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I'm sick and tired of the high prices of Cable TV, Movie Popcorn, Steaks, Gasoline, Insurance and Big Government! --- They have no right to charge me such outrageous prices! How can I avoid paying the people who provide these things ... without, of course, interfering with my ability to have them whenever I want.
What a conundrum. I worked hard to get my money and now these 'money grubbers' are making me spend more of it than I want to! Life just isn't fair.
I think I should just cut and paste from previous answers...sigh...
The reason that flat and hourly rates don't dominate is because consumers don't want it. Seriously, they don't. I am a fee-for-service broker and have been for 10 years. 90% of what I do is commissions because when presented with a choice, consumers choose to pay me a commission.
When consumers say they want flat rates or hourly rates, what they really mean is they want you to charge that but only if they close escrow. The problem is that doesn't work in business. Commissions are all or nothing for brokerages, like gambling. High risk equals high reward. If you are going to spend all of your time working and paying out your own money to market a property, with the possibility that you won't get paid, you are gambling with your business and income. As such, you expect to get rewarded for that. A seller loses nothing financially (generally speaking) if the agent doesn't close. They move on to agent number two. An agent loses hours and actual real money.
So...onto flat rates. Only bad business people cut their rate but stay with a high risk. Redfin knows this which is why they only go into markets with $500,000 homes. It lowers the risk for the business so they can offer rebates. Flat rate companies crashed and burned during the bust because the ability to sell a home decreased, costs to sell and market increased, and they were charging flat rates with no guaranteed payment. Bad business model and the owners need a math refresher.
The only way to do flat rates is to charge 50% upfront and 50% at close (or some variation). This minimizes the risk for the brokerage, which you would expect as they drop the rate. Low rates have to be low risk. It is that simple. Plumbers get paid regardless. Same with attorneys. Attorneys charge a retainer. Plumbers can put a lien on your house for non-payment.
Not surprisingly consumers aren't willing to shell out $2,000 upfront in order to save $10,000 on the back end. I have been living this business experiment for 10 years now.
This is true for hourly rates as well. Those get billed every 30 days.
Consumers are paying for the privilege of not paying. This is the main reason fees are so high and make no mistake, consumers choose this model. As such, it dominates.
There are fee for service brokerages in every state. Consumers just have to take the time to find them. Most choose not to because at the end of the day, people are risk averse and will avoid it when given a choice.
Please keep this handy. I'm sure you'll need to post it time and time again.
My brother in law was recently complaining about having to pay the IRS. I said I can tell you how to pay no income tax. He asked how? I said make no money. He did not get it.......LOL
You guys are missing the point. It's not about avoiding Realtors, it's about not paying them.
It's one thing to not want to pay their price and not using them, it's another to try and steal their work. The first is for most people a bad idea, the second is immoral. It's equal to someone breaking into you house and stealing your TV.
It's one thing to not want to pay their price and not using them, it's another to try and steal their work. The first is for most people a bad idea, the second is immoral. It's equal to someone breaking into you house and stealing your TV.
Quote:
Originally Posted by johngolf
Does the word facetious mean anything to some?
My brother in law was recently complaining about having to pay the IRS. I said I can tell you how to pay no income tax. He asked how? I said make no money. He did not get it.......LOL
"Facetious"
fa·ce·tious
/fəˈsiʃəs/ Show Spelled [fuh-see-shuhs] Show IPA
adjective 1. not meant to be taken seriously or literally: a facetious remark.
2. amusing; humorous.
3. lacking serious intent; concerned with something nonessential, amusing, or frivolous: a facetious person.
You guys are missing the point. It's not about avoiding Realtors, it's about not paying them.
It is late at night and I thought I wasn't seeing right when I stumbled upon this thread. You want to take someone's services, but not pay for them??!!! So what thread do you plan to start next? How to shoplift? Three easy ways to commit identity theft? How to be a burglar?
They should be paid if they represent someone in the transaction. Otherwise, use a flat-free service or go FSBO. Why would it be okay to cheat an agent out of their commission?
You guys are missing the point. It's not about avoiding Realtors, it's about not paying them.
Do you have any morals at all?
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ʃəs/ Show Spelled [fuh-see-shuh
