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Real Estate Begging...It's Not My Bag

I saw a very large sign the other day on the corner of a semi-busy intersection which stated "We Pay You the Most to Find Your Home". Whoa, hit the brakes there buddy! Let me get this straight.....you're going to pay someone to let you work for them?

Have I overlooked something in the last eighteen years? I mean, I know I don't sell a tangible product such as Target or Nordstrom, so I doubt trying to use an anology such as "Would Nordstrom pay ME to buy a Pair of Uggs from their Store?" would work here.

I'm in the service business. So maybe I should think of the above offer in terms of other service industries; Accountants, Interior Designers, Dentists, Swim Instructors, House Painters, Financial Planners, Attorneys. All of these are occupations upon which compensation is based on time, education and expertise in the correlated field.

Now I asked myself, "Self, if I were looking for a _____(insert one from the above list)____ and they advertised: we'll pay you the most to.....

Complete your tax return
Redecorate your Living Room
Preserve your Dental Health
Teach your child water safety
Paint your house
Secure your financial future
Draft your will

....would you really want to use this person?"

What can this message possibly say about their quality of service, knowledge or expertise in their field? (By the way, I have these types of conversations with myself often, but that's a post for another day)

Seriously though, are you kidding me? What a ridiculously unprofessional message to be sending to a potential customer/client about what will probably be their single largest financial investment.

(Soapbox Warning).....

The value of my services or (those of any qualified Real Estate Professional )lies not in my car which can deliver you to the driveway of any listed property or the MLS key which affords entrance to that listing. It does not lie in the pen I use to fill out the contract or my access to a database with "non-public" information. Rather the value I bring to my clients lies in the sum total of my experience; the hundreds of contracts I have reviewed, the tough negotiating situations when tension and emotions are running high which I've helped diffuse, my willingess to stay on top of technology, and knowledge of how to best position and market a home, and above all,my willingess and ability to provide valid, honest information upon which someone can make an educated, informed decision.

Words such as Integrity and Honesty are bandied about often in slogans and taglines in my Industry. How about a new word..."Pride"?

Have I ever worked for free? Offered a complimentary market analysis or shown homes to someone who decided not to buy? Absolutely!

But I draw the line at "paying people" to let me work for them.

That will be the day I say "au revoir real estate!"

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Looking to Buy or Sell a home in Maple Valley? I can help! Since 1990, I have been successfully marketing and selling Residential Resale and New Construction homes in South King and North Pierce Counties since 1990, but I specialiize in the greater Maple Valley area, Whether you're interested in Buying, Selling or need more information because you are Relocating to the Puget Sound Region, email me or give me a call, I'm happy to help! Contact Colleen Maple Valley Listings delivered to your inbox via email Complimentary Online Market Analysis of your Maple Valley Home View or Post Maple Valley For Sale By Owner Listings Learn more about the Maple Valley Community including information on Tahoma Schools and Maple Valley Neighborhoods

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Colleen Fischesser is the Broker/Owner of RE/MAX Select Real Estate. She has been successfully helping clients buy and sell real estate in the greater Seattle area since 1990 and specializes in South East King County including the communities of Covington, Renton, Auburn, Kent, Ravensdale, Black Diamond & Maple Valley. Voted by clients and industry professionals as one of Seattle Magazine's 5 Star, Best in Client Satisfaction for 4 years running, she and her team rank in the top 50 of RE/MAX teams in the entire Northwest region. Colleen is committed to remaining on the cutting edge of real estate marketing and technology while providing value-added, personalized service.

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Posted by South King County Broker/Owner Colleen Fischesser 425-432-5400 on 02/13/2008 02:26 PM

Comments (73)

professional realtor, discount brokers

Originally posted at: : Real Estate Begging...It's Not My Bag

73 Comments on Real Estate Begging...It's Not My Bag

FEB

2008

You and me both, Colleen. What an enormous, scary crock.

Colleen,

Let me start off by saying the sign is not mine nor do I know the intent of their message. In all situations, I try to assess the meaning behind the talk. Comes in handy for negotiating. In my estimation the sign maker was I'm sure trying to get buyers to call and say "I want you to pay me to find a house!" The explanation probably went something like this. "With my strong negotiating skills I am able save you more than my competition, so in essence I am paying you the difference in what I can negotiate over what they can." That would be my presumption, whether right or wrong, trying to reel people in like that I believe is unethical. A bait and switch. There are many unethical people out there.

Colleen, I agree it would be time to find something else for me to do.

Karen, Yep....and embarassing to the industry!

Mike, actually, this company is making a run at Redfin. I think their message "we pay you more" is really about them PAYING the buyer a larger portion of their commission than anyone else. Whatever my opinion about the business model, the message is tacky and and unprofessional.

Tony & Darcy, gotta ride off into the sunset at some point. Hopefully it will be later rather than sooner because consumers "just say no"

Wow... That's bad... I know that there are certain (discount) companies that advertise a "rebate" on the buyer's side commission for going with them.... Not sure how it works legally, but somehow they do it! It just makes more explaining for the rest of us to do!

FEB

2008

It's not my thing either. I could not agree more with you. Great post!

Colleen, But do these companies really show you homes? I thought that they just listed the homes and the sellers have to do the Open Houses and let the buyers in. I don't think there is much help in the negotiations, inspection issues, or transaction management. The buyer and seller both work for that rebate and you can bet they don't do as good a job as we do. There are no real safeguards against the buyer overpaying and the seller may not be getting the best advice on priciing. I think the Redfin model has shown that the economies are false for many buyers and sellers. Discount brokers cheapen our industry, but it's a model that we have to come to terms with and figure out a way to convince our clients that full-service provides the better value. It would be nice if NAR would do this for us.

The funniest thing about this is, that if no one is paying them to find a home, then if they pay $1.00 then they are indeed paying the most. So, if you paid them $2.00 to find them a home, well you could have the most homebuyers too? Lance

"...the value I bring to my clients lies in the sum total of my experience..." Well said, Colleen. I've long said that we don't get paid for opening doors, or filing in forms on a boiler plate contract... we're paid for our expertise. I suppose if someone doesn't have that to fall back on, then paying clients to work with you might be an option. I'll stick with the expertise thing... Kathy's expensive; I can't pay clients and afford her too.. :)

There's no end to the gimmicks some folks will use to pull in consumers! I feel bad for people consumers who are "sucked in" by the claims of free settlement, free mortgage, and we'll pay you to... But there is plenty of good information out there - they make the choice to try and get something for nothing, and they usually end up getting nothing for something.

Collen,

The broker/agent in this model has been reduced to a commodity. And when shopping commodities the consumer will choose the least costly option (or so it would appear). Clients who buy into this arrangement once, tend not to do it twice. I believe it comes from lack of service or so I've been told. I have worked with several clients who over the years had enlisted the service from Rebate Brokers. They only did it once. The rebate did not justify the lack of service, inconvenience and realization that you get what you pay for. Of course this knowledge comes after the fact. That's not to say I haven't had clients request a rebate from me but they did not receive one. (OK, I did rebate one client in 9 years and would not, after that do it again!) Those folks call me regularly and refer additional business.

If all you can offer is to buy your business you must not have a service anyone would really want.

Cheers,

I think someone willing to give you their pay and work for almost nothing, has a hook waiting somewhere to be baited, and smart buyers and seller will too, otherwise why?

Applause, Applause! I agree with each and every word you wrote. A colleague of mine just dropped some buyers because they were $6,000 apart from the sellers when negotiating and the buyers said to her, "you should do whatever it takes to get this deal together, including cutting your commission to make it happen." She had shown them 50 homes, written 2 contracts (first one wasn't a go either), and negotiated a wonderful deal getting the seller down to $311,000 from his $340,000 listing price. These are the people that should be using services like Redfin. Where someone will let them into the property (hey, even a monkey could open a lockbox, let's get real), but due to lack of market knowledge, negotiating skill, etc. will assist them in writing a contract where they will pay $335,000 on that $340,000 house and think they are getting a deal because they get $2000 of the commission back at closing. I'll get off my soapbox now!

Colleen After 31 years in the business I am not surprised at the tricks people play to get you through the door - the more they rebate the sooner they won't be with us, Karen

Colleen,

At some point, all business poeple have a obligation to ask themselves: "Why am I doing this?"

If the answer is SOLELY to make money, they should readjust his or hers business plan.

If someone is using a Relator-HOORAY! If they don't "get"working with a Realtor, what is a Realtor to do?

Hang in there-Realtors are NOT commodities!

Steve

Jonelle, in Washington state it is permissible for a broker to share commission w/ a principal to the transaction. However legal doesn't always mean "smart"

Thanks Jason!

Gail, I agree. I'm not sure exactly how NAR would get involved in order to counterpoint each one of these new upstarts. The problem as I see it, lies in the licensure requirements and how they are so lax. Unless and until it becomes harder to get a license, I think it's just going to get worse.

Lance, um....don't think I want that title (or buyers who come to me that way) LOL!!

Jesse, Kathy's expensive? Good for HER!!!

Margaret, I chalk it up to "desperate times" but I'm so disheartened by what the message says about our industry. These signs are everywhere!

David, I absolutely agree, but where or how can there be service based on this type of model? There can't be. As I said, if it were just a matter of gaining access to the property, fine. That may be able to be reduced to a $ amount. But everything else an experienced agent brings to the table cannot and should not be discounted.

Mary, just hope the hook is hanging empty :-0

Kelly, good for her! And by the way, you're welcome to join me on the soapbox anytime :-)

Karen, I'm sure nothing surprises you at this point

Steve, I think money initially can be a motivator, but it's definitely not the be-all, end-all. And if that's why someone is doing this, they're going to burn out really quickly!

Colleen,

LOVE this post. WELL-STATED.

Have a great and jazzy week!

Colleen when your self is talking to your self next time (BTW, I'm starting to worry about you), ponder this: What is the purpose of a business? It is to make a profit. If they are paying you the most to find a home, then surely they will not be making much if any money. They will shortly be history. That tagline makes no sense at all.

I'm completely on board with the expertise you bring to the table. It is your differentiator. The fact is you don't have to work with all clients. If they don't see your value you move on to the next one.

Colleen,

I am so tired of seeing the gimmicks used by "discount" brokers. I really do believe that consumers will start to see through the fluff and realize that these people are not doing anything at all for them. At least that is my hope!

I agree! If I see an ad like that it makes me wonder, "if you have to pay for business, what are you doing wrong that you don't have business in the first place?"

Amen! Everyone, I don't care what business they are in, deserves to be well compensated for a job well done.

It's another excuse for people to say we Realtors are a bit wacky. Here's hoping that ad campaign goes over like a lead balloon.

Real estate agents (including REALTORS(R)) ARE a commodity. There is always another one. Even with the loss of 10% (I read that yesterday somewhere) of the licensees, there are still enough to stand on almost every street corner.

Now, GOOD ones are a different matter...

You'll HATE ME, Colleen, but I have to say...as a buyer, with access to the internet and the ability to get a large part of the information that I need (I'm assuming this profile buyer), and one agent will show it to me, and assist me; the other will show it to me, but rebate half of the commission (in most states, legal) so that I can furnish part of it (and also assist me)...I'm looking at it as objectively as possible.

Colleen, well written as always...this is such a pet peeve of mine. This whole mentality of buyers looking for agents who will rebate the most money, as opposed to agents with the most knowledge and experience, is a bit scary. I could be wrong, but I think that Realtors who fall into this marketing trap are setting themselves up for an unrewarding career.

Unbelievable way to hook people, and embarassing to hard workler professionals like you and mnay others.Good Post, thanks

Amen Colleen! It's about time pride got back in it! Take pride in the service we offer, we are not the day old bread store after all...

Its a buyers market, so you better adjust or get adjusted. Well it sounds like the chicken has come home to roost. For the past few years mortgage brokers have taken a beating from realtors. They have suggested to clients rates that would put a broker shop out of business. In some cases we have done most of the work and were only able to charge 1 to 2%. If there is a realtor out there paying clients to look for homes, I WILL SEND THEM ALL MY BUSINESS. In short, yes we are all in the service industry. So unless we respect each others profession, and support how each other are paid. Just like every realtor took there clients to the mortgage professional who was pricing his self into BK. I will support any realtor who lowers his/her commision, pay my client to look for a home, furnish ther home, or lower the asking price.

Colleen, interesting post. And I have to agree, I have to draw the line at paying people to let me work for them.

Colleen:

I just came from a well know motivation speakers seminar, and he was emphatic about the fact that as an agent you should not reduce your commissions, and he went on about being assertive when client say well this agent said that they would reduce their commission to XXX. He said that you need to know that you bring such great skills to the table. Yes, I use the word skills. Here are just a few:

Skill in time management
Skill in knowing your market.
Skill at negotiating.

Those are just a few, and the only reason that I bring these factors up is that when a person offers rebates, or offers a discounts commission program I often wonder how skilled they are and why do they think it necessary to beg for business. i know my Dentist sure doesn't give me a break on my dental work.

Just a thought

With all due respect, Lorraine (and to further this interesting and thought provoking post- THANK YOU, Colleen) dentists do negotiate. If someone comes in requesting a procedure without benefit of insurance, they often compete with one another for the business (have you ever heard of a "discount" dentist? It's not advertised where I live, but pricing can be negotiated). My point: most things are negotiable. While I wouldn't really want to work with a company that advertises that way, I can't criticize their point.

Im all for rebates to buyers. As Lorraine and Loretta point out, we are paid for certan skills and knowledge that we bring to the table. Often times, however, the customer dosent need everything I have to offer. in those cases Im happy to rebate some of the commission. I just never thought of advertising it

Colleen, I take great pride in my profession and the service that I provide for others. The begging is just too much and doesn't look good on our profession. I am with you.

Colleen,

In the beginning, you mentioned how a professional service is different than a tangible good (i.e., Uggs @ Nordstrom). My career thus far has been exclusively with marketing professional services and I am a member of SMPS (society of ---). It is absolutely different as you explained. However, that being said, there are similarities.

When you go to a discount store, you are purchasing both a product (or products) AND an experience. Bargain stores have these in common: lots of fluorescent lighting, crowded/cluttered aisles, inexpensive display fixtures, white and gray walls/flooring. More exclusive stores and retailers of finer goods share this: spacious layout, sparse in numbers (no shelves brimming with 50 of the same item), better lighting, softer tones, nicer fixtures/displays. Note: different shopping experience. And this isn't even taking into account staff. (Consider your experience with employees at Starbucks or Chik-Fil-a versus McDonalds). Even with online retailers, your experience will vary often according to the price bracket they fall into. And it's part of their respective business models: Wal-mart sells to the masses, INSERT NAME OF FAVORED RETAILER HERE doesn't. Their pricing reflects this. You CAN get quality goods for less (not always, but new manufacturing techniques/outsourcing has made this feasible), but you CANNOT substitute the experience.

If a consumer chooses to get "paid" to work with a real estate agent, let them. They are choosing to have a "big box" retailer experience and not weighing/carefully considering the full cost/benefit analysis. They will endure an assembly-line style process with a paraprofessional. For clients who want FULL service, they reap the rewards of a knowledgeable, dedicated professional negotiator/scout who knows the market and can command the best results. That's your leverage.

Do not worry about what the guy down the street advertises. Your business model is just fine.

People line up to pay $4 for a coffee based on experience. And guess what? It's a good one.

All the best,

Audrey

www.simplystage.com

Colleen, This must be the theme today, unfortunately. I totally agree with you and this is what hurts the professionalism and perception of the whole industry.

Colleen - you are awesome - great points and well written - I get tired of this, too. Brokers should be advertising their services not essentially bribing people to use them:)

Good for you! Everyone ends up doing some freebie work but that is where I would draw a line in the sand.

We have to bring Value to the table for our clients. If you cannot argue that you are worth your commission then you are not bringing your A game. And if you're not bringing your A game you should go home.

Colleen,

I enjoyed your post. Yes, one would have to be awfully desperate to promote in this manner. I'm sure not going to do it anytime soon.

Gary, I'm keeping you in business remember? Have you put me on the clock yet for excellent therapy? (PS: I'm worried about me too)

Lane, I disagree with you on the "Realtor is a commodity" statement in the purest sense, a realtor is not consummable, able to be bought in sold. (remember, I said it's purest sense) Especially when you throw in the "good ones"....not always as easily replaced.

Jen, I don't like seeing the gimmicks either, however I think they may be here to stay.

Team Glidden, AMEN!

Virginia and Marsha, I agree w/ both of you!

Laurie, no hate here at all. But are you really just looking for someone to show you the property? If so, you have a model for it. It's not the business model I take issue with per se here, it's the message of desperation which undermines what I and thousands of others do that I find distasteful. All professions are up against this, Dentists, Attorneys. There's always a sleazier side to any profession. I don't have to like it and I don't. Again, I place the blame on the licensure requirements across the country. At the risk of sounding cold, buyers who use an agent just because they'll get money back, deserve what they get. My two cents.

Thanks for counter-pointing though. :-)

Great points and great blog, it is amazing to see what agents who can't sell themselves will do. Always looking for the easy way to build relationships.

Thanks Lisa, I couldn't agree with you more! The sheer volume of transactions needed just to make a decent living would be amazingly exhaustive. No client or transaction can be getting the attention they/it deserves. Oh wait, it's at adiscount, maybe they are.

Thanks Maria.

Vanessa, we are far from stale LOL!!

Ahhh Ronell, "Its a buyers market, so you better adjust or get adjusted" Actually, I don't. I've been through enough buyer/seller market shifts to know what I'm doing. Advice appreciate though. Pardon me, but you sound more than a little bitter. We all have different business models as competition. If your value wasn't being perceived by the consumer, I hardly think that's the agent's fault.

"Well it sounds like the chicken has come home to roost. For the past few years mortgage brokers have taken a beating from realtors. They have suggested to clients rates that would put a broker shop out of business. In some cases we have done most of the work and were only able to charge 1 to 2%."

For your information, I have never once, pushed my clients onto any other lender unless they were being grossly taken advantage of. My clients are funny that way, they don't ask me to pay them and in return, they get excellent advice from me because I'm a full-service, experienced broker who is looking out for their best interest.

If there is a realtor out there paying clients to look for homes, I WILL SEND THEM ALL MY BUSINESS....I will support any realtor who lowers his/her commision, pay my client to look for a home, furnish ther home, or lower the asking price I'm not sure you're going to find much Realtor business here my friend with an attitude like that. I

In short, yes we are all in the service industry. So unless we respect each others profession, and support how each other are paid. You mean like you're respecting me right now?

L & L: I often wonder how skilled they are and why do they think it necessary to beg for business

Exactamundo!

Hi again Laurie! Maybe they could with one Dentist, but not with their Dentist. Because he's more experienced, professional, up to date, sterile....ect ect. It's not that you can't find them, but the industry is undermined by the message.

Audrey, hopefully you read my replies above. I don't like the model, but my beef is more in their marketing message.

Thanks Mark & Courtney.

Renee, gotta draw it somewhere! :-)

Krista....And if you're not bringing your A game you should go home I KNEW I liked you!!!

Diane, are you sure? I hear they're hiring!

Joey, I don't think this really classifies as relationship building...more like order taking ;-)

I agree. I just don't like the sense of desperation given off by that kind of a sign. This is a time in Real Estate where Realtors need to step up and show what their value is. We don't need to grovel. There is plenty of work to go around to hard working, honest people who truly care about their clients and their needs.

There are bottom feeders in all industries, and in all markets.

FEB

2008

Emily, well said!

Eric, OMG, great visual. I hadn't thought about it in those terms.

What I would tell a client who is considering that type of service is..........if that agent is willing to give up their commission so easily how much of your money are they going to give up? Someone who is willing to give up their money right off the bat surely can't be a good negotiator.

Another way to work with it if a client asks for some of my commission is to ask them which of my services would they like to cut out? Of course the answer is almost always.......none. I cannot provide the expertise and services that I do and pay the client for that benefit on top of that! Like you said earlier we are real estate PROFESSIONALS! Other professionals like attorneys, accountants, doctors, etc. would not pay us to access their skills and knowledge. I don't feel that we should either.

Great topic Colleen. I couldn't agree with you more.

I can't even imagine it!!! Crazy! We spend so much of our earnings on running our business...People "think" they know what we "make" but they don't, and now some agents are giving MORE back to the consumer??? NOT ME!!!

Colleen you couldn't be more right on! These people and models come and go. In the meantime I protect myself with BBA's and once in a while you get a client moan. You just move on and say what the heck!!

If they are making offers like that, I doubt they'll be in business long. That's crazy. I wonder if they actually thought about what they were saying in that advertisement.

Christy, it's not just an ad. It's their Company's tag line....all over their website. It's the statment they are basing their whole business model on. And I refuse to give them further recognition by publicly naming them here.

That agents lack of confidence shows right into their advertising.My cients have never given me part of their salary,hmmm maybe I should ask.

Cameron, let me know how that works for you LOL!

Colleen - You've given great responses to a wide range of replies. I can see why your clients trust you and work with you. You're on solid ground. Congratulations on the featured post.

FEB

2008

Colleen...

I am so glad I popped over here. I know this is not meant to be funny...

But quite honestly the whole idea of that kind of marketing just cracks me up...

I am starting to think I've been in this business too long...You would think I'd find shock value here...

But Nooooooooooooooooo...I'm way too busy laughing :)

TLW...ROAR!

Gail, thanks!

TLW, if you could only see the signs you'd really be in trouble. UNBELIEVABLE!!

Colleen - Here's an idea. Would you go to a dentist who advertised that he would pay you to do a root canal or would you think "Now that's really weird. This is one dentist I'll steer clear of?"

Gail....perfect! It definitely makes one go "hmmmm"? Doesn't it? There will always be these discount minded consumers. But I still think there's a professional line which shouldn't be crossed.

LOL Gail... were you watching Little Shop of Horrors recently??

FEB

2008

Hi, Colleen! What a great post! We deal with a lot of competition here from "discount brokers" (disclaimer: I realize all discount brokerages are not created equal - I am speaking of the stereotype here, because of course, stereotypes exist for a reason). We deal with objections from sellers and buyers alike who want to know how much of our commission we plan to cut for them. The answer: Zero. Would you ask your doctor or lawyer or surgeon or CPA to cut his fees for you? No (unless you're just THAT gutsy, which I suppose some people are, but their answer would most likely also be a resounding NO).

Great post, Colleen! I feel the same way!

~Maura Gebhardt

Thanks Maura, it's interesting because as the market tightens, I'm really sensing Buyers AND Sellers are having more appreciation for the agents who are worth their fees. We all know there are many who are not.

MAR

2008

Great explanation of your value added

AUG

Excuse me. Misquotations are the only quotations that are never misquoted. I am from Vanuatu and also now teach English, give please true I wrote the following sentence: "Retro designs from the movies, tv and music world." Waiting for a reply 8-), Elias.

SEP

Hello everyone. Vegetarianism is harmless enough, though it is apt to fill a man with wind and self-righteousness. I am from France and too poorly know English, give true I wrote the following sentence: "Better than provillus, changes itching american, natural or parasiticidal symptom are most away maintained." With love 8), Alexander.

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