Now buyers agents can bid on how much of their commission they are willing to give away in order to get business. The web site is HungryAgents.com. There is more info in the Inman News article too.
I don't know about you, but I have no intention of signing up with this web site. I don't see how giving away commission is a long term way to make a living. Maybe the people who do sign up expect to make it up in volume or referrals?
What do you think about this?
Commissions are not fixed and if a buyer is willing to do some of the legwork, is it not worth reducing your commission to gain a possible client for life?
Paul, Good post, it's nice to see you add links and talked about your thoughts...
This is another example of agents who cannot justify their existence. They have no self worth so in order to compete they must reduce their commissions. What kind of business plan is that? How long can you stay in business if you don't earn a good income, nor have the ability to defend YOUR OWN COMMISSION? How can you defend your listing price? DUH!
Joesph, do you assume this to be a one time deal? I have a hard time believing someone will do repeat business with you if you don't rebate your commission again. It is almost as if an employer paid your salary then asked for a rebate to keep you employed. That just does not make sense to me.
You choice, but not enough compensation for the liability I take on as a licensed agent. My license is much more valuable to my clients.
I have no argument with those who partake of the offering, I know it is not right for me. I wonder how long those agents will be in business if their income does not cover thier costs and allow thme to make a decent living?
George, I am seeing the same deals and they are not selling due to being overpriced and not much co-broke.
Leigh, word of mouth for a job well done is gold and reaps long term dividends in referrals and repeat business!
This may be one of those places where unprofitable agents go as a last gasp before leaving the business. I hope we hear from someone who has used the service and what their experiences are.
Perhaps the home buyer doesn't need full service and is willing to incur some of the legwork. In that case, a buyer's rebate might be appropriate and is merely a price reduction of buyer-agency services.
I always feel that if you are willing....especialy eagerly voluntering to reduce commissions, then are you going to fight and work to get your clients the best deal? I have never negotiated with my Dr. on the price, so we need to also raise the bar. Cutting commission doesn't pay if it doesn't sell or if they don't buy. It only hurts other Realtors who are trying to make this a career instead of a hobby.
There is an agent in my office that uses this service and has success getting listings, but the problem is that when the leads come in from the company the price that the company estimates the house at is usually way off, and the house ends up being worth less than originally thought! Personally, I believe I am worth every penny that I earn, and there is such a thing as rate integrity! If I don't see value in the job I perform, how can I expect anyone else to? Its services like this that are the very reason our profession is undervalued. If you expect me to cut my commission rate then you are not going to get my entire marketing package - something has to go to compensate for the cut in pay, and then you are not getting the best possible agent and exposure out there - you get what you pay for. I dont want my services to get the bad name that would then be associated with this kind of downward spiral.
I think you agents feel hurt that most people place you alongside lawyers and used cars salesmen, but can you blame us? Can you see it from a seller's perspective? We pump blood, sweat, and tears into a house payment and then you sidle up, do what appears to be little to no work while demanding a non-negotiable 6%? Can you not see how that makes people angry? I've heard tons of realtors on the phone to me of late telling me how hard they work for each and every client giving them a 110% So my question is that if you do the same amount of hard work for every client, why are they all charged differently? Why does Bob down the block only have to pay $8000 for that service while I have to pay $12000? Why does it matter that my house gets lucky and I can sell it for a little more than Bob's? Aren't we getting the same service from the same realtor?
Those who want to compare themselves to doctors, doctors don't charge in percentages. They don't say, "I'd like to take 6% of whatever this broken arm is worth to you and then I'll fix it." They have standard fees for standard procedures. The same as pretty much anything you else you guys are trying to compare yourselves with. Your office worker comparison? Does an office worker say, "Hey boss, I know my pay should be the straight salary but I think instead, I'll take 6% of the company's gross this year, regardless of how much that hurts you or your ability to continue the company down the road."
I would love a realtor that took a straight flat fee over any ridiculous percentage. People are happy to pay you for your services, its the non-sensical percentage that people hate.
Dear Average Seller,
You can easily find an agent to take a flat fee. Just call Help-U-Sell and there you have it: a straight flat fee and you are on the MLS.
Everything else is up to you:
We could also charge an hourly rate, say $200/hour. If we just look at a typical 4 week contract period and we estimate 20 hours a week for 4 weeks, that comes out to 80 hours x $200/hr = $16,000. Not counting what amount you contracted to pay the Buyer's Agent. And we have not even counted all the prep work to get the the house ready to be put on the market. That 6% may be a better fee alternative after all.
BTW, the 6% is split between the two brokers. You are actually paying 3% to your agent to represent your best interests and 3% to the Buyer's Agent to represent the buyer's best interests (per real estate law, agency law, and consumer protection law requirements). The fee is rolled into one number for simplicity. The Escrow company actually parcels out the funds, not the agents.
There are some sellers who have expertise in real estate transactions and don't need an agent. If you are one of those, congratulations, you don't need us. Call your lawyers and get their best hourly rate to help you when needed.
We Agents are here to help the rest of the sellers and buyers navigate a heavily regulated, increasingly complex, and highly litigious process that occurs infrequently and sometimes under less than pleasant circumstances in this market of 2010. We charge a fair price for our services. If you disagree with our price, you are encouraged to shop around for a price that suits you. Be carefull for what you ask, as it just may be that "You get what you pay for" could be distrubingly true.
The licensing process for residential or commercial brokers is nothing more than a cartel designed to impose a tax on real estate transactions. The list you provide Paul is a joke, that is NOT hard work for an intelligent person, but instead your profession, and the politicians you prop up to perpetuate your cartel, lead the public to believe that because buying a home is "the single largest 'investment' most families will make" we need the sucking of a leech on the transaction, a leech that ultimately just wants to get the real estate moved as quickly as possible and to collect their commission as quickly as possible with the least amount of information provided so as to not complicate the situation for themselves.
Now I will admit that the Buyer's Agent has a greater value and should be commissioned, they do (some of them) provide information to their buyer and they do spend time researching (again, some of them). What is flawed with Buyer's Agents is that they ultimately don't want to get in the way of the deal and so ultimately their best interest is not that of their buyer. You can give me some principled explanation to the contrary, but you and the rest of the hot air balloons on here with your pomp are full of it. You may have thought and behaved differently when you got into the business, you may convince yourself otherwise, but in the end, complacency sets in and you take advantage of the back scratching system that is in place thanks to the real estate cartel in your local community.
Here's the right deal - 2.5% to 3% to Buyer's Agent, 1.5% to Seller's. The Seller should do more work, they should understand their asset better rather than abdicating responsibility to the deal mills that are seller's agents. Let's not forget that we have not valued the free advertising associated to the Seller's Agent for having their name on the listing and property. These are not arbitrary numbers pulled out of thin air, they are based on adjusting the true gross value of real estate agents against the average value of homes sold in America. Guess what . . . I just gave you clowns a huge pay cut. Well-deserved, pat yourselves on the back.
Paul,
As a rule you are correct, but contemputous seller has some valid points.
I signed up with HA when they first started and I WAS working for Help U Sell at the time. I never did a flat fee in the 4 years they were in our state. I did a 4.5% listing and it actually worked for me, got a lot of volume and marketed full service because whether you charge 4% or 7% if it doesn't sell you get ZERO! But as far as HA I only had 2 opps that they send me to bid on until a month ago they sent me a listing change and I got it under contract in 2 weeks and I'll net about $2305 but because this is because my broker only keeps a flat fee of 400 on any sale. HA is not ALL bad but I would not want to do all my deals with them, they now charge $795/listing. It's Dec 2015 when I took the bid and the home was very saleable. so I don't mind some extra winter cash!
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