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We don't mind a little work..simply not quite as irrational as you.
I simply do not share your view that showing a serious buyer – particularly a first-time buyer – as many houses as they need to be comfortable is “irrational.”
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Originally Posted by olecapt
I don't however show 2% or below unless the buyer agrees to compensate me for the difference. I do FSBOs the same way.
Of the 28,149 properties currently listed in our area, OleCapt, 10% are offering more than the percentage you like and 8% are offering less. Sometimes you’ll make more, sometimes you’ll make a little less…but it will always even out. Lord knows that you and I live in a town where we should be savvy of the odds.
I personally cannot understand why an agent wouldn’t show every house, regardless of the co-op. When it comes to FSBOs, you and I know that they are almost universally overpriced. Those sellers aren’t doing it themselves so that they can hand over their savings to a buyer. I’ve shown tons of FSBOs with full knowledge that one of these days a buyer is going to want to make an offer and I’ll end up doing both sides for free. When it happens it will be a small price to pay for the trust and confidence of the other 300 clients that knew I wasn’t afraid to show them FSBOs. And how many referrals do you think I would get from the one that does buy a FSBO? Again, these are good odds, OleCapt – realtors that play them do extremely well.
By the way, do you really think that your client is incapable of getting in his car and going by himself to see the FSBO that you wouldn’t show him?
Quote:
Originally Posted by olecapt
When are you taking a bribe to get your client to sign? Hell there was one condo conversion offering 15%...you go there too?
Let me get this straight: I will show my clients any house irrespective as to whether any commission that I might earn is high, low or even non-existent. You refuse to show your clients any property that will not result in a 2.5% commission to you. And you accuse me of accepting bribes? OleCapt, you’re the one demanding the “bribe.” Do you drive your client back to their car when they refuse your demand or do you just make them get out and walk home from the FSBO you won’t show them?
The highest percentage I’ve ever received was the 5% in the transaction I wrote about above. And, as I wrote in my post, if a property is offering a commission that’s on the right of the bell curve, I tell people about it before we even head to the property. It’s why I haven’t sold the new construction that’s offering 7% and more. But if someone wanted to buy one, I would be thrilled and I would keep every penny.
Quote:
Originally Posted by olecapt
I will do 2.5% as well as generally not being worth a redicker over.
You are colorful, OleCapt…although this word does not exist in any dictionary, your use of it is what makes you rock!
I simply do not share your view that showing a serious buyer – particularly a first-time buyer – as many houses as they need to be comfortable is “irrational.”
That is always a funny problem...one who has it is always the last to know.
Quote:
Of the 28,149 properties currently listed in our area, OleCapt, 10% are offering more than the percentage you like and 8% are offering less. Sometimes you’ll make more, sometimes you’ll make a little less…but it will always even out. Lord knows that you and I live in a town where we should be savvy of the odds.
I personally cannot understand why an agent wouldn’t show every house, regardless of the co-op. When it comes to FSBOs, you and I know that they are almost universally overpriced. Those sellers aren’t doing it themselves so that they can hand over their savings to a buyer. I’ve shown tons of FSBOs with full knowledge that one of these days a buyer is going to want to make an offer and I’ll end up doing both sides for free. When it happens it will be a small price to pay for the trust and confidence of the other 300 clients that knew I wasn’t afraid to show them FSBOs. And how many referrals do you think I would get from the one that does buy a FSBO? Again, these are good odds, OleCapt – realtors that play them do extremely well.
Never had an occasion when I did not show the house. Can't you always sell your buyer on doing the right thing? Your position is wonderfully inconsistent though. You discount only for relatives and repeats...but you do FSBOs for free. What was that term "irrational"?
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By the way, do you really think that your client is incapable of getting in his car and going by himself to see the FSBO that you wouldn’t show him?
Sometimes...but he will have to find it. I mostly know the FSBOs. I don't stumble on them with clients. (Well mostly I don't...when that happens I wing it)
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Let me get this straight: I will show my clients any house irrespective as to whether any commission that I might earn is high, low or even non-existent. You refuse to show your clients any property that will not result in a 2.5% commission to you. And you accuse me of accepting bribes? OleCapt, you’re the one demanding the “bribe.” Do you drive your client back to their car when they refuse your demand or do you just make them get out and walk home from the FSBO you won’t show them?
The highest percentage I’ve ever received was the 5% in the transaction I wrote about above. And, as I wrote in my post, if a property is offering a commission that’s on the right of the bell curve, I tell people about it before we even head to the property. It’s why I haven’t sold the new construction that’s offering 7% and more. But if someone wanted to buy one, I would be thrilled and I would keep every penny.
No no. I never refuse to show any property. I simply insist that I be compensated for it. Now you are willing to profiteer at your clients expense and then think it wrong for me to obtain a just wage?
Next time you do this to your client tell them up front that you have the overage for them but you are going to keep it because you can. See how much they love you when it is explained properly. You folks play this funny game where you make it appear as it is not their money. Kind of the RE Agents three card Monte. If you explain it properly to the client they will take the money virtually every time. You just avoid a proper explanation. Have the next one call me. I will explain it fully, clearly and correctly. Wanna bet who gets the money?
Quote:
You are colorful, OleCapt…although this word does not exist in any dictionary, your use of it is what makes you rock!
My wife would have made me place a hyphen in the middle if she saw it...but I like it fine like that. The components are easily found in a dictionary.
Many non-agent posters to this forum have the mistaken notion that an agent's marketing efforts should be directed at buyers.
They are incorrect.
After a brokerage split and taxes, the listing agent is looking at around $4000 on a typical $250,000 house - if it sells. At $150 - $250 for a weekend ad in most newspapers and $300 - $500 for a small ad run once in a weekly or a monthly magazine, consumer marketing efforts are not economically viable.
Most agents target their marketing at other agents. MLS listings, broker showings, flyers at other offices and, yes, bonuses...these are not only economically viable marketing efforts, they're smart. After all, over 90% of all potential buyers will utilize the services of an agent once they make the committment to purchasing a home. A particular advantage of offering a bonus to the buyer's agent is that the listing agent is only out of pocket if the property closes.
Last year, I was looking for a home for a couple that worked opposite shifts. The husband and I would go out during the week to look at everything on the market and narrow it down to five or six that we would show his wife every Saturday. This went on for about seven or eight weeks.
The husband always knew what the commission was that I would receive--it was right on the listing sheet with the directions that he would read to me as we went house to house. It never mattered to me if it was 2% or 3% or 4%. A percent or two is nothing compared to the value of a happy client that refers their friends to me.
One night, as I was planning the next day's showings, I came across a home that was about three or four miles out of the area we had been looking in, but it looked perfect...and it had a 5% commission.
When the guy and I were done looking at homes the next day, I showed him the out-of-area listing and said, "Would you mind if we took a quick look at this one? It actually looks pretty good and it's got a huge commission for me."
He laughed and said sure...after riding around together for eight weeks, we we had gotten to be pretty good friends - and it was only seven or eight minutes away.
When we walked in the house, we knew immediately that his wife would absolutely flip over it. It was exactly what they had been looking for and the area was even better than the one in which we had been looking.
We brought his wife the following Saturday. She did love it and we wrote the offer that night. Two counter-offers and 25 days later, they moved in.
Was my action ethical? It certainly seems so - I disclosed the commission and my motivation before we even went to the home.
Did the big commission cause the buyer to buy a house that they shouldn't have purchased? Absolutely not...they love their house and they're totally glad that they're in the neighborhood they are in rather than one of the ones in which they had told me to look.
Did the big commission cause me to recommend a negotiation strategy that was less agressive than I otherwise would have? Tough to prove either way, but the fact that it took two counters is at least indicative that we weren't patsies.
Do my buyers have any regrets or resent that I received a higher percentage than I would have had they purchased one of the other 80 homes that the husband and I had looked at? Not at all. Their downpayment came from the sale of their condo - in which I gave the buyer's agent 4% and kept 2% for my side. And, yes, they have referred their friends to me.
Did the big commission cause me to show a property that I otherwise would not have? Clearly, the answer is yes, in that the property was outside the area they had instructed me to look.
The financial incentive offered to buyer agents was a smart marketing decision on the part of the listing agent and the seller because it resulted in a showing that would not have otherwise occurred.
Incentives targeted at agents are neither inherently evil nor do they necessarily result in unethical behavior. It is simply part of the marketing arsenal that we have available to us.
Eric - I wish every single poster at city-data could see this terrific post. May you live long and prosper.
I'd send you referral business any time.
Givers gain!
David Beckett
Many non-agent posters to this forum have the mistaken notion that an agent's marketing efforts should be directed at buyers.
They are incorrect.
After a brokerage split and taxes, the listing agent is looking at around $4000 on a typical $250,000 house - if it sells. At $150 - $250 for a weekend ad in most newspapers and $300 - $500 for a small ad run once in a weekly or a monthly magazine, consumer marketing efforts are not economically viable.
Most agents target their marketing at other agents. MLS listings, broker showings, flyers at other offices and, yes, bonuses...these are not only economically viable marketing efforts, they're smart. After all, over 90% of all potential buyers will utilize the services of an agent once they make the committment to purchasing a home. A particular advantage of offering a bonus to the buyer's agent is that the listing agent is only out of pocket if the property closes.
Last year, I was looking for a home for a couple that worked opposite shifts. The husband and I would go out during the week to look at everything on the market and narrow it down to five or six that we would show his wife every Saturday. This went on for about seven or eight weeks.
The husband always knew what the commission was that I would receive--it was right on the listing sheet with the directions that he would read to me as we went house to house. It never mattered to me if it was 2% or 3% or 4%. A percent or two is nothing compared to the value of a happy client that refers their friends to me.
One night, as I was planning the next day's showings, I came across a home that was about three or four miles out of the area we had been looking in, but it looked perfect...and it had a 5% commission.
When the guy and I were done looking at homes the next day, I showed him the out-of-area listing and said, "Would you mind if we took a quick look at this one? It actually looks pretty good and it's got a huge commission for me."
He laughed and said sure...after riding around together for eight weeks, we we had gotten to be pretty good friends - and it was only seven or eight minutes away.
When we walked in the house, we knew immediately that his wife would absolutely flip over it. It was exactly what they had been looking for and the area was even better than the one in which we had been looking.
We brought his wife the following Saturday. She did love it and we wrote the offer that night. Two counter-offers and 25 days later, they moved in.
Was my action ethical? It certainly seems so - I disclosed the commission and my motivation before we even went to the home.
Did the big commission cause the buyer to buy a house that they shouldn't have purchased? Absolutely not...they love their house and they're totally glad that they're in the neighborhood they are in rather than one of the ones in which they had told me to look.
Did the big commission cause me to recommend a negotiation strategy that was less agressive than I otherwise would have? Tough to prove either way, but the fact that it took two counters is at least indicative that we weren't patsies.
Do my buyers have any regrets or resent that I received a higher percentage than I would have had they purchased one of the other 80 homes that the husband and I had looked at? Not at all. Their downpayment came from the sale of their condo - in which I gave the buyer's agent 4% and kept 2% for my side. And, yes, they have referred their friends to me.
Did the big commission cause me to show a property that I otherwise would not have? Clearly, the answer is yes, in that the property was outside the area they had instructed me to look.
The financial incentive offered to buyer agents was a smart marketing decision on the part of the listing agent and the seller because it resulted in a showing that would not have otherwise occurred.
Incentives targeted at agents are neither inherently evil nor do they necessarily result in unethical behavior. It is simply part of the marketing arsenal that we have available to us.
So I wonder if as a selling agent this bonus (Vig) should be paid out of the selling agents cut of the commission? Seems fair to me, since according to the above we're marketing to the agents not the buyers and the only people who gain out of the Vig payment is the agent not the buyer or seller. Yes, the seller gets the house sold but has raised the price to cover the Vig so from that aspect it may not sell as fast as it would have had the Vig increase not been there and the buyer doesn't benefit since they're the ones paying it whether they really know it or not.
I do love watching people justify taking someone's money....
I do not believe there is anything wrong with performance based pay.
If I do the job I set out to do, I get paid. There is no prize money for second place.
I get paid paid based on a percentage of the sale. So to me, whether it is $5,000 or $5,900, or $15,300 doesn't matter as much, as long as the client is happy.
I have enjoyed working over the years for one client who came to me from a floor call. He wanted a condo for mom. We found one for $45,000. Next he wanted a small rehab for investment, we found one for $95,000 that he sold for $125,000...fast forward 15 years...that one $45,000 sale, has turned into more than 30 transactions.
My relationship with my clients is based on trust. If you don't start your partnership off based on mutual trust and respect...you start to focus on the person rather than the goal of homeownership.
Select the best representation you can find, and keep your eye on the prize.
So I wonder if as a selling agent this bonus (Vig) should be paid out of the selling agents cut of the commission? Seems fair to me, since according to the above we're marketing to the agents not the buyers and the only people who gain out of the Vig payment is the agent not the buyer or seller. Yes, the seller gets the house sold but has raised the price to cover the Vig so from that aspect it may not sell as fast as it would have had the Vig increase not been there and the buyer doesn't benefit since they're the ones paying it whether they really know it or not.
I do love watching people justify taking someone's money....
How do you prove that the seller raised the price to cover the commission? Doesn't the house have to appraise? Doesn't the buyer choose the property base on comparison of other houses? Informed buyers never buy homes that they don't want. [Hey buyer, come buy this house - over the other 10 that you've seen. I know it's more money, and it's not exactly in the school district you wanted....but I'll make another $2500...so initial here all 11 pages, sign this page, press hard, you are making 5 copies.]
How do you bonus out of your own commission?
We market to BUBBA's (Buyer's Unrepresented by Buyers Agents) and other agents/licensees/brokers/neighbors. We want to reach out through advertising that we want to broker a sale for our client, period.
Brokers are not the natural enemies of the buyer or seller. The differing agenda's of the buyer and seller make them adversaries.
I have not read thorugh this whole thread because it has all been said before in other threads.
If you want to pay an agent by the hour, there are agents out there that will do it.
If you want to pay an agent a retainer against a kickback at closing, there are some out there that will do it, in some states it is illegal to give a kickback though.
If you want an agent that will just take the commission that is offered by the seller, we know there are agents that will do this.
If you choose not to utilize an agent you have every right to do this also.
So, you have all these choices and more, it is up to the buyer what they wish to do.
Regarding different commission amounts, the seller chooses how much commission to pay their agent and how much to offer to the buyers agent.
If they offer 12% to the buyers agent that is their choice. Of course the buyer does not need to buy that home but if it is still priced right and is what they want, where is the problem?
If they are offering 12% and priced too high to cover the commission it probably will not sell anyway. There are FSBO's priced too high and not offering anything. We all know price sells. If a buyer is not strong enough mentally to resist buying something they shouldn't who's fault is that?
Linus, a good agent will provide you with what you want and you don't have to worry about a retainer. A good agent doesn't worry about the commission. Your problem is bigger: you don't trust any real estate agent. One poster commented earlier that your lack of trust will lead you to exactly the agent you want to avoid and I tend to agree.
A top producer (generally the best agents) makes around $250/hr or better. You want a top producer, not a $100/ hr. agent. You also fail to grasp the money side of real estate. Unfortunately, it is difficult to understand unless you've worked in real estate. You aren't alone, many share your point of view. I don't blame you, it's just difficult to grasp until you do it. There are only 2 professions with more legal responsibility: Lawyers and Doctors. High risk=high reward.
I think you're missing the point. A buyer's concerns about conflicts of interest are reasonable, and legitimate. You can brush them aside, if you want, but I think you should expect buyers to trust you even less, when you do that.
As far as the argument that agents don't care about fees... what can I tell you?
I didn't just fall off the turnip truck.
I'm not looking for the Mother Theresa of real estate agents.
I want someone who DOES care about fees, and understands that I'm the one paying his bills, not the seller.
I think you're missing the point. A buyer's concerns about conflicts of interest are reasonable, and legitimate. You can brush them aside, if you want, but I think you should expect buyers to trust you even less, when you do that.
As far as the argument that agents don't care about fees... what can I tell you?
I didn't just fall off the turnip truck.
I'm not looking for the Mother Theresa of real estate agents.
I want someone who DOES care about fees, and understands that I'm the one paying his bills, not the seller.
Can someone please forward Linus a copy of a HUD1 statement. He is under the assumption that lines 700-704 are his obligation. He will need a Realtor who is also a CPA as well as an attorney, and pastor to explain lines 700-704.
Can someone please forward Linus a copy of a HUD1 statement. He is under the assumption that lines 700-704 are his obligation. He will need a Realtor who is also a CPA as well as an attorney, and pastor to explain lines 700-704.
I take it that's your condescending way of saying it's the seller who pays the buyer's agent's fees.
Thanks for the heads-up on that.
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