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I find it quite funny that so many real estate agents on this board have their *&^ties all bunched up because someone asked for a rebate. I'm sure all these agents paid full MSRP to their car-sales brethren for their automobiles.
Anybody running their own business "pays" in some way or another to get a client. We pay via advertising, networking meetings, fancy advertising brochures, gas, tolls, phone bills, etc etc - so many things we truly pay for to "buy" business. Just because you are not offering a rebate or not bribing anybody (lol) does not mean that you are not "buying" your customers.
Perspective is also important - there are many things worse than asking for a rebate - like that buyer who wanted to visit every listing in town and never bought anything. Or the buyer that used you to see a bunch of listings and then used their new friend / family member to place an offer and close the deal.
In my opinion, business is all about a little give and take. I am 100% sure that OP will find an agent to represent him. In Houston, there are agents who rebate 2.5% of their 3% commissions on new home construction sales and 1.5% on a 3% sale - even in today's hot Houston real estate market. This is a great deal for the savvy buyer who knows what he/she is doing.
In my opinion, business is all about a little give and take. I am 100% sure that OP will find an agent to represent him. In Houston, there are agents who rebate...... .
I take it you are not familiar with the San Francisco market. It's brutal for Buyers and their agents there.
It takes 3-4 times the amount of work and a buyer can make many offers way above asking price and never find a home.
Houston ain't San Francisco and that's what THIS thread is about.
I find it quite funny that so many real estate agents on this board have their *&^ties all bunched up because someone asked for a rebate. I'm sure all these agents paid full MSRP to their car-sales brethren for their automobiles.
Anybody running their own business "pays" in some way or another to get a client. We pay via advertising, networking meetings, fancy advertising brochures, gas, tolls, phone bills, etc etc - so many things we truly pay for to "buy" business. Just because you are not offering a rebate or not bribing anybody (lol) does not mean that you are not "buying" your customers.
Perspective is also important - there are many things worse than asking for a rebate - like that buyer who wanted to visit every listing in town and never bought anything. Or the buyer that used you to see a bunch of listings and then used their new friend / family member to place an offer and close the deal.
In my opinion, business is all about a little give and take. I am 100% sure that OP will find an agent to represent him. In Houston, there are agents who rebate 2.5% of their 3% commissions on new home construction sales and 1.5% on a 3% sale - even in today's hot Houston real estate market. This is a great deal for the savvy buyer who knows what he/she is doing.
I don't pay full MSRP for any car. I deal hard and I know the car dealer's business better than the salesman. That said, I would never think to ask the car salesman to give me part of his commission to make the deal. If I ever become that kind of miserable cheap miser, just shoot me.
How is it different for a buyer to ask for a 28% rebate, when you willingly offer a 28% referral fee and defend the practice?
How is it not "Buying Business" regardless of the beneficiary of the kickback?
If the buyer should eschew a rebate that equals the hit to your bottom line from a referral out of respect for your business acumen, professional service and skill, shouldn't the referral partner offer the same recognition and be satisfied that the valued client is benefitting from your skill?
28% on a $5000 commission = $1400, leaving a $3600 commission. Does that gross commission of $3600 spend differently because you paid for the business with a preferred partner rather than a consumer/client?
$3600 spends the same for me, however I earn it. My groceries cost me the same, regardless of the source or amount of my paycheck. Same with my rent, professional fees, taxes, and all other business overhead.
I'm all for any broker agreeing to whatever rebate or referral they want.
Personally, however, I do see a difference between a rebate and a referral. I'll pay a referral fee (up to a certain amount) because I see that as business to which I would otherwise not have access. It didn't come to me through advertising or marketing of my own, and for which I paid. A rebate is usually asked for by people who have found me through my marketing efforts, for which I paid, in one form or another. So the rebate ends up seeming like a double payment, and therefore a bad ROI.
But that's just my personal justification.
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Originally Posted by Bill Keegan
I'm all for any broker agreeing to whatever rebate or referral they want.
Personally, however, I do see a difference between a rebate and a referral. I'll pay a referral fee (up to a certain amount) because I see that as business to which I would otherwise not have access. It didn't come to me through advertising or marketing of my own, and for which I paid. A rebate is usually asked for by people who have found me through my marketing efforts, for which I paid, in one form or another. So the rebate ends up seeming like a double payment, and therefore a bad ROI.
But that's just my personal justification.
I work for revenue + margin, and my $3600 spends the same, regardless how I arrive at it.
My advertising is pretty much a fixed cost. It is offset by revenue and margin.
Throw another $3600 in my pocket at no additional ad costs, and it is a pure play, in my mind.
It would also seem that to analyze the "double payment" as a bad ROI, one may have to assume a very high, perhaps 100%, conversion and closing rate on contacts.
Last edited by MikeJaquish; 04-07-2014 at 07:50 AM..
Reason: Added ":D"
Especially in a place like SF where there is a shortage of homes.
When there is a shortage it takes about 3 times the amount of work to get a home.
I have a client here who's made 5 offers over list price and not gotten any.
It's taking me much more work because we have to run out every 2 days and look at all the new listings.
Then when you see one you like there are 3-5 more offers to compete with.
It was OP's 1st post and he's not been back. Must have found an agent.
Snort. Found an agent. Yeah sure!
There's a flip side to this as well. We were selling our house and it was listed with an agent for 9 months. I lived out of state and she sent us copies of the ads and newspapers the house was listed in. She didn't sell the house and had a boatload of money tied up in ads, open houses, mls listing, showings, etc. She collected NOTHING when it was sold via short sale with a different agent. She spent a small fortune and ended up with nothing to pay all those bills.
So just because an agent collects a commission on a sale doesn't mean they are racking them up. For every house they have sold, they could have 5 or 10 that they have not and lost money on.
So why would agents line up to give away their earnings??
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Snort. Found an agent. Yeah sure!
There's a flip side to this as well. We were selling our house and it was listed with an agent for 9 months. I lived out of state and she sent us copies of the ads and newspapers the house was listed in. She didn't sell the house and had a boatload of money tied up in ads, open houses, mls listing, showings, etc. She collected NOTHING when it was sold via short sale with a different agent. She spent a small fortune and ended up with nothing to pay all those bills.
So just because an agent collects a commission on a sale doesn't mean they are racking them up. For every house they have sold, they could have 5 or 10 that they have not and lost money one.
So why would agents line up to give away their earnings??
under the current most common business model, it is a fact that clients who close transactions and generate agent revenue are covering the costs for those who don't.
And, wealthier clients with more expensive properties subsidize lower end transactions.
I just don't understand this. I'm not trying to start a fight or argument, but it just boggles my mind. Why would somebody ask someone (whom they are NOT paying from their pocket) for money back for doing a job?
I could understand a seller's agent giving up a portion of their commission for the seller to agree to the offer -- the seller doesn't have to pay that much in the end.
I don't know, maybe it's because I give my clients full attention. I work hard for them and am always learning what to do better. And my paycheck does not come from them! So if one of them were to ask me for a portion of my paycheck I would say what for? I'm already working FOR you at no cost to you and now you want to discount that cost even further? Seems unfair...
In my opinion, business is all about a little give and take. I am 100% sure that OP will find an agent to represent him. In Houston, there are agents who rebate 2.5% of their 3% commissions on new home construction sales and 1.5% on a 3% sale - even in today's hot Houston real estate market. This is a great deal for the savvy buyer who knows what he/she is doing.
It wasn't that the OP couldn't find an agent to rebate to them. They couldn't find a good agent (one who spends the time they wanted) to rebate to them.
I agree that rebates can be a great thing for a savvy and well educated buyer that knows what they want, but the OP wants an agent's time. Will they find someone to rebate and give them the time they want? Maybe, but it would take a lot of phone calls and interviews. Typically rebating and a lot of personal attention don't go together for agents that want to make a profit and stay in business long term.
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