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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?

Posted by Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc on 11/10/2006 04:43 PM

Comments (145)

disentermediation, educational

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

NOV

2006

"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!

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

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.

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.

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.

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.

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.

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

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.

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?

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.

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.

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"...

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.

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.

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!

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.

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?

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.

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.

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!!!

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

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... :) )

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.

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?

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.

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.

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

You may get better answers if you don't start offending everyone out of the gate.
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

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!!!!!!!

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!

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.

((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 ...?

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

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?

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!

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

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!

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......

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.

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.

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.

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.

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.

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.

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?

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.

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.

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.

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!

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.

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!

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.

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!

NOV

2006

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!

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.

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?

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

"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!

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

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 and thought provoking.....and probably good for many professions including mine. No doubt that a nerve was stricken.

Kudos, Great job of exercising respect and control.

So you got me curious and I just had to check this bloodhound blog... what a sad blog! Full of egos and attitudes clouding judgment and reason. Classic example of what not to do when confronted with offensive, misinformed, and abusive comments.

Candy Bags said on the Bloodhounds blog >"I saved (coincidentally) that same $200K in commission that you mention. I bought more investment property."

While I am not going to go into why I charge what I charge debate - I just want to ask CandyBags, when he bought the next investment property - did he use the 1031 exchange?

Wow! If I ever think about working for consumers again I am going to re-read this. Mr. Bags is entitled to his/her/its views but I can't imagine having that listing. Lord help me if I ever start working with buyers and have one like him/her/it.

BB and others here, you have my respect for even answering this guy/gal. I am thankful that my clients appreciate all of the work that is put into solving their problems (aka selleing their property). The listing appointment with this guy would last about 25 seconds. I need a client like CandyMan like I need to shoot myself in the d*ck.

Trouble going in...Trouble coming out

Delicate R.

CB~ "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."
I do not care what an agent does with their commissions. They can make it into a paper mache ball and roll it down a mountain for all I care ... :)

TLW~ "CB's paycheck has nothing to do with his question...His question is about our paycheck, not his..."
Ok... To some degree I agree. But ... he is questioning the validity of what we earn, and I was just comparing a "stable" income to a "commissioned" income. I was not trying to say that he doesn't deserve his $$. I know several engineers who work for the space program (Maybe they know CB..?) and I know that they earn A LOT, and deserve every penny. Maybe my point just got lost... ?

CB~ (again) Three more points...

You are right. Many people would rather get a rebate/discount listing company ...duh! But here is the landscape in my town: Sell4Less sign in yard... Our experience shows that Sell4Less agents are all about quantity over quality. Right? They HAVE to be to make a living. Now, we have a buyer who may be interested in the house. We represent our buyer, not the seller, right? We throw a low offer at them with several concessions. It gets accepted. Why? Mr.Sell4Free wants the property gone, because time=money, and statistically Discount Listing homes are on the market 2x longer than average*(see #2). What happens during contract time? We wind up doing it all. Our buyers get everything they want, because the selling agent doesn't have time to deal with his fiduciary duty to his seller. It happens all the time.
We run a pretty extensive "ReListing/Expired" Program. We happen to have an intimate knowledge of the "market share" of discount listing brokers. Here, 76% of ALL listings taken by a discount broker EXPIRE and are relisted by a "conventional" broker (Keller Williams, ReMax ...). Now, was it really a "discount" that the house sat on the market almost TWICE as long- How many mortgage payments were made? How many rate-locks were missed? How many days did the house sit empty... ? I completely agree that PRICE is king. Price it right... they wil come- but, we (in our town) also depend a lot on marketing. If there is no money for marketing ... you get it.
Maybe my comparison was off, but my business is not comparable to WalMart, either. I cannot buy their stuff. There is no value if their products last a fraction of the time that other store's products do. It is a throw away store. Buy it. Wear/Use it. Throw it away. There is no quality. They are better compared to discount brokers. You get what you pay for, and I would rather be known for Quality over Quantity.

Now, I'm not saying that we don't give discounts based on a Seller's situation, but like BB said, "commissions are worked into the value of the house" and (most) see it as the cost of doing business.

All this said. I am SO GLAD that CB has been voicing his/her (did I miss something?) opinion. Maybe it will force us all to think/ re-think our value position.

Cheers and Happy Weekend!! ~Mariana

(My magical word of the day is "Passion" ... appropriate...)

OMG! I could've written my own post with that last comment...!

But where's the fun in that?

Oh~ and CandyBags has really made his/her way around the RE community with this frustration. I have found his/her comments on RE blogs other than Bloodhound (who, by the way, those agents WERE very unprofessional...) and AR.

I hope that maybe this AR blog helped shed some light on the good side of brokers. ?

Finally got through all of the posts here and on bloodhound. Candybags is just one of many consumers out there that has been exposed to people in our profession who either chose the almighty dollar over the consumer's best interest and/or the ever-loving new realtor who has not been trained nor had the experience to give them insight into the arena of Real Estate.

It is too bad that ego's seem to get involved when it comes to providing explanations for our profession. Yes, sometimes no matter what you say little will be heard or perhaps even misconstrued. In life it is vital to understand that others may not be coming from the same place in life that you are and compassion for the other individual is sometimes needed and works better toward being able to arrive at a neutral ground.

Some of us are very passionate about our profession as well as passionate in protecting our clients and see the value in what we do. Don't let that passion color your ability to communicate in a sensible way what you do. And if it becomes a stand off, know when to walk away. We can't save or change everyone's mind especially if there is a lot of baggage... there's an old saying that I keep close to me and that is ... you can take a horse to water but you can't make them drink.

Bryant and LTW, I commend you for your effort and your explanations of what a REALTOR does and how we do earn our commissions as well as keeping it professional, as it should be.

Now, let's all get back to helping our clients and being the best that we can be. And for those new agents in Real Estate...this is an example of how important it is for you to get proper training and ask yourself if your heart is large enough to be in this business. It takes a lot of heart!

Good morning Broker Bryant, Lovely Wife et al. Here I am again, the proverbial bad penny. Also a dominant type A who will keep pushing until satisfied with the data.

In reply to Christine: I sure did use that 1031 exchange. I bought an apartment building. It's been a tough year because the building was a run down shell, the tenants were crazy, and I have no doubt that said building has contributed to my dyspeptic attitude of late. That aside, any further responses to the questions I posted late last night when I should've been getting some zzzzzs??? - Broker Bryant, thanks for your replies.

1. Your feelings regarding buyer rebates? Redfin for example do not do business (yet) in my area but they are slated to arrive next year ... if Redfin were representing me as a buyer and you knew that Redfin were rebating two thirds of their commission back to me, would that have any kind of influence on your decision about whether or not to accept my offer on your listing?
www.redfin.com

2.. How do you differentiate yourselves from an online brokerage that, say, DOES offer full service for .5% while at the same time offering that full service with a real live agent? .5% is a big difference from 3% - I don't know of any company that offers anything that low but I would hazard a guess and say that it's only a matter of time.

The internet is formidable.

To Rich - you will most certainly need to be on your game to work with me. You should expect nothing less than that. Judging from your post, I would most likely not be too thrilled at the prospect of working with you either. You asked for it. Realtors (I am going to stop with the needling and spell the word correctly out of deference to the Broker and his lovely wife) are completely and utterly responsible for the public image they have created. Therefore it is to be expected that ANY consumer you come across is going to have to be won over. I am telling you like it is ... from the front line. And if realtors really want to make over their image, let me make a suggestion. For any member of our armed services who have served a tour of duty over in the Middle East, so that the rest of us can sit comfortably at our PCs and pontificate (myself included) PROVIDE YOUR SERVICES FOR NOTHING. Represent them free of charge. And give your commission earned back to them as a way of saying THANKS FOR PUTTING YOUR A$$ ON THE LINE FOR ME. I would. I probably wouldn't make much money but, along the lines of the attitudes in this thread, money isn't everything. And what better way to put your money (literally) where your collective mouths are and turn the GENERAL reputation of realtors from S**T to sugar. I hope that what I have had to say has been enlightening to anyone who stuck with me - I represent the multitude, people. You didn't have to pay for a fancy survey, you didn't have to wait for NAR to come up with something three years too late, you have it like it is RIGHT NOW. This is the marketplace you are dealing with, these are the feelings. The discounters will prevail easily if you let them - Web 2.0 has only just begun.

This one certainly got the blood pressure up! There is much deception in RE, period. This article from Realty times back in August talks about what the agent brings to the table...I keep this on file, It seems the more we transistion in RE, I think the more valuable we become. Keep the boxing gloves handy!

Muah Ha Ha! There are always obstacles in every field. I love the internet and I love the competition that it brings (including Type A commenters like CB...). It keeps us on our toes.

Will an online agent "roll up their sleeves" and help clear the yard of debris for an out-of-town seller? ...Hand deliver contract items to needed parties? ...Provide comparable properties in a hard to comp area for the appraiser? etc...? Probabaly not. Will we? Absolutely.

What I bring to the table is knowledge and keeping the deals together. There is always something that comes up and if left too the buyer and seller these deals would fall apart.

Oh I missed all the fun!! So many missed opportunities to share my thoughts, but as always the wiser BB has spoken and now my available comments are to a minimum. Sorry if some are repeated here in my comment.

So I'll chime in with at least something worth saying. And I'm not breaking out my pad to rebuttle the so many points listed above, but I'll try to make it a decent comment.

This is Nick, a.k.a. BigNick on AR but known mostly known as Nick the appraiser and I offer a comment from another perspective.. why? Because PERSPECTIVE is what its all about.

"It is what it is" but everyone will live their reality from their point of view. I comment because I have sold a few homes also so here is my reality.

FSBO's do sell for less. I can prove it with local data. Why do I think? They are normally overpriced to start. 1- because their emotional attachment gives them a false sense of market value. 2-they don't have all the market data (past and present) to price according. 3-they reveal too much at any showing (this applies to housing, mind you, not land) If you sell for less and you 'saved the commission', did you really save? or did you do all the work yourself for the same (or less) net amount? difference perspectives will tell you different answers. the FSBO will never see.. call it ego, call it ignorance, call it inexperience, call it all 3!

DISCOUNT agencies will eventually go under due to lack of providing quality service. Get it put into the MLS for a flat fee. When the prospective buyers show up, well, see #3 above. I recently visited a seller than paid a flat rate to get into the MLS. I told him that his house will see for $x dollars, about 35K under list price. 8 months later, after price reductions, it sold for $14K less than what I told him originally.. account for the 8 month decline in prices and I was right on the money. He should have paid me for an appraisal 8 months ago. best money he could have spent.. 8 months more of driving over 70 miles to work each way with health issues.. He didnt save anything. the 3% he 'saved' he paid in stress, 8 months of mortgage payments, gas, etc.

Do you think that getting a rebate is a deal? Your probably overpaying up front anyway, so if you believe it, then your perspective will tell you that you got a good deal.. NOT! they rebate you because greed is a #1 motivator. this keeps the clients loyal because of their 'interest' in this relationship. Did you really get the most for your property? It closed just to get the deal done, thanks for my 25% of the commiss.. and bye now. see the picture? maybe, maybe not.
Discount companies don't care. Its all about volume and quantity, and basic economics will tell you that.

I don't believe that it is a black-and-white issue about where the money is earned. It's different for different deals. On one deal it is the pricing of the property. You say its $275K Mr seller? I got him 300K in about 60 days listing to close this year with the declining market. Gave them advice on how to handle their out of state purchase and they moved without a glitch. WHY?Because I had the facts (data) and they were willing to do what I said to stage the house correctly. 6% of that 300K sales price is 18K, they netted 7K more than their original 275K they would have done FSBO, without showing the property themelves. without being lost, and they paid me to stress for them.

On another deal it may be the negotiations. It may be how you the inspection results are handled when there is a defect involved. Any delay in a sale is normally a mortgage payment coming up soon to get paid. 3 or 4 of these will account for a nice piece of change. Maybe that delay affects the purchase of your new home when your still trying to sell this one. Each scenario is different.

Now, are many Realtors an embarrassment? Yes. Inflated Ego's, no interest in the person selling / buying, no experience or willingness to due their diligence.. they are everywhere. But a good agent will be worth their weight in gold be defending the client and looking out for their best interests.

Can you sell on your own? YES. Especially in a market where your property is in the path of growth. Easy-peasy-lemon-squeezy. Of course! If you do you diligence, its not rocket science (no pun intended). In a market experiencing decline or record numbers of listings, you don't have the info, data, knowledge to truly know how to get the most. (maybe one would think by using IDX MLs at Realtor.com, but we all know that is outdated and time-lagged data) NOW, your sales price may be the most in YOUR head, so your ego tells you that you did fine. I preview, meddle, call realtors as an appraiser, etc.. so my perspective is based on more facts than you, as a FSBO, have access to. It depends on the local market and what consumers are willing to pay, not what you want, or what you 'think' its worth.
Oh well.. just had to get something on the board.. this was too juicy not to say something.
Gotta go and earn my commission! see youz around.

nick

Thanks for your perspective Nick. I, too, am at work but obsessively clicking back n forth between this and blueprints ;) I am definitely gaining a better perspective on how the "best" realtors operate... What is that award you've got goin on up there BB? See how you are? You take a loudmouth (me) and make me listen. Kudos to you. And a HUGE finger to Russell Shaw at the Bloodhound blog who censored me. Irritating Commie. Take a lesson from BB here - LEARN TO TURN IT AROUND BUB. Even if you DO make ridiculous posts that end up making you look less like an "expert" and more like an argumentive knucklehead. Who do YOU think looks like the ignoramus here?

CandyBags asks > 1. Your feelings regarding buyer rebates? Redfin for example do not do business (yet) in my area but they are slated to arrive next year ... if Redfin were representing me as a buyer and you knew that Redfin were rebating two thirds of their commission back to me, would that have any kind of influence on your decision about whether or not to accept my offer on your listing?
http://www.redfin.com/

I am an agent in NYC - so in our state there is no such thing as a buyer agent. We all represent the sellers. Not that an agent can not represent the buyers - its just something that is not practiced here. In order to be a TRUE buyers agent - then your broker firm can not have listings. This is a whole other arguement in itself, but for this question, I can not answer you. BUT, with regards to any offer on any of my property - I would absolutley present all offers to every owner. It is their right to know. Hey, listen some low offers have some great terms that are worth the while to look at and in the end, may be beneficial for the seller to entertain.

The internet is formidable

To answer your second question, any agent that works for xyz firm who lets say, is discounted has to perform on quanity, like others have said here. Quanity in my opinion is great. BUT, I want to know, because of my own standards that I did not undersell my sellers. I, like I said, represent sellers. When they hire me, they know that they are getting 110% of me because these are people I will have to see at a later date. I will have to face them at somepoint. But, you are not questioning my morales you want me to justify why I feel that my fees are justified as opposed to a discounter. Because, I have to protect my sellers from the buyers and agents who are the money hungry, no morales, a dollar today means more than anything type people. I serve as their (the sellers)guardian. Yes, I market, yes I hold open houses and yes I do all the things that a realtor is "suppose" to do - but I think that any agent or any homeowner could do those things, I mean lets face it - But, when a seller entrusts to me their most valuable asset, then my morales do come into play. I want them to make the most amount of money that they can - I want them to know that I advised them correctly and I want them to know that I will never never have to justify my fees to them. When the time comes and my name comes up in coversation, I want to know that people who PAY me, TRUST ME.

To put a dollar amount on each service is not something that I can convey to you. (not that I don't want to - but its impossible) I don't actually form my fees like that. But, I can say that there have been sales that I made alot of money on and some that I did not. It evens out. But for the most part, I can sleep at night. There are alot of professions that I could have chose from, I chose Real Estate. I understand that alot of people have been burned by a Realtor, but I think that you will start to see that standards are being raised and the consumers are not at anyones mercy anymore. That is a good thing. I really do feel that.

I am not sure that I gave some insight to your questions, but to know that you have a good agent - I think you should know the agent first. If they are a good person - then they are a great agent, and its not always about the money. Trust me when I tell you.

Best wishes to you always -

What an interesting blog! I was surfing because a friend invited me to join this community, and I was compelled to read to the bottom.

CB, what someone says is full service and what is really full service are two different things. One cannot give true full service as a discounter and remain in business. I know, because I've tried it. If I had not had full financial support from my husband, I would have been out of business immediately, because I could not have handled the volume that would have been required to support myself.

In addition to all the other excellent comments above, I'd like to add that virtually every state requires a license to represent others in a real estate transaction for a reason. That reason has little to do with marketing or sales, and now has little to do with actually finding the home for a buyer to purchase (due to the internet.) It has everything to do with the fiduciary duties someone mentioned, and clearly CB's sister had the misfortune to deal with an agent who wasn't performing them.

Guidance in the due diligence is where I can justify my commission. There are all sorts of horror stories like CB's sister had. My clients don't have them because I insist they either get a professional inspection or sign a waiver acknowledging that I recommended they do so. That's just one example, but it's an important one. I don't want my buyer to buy a bad house, period.

I agree with CB that representing a buyer as a real estate agent and then as a loan originator is a conflict of interest, and so does my state. I also happen to believe personally that representing both seller and buyer is a conflict of interest, although many in my profession won't agree. I simply don't do it. I may in fact bring the buyers, and help them through the process--but in such cases I make it perfectly clear that I don't represent them, that they are entitled to an agent who does, and I offer to refer them to an agent of their own. Most don't take me up on it, because they recognize that I'm going to treat them fairly even if I don't represent them.

One last thing. There is a strong difference between a real estate agent and a REALTOR. Forgive me if someone has mentioned this before and I missed it. A REALTOR is a person who subscribes to a Code of Ethics and takes a 3-hour class to review it every four years. He or she belongs to a professional organization that confers the right to use that appellation. Not all agents are REALTORS. To call an agent a Realtor when they do not belong to the organization and do not subscribe to the Code of Ethics is misleading to the public.

Thanks for letting me air my two cents' worth. I'll be joining the community--it seems to be a good one.

Cheri Merz

What's deliciously ironic is this debate started on the blog of a progenitor of the rebate model ... you'd expect the discourse to start somewhere where the general thought was the opposite.

If an agent from Redfin were to present an offer and my seller were inclined to take it, I've got no reason to oppose such a matter. It's their side of the transaction and their call.

As for full service at a half-percent (or similarly lower than what I charge, which already exists) we are marketing to different groups. But it's difficult to compare my full-service offering to their full-service offering in such a broad-brush context. I can say that almost everyone has a different definition of full service, in some cases even including their own efforts to market themselves as service provided to the client.

Hi everyone, I haven't been able to get into the system today and it looks like I missed about 13 comments. I have to say, I have absolutely nothing else to add. Everyone has done an excellent job in moving this conversation forward in a professional manner. CB you must be pleased at the responses you have received here. You may not agree with all of them but my peers have certainly responded with well thought out and well written answers to your questions. It's folks like this they make me proud to be a Realtor. CB this is the cream of the crop in our profession. I hope if nothing else we have proved ourselves to be honest and caring professionals.

BTW, CB, I liked your idea on the military. Just so you know TLW and I have twin 31 year old boys. One is ex-Marine and one is active Marine. And we have 5 grandchildren. Real Estate is just one facet of our lives.

Good day, BB. Yes I am going to say that your contributors here have impressed me with their candor and respect. There is hope for all of us, including me ;) I have been enlightened. Surprisingly.

Today is Veteran's Day - I know we all know that - and my comment was just my small way of acknowledging EVERYTHING those in the services go through for us. They make all of our lives safer, no doubt about that. I personally would not want to be in Iraq. But someone very close to me is in the army.

You are a fine person BB. It shows.

CB...Ahhhh...So much better. I am proud of you...You allowed everyone to speak (and you have been polite) and in the process you gained some insight into the Professional side of Real Estate. Thank you for joining us and letting us show you..."we are not all bad, we are people just like you"...The Lovely Wife.

I not only act as an advisor and friend, but how many of us have been in the position of trying to negotiate for the sale of anything we own? I bring AWESOME negotiation skills and always come to the table with knowledge and skills that a normal consumer wouldn't have. I just had someone bring a lowball offer on one of my properties. I was able to blow them away in the negotiations because I had the facts, I knew how to manipulate them, and I have market knowledge!!! That just saved my client 15K. My fees on this sale at full offering price would have been 6K. By my calculations, justification done!

CB, Good evening to you. OK, one more question from me. Can you see, after getting a good idea of how I conduct myself in my business, why people are willing to pay me well for my services?

Also, I invite you to take some time and read through my Blog, it will show you real life examples, of how I help people. Some that are going through some very difficult times in their lives. I think, my posts, will give you a whole new perspective on what it is, we as Realtors, are faced with on a daily basis. And how, some of us, are indeed worth every dime we make. I say it constantly and I will say it again- Real Estate is about people not money.

I am glad we had the opportunity to cross paths. If you are ever in the Central Florida area give me a call and we will let TLW treat us to lunch.

Definately ... Broker Bryant's Blogs (BBB's) are well worth reading through- no matter who you are.

..."The Life of Florida a Realtor ... A look into the business and heart of Poinciana's best... and the LW that supports him!" ...

ok, good night.

CB- you certainly provoked an interesting discussion. You even provided the incentive for me to finish my most recent blog. I have to say that I disagree with you on your concept of value though, particularly your example of Wal-Mart. While I agree with you that Wal-Mart has great prices and service, I personally don't find Wal-Mart as valuable as my local grocery store. The reason is two fold. One, the lines at my local Wal-Mart are usually 2-3 times longer than the lines at my local grocery store. And two the store is physically much larger than my local store. This means it takes me substantially longer to shop there than at the local grocery. For me, my time is extremely valuable; to waste it waiting in long lines or walking from one end of a building to another, is not worth the pennies I might save by shopping there. I think real estate services are similar. While the very savvy seller or buyer might be able to handle their own sale, how much time do they need to spend on the transaction and what is that time worth? Is it valuable to hire a professional to do something if it saves you time? I think that often consumers hire others to do things that they, the consumer might be capable of doing, because it is easier, most cost effective, less stressful, less risky etc. There is value in hiring professionals. Is it a value that you will choose to recognize, who knows? I do believe it is a value that others will appreciate.

TOLW

Melissa, I used Walmart as a case in point because their parking lot is always packed. Since they opened up here in town, the local grocery chain I used to go to (which bilked the HELL out of me) lost my business because I perceived the value to be better at Walmart. Also, their parking lot became significantly LESS packed. I certainly save money on the grocery bill which is important to me because I am a tightwad. That, and I am on the hook for med school bills which is a whole other story. That being said, I do see now that different types of people are going to want a level of service that is comfortable to them. Prior to meeting up with BB and TLW on this blog, my "tunnel vision" would not allow me to accept that concept, due in part to the anger that I had harbored toward the real estate profession in GENERAL caused by the "licensed agents" who were a disaster to work with. It follows, then, that the concept of value is going to be found in each individual's perception of what they need to get out of life. For me, more money is always good because I need to help a certain somebody convert that money into a diploma, which they can use to take care of me in my old age ;) I think that is true of most families with dependant children. For the professional without kids at home, their perception and attitude of what they want out of life is going to be totally different - I don't see Dr. Smith holding open houses and nailing FSBO signs to poles. So it would appear that the real estate market is allowing for every type of business model to compete. And there are always going to be successes and failures. However, I don't think it's really that far off before a full service real estate business manages to be truly FULL service at let's say a .5% listing fee.

To Cheri Merz, why do you think your business model failed? There are 5 key factors to every success or every failure - what would those 5 be in your case?

I think it all comes down to selecting your niche.

Wow.. this has been quite a thread.. From all the vitrol on the Bloundhound blog to the rational and thought provoking questions asked and answered here with Broker Bryant and of course TLW. CB has made us think about how agents are perceived by too many people. After reading the responses to his initial questions I can't blame him for not thinking very highly of agents. I'm glad he decided to check out Broker Bryant and the A/R group. Now he knows how professional agents respond to his very serious question about what we are worth and why.

On the subject of Discount Brokers, I think there is room for all types of services in real estate. My gripe with companies like Redfin and others isn't what they charge or don't charge but rather their business models. Many discount brokers force clients to use their in-house services and there is rarely a discount on those items. I think you will see many discounters who won't be able to survive the current real estate market. What you can do in an up market and what you can do in a down market are vastly different. Discount real estate brokerage isn't a new business model I've seen a lot of companies go broke in the bad times. It's expensive to operate a real estate company. In the bad times the bottom line is narrow indeed. Insurance is very expensive, not to mention E&O, phones, computers, paper, office help etc. Basic advertising, let alone property advertising is very expensive. Hard to charge agents all those fees when they aren't making much money.

I think CB will see the demise of those newbies in real estate. Here in Ca. we have a number of aerospace firms. It's amazing how many new agents go back to Northrup when the market goes south. All we can hope is that states finally realize that they owe it to consumers to make it harder to obtain and keep a real estate license.

As a last thought to CB.. What makes professional REALTORS® stand out is integrity. We all know when we work with a great agent. You can trust them to do everything they have promised and more. They don't quibble if something needs to be done.. they do it. If they say the dishwasher works.. it will work. If they tell you the check is good.. it is good. A professional may not know all the answers but they know where to find them. Real Estate is hard work. Keeping up with all the details of each transaction plus all the other work that needs to be done on a daily basis takes a lot of time and effort. Yes, there are transactions that are easy.. but then there are the others.. I had one last year where 4 siblings were at each other's throats over the family home. One had actually threatened to shoot another sibling. The attorneys only added fuel to the fire. Fortunately I was able to sort it out, get the house sold to a neutral party and funds dispensed to the family members. A good agent makes it all look easy.. so easy that I've had clients who thought they wanted to be agents.. until they found out what it involved and went back to their old jobs. Like my Daddy always said.. a good deal is a good deal for everyone..a good agent makes it happen.

Thanks CB you have made us all think.

Kaye, I have to agree, this is one awesome conversation we got going on this post. If you started at the BloodHoundBlog you can really see the growth in the discussion. It went from really bad to really great. These types of conversations is what will make AR even better than it already is. The consumer can not get this kind of a response anywhere else on the web. It truly was a great experience to see my peers step up to the plate and knock it out of the park. Thanks for reading and commenting.

Sorry that I am late to this party.... 88 comments now? wow

Bryant.... you hit the nail on the head. there are some people that will never be satisfied

Candybags.... in regards to your Sister.... I know most realtors that tell their clients to get a home inspection.

Karen Hurst... you apologized to CB and his sister on behalf of the realtor. But also told him that all realtors aren't like this.

Candybags.... I am not a realtor, I am a loan officer. Just FYI>

Candybags..... Like Bryant talked about and I even read Nicks comment..... discounted brokers will go out of business. The flat fee companies. There is a reality behind this theory. You just don't get the same quality service.

Kind of funny, because this discussion is going on in another blog. Bryant has been to this blog. And I think I might have gotten out of hand in my comment today, but someone had to stand up and make people aware of what takes place. I am tired of the mortgage industry getting slammed because of the bad apples...

Bryant.... just like it was mentioned in here....discount brokers won't cut it. The same thing could be said in this other blog. I think you know which blog that I am talking about. And I didn't want to mention the name of this blog in your blog. It's one thing to educate clients....but another to impliment your THOUGHTS, but making people believe that these are facts and not toughts. That gets to me...and it's so wrong.

This is a great discussion. I hope the general public can get a better picture of how this operates and not just an opinion that was based on a bad experience. Just like the lending industry.

Kaye Thomas.... great point about the discount brokers and their other services.... people fail to realize this. One stop shopping doesn't mean it is cheaper.

candybags........ I will give you the up most respect because you admited that you can now follow a little more of what these realtors are all about. And I am not stating that you have thrown in the towel, but that you stated that you had "tunnel vision". I commend you in saying this and not holding to the true form from when you first started making comments. My main point.... I respect those that admit not when they are wrong....which is still great....but in this case, admit that they understand a little more. That some things make sense.... People that bend a little and not keep the same opinion that they started with.... even if they don't want to sound like they were wrong or out of place. Again CB.... not stating that you were wrong. But so many people assume....

CB...This Is For You...

This is just something we do around here we pass out trophies. Yours is for your willingness to look into The Other Side Of Real Estate...TLW "The Lovely Wife"...ROAR!

Hey TLW......where can I get one of those? lol

Thanks LW for the trophy :) Interesting how the agents on THIS blog are willing to share and agents on the blood blog were just plain infantile. Jeff, are you trying to get my goat again? I am not waving any white flag over here. I've gotten some excellent insight over the past couple of days which have helped me to see things in a different light than before. That was all I wanted. To find out how realtors justified their 6%. For those of us who are not in the business, we need to know. There is no wrong or right to be assessed. I believe my rant was justified on the blood blog - people who take the time to sit and post but then sit and post cr*p are going to not only make me angry, but also those who think like I do and who would ALSO like to be educated. Asking what it is that a realtor does for their cut and then getting ridiculous, stupid answers only served to cement the view that I had at THAT time which was - well, we all know what it was.

Anyway, what other blog are YOU referring to?? Was there a Candybags2 starting up? Even though I feel quite at home here in BB's blog, I would like to be privy to that link. ?????

Damion...I invited CB to join us here at AR...I am very pleased with you all for stepping up and confirming that my invitation to CB was not a mistake...This conversation went very well. I am so proud of all you...ROAR...TLW...ROAR!

Damion,

Actually visiting the Bloodhound Blog can be very enlightening, and in this case turned out to be very helpful to the Active Rain Community and more importantly to CB the consumer in our midst.

If we could get more consumers here we could actually show them what we are all about and hopefully change the attitude the general public has of us, one consumer at a tine:)

You have to admit, BB and TLW sure know how to host a blog!

candybags.... I hope you didn't read into my comment. I am tired and maybe it didn't sound the way I wanted it to..... I was trying to pay you a compliment. Basically stating it in another way...." that you kept an open mind." I admire that... that's all.

I wanted to post a quick reply to Jeff up there about the comment:
"I know most realtors that tell their clients to get a home inspection".

Yes, Jeff, that is true. However in this case, the sanitation problems had NOTHING to do with the home inspector. He actually did his job. I am going to hand out some free legal advice here that I KNOW will save all of you a massive headache if you write it into your purchase offer, which you definitely need to do if you don't already, because the BS my sister went through was totally unnecessary and would NEVER HAVE HAPPENED if the realtor she worked with had had more experience and here it is:

Especially for homes that are on a septic system and ESPECIALLY if the house is VACANT, you need to request in your purchase offer a "Full and complete septic inspection with a 2 year warranty - septic to function properly for a minimum of 2 years".

The realtor did not look out for my sister and she got stuck with a HUGE bill to replace an entire rotted out metal tank septic system. Two days after she moved in, the contents of the derelict septic regurgitated all over her nice, newly decorated bathroom. It was horrible. And the lawsuit has cost her even more $$$. All together, she is out $60K and counting. I hope I am saving other homeowners the misery.

Point taken Jeff, I need to get some sleep myself.

BTW how bout posting that link to the "other" blog? TIA

NOV

2006

CB>... that is up to Bryant. This is his blog. If you click onto my name and go to my profile...send me an e-mail with your e-mail address.... I can then send you the links.

In regards the septic issue. You can also sometimes blame the appraiser and the lender. The lender usually asks for a septic test or cert. It also depends on the type of the loan program. nite now....lol

CB...You are welcome that trophy was well earned by you...BTW...I love how you are now sharing something that will help new Realtors...Septic and a Crappy Lawsuit...This is good stuff...We do say crappy a lot around here...Crappy is a coin phrase that keeps everyone from cussing...LOL SEE :> "The Lovely Wife"...ROAR!

i dont mean to drag this on, but I think I am missing a point. Jeff, I must be misreading this or not understanding something.. could you please clarify for me?

"You can also sometimes blame the appraiser and the lender."

How would I, as an appraiser, be blamed? I dont check the septic system.. ever. Not in my responsibilities. Just note whether its on septic or city sewer.

just curious, not getting riled up. :)
Nick

Nick.... if the apprsaiser doesn't put on the appraisal that there is a septic system. If the lender doesn't know, they can't call me a septic system. ALso.... and I am not an appraiser, but if you noticed something wrong with the ground around the house, couldn't you state this in the appraisal?

Nick...I wasn't implying that appraiser are at "fault"...but could be if they left something out of the appraisal. That's what I meant. And again...not you....this is just in general. I have seen appraisers mess up a settlement, because they didn't supply the right information. A lender screwing this up.... there are some programs that require certain types of inspections. FHA....you have a water test that is mandatory.....and if you have a septic system, they want a septic cert. So, if lenders don't do their due dililigence, then this could come back to haunt the buyer also. Just my view points. And sorry if you read it differently.

Understand, I said this at 2 am..... lol

Nick I think what Jeff is implying is that the appraiser is responsible to check off whether or not the property is on a septic. When the lender ses that it is, it is common for them to require a septic inspection.

ok, ok gentlemen.. just curious. because if I'm missing something, I wanted to know/learn. If the post stated 'the lender will call for inspection if its checked on the report' then I would have understood. But Jeff, you do better than me at 2am, because I can barely see the keyboard at that hour!
We all agree that apprs need to check if the property is on septic and note it on the report. Now I further understand that if it is checked, the mortgage broker will call for an inspection specific to that. We have mostly city sewer around here, with septic being popular in a more rural section. thanks for the info.
again, I wasn't getting riled up.. just curious.
I guess my prior posts have given me a 'rep', not sure if that is a good thing. :) I still have nothing but love for you guys. no seriously, stop laughing.. no really. stop. that is what is nice about AR. I can acutally get feedback 'from the other side' instead of a ' raised fist and demands' like in the real world.
are you still laughing? stop. :)
nick

and to answer Jeff, if I smelled 'waste' and saw the ground was dug up then I would investigate. If the ground has been recently moved, then I would ask.. but normally you dont run into it with the few areas that are still on septic. BTW< stop laughing.

Nick... I am not laughing..... I am crying with laugher... lol

Seriously though..... thanks Bryant. That was basically my point. And not knowing or seeing this appraisal from Candybag's sisters loan, then one could only assume. When all facts aren't presented, where does this leave us. Sound recently familiar Bryant? LOL

It's good to be on the same page. YIPPIE.

Hey CB..... just curious. What's the meaning behind the name, if you don't mind sharing.

ok I'm ready for a group hug.. Get CB over here.

Morning everyone ... I am always a grump in the ayem, can we group hug later on ;) after I have had my heart starter mud coffee which my wife makes especially for me (maybe she's trying to kill me). Joke!! - perhaps. My sister bought her house right in middle of the boom market and necessary inspections just didn't get done for whatever reason. Everyone was "super busy". If it hadn't been for me over here realizing that the ROOF hadn't been certified, she would've bought a house with both a bad septic AND a bad leaky roof. As it was, we caught the roof in time, got it inspected and the seller's agent had to cough up the money for the repairs out of his own pocket - we were about to close and he just couldn't go back to his seller and say, "Oops, I forgot about the roof", even though my sister had asked for a roof cert in the purchase offer. As for the septic, there was absolutely no outward sign of any malfunction - no digging, no smell either inside the house or outside ANYWHERE on the property, and no standing water or "mushy" parts. The key here is that the house was VACANT - an experienced realtor would've put 2+2 together and would've ordered a video inspection - then my sister wouldn't be in this world of sheise. My sister's lawyer went after the real estate brokerages involved - he didn't even mention the appraiser or the lender as being remotely connected. I can see how they wouldn't be. Obviously, the house had been vacant and the septic wasnt being used - the lawyer's consensus is that the seller knew the septic was bad, didn't want to pay the necessary $30K to fix it, and moved out. Still and all, a proper septic cert would have alleviated any problems and my sister still would've bought the house minus the cost of repairing the septic OR having that money held over from the seller at close of escrow for the repair work. So, TLW, I hope this little tangent has been useful for all of you who needed an education - get a septic cert with a 2 year warranty.

I read this morning that Rich Barton, the Zillow CEO, stepped down on Friday - hoax maybe??

Oh, my small son likes to grab my gut and refer to it as "Candybags". I love small children.

CB...Cute on the name...My Grandkids call me "Lady Of The Lake"...We live on a private lake which they have decided I must own. I humor them. Pardon the group hugs, we are all very close here. You'll get used to them. I am amazed by what happened to Sis. Pardon the expression, but it was crappy. I have to check in with a Lady in NY about Zillow. Will get back after I find out what that is all about. P.S. "The Lovely Wife"...ROAR!

CB, If there were no outward signs of problems with the septic AND the seller did not disclose the issue, then the Realtor is not required to order a septic inspection. We are not inspectors. The buyer or their agent would be responsible to do their due diligence. Now if the seller was aware of the issue and did not disclose it then they could definitely be held liable. Realtors can only disclose what they are aware of. I never give an opinion on roof condition, electrical, plumbing, structure, septic or any other item related to the condition of the property, unless of course the seller has disclosed a problem to me, BUT I always recommend the buyer have and inspection.

Whew! I'm glad we are all on city sewer in our areas! But, should I ever need to deal w/ septic ... now I'm prepared! And luck favors the prepared, right?

I must say that I am "plum" happy with how this whole blog has turned out!

okay.... double group hug with cheese on that. Whoops.... I guess I am hungry. Maybe a whopper with cheese. But we can still do the group hug. Hell, I hug myself daily. Would that be considered TMI?

Just one last thing I would like to mention. In my neck of the woods as a buyers rep, we have "all" houses inspected, or else they are sold "as is".

If, after the inspection, which the Buyer pays for, there are any problems noted, then that becomes a new negotiating point. Either the Seller fixes it, or lowers the price or the buyer backs out.

In any event, it would be the "inspection company" and not the Realtor that would be the problem, assuming it was something that could have been noted in a thorough inspection.

Okay, just had to add that.

I think that one of the most imortant things we contribute to the process that justifies X% is experience. As for the rest I find that both buyers and sellers are unqiue and the homes that I list are unique. I do not provide the same services for each client and do not charge the same comission. I find out what they want, and research the property to come up with a marketing strategy and base my rate and services on that.

Wow!! I think I'm way late here. I didn't want to miss anything and started from the beginning with the Bloodhound blog. I have to admit I was very disappointed with all the responses and so glad Bryant and TLW stepped in to answer the question at hand, (but it was also very entertaining). It is important to note that we cannot avoid CB's questions - although we can disagree how these were presented - answering these questions is the only thing that can give our industry credibility.

Industry comparisons: I too, like CB get offended when Realtors are compared to doctors and lawyers, but it is mostly about the comparison, it makes absolutely no sense to me.

Education requirement of Realtors: we have had numerous posts here in Active Rain and most of us agree that the requirements and training are a joke and we must do something about it.

Dealing with dead-beat real estate agents: we, as Realtors deal with these people every day and cannot understand why they are in business and they do make our industry look bad, but we must do our part to stick above them and do our job, with integrity.

Discount brokers: I think you guys answered it; it's the quality you are leaving behind. The analogy about Wal-Mart is right on; I don't go to Wal-Mart to avoid the horrible service and most of the time, they don't even have the product I am looking for.

If you, as a seller, don't mind showing your house at ridiculous times, holding open houses, and doing all the work - go for it! But let's make one thing clear. As a Realtor, my marketing does not stop with a sign and the MLS - we are in every local publication, national publications, NewYorkTimes.com, and other very costly marketing efforts.

Selling your own house: this can be a very bad thing - you tend not to be very objective about your own property, can overprice, and say the wrong things to a possible buyer, in addition to not knowing the intricacies of a real estate transaction. It is important to detach yourself and sometimes a third party is the best route.

Lastly, a lot of us don't just have a real estate license; a lot of us have degrees in other fields. Rick and I are perfect examples of this. Rick is an accountant, I am an architect. In addition to all the incredible things mentioned above, I have fun dissecting a house with floor plans and elevations and help my buyers and sellers see potential remodeling options for their properties. I offer architectural consulting for no additional charge exclusively to our customers. Some others here in AR offer really unique services as well. I am glad to be part of this network and you guys made us proud. Thank you Candybags for accepting TLW's invitation with an open mind.

I am glad to have been able to include my $.02

Ines

CB, although the discussion has moved on, I wanted to answer your question. I think the ONE key factor in my abandoning my business model was that I simply couldn't do everything. I could either take care of my clients or prospect for more.

A discount model depends on volume, and without the means to advertise, I was completely dependent on referrals. Had I charged a reasonable commission, I would have had the means to advertise. Had I given less service I would have had the time to do direct and personal prospecting, which requires an organized and consistent plan. But every time I got busy with existing clients, my plan became disorganized and inconsistent. Now, I am speaking from the perspective of solo practitioner, which was the case when I tried this model. The other thing I didn't have time to do was recruit agents to help.

I guess you could say that I was undercapitalized as well, but I don't think having more capital in the beginning would have helped for very long. My business plan depended on recruiting agents.

Regarding the septic nightmare, most states have disclosure laws in place that would have placed that squarely back in the lap of the seller, with some responsibility going to the listing agent and brokerage if they knew and did not disclose that the house was on a septic system.

Agents are not inspectors and are not qualified to advise on the condition of a house and especially not its infrastructure. A competent agent will recommend an inspection and make the contract conditioned upon the buyer's satisfaction with the results. In my state, a buyer is free to act upon that recommendation or not, but it's up to the buyer to follow through.

I don't think the house being vacant would necessarily lead to the conclusion that it must be on a septic system that wasn't working. There are any number of reasons that a house might be vacant.

BB and TLW, thanks for an interesting and very positive discussion. And CB, kudos to you for having the integrity to concede a point when it's reasonable to do so, whether or not it applies to your particular situation.

Cheri

Ines, I can't believe you went back and read everything. How long did that take? I'm going to undertake that gain in the morning. Even though it's my post, there have been so many comments I may have missed a few. I'm sure it is quite the read. Your comments as always are excellent. And I really appreciate you taking the time to go through all of this. I'm more than impressed.

Cheri, you have just explained in a nutshell the difficulties that a discount brokerage will have with staying in business for the long term. It's all about quantity. And that just won't work in a market like RE that changes so often. It's a good biz plan in a booming market but certain death in a slower market. Thanks for sharing. I am a solo agent, by the way, and have been for a long time. TLW and I used to work together up until about 6 years ago now she is behind the scenes.

Ines and Cheri: Boy the two of you did your Bloodhound homework. This has to be one of the greatest advantages to AR. We can speak to and with the Consumer. We can change this industry one Realtor and one Consumer at a time...This may not seem realistic, but it is...CB's presence on this post proves I am right about the potential AR has to help us educate Realtors and show Consumers we are not all bad Realtors and we are trying to clean up our own industry...TLW...ROAR!

NOV

2006

In case someone hasn't posted a link to it since I last read this long string of comments, in the first words of my second paragraph this morning in my blog I linked to the article that I think Candybags originally got set off by and prompted his writing to BloodhoundBlog. I'm sure this is the one because it references lawyers and doctors, something that Candybags took issue with comparing to REALTORs.

Like Ines, I agree, we aren't either, and like Cheri, we, too, have a lot more than a real estate licence (in my case a brokerage license, not a salespersons). angel has a double Ph.D. (Communications and Psychology) and I have a double in Finance/Business Economics and Computer Applications...in addition to over $1Billion in real estate transaction structuring and negotiation experience.

Thanks to everyone who quenched my thirst for justifying data. I am taking away from this conversation much more than I came in with. I had my blood pressure checked on Friday - usually maintain around 120/80. 144/90!!!! Did I get pissed of or what?! I plan to check in with you BB and TLW on the regular, just to see what's kicking around out there.

You are all a professional bunch and I wish you all good things for 2007. <Keep an eye on your BP>

I'm not about to have the last word in this discussion, but the whole discussion demonstrates what good professionals do. We act as a buffer many times between buyers and sellers whose opposing views and past histories make them irate. Many times I have acted to calm down the opposing party by trying to find the common ground or by giving a little more of myself.

Going back to Candybags question about discount brokerages. I am not in the least bit threatened by the discount brokerages. One of the things I bring to the table is fiduciary responsibility. I act on behalf of my client and in their best intersts. It is my priority at all times even when it means kicking in part of my commission to make the deal work, even when it means biting my tongue when insulted by an "ego REALTOR", even when it means doing the work of the agent on the other side. Fiduciary is the most important part of my job, and I'm not sure the discount companies provide fiduciary. Most discounters that I am familiar with are offering non-fiduciary duties or acting as facilitators in the transaction. In that capacity advice and negotiation are not part of the service provided. The true value of a professional in my opinion is not in the paper pushing. Redfin and other discounters can do that. The highest value of an agency is in acting as a fiduciary. I've just thought all along that all agents do that! I was wrong.

The other side of the fidiciary issue is that the public really doesn't care if we act as their agent. They don't see the value because they don't understand how important agency representation is. All the public wants is the house! Much to my chagrin!

As to the septic issue. Real estate is local, local, local. Our state's (Minnesota) purchase agreement has verbiage to address the septic system. Each county here has different regulations regarding whether the system has to be inspected, but most require it. There is so much involved in private well, septic and propane supplies, that a novice agent needs to get advice from an experienced mentor. Well water should be tested. The septic tested and pumped. The propane should be addressed as to how much is in the tank (seller may want credit for a full tank and buyer will want enough in the tank to continue heating in cold weather). Good agents research those issues and have appropriate inspections done as they apply.

My mistake may be similar to Candybags. My standards are high and I assume the rest of my profession operates the way I do. It just isn't so to my dismay!

Bonnie here...Word...Now the last one belongs to me. Sorry, I could not resist that...LOL. TLW...ROAR!

NOV

2006

I do four things:

I market your home ultilizing very a agressive marketing plan.
I consistanly sell homes faster and for more money than the area averages.
I protect your interests
I make the process as pleasant as possible

For that I earn a fee.

I promise one thing and one thing only, I make the home selling process as simple as buying a gallon of milk at the corner grocery store. That type of piece of mind money can't buy, if they can't see that......NEXT!

NOV

2006

As if more needs to be said on this, Angus Woodbury just posted a blog on a separate topic but included the following great quote from Mollie Wasserman: "REAL ESTATE INTERNET WARNING © "Despite advertising claims to the contrary, the internet is NOT an experienced Real Estate Professional."

How true.

NOV

2006

While I'm not going to answer the question (you have over 100 comments with answers) - I did want to say excellent post and perfect point.

NOV

2006

I'm not sure what more can be said on the topic - with all the comments every conceivable point of view appears to be covered. Great post and great discussion!

NOV

2006

Thanks for the detailed explanation

NOV

2006

I believe we should be paid as Trusted Advisors not unlike Doctors and Lawyers. Just as they do, we deserve to be compensated for our experience. Not to say there isn't room in the industry for new agents or part timers. However, it is up to the customer to chose just as they chose wheter to buy name brand verses store brand products at the Grocery store. I totally agree that we need to have a more prepared method of dealing with objections to our commissions. I suppose if we sold a house every hour or didn't have to spend more time with some clients than others, we could restructure but there has to be some standard of pricing as in any business. Why are we looked upon as being any less than most of us know we are. We all put in alot of hours and pour alot of our souls into our business after all! Thanks for the post Bryant as well as all of those who answered it!

Lisa Hammerstein

DEC

2006

CB -- I have found out that I NEED to be licensed to do mortgages in FL...I can get all the docs needed and submit them to a loan company, BUT I cannot get a commission from the loan if I am not licensed...I wanted to respond after I had found out all the details.

I had recieved a postcard in the mail that stated otherwise....I found out it was a mass mailing...I advised the company vice president not to send that postcard in FL. anymore...OR change what it said.

So...I CAN get all the docs to start the loan process...BUT I do NOT originate the loan...until I am licensed as a loan officer. That will come in time......

I WANT to offer that service to my clients.

:-D

"Alex"...I am curious. How can you be a Realtor and not know that you need a license to do the mortgages? I mean they teach us that in our licensing class. I find this odd...TLW...ROAR!

DEC

2006

I answered candy bags question on bloodhound. I laid out most of the fees. I think I covered the big ones. I never thought real estate agents were hated like this. I became one because I had terrific agents and I love working with people. It's so sad that we get hung up on, door slammed in our faces, and people calling us everything under the sun. I would honestly think they were justified if we indeed did nothing. People critcize things before they even become informed. They can look up the costs of advertising. It's not something that a person is unable to find. I didn't even include the brokerage advertising. I just wish people had respect for one another like they used to. May be I was born in the wrong time.

DEC

2006

The Comments Policy from BloodhoundBlog says something that is a little disturbing to me. It essentially says what you read here may likely tick you off and when it does be careful about your response (we can say what we want but you cannot). I've never even heard of that blog until your post but since then I've read a good bit and I do say that it seems for the most part to take a direction such as to tell the readership what idiots they must be and they should bow in the presences of such greatness. It certainly does not go for all the contributors nor all of their postings but, in my opinion, that is the type of blog which would do more harm than good to our industry.

Comments policy: Everyone disagrees with us about something, and we welcome this: It’s how we learn. We encourage a free and spirited debate about the issues we raise here. We police comments with a very light hand, deleting comments only for extreme obscenity, flame-baiting, plagiarism or copyright infringement (a fair-use quotation with a link is fine). http://www.bloodhoundrealty.com/BloodhoundBlog/?page_id=2

JAN

2007

Bryant, congratulations on having one of the most memorable posts of 2006!

Congratulations Bryant , on having one of the best posts in Active Rain's first year! So very proud to know you through Active Rain!

www.HomeRome.com

Baltimore,Md.

Thanks Margaret and Maureen, But truly it's not the post it's the comments that really made this memorable. The Rainers really stepped up to the plate to turn Candybags around. I thought it was awesome!!!

I will be back with your present darlin. I want it to be special. Must shop. SVW...TLW...ROAR!

Bryant,

Congratulations... this was an amazing post.. I predict that your post on Compensation for Performance will be another one that will find the whole community reading and commenting.

Way to Go!!!

JAN

2007

Present done...But not here...Wink. Wink. TLW...ROAR!

FEB

2007

Just checking the all time high posts. Over on Mercer Island, we have the highest priced home in the Country at $40,000,000. That's a lot to justify.

TLW.....

They may have taught that but I did not remember as I took the class way back in 1997..... AND as I stated in my comment above, the postcard DID say I could get paid to originate the loan.... so, not remembering what the law was AND trusting what they said on the postcard...I investigated it.....and found out what the REAL DEAL was.....

Did you have a good Mortgage company to recomend?

MAY

2007

WHOA. I'm glad you sent me here!! Send me that bill!

This really speaks to the way I like to help people. I don't think I've ever heard anyone else give this type of caring service as a reason to justify a commission -- and yet as a client I would find it to be far more valuable than any technology.

Tell your Lovely Wife to buy something nice with my payment! ;o)

Sarah...

It's all FREE.

My "Daughters" all get FREE on line real estate courses :)

If people like you keep reading these we can change the very nature of the way other's in this industry conduct themselves in this business :)

TLW...ROAR!

MAY

2007

Oooh, and a Family Discount!! I am one lucky girl indeed!

AUG

2008

I don't think 99% of agents can justify their commission.

AUG

Happy to report that I'm still taking 6% listings - something very few agents in my office manage at all, much less regularly. Now that I've read this older posts, maybe I'll land more at 7%...

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