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Old 04-18-2018, 12:43 PM
 
9,601 posts, read 9,156,864 times
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Quote:
Originally Posted by SFSGood View Post
I can't think of any occupation that requires less effort to earn as much as six or seven percent of hundreds of thousands of dollars.
This is what a lot of people think about Realtors. They think they spend a few minutes showing a home, a few more to write and present a contract and make a huge profit from the commission.

Today the listing agent is except in rare occasions, is only the listing agent, and their office gets about half of their share of the commission, so the salesperson is actually only getting 1.5% of the selling price, not 6% or so. The office gets the same, and the selling agent, and his office get the same.

And out of that 1.5% of the commission, the salesperson has a lot of expenses to be in the business the sellers never even realize. And the same for the brokers.

They do not realize, that 80% or so of all agents, and a large share of that group are not earning as much after expenses as someone working at McDonald's, and the majority of that group will run out of savings to keep going on, and will leave the business. They do not realize, that that same group is the ones willing to cut commission to get listings, and the 15% of the agents that sell 80% of all property, know they cannot afford to cut commissions as those listing just sit unsold month after month because the other agents (selling agents) will only work on properties that pay a full commission.

Figure how many sales that 80% make, when only 1,500,000 homes are sold each year, and there are 1,400,000 licensed real estate agents in the USA.

I was an investment real estate broker, from 1972 until I finally retired. In all my days in the business I would not work for less than 6% commission. A large percentage paid a 10% commission, if they were going to take a lot more effort and time than normal. Properties that the average Realtor could not get sold.

A lot of my transactions were exchanges often involving up to 7 or 8 properties with different owners called a running exchange with some properties from other states and even a few with foreign properties involved.

I bought, sold, and exchanged a lot of single family mid range newer homes to investors. My best day, was selling out a 13 unit to be built subdivision and one extra home by a seller needing a 2 day sale period to beat the repo man. Yes 14 nice homes, sold on the phone sight unseen to buyers that bought 2 to 5 homes, depending on how much available down payment money they had at the time, all done in 2.5 hours. And one I got 6% commission and the other 13 I got 3% commission. The 13 home subdivision was done for a 16 year in the business broker that owned the lots, and a small but good builder. They had to have 6 under formal contract before they could get construction money. They came to me to solve the problem and offered me a full 3% commission to sell them, which neither of them could do. They made the deal with me over lunch that they bought and paid for, and by 3 pm they were all sold to good solid buyers.

I had some of the best house selling brokers, bring properties owned by themselves and or family members and listed with me at full commission as they knew they were not qualified to sell the properties quickly and at a good price. I had two brokers with many years in the business, offer me a 3% commission to handle a complicated transaction with properties they owned, that only needed someone that understood what they were doing to structure it and write the contract. They did not take it to an attorney to do, as no attorney in town would know how to do it. It took me less than an hour to get it written up, and ready to go to the escrow company to handle the closing. I went with them to the escrow company, and showed them how to handle the closing as they had never handled such a transaction.

Too many people do not understand the real estate business, what efforts agents put forth and how many hours they work, and the expenses they have to cover out of their pockets. Only a few agents/brokers really make a lot of money, that people think every agent earns. And the successful agents that get the job done, are not the ones that cut commissions to the bone like sellers think they should.
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Old 04-18-2018, 01:28 PM
 
Location: Raleigh NC
18,199 posts, read 10,106,183 times
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Quote:
Originally Posted by mikejaquish View Post
:d
there is no "standard" in the informed world.

If the agent in the rust belt cannot make a living because their model does not generate adequate revenue, they need to reconsider their model.
If the consumer in sf decides to pay a commission they don't like, they need to reconsider their decisions.

But, there is no "standard" commission.
why do you put in air quotes?????????//11111//???/
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Old 04-18-2018, 01:29 PM
 
Location: Raleigh NC
18,199 posts, read 10,106,183 times
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Quote:
Originally Posted by SFSGood View Post
I can't think of any occupation that requires less effort to earn as much as six or seven percent of hundreds of thousands of dollars.
sports agent?

I mean, the standard is 10% of the contract. There's not an agent alive that averages even 5% per deal.
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Old 04-18-2018, 01:44 PM
 
Location: Cary, NC
36,323 posts, read 63,218,132 times
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Quote:
Originally Posted by BoBromhal View Post
why do you put in air quotes?????????//11111//???/
Because I wanted to.
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Old 04-18-2018, 02:06 PM
 
Location: Columbia, SC
9,718 posts, read 19,105,921 times
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Quote:
Originally Posted by SFSGood View Post
I can't think of any occupation that requires less effort to earn as much as six or seven percent of hundreds of thousands of dollars.
Attorneys?
Finance Managers?
Lenders?
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Old 04-18-2018, 05:58 PM
 
Location: Austin
13,904 posts, read 8,040,015 times
Reputation: 15847
Quote:
Originally Posted by Thundarr457 View Post
What do you think will be the future of percentage based commissions? Will it go to a fixed rate? With the advent of the internet, do you think its just a matter of time until someone develops a platform where they recruit local agents to work for a fixed remuneration vs the current percentage based system? It might work where the homeowner does some of the work ala FSBO but an agent handles the transaction and offers some limited assistance. Perhaps what to do to make the house more salable, listing price.
the MLS monopoly will go away eventually. it should. the overwhelming majority of real estate agents add no value to a transaction other than their closely guarded MLS statistics.
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Old 04-18-2018, 06:31 PM
 
Location: Raleigh NC
18,199 posts, read 10,106,183 times
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what is the "monopoly" and the "cartel"?

The "good agents" here have no issue discussing the compensation we charge and the compensation we are paid, and the compensation we earn.

We just want to do so with folks who have a semblance of understanding,and don't have an ax to grind. With folks that are upfront and honest - as the agents are expected to be - and not full of questionable "this happened to me" anecdotes that even if true cover a 30 year span of very different times and practices.

For at least 20 years, the commission that a seller pays an agent to assist in the sale of their home has been negotiable. For at least 20 years, Buyers have had the opportunity to be represented. For at least 10 years, various other models - be they Zillow, Redfin, Opendoor and numerous outfits no longer in business or that have yet to be conceived - have been available.
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Old 04-18-2018, 06:37 PM
 
Location: Austin
13,904 posts, read 8,040,015 times
Reputation: 15847
Quote:
Originally Posted by BoBromhal View Post
what is the "monopoly" and the "cartel"?

The "good agents" here have no issue discussing the compensation we charge and the compensation we are paid, and the compensation we earn.

We just want to do so with folks who have a semblance of understanding,and don't have an ax to grind. With folks that are upfront and honest - as the agents are expected to be - and not full of questionable "this happened to me" anecdotes that even if true cover a 30 year span of very different times and practices.

For at least 20 years, the commission that a seller pays an agent to assist in the sale of their home has been negotiable. For at least 20 years, Buyers have had the opportunity to be represented. For at least 10 years, various other models - be they Zillow, Redfin, Opendoor and numerous outfits no longer in business or that have yet to be conceived - have been available.
do buyers or sellers have unfettered access to the mls stats in your area? I think the traditional re agent is already a dodo bird in many markets.
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Old 04-18-2018, 06:38 PM
 
Location: Staten Island, NY
3,615 posts, read 1,304,443 times
Reputation: 2735
When I was a Realtor it was during the 1% and 2% sales boom. It really hurt the real full-service realtors. I would work on a flat rate or percentage depending on the difficulty of the sale and the eagerness of the client to sell. Back in those days I could list a house on a Tuesday, have an open house on a weekend and if the house met a certain type of criteria, conditions, location school system I would have several binders with offers to negotiate by Monday.That type of sale I cold work on a flat rate because in most cases the house sold itself. The harder sells, divorce, bad condition that needed time to sell and needed more of an effort by me usually resulted in 3% commission fee. Many of those times the client tried a cut-rate internet brokerage and the house wouldn't sell. If my memory served those realtors required a 6-month listing. I would do a 30-day listing if I knew I had someone waiting and I could get 4% out of the seller because now they are beyond motivated, they are desperate. Winter is coming, the house could be in foreclosure and they need to move it or lose it. Timing is everything but I was able to create a nice reputation as a miracle worker back then. I did very well for myself but, I don't miss the business at all.

I should also add if I was getting 3% I could co-broke. Usually only 1% but I wouldn't turn the offer away. If I got 4% it would do 1.5% to 2%. My first responsiblity was to the seller to sell their home as quickly as possible to best-qualified buyer.

Today the commissions are 3% to 6%. I remember in the 80's and 90's we were getting 6% and 7% and the home prices were significantly less but we had much more inventory then we do today.

Last edited by LGR_NYR; 04-18-2018 at 06:50 PM..
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Old 04-18-2018, 06:46 PM
 
Location: Raleigh NC
18,199 posts, read 10,106,183 times
Reputation: 11756
Quote:
Originally Posted by texan2yankee View Post
do buyers or sellers have unfettered access to the mls stats in your area? I think the traditional re agent is already a dodo bird in many markets.
unfettered access? No.

Can a consumer in major markets (including mine which is a MSA of ~ 1MM people) see: Active, Under Contract, Recently Sold?

Yes.
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