commission. We all have a hurdle to overcome.  

This "shifting market" will help sift out the ones that are NOT worth their salt and maybe help the reputation of those who DESERVE TO BE A REALTOR.

Finally, we are in "sales" ... (ok, for this point, I will call us sales people...) Sales people HISTORICALLY make more money than people in "secure jobs" (like NASA)- if they are good. Why? Well, WE are willing to take the risk- and our career choice IS RISKY... yes? I mean... look at stocks... the risky ones either fall flat on their face (we have all seen THAT Realtor) or skyrocket to epic proportions (we have seen that one, too.). 

Finally (yes, I know that I already said finally, but oh well...) 90% of all agents (in my crack of the world) who enter the business FAIL and leave within 2 years. And we wont even talk about the thousands of folks that take all the classes and NEVER PASS THE EXAMS- Colorado RE Laws are some of the toughest in the Nation.

Thank you for bringing it to light, BB/TLW ... too bad it came from such a sour source.

~Mariana (I will from now on... :)  ) 

11/10/2006 09:09 PM by Mariana Wagner ~ Colorado Springs REALTOR® (Wagner iTeam -Keller Williams Clients' Choice)

As my husband Jay posted on his blog

 

Lack of education and educational requirements are a real travesty. Our state requirements are only 9  hours !  I teach post licensing classes and it really amazes me that some of the people in my classes actually passed the test to begin with!  To think that they get to “practice” real estate is pretty sad.

11/10/2006 09:11 PM by Monika McGillicuddy~ N.H. Real Estate Broker & Trainer (Prudential Verani Realty/Hampstead)

Hi Broker Bryant and Wife - no cussin I promise. I will exhibit behavior more becoming of a government employee - Say no more!!

Karen - in reply to your post, yes my agent did work her tail off. I paid her less than 1%. She did her job AND the buyer's agent job too, because the buyer's agent was too busy off someplace else to even so much as return a phone call. She had to be THREATENED to bring back the disclosures signed so that we could all move on. Ridiculous. AND I paid that buyer's agent 2.5% (for what?) .. oh right .. bringing the buyer straight from the MLS. Then I found out the buyer's agent had only been an agent for 11 months. Small wonder.  Shall we talk about my sister who had to fork over $30K in repairs the second she moved into her house, again represented by an agent with less than a year's experience? The agent didn't know what to look for and, due to issues of sanitation, my sister had to immediately find a significant sum of money. Don't go there. I never cease to be amazed by the stories other people tell me too. Hence, when I read that RIDICULOUS blog of Russell "The Censor" Shaw and saw the parallels he was trying to draw between reeel-torrs and doctors and lawyers I just about hit the roof. Yeah I was mad and it shows. How many stories like mind do you suppose are out there?

I have no doubt whatsoever that there ARE good brokers out there. There HAVE to be.  

Nonetheless, that dude over there on Bloodhound deleting my post?? Just when things were getting interesting too and perhaps just when we were all to learn more on our own terms. Sorry - Shannon Hubbard AKA Old Mother Hubbard shouldn't dish it out if she cannot take it. My suspicions are that Russell Shaw didn't want anyone to follow the link I posted so, for everyone's info and review, here it is:

http://www.bradenton.com/mld/bradenton/15973939.htm

BTW I am learning a little more about what an experienced agent is supposed to be doing from reading this particular blog. It shouldn't be that difficult. I posted my own step by step account of what I did to sell the family plot. Why couldn't others justify their existence and do the same? 

11/10/2006 09:15 PM by Candybags

BTW. quit the digs about my NASA paycheck ;) I am paid handsomely. Believe me, do you think I would really work for peanuts?? There are engineers and then there are ENGINEERS. Honey, I'm an ENGINEER. One of these days you folks might be taking a consumer trip into space, perhaps on a vehicle that I may have had a hand in. Scary thought, eh? I promised to be nice on this blog out of respect to Broker Bryant, the only REALTOR who answered the questions I so deftly put to EVERY SINGLE REEEL-TORR OUT THERE. So, I won't get riled, I won't swear, I won't be obscene, and I won't make the broker's wife mad. I just will not.

11/10/2006 09:21 PM by Candybags

Hey Wagners, I've been meaning to ask, who am I talking to? My guess is Mariana. Am I right? If you guys share you need to sign off with the author's name.

Anyway great comments from every one. I hope this discussion helps every one to really think about what it is you do. And not only think about it but be able to communicate it to your potential customers/clients. This has never been more important. The consumer is going to want answers. They are going to want a reason to work with you. If we all step it up a notch, we can make a difference. Especially now that we have this awesome (AR) platform to spread the word from.

Don't shy away from the tuff questions. Welcome them. It gives us an opportunity to show our best side. And no matter what don't get defensive. We do not have to defend our fees we just have to be able to explain them and justify them.

11/10/2006 09:22 PM by Bryant Tutas-Tutas Towne Realty, Inc

I must say that I, too, noticed that (until BB and TLW) showed up, no one was answering the ??'s that CB put forth. True. But... CB sure didnt pose the question in a "OOh. Let me answer this" kind of a way. It was very offensive, and with all the Type-A personalities in our field, a battle was bound to begin. And it did. Maybe Points were proved? Dunno.

HOWEVER ... Did you notice how BB posed the very same question (above) and got some great answers? hmmm. That tells ME that

  1. You may get better answers if you don't start offending everyone out of the gate.
  2. ActiveRain may (and I dont know BH too well) have some more respect floating around ...? Maybe?

Anyway, like I said earlier... I guess this is all more confirmation that we need to prove ourselves in the world... 

~Mariana 

11/10/2006 09:29 PM by Mariana Wagner ~ Colorado Springs REALTOR® (Wagner iTeam -Keller Williams Clients' Choice)

Now we're talking! CB welcome to my blog. I think you will find the environment around here a little different. As long as everyone respects the other person's right to disagree, we will get something accomplished here. And CB, if you ever have a property to sell in my neck of the woods, then give me a call, I promise to make us BOTH a lot of money on the deal. Ok folks, have at it!!!!!!!

11/10/2006 09:29 PM by Bryant Tutas-Tutas Towne Realty, Inc

CB...I am not sure why all that happened. As you know I was pretty concerned. I understand things got out of hand but that should not have stopped PROFESSIONALS from stepping up and getting to the bottom of what it is that you wanted. Which of course, is for us to explain what entitles us to our paycheck. I will let others explain that. I myself, will apologize for the behaviour for those that you encounter on Bloodhound. This may have been "gruff" on your side, but your "meat" question should have been answered ASAP. This probably would have helped tremendously. Thank for returning and thank you the cussin' promise. We appreciate that...I also wish to thank you for accepting my invitation to visit us here. I do hope that here your questions, concerns and comments will be addressed with respect and in a civilized way...P.S. Don't worry about that ROAR down there it's my trademark here ROAR means be a part of the solution, not a part of the problem...

TLW "The Lovely Wife"...Thank you Sir CB...ROAR!

11/10/2006 09:31 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

Candybags,

I can see where you would be angry and I would like to apologize for what you and your sister had to go through.

Would it be pointless to say that all Realtors are not the same? As in any profession there are good and bad. As you noted, just reading this blog has given you some idea of what some Realtors do everyday in their business.

Some Realtors are extremely serious about what they do and when they feel that they are being criticized may get a little defensive. However, you have every right to ask the question and if a Realtor cannot give you a straight answer, go elsewhere.

As far as the fee that a Realtor charges, that is strictly up to the consumer and the Realtor. If you or any consumer can strike up a deal that you both agree with, thats what counts.

And I have to give you points for not getting "the Lovely wife" mad. 

11/10/2006 09:35 PM by Karen Hurst ~ Real Estate Broker ~ Warwick ~ Rhode Island (Storm Realty LLC)

((of topic... )) For now I have changed the profile up a bit ... until the "D" becomes more involved... Sorry for the confusion... But you DO get kudos for guessing right ...?

11/10/2006 09:38 PM by Mariana Wagner ~ Colorado Springs REALTOR® (Wagner iTeam -Keller Williams Clients' Choice)

I would like to say I did not read the post everyone is talking about in this blog and the comments attached; BUT every real estate agent SHOULD have THAT question ready to be answered to everyone that comes across their path...if they cannot answer that question...then as a potential client...I would NOT use their services....

As with any professional service GO SHOPPING for the right professional to do the job..... friends and relatives are good people to go to for advice...if THEY had a good experience with their agent, then chances are you will too!

That is why I have customer testamonials on my website. ;-D

11/10/2006 09:46 PM by Central Florida real estate - Alexander Harb PSEM®, E-Agent® (Beach and Luxury Realty Inc.)

You know, things happen for a reason. I found that Bloodhound blog quite by accident ...I don't know how it happened ... I was clicking around on the internet of an evening, probably following an interesting link or two, and there it was. Perfect in all its pontification. I am glad Russell Shaw deleted my post!! I am. I am glad that he just doesn't "GET IT". It is clear to me that he just doesn't "get it" because the last thing you do is open your mouth before you know what the shot is!! - anyone know where that line came from?? Packet of e-M&Ms to the first right answer ;) I believe his "followers" (drunk and watching TV as they are) could've stood to learn something. A whole different e-atmosphere on Broker Bryant's blog though. Intelligent responses and an ability to soothe the savage beast - Broker Bryant and his wife are definitely in the right profession. 

Question: How are you going to deal with the brokerages that charge low flat rates and even give back a buyer rebate? Redfin charges a $2000 flat fee to list and gives back two thirds of the commission to the buyer. Buysiderealty.com gives back a whopping 75% of the commission they receive to their buyers. These are the two models I know about online - there are plenty of other flat fee MLSs and store front commission slashers. I don't see how this business model can lose - of course, I have had more than a couple of bad experiences. What say you all? 

11/10/2006 09:48 PM by Candybags

Karen, I got mad at the Realtors who were involved in all of this. They were not Professional and reflected our Industry badly. I mean really, our code tells us CB's needs come before our own...It was pretty obvious these Realtors were avoiding CB's bottom line question by adding fuel to the fire...Not a good thing. When a fire is burning it makes more sense to use water to put it out instead of gas...TLW...ROAR!

11/10/2006 09:52 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

CB...Would I be correct that you are from the U.K. I sense that...TLW...ROAR! 

11/10/2006 09:59 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

As long as it doesn't go against RESPA (enticement to buy) laws, any agent can give money back to another party in a contract. Caution MUST be taken tho...

Now- "flat fee MLSs and store front commission slashers" WILL lose.  Why? Well, based on what we are all talking about anyway... VALUE will beat out COST in every field. Wouldn't you rather have a well-built space ship to take my clients to space in that may cost more, than a so-so spaceship that may cost less up front , but may cost you more money in repairs ...?

I am not worried about com.slashers- as I am confident in MY value. Why? There are realtors (reel-tors) and then there are REALTORS. I am a REALTOR. Cheers!

11/10/2006 09:59 PM by Mariana Wagner ~ Colorado Springs REALTOR® (Wagner iTeam -Keller Williams Clients' Choice)

Sometimes you GET WHAT you pay for, Mr. Candybags......

I have a listing in Wedgefield (Rocket City or Cape Orlando Estates if you know where it is) and I do plenty to market the listing. I am friends with the owner and I helped him find that plot of land he is standing to make about $200,000 on.

I DO have flat fee listings and reduced commission listings BUT I do MORE than the other flat fee and reduced commission agents do.

I have heard that some flat fee agencies JUST put your home in the MLS...NOTHING more... they may make up some flyers, BUT you do the rest...I think they do the paperwork, but the negotiating and keeping on top of all the details (title work, loan application of the buyer, inspections and everything else all the way to closing -- some 200 steps in all) they just do NOT do.

I have heard of a brokarage that kicks back part of the fee they get to the owners, BUT they make it back by getting fees through their mortgage division and they state that in their company disclosures. They are on the local radio here in cetral Florida. So they are working smart......tough to beat a comapny like that.....

I AM beginning to do the mortgage side of the process, so I might be able to start doing that too....I can legally take part of the fees a mortgage company makes if I do the right things, even if I am not a licensed loan officer.......as long as the client is notified in writing about it.......sounds kinda neat, hmm?

I hope this partly answers your question...there ARE agents out there that will make concessions if YOU need them.....I am one of them.... :-D

BTW the concessions are on MY side of the split...NOT the buyers agent....2.5 - 3.0% is always a good lure to catch a "fish"...feed them and they will come again and again.....Depending on the sales price, the seller can (and has gotten) many thousands of dollars from my concessions......

11/10/2006 10:00 PM by Central Florida real estate - Alexander Harb PSEM®, E-Agent® (Beach and Luxury Realty Inc.)

Bryant You are totely right on the mark! Plus I hate toi say there should not have been a slam match. Never argue with a a potential client. I've turned thsoe around.

11/10/2006 10:02 PM by Rob Wills (Gilpin Realty Inc.)

Cb, that's a good question. From my perspective, I don't work with buyers so if their Realtor want's to share commission with them then that's all right with me. Assuming it's done legally and is not mortgage fraud. But that's a subject for a different thread.

By being a listing agent, I control the inventory and I control the commission. Granted I will lose some business to a Realtor willing to charge less of a commission, but that's OK. I can't list them all. Getting business is not an issue for me. I work a very specific market and have been the top lister for years. Even though I work form my house and I work by myself I have no problem competing with the big boys. It really is about the individual Realtor not the company.

In this more difficult market I am actually seeing the discounters struggle quite a bit, at least on the listing side. The fact of the mater is that if the seller is not offering a competitive cooperative commission the house will not get shown. Unfortunate? maybe. But it's human nature. Also, you read the paper and see the types of incentives that builders are offering to buyers and Realtors, sellers have to be able to compete. 

By being able to offer a competitive or better than competitive selling side commission and by pricing properly, the listing will get more exposure. More exposure creates, more offers and higher selling price. You cannot achieve this by charging a lower commission. IMHO. 

11/10/2006 10:09 PM by Bryant Tutas-Tutas Towne Realty, Inc

Mariana - I do see your point. However I think we need to try and compare apples to apples and oranges to oranges. Space travel is a highly specialized field - the problems we encounter are really in a realm of their own. There is really nothing to compare it to. So, for the sake of argument, let's use Walmart vs. All other stores. I guess I am a bit of a cheapskate but then there are thousands like me. The Walmart family did not get to occupy the highest echelons of wealth in this country (they occupy something like the top 3 or 4 spots at last count) by forgetting about value. They do something really interesting - they combine value AND low price. Walmart really are tough to beat. Being anal retentive, I found it necessary to document my grocery store findings for six months, comparing Walmart (a store I have tried to stay out of for the longest time) with the local major grocery retailer who has sucked my wallet dry FOR the longest time. I stand 100% behind my final observation - Walmart is CHEAPER, the service BETTER, the value UNDISPUTABLE. I couldn't believe it and internally chastised myself for being such a darn snob. (Lovely wife - my grandpops is from the UK and is a horrible influence on the family with his demanding and dictator-like ways. We all inherited his genes.)

To further illustrate the Walmart concept of value and service and cut throat prices, consider the following eavesdropped conversation which occured quite by coincidence a couple of days ago at work:

Co-worker 1: "Thinking bout selling my house."
Co-worker 2: "Who you using?"
1: "Not sure. Wife was thinking remax down the street but I was thinking buyside. the buyer rebate will help big time with the closing costs. I might even be able to reduce the mortage amount."

No kidding. How many times in how many homes in how many cities in how many states do you suppose this conversation is being held? Do you perceive such brokerages to be a threat? This is a genuinely interesting concept to me. I am not going to be like your regular common garden client. Not only do I have bad experiences to draw on (unfortunately) but the analytics of this situation interest me. The only way to draw a conclusion is to listen to what those people who actually DO the job have to say.

11/10/2006 10:20 PM by Candybags

I had a client once that did not want to pay commission because when he sold his last house his agent sold it in a week.  He resented her making her commission.  I told him instead of being resentful he should have gave her a bonus.  Would he have felt better if it had taken her a year to sell his house?  NOT.

11/10/2006 10:23 PM by Vicky Poe, Realtor/Apprentice Auctioneer (Realty 1 Group)

Broker Bryant and everyone, what would constitute a typical listing arrangement for you? How would you differentiate yourself from an online brokerage that offers full service? I have never used one of these models personally but of course they look mighty interesting. I would definitely be open to the concept. I am gleaning from different articles that online discount brokerages are frowned on by the real estate community. If one should come along that promises full service with actual agents at (for argument's sake) a .5% listing fee, how would you match that? I guess this is just another way of paraphrasing the original 6% listing question I had but nonetheless I am curious to read what the real estate community here has to say.

11/10/2006 10:31 PM by Candybags

CB, more food for thought. By discounting commissions, brokerages are forced to concentrate on quantity over quality. This forces then to hire as many Realtors as they can whether they are good at their trade or not. The best way to improve quality in our business would actually be to raise the commissions. Thereby forcing the consumer to make a more intelligent decisions when hiring a Realtor and forcing brokerages to hire quality not quantity. There are some of the larger companies that make their money by renting desks. It's a numbers game. Not to say there aren't some excellent Realtors that may work for them But to a newer Realtor, going to work for a company with that biz plan, is certain death in the business. 

And again commissions are worked into the value of the house. I mentioned this earlier on the other blog and was able to read your rebuttal prior to it being deleted. Your rebuttal actually proved my point. Property values are based on previous sales. The comparables that are being used include the commission that was charged. Over a period of time if the bulk of the commissions being charged went either up or down, the property values would do the same, being based on previous sales. So my point was, that if commissions went down on the majority of properties sold then since the value of the property would also go down, the seller received no benefit. Think about it. 

11/10/2006 10:36 PM by Bryant Tutas-Tutas Towne Realty, Inc

Alexander Harb - are you able to represent both the buyer in finding a house and then, when you've found it, represent them on a mortgage too? Not sure if I read your post correctly. Wouldn't that be a conflict of interest?

11/10/2006 10:41 PM by Candybags

CB, there are numerous companies that will list a property at a flat fee. Very minimal. I have seen them a slow as $295. For this they will place the property in the MLS and may even provide some services. The seller has to agree to offer a commission to the selling agent. There are several ways these types of companies make money. Some are E-businesses and make their money solely on the upfront fee. They offer no services. Some have Realtors and their goal is to get as many signs in the ground as they can. Why? Because they want the buyers. They make money by selling other Realtors listings or selling their own for the selling side com. They may be selling mortgage services as well. But one thing they are not doing is looking out for the seller. The seller is not their consumer, the buyer is. The seller is their bait.

11/10/2006 10:46 PM by Bryant Tutas-Tutas Towne Realty, Inc

Broker Bryant, I understand your point. The question is, would a seller? Most of them are having a hard enough time as it is adjusting to a different market - they still think the house is worth the same as it was a year ago. What caused the prices to drop? Supply and demand. How would selling a house by yourself without paying any commission cause you to sell the house for less than an identical house next door? I don't see sellers doing that. I don't think consumers necessarily see the price of a house as having a commission written into the asking price - the price is what it is. How did they arrive at that price? MARKET VALUE. It stands to reason then that a FSBO seller would advertise the house for sale at market value and would most definitely NOT lower that asking price by a corresponding 6 or 7%. There are two ways of looking at it and the only way to be certain would be to conduct a controlled study of how FSBOs behave vs. represented sellers. Also, where did NAR get that statistic from? You know, the one that says an agent sells a house for more? I believe their concept is flawed.

11/10/2006 10:48 PM by Candybags

This brings me to my final question of the evening. What are the feelings of everyone here regarding buyer rebates? If I personally chose to go with a company that offered a buyer rebate to their clients and I made an offer on one of YOUR listings, how would you react? Knowing that the company I am with is going to give me back, say, 75% of the commission, would that make you hostile and why? or why not? Be honest. This may well be a question you will be faced with daily 6 months from now. Check in with you all tomorrow - thanks for engaging in this debate with me.

11/10/2006 10:57 PM by

I learned my lesson years ago, when buying my house. The seller was doing FSBO, would not pay a commission. So, we did it her way... During the negotiations, she tried to back out 3-4 times, changed the closing, tried to stay longer, all kinds of things. This was my family's 1st home purchase, so we knew nothing... A realtor would have helped us on all aspects!

11/10/2006 10:58 PM by Andrew Cox (Cox Property Services)

The NAR stats are from the public records. It is a true stat. The reason being that there is no better exposure than the MLS. Most qualified buyers work with Realtors. It is actually supply and demand at it's finest. More exposure more demand=higher sales price. Granted when the market was booming everything was selling. FSBOs included. In fact commissions were at an all time low. But not now. Now they have to be able to compete. FSBOs are way down. Commissions are on an upswing. Why? Because Realtors have the buyers and the consumer knows that. The game has changed and will surely change again. May be a few years but it will change.

11/10/2006 11:01 PM by Bryant Tutas-Tutas Towne Realty, Inc

It took me almost as long to scroll down to leave this comment as it did to read what you had to say today! I just wanted to say  YAY!!! I am so glad you are out there inspiring real estate practitioners to step up to the plate as PROFESSIONALS!  I would like to put in a word for Positve PR...think we as a group need more of it..and for Education...setting higher standards for and also letting the public know the level of focused attention and CARING that goes into what we do. About commissions...I made more in one deal when I was in executive search 15 years ago and it was way easier than what I do today...so I think we REALTORS must either be crazy or love what we do. I sure love this business...I read the AR BLOGS and think there are thousands of us out here...YAY again!

11/10/2006 11:03 PM by Asheville's GREEN Land & Homes ECO-Steward Realty

CB, I answered this one in a previous comment. I could not care less if the Realtor rebates the buyer. As long as it is disclosed and allowed by the Lender, so it is not fraudulent. Mortgage fraud is where this biz plan is going to have issues.

OK that's it for me tonight. I really enjoyed this thread and will look forward to coming back to it in the morning.

11/10/2006 11:05 PM by Bryant Tutas-Tutas Towne Realty, Inc

CB...Sleep well I hope we have helped. I also would like to thank my peers for their professionalism and respect to CB. You have made me very proud...Sleep tight everyone...The Lovely Wife...aka...TLW...ROAR!

11/10/2006 11:20 PM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

Awesome post, BB, per usual!  One thing I can add is to tell them that a discount commission broker is not going to step up to the plate and circumvent problems or closing slowdowns before they happen, at least not the way I will.  I develop a rapport with their lenders, even if I didn't know them before; I contact the title company contact weekly, schoomzing, asking questions, making sure there isn't some piece of the pie missing to cause us to delay closing; I tell them I am taking the stress out of their lives by finding problems and solving them before they even know about them. And then by golly I actually do what I say I'm going to do!

11/11/2006 12:04 AM by Carole Cohen (Howard Hanna Cleveland City Office)

I'm still working as a buyers agent with designs on becoming a listing agent in the future. I feel that the value I add is a human touch with a focus on the basics. I shake hands and introduce myself, I call a spade a spade and I enjoy being a part of a "Team" that is trying to win: ie. get the best deal. I also keep up to date with my market including local laws and regualations that may affect my clients.

11/11/2006 01:02 AM by Ryan Windsor (RE/MAX Crest Realty (Westside))

For those who like summaries:

I am a calming force. I am a trusted advisor. I am your friend. I am worth it to have the layer of legal protection (buffer) between you and the buyer. I am worth it to have the layer of emotional protection (buffer) between you and the buyer. I am the difference between your property being "For Sale" and being "SOLD". I am the difference between receiving the highest price possible for your property and receiving too low a price. I make sure the proper disclosures are completed and the paperwork is properly filled in so you don't get sued. I am an excellent negotiator and make sure you do not get eaten up in fees that reduce your bottom line. I am not Zillow that will suggest a price that is so high your home will never sell or so low that you will lose thousands of dollars. I don't want you to be one of the ones who tried selling a home by yourself who said, "Never again will I try to do that alone!" I will assist you with the rules governing real estate set forth by HUD, FHA, etc. I will assist you in qualifying a buyer. I will manage the roughly 400 phone calls and 70 signatures that are involved in the average real estate transaction. I will be a true advisor who will be blunt with you. I will show you the flaws you don't see in your home so you can fix them rather than have no offers come in. I can help make a deal come together and hold to closing. I represent your best interests. I keep my client's information confidential. I split the commission four ways: with the buyer's broker, the buyer's agent, my broker, and myself. I still split the commission three ways (bringing the buyer): with my broker (buyer side), with my broker (listing side), and myself. I will keep your house (on the average) from selling at 16% below where it should have according to NAR statistics. I will keep you from being penny wise and pound foolish. I have the graduate level post-licensing real estate coursework to help you make the right decisions. I am your time manager and appointment scheduler and I represent you at multiple meetings so that you won't have to be there. I will save you days on the market. I invest time and money in your home and am entitled to payment for my services. I am the real estate professional and you are not. I can reach many more buyers due to my targeted online marketing methods. I receive a commission that is worked into the price of the home through property values. I will create more exposure which brings higher demand which yields higher sales price. I will provide you with unparalled service, quality, and experience.

Did I miss any?

11/11/2006 01:20 AM by Lawrence Kansas Real Estate Rob Lang CRS, GRI, ABR, ePro, Realtor (Realty Executives, Hedges/IHaveAddresses.com)

This is in response to Damion's Comment.

"Think about it - if they can't negotiate their own commission - how in the world are they going to negotiate a better deal on your most valuable possession? "

This is a response I have been using for years. It says it all. I usually let the seller or buyer know that I am working for myself up until they sign the paperwork and that is when I go to work for them.

I only skimmed through this thread but just wanted to confirm what Damion had said it is the key factor when negotiating my services.

Thanks Jay 

11/11/2006 06:00 AM by Jay McGillicuddy~Real Estate Broker (Prudential Verani Realty)

"Rob"...I really wish someone had just done that kind of summary over at the Blood Hound Blog...Very Professional.

BTW...I agree with CB  "quit the digs"...CB's paycheck has nothing to do with his question...His question is about our paycheck, not his...

Conflict of interest=Depends on the Realtor who holds both licsenes...Touchy topic with me! Here is my post about multiply licsenes and a Realtors WALLET!

TLW..."The Lovely Wife"...ROAR!

11/11/2006 06:25 AM by "The Lovely Wife"...Broker Bryant's Wife... (Co-Owner Tutas Towne Realty, Inc.)

BB (& TLW)

Your comments on “Bloodhound,” and that of TLW, show an immeasurable degree of honest professionalism. You never attacked Candybags on a personal level, showed some agreement with his allegations, and answered his basic question.

And now I see CB participating here on AR—that’s great!

It gives me more pleasure than usual to award our coveted (because it is so rare) Honorable Mention Award (your second, I believe): Med & Jay's Honorable Mention Award

 

 

 

Jay Merton

11/11/2006 07:05 AM by Boomer Jack's Conversations & Cheesy Stories (Saturn of Saint Paul)

BB,

What a great post and great debate (candor, honesty and respect) this is. This post should be ranked up among the AR all-time best.  I think it epitomizes what AR should be all about! The core question is straight forward, appropriate an