Richard Foster caught my attention with a recent blog post. In his post, he vented his frustration of working in a field where practically anyone who breathes can get a license to practice. He went on to use examples of other occupations which have more stringent requirements for licensure such as hair dresser and nail technician.
Richard suggested weeding out the part-timers by increasing dues dramatically.
But, will this really fix the broken system?
Won't Brokers continue to recruit and recruit and recruit without regard to ethics, education and professionalism? (I'm talking about Realtors here, not licensees who aren't members of NAR and aren't promising to be ethical in the first place).
Does the fault lie with current commission based structure?
Think about it.....with the current structure, agents do not get paid one dime unless they close a sale. Isn't that, in and of itself, inherently asking for unethical behavior?
Can an agent who is say, facing personal financial difficulties, really be expected to look out for the best interests of their client over their own family? Is it really fair to put someone in that position to begin with? (Yes, I know the Code of Ethics and what it says....I am talking about DESPERATE times calling for desperate decisions where the Code may be "forgotten").
In order for an agent to survive financially, they must be successful enough and disciplined enough to ride out the low periods for extended periods of time. I have met top agents who have gone months without a paycheck while still shelling out tons of money for marketing, gas, supplies, dues, etc. That's the life of an agent, right?
Some Brokers have tried the salary + commission structure. Well, doesn't that put even more pressure on the agent to "perform" (i.e. make sales) or risk losing their salary or being fired? Are Brokers really willing to pay an agent a salary for a few months without a closed sale?
For a buyer or seller to truly get unbiased representation from their agent, how should the agent's pay structure be defined?
- A salary plus a commission based off of the client's satisfaction with their agent? What if the sale didn't close and it was because the agent was looking out for the client's best interests and the client is happy it didn't close? Who pays the agent for sticking to their guns and looking out for their client?
- A pay-as-you go/fee for service system where the agent charges the client an hourly fee for services rendered and expenses?
- A "team" based commission model where a client hires a team and each team member is paid a salary from a pool of the total commissions earned by the team.
Of course, Brokers and the industry in general need to redefine "success" in real estate as creating happy clients instead of dollar signs. Seriously, is the "Number 1" agent ever really the "best" agent????
Tina in Virginia
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