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Old 04-11-2012, 02:59 PM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 12,676,581 times
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On another thread, a non-Realtor poster suggested that Realtors should be paid by the hour and not by commission. The reason suggested was to remove the conflicts that can occur by the agent wanting a buyer to pay more for a home so the agent can make more commission.

I assume he would want to pay the listing agent by the hour also to make it uniform. If I remember correctly, in an earlier post, the same poster said that he would be willing to pay a buyers agent around $25/hour to drive him around.

If he visits this thread, then he can clarify his thoughts so that I'm not misrepresenting his statements.

I decided to post this on the professional forum so agents can give their thoughts on the pro's and con's of this type pay arrangement, both for the agent and for the client.

Obviously any agent can charge any way s/he chooses as long as the Brokerage agrees, so this is just a hypothetical discussion.

What say you?
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Old 04-11-2012, 03:03 PM
 
Location: Salem, OR
13,745 posts, read 31,570,576 times
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I do typically 2-3 hourly billing contracts per year. $25 an hour doesn't cut it. Not even close. You can't run a business on that rate.
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Old 04-11-2012, 03:07 PM
 
Location: Cary, NC
31,614 posts, read 55,335,524 times
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You can't hire a jitney taxi for $25.00/hour.
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Old 04-11-2012, 03:07 PM
 
Location: Lakewood Ranch, FL
5,119 posts, read 7,647,297 times
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I suppose it depends on the hourly rate but I'd love to have the option to charge for all the hundreds and hundreds of hours I've spent working for people with nothing to show for it, not to mention the expense for gas and advertising, etc. Maybe it should be a hybrid approach.
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Old 04-11-2012, 03:08 PM
 
Location: Salem, OR
13,745 posts, read 31,570,576 times
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Quote:
Originally Posted by bbronston View Post
I suppose it depends on the hourly rate but I'd love to have the option to charge for all the hundreds and hundreds of hours I've spent working for people with nothing to show for it, not to mention the expense for gas and advertising, etc. Maybe it should be a hybrid approach.
Some agents have shifted to requiring a retainer up front for home buyers.
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Old 04-11-2012, 03:21 PM
 
Location: Lakewood Ranch, FL
5,119 posts, read 7,647,297 times
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I'd love it but I don't see it happening around here.
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Old 04-11-2012, 03:27 PM
 
Location: Martinsville, NJ
6,159 posts, read 10,897,199 times
Reputation: 3939
Quote:
Originally Posted by Captain Bill View Post
On another thread, a non-Realtor poster suggested that Realtors should be paid by the hour and not by commission. The reason suggested was to remove the conflicts that can occur by the agent wanting a buyer to pay more for a home so the agent can make more commission.

I assume he would want to pay the listing agent by the hour also to make it uniform. If I remember correctly, in an earlier post, the same poster said that he would be willing to pay a buyers agent around $25/hour to drive him around.

If he visits this thread, then he can clarify his thoughts so that I'm not misrepresenting his statements.

I decided to post this on the professional forum so agents can give their thoughts on the pro's and con's of this type pay arrangement, both for the agent and for the client.

Obviously any agent can charge any way s/he chooses as long as the Brokerage agrees, so this is just a hypothetical discussion.

What say you?
I say that if the only services provided by the agent are those of a chauffeur & doorman, the agent should be happy to take an hourly wage similar to what those service persons make.
If, however, the agent provides information, insight, advice, knowledge, expertise, experience, confidentiality, & fiduciary representation, then he has the right to ask for what he feels all those things are worth. Any person who wants those services can pay for them, and any person who wants to do without them is free to do so.
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Old 04-11-2012, 03:36 PM
 
Location: Long Island
9,038 posts, read 18,366,398 times
Reputation: 4745
$25/hr on Long Island? That might work if you're an employee, but certainly not when you have the overhead and taxes of self-employment

How about we change the name from commission to contingency fee? After all, we only get paid when the transaction closes. Attorneys get a much higher contingency fee...
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Old 04-11-2012, 04:12 PM
 
Location: Lead/Deadwood, SD
948 posts, read 2,268,114 times
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Hmmm. There are some complications I see with this - so you get a call on a Sunday evening, a buyer you've never worked with is very interested in a property you have listed plus would like some basic info on 4 others, the buyer wants addresses and info so he/she can do drive-buys the next morning before leaving town, and says he/she will then call you and schedule appointments for the following weekend.

Do you take the call and spend 30 minutes with them on the phone and another 10 sending them additional info, do you tell them you can't send them anything without a signed rate form, and what do you tell the seller for the 1 you have listed if the buyer didn't/wouldn't work with you do due your rate schedule? Who pays when in dual/limited agency? How does the co-op work with other agents?

I think it could most certainly work, but the varied rates, negotiations on the rates, and the logging for time I think would create a situation where time spent negotiating rates and logging rates, would reduce the time available to actually show and market property.

Oh ya and what about inputting info and talking on the phone at the same time - sweet double billing I guess....

Nah, I'll stick with the commission - the seller pays it, and it is simple for them to wrap their mind around the cost when it is in a percentage and for the buyer it is a no-brainer - whew, how would short-sales work? I'm sure the bank would love to here the end of the day amount would depend on how many hours you put in to it.
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Old 04-11-2012, 04:52 PM
 
Location: Columbia, SC
8,851 posts, read 17,447,111 times
Reputation: 6212
Of course that $$$ wouldn't cut it but I'd be open to be paid hourly.

On the flip side a fixed % of the sale is better for the client in most cases because they know what expenses will be up front. I can see consumers being surprised by the final billing hours since they don't see the work we do on the back end of the file. Then agents would be accused of running up the hours on purpose in order to fleece them out of their money. As a result the agent would end up taking the consumer to court to get paid. Good thought, but it would be messy and the consumer would end up being even less trustful. I could see that system becoming a complete disaster even though it sounds like a good idea on the surface.
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