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I personally hate how agents are paid. The only people really benefiting from this pay structure is the big brokerages. Don't tell my branch manager I said that I would very much rather there be a flat fee and ala carte services clients pay for; and the agent be paid in "billable hours". But as someone mentioned, these types of brokerages already exist and the public has chosen to stick with the big brokerages for the most part because there is the perception that you get what you pay for.
When most houses sold for $30,000, six percent seemed an ok commission to pay. Now that you might sell a house for $850,000, that same 6% seems absurdly overpriced for the amount of work done. I'd like to see something on an escalating scale (or maybe de-escalating scale) as the price goes up. Or maybe the owners of these high-priced houses negotiate something lower from a realtor?
Commissions are always up for negotiation, so feel free. I will note, however, that it generally costs more to market a $850,000 house than it does a $200,000. Depending on geography, a $1 million home could take six-twelve months to sell -- that's 6-12 months of constant marketing.
I personally hate how agents are paid. The only people really benefiting from this pay structure is the big brokerages. Don't tell my branch manager I said that I would very much rather there be a flat fee and ala carte services clients pay for; and the agent be paid in "billable hours". But as someone mentioned, these types of brokerages already exist and the public has chosen to stick with the big brokerages for the most part because there is the perception that you get what you pay for.
The "a la carte" brokerages often end up with unhappy clients because no matter how carefully the a la carte brokerages explain that "this costs this, and that costs that, and if you want this, it's extra. . . " there's always the expectation in the back of a client's mind that "well, why can't you just throw this in, too, since I'm paying you all this money?" Or they ask for a sign, and don't like the $200 charge. Or they want someone else to schedule showings -- that's an extra $500 . . . etc. Leads to disgruntled clients, because their next door neighbor, who is using a full-service broker, isn't having to deal with that. Every time I've worked with an a la carte broker, the seller ends up coming to the closing table frustrated and annoyed, and almost always says, "never again". it's fine for people who do it regularly -- i.e., investors, etc. But for people who only do this once ever 7-15 years -- it's often overwhelming..
Billable hours for real estate agents . . . omigod, that would be amazing. Bring it on. My pay scale would be considerably higher. ;-) And that would be on TOP of hard marketing expenses, right? *cough*
Unfortunately, that is just not true any more...that is what agents want the public to think, but 9 out of 10 times in my area the only "marketing" that is done is professional photos, maybe an hour or two with a staging expert to move existing furniture and declutter, then its get put on the MLS....And I am referring specfically to homes in excess of $1,000,000 - b/c where I am active, that is the lot value of the homes.
The MLS is 99% of the exposure, the other 1% is the agent blasting the listing onto facebook/twitter/instagram - ALL of these are free services, and take far less than 2 minutes each to populate. Our MLS is pay per quarter or per year...annually is less than $300 for unlimited listings and each listing comes with its own dedicated web page.
Well, everyone does it differently in different parts of the country.
Professional photos for a $2,000,000 home around here usually end up being between $500-$800. Add in a professional videographer. $850-1,5000.
Our MLS is NOT per quarter -- it is PER TRANSACTION when it sells, i.e., .0012 of the sales amount -- from both the buying AND the listing agent. So for a $2,000,000 home, that's $2,400 TIMES 2. The MLS is getting $4,800. So there's another difference.
Yes, there's Facebook, Twitter and Instagram (don't forget Pinterest :-) Facebook can be free -- but you get more bang for your buck if you boost a listing to targeted demographics - and that costs money. And while it may be "free" -- it still takes time to do it, and as we all know, "time is money". To sit down and craft an eye-catching piece for publication is not the work of "two minutes".
I have a list of approximately 103 things that are done on a new listing within the first 30 days, to insure that it is reaching the widest possible audience and reflects an expected degree of quality of service. Some of it is done by me -- other parts of it is done by an assistant, who also need to be paid.
Everyone thinks that the agent takes that 3% and dances away from the table, planning their spa trip. Take out taxes, take out brokerage fees, take out marketing costs, take out administrative costs, take out overhead -- all those pesky things that almost EVERY self-employed person has to deal with -- who has time for the spa?! :-)
Our MLS is NOT per quarter -- it is PER TRANSACTION when it sells, i.e., .0012 of the sales amount -- from both the buying AND the listing agent. So for a $2,000,000 home, that's $2,400 TIMES 2. The MLS is getting $4,800. So there's another difference.
It leads to disgruntled clients because all the parts that make the whole are over priced. I agree there will be some pain on the clients side to level out the market but I think its worth it. A sign should not cost $200 and as long as clients are willing to deal with a little pain until the market corrects it will be ok.
Quote:
Originally Posted by dblackga
The "a la carte" brokerages often end up with unhappy clients because no matter how carefully the a la carte brokerages explain that "this costs this, and that costs that, and if you want this, it's extra. . . " there's always the expectation in the back of a client's mind that "well, why can't you just throw this in, too, since I'm paying you all this money?" Or they ask for a sign, and don't like the $200 charge. Or they want someone else to schedule showings -- that's an extra $500 . . . etc. Leads to disgruntled clients, because their next door neighbor, who is using a full-service broker, isn't having to deal with that. Every time I've worked with an a la carte broker, the seller ends up coming to the closing table frustrated and annoyed, and almost always says, "never again". it's fine for people who do it regularly -- i.e., investors, etc. But for people who only do this once ever 7-15 years -- it's often overwhelming..
Billable hours for real estate agents . . . omigod, that would be amazing. Bring it on. My pay scale would be considerably higher. ;-) And that would be on TOP of hard marketing expenses, right? *cough*
It leads to disgruntled clients because all the parts that make the whole are over priced. I agree there will be some pain on the clients side to level out the market but I think its worth it. A sign should not cost $200 and as long as clients are willing to deal with a little pain until the market corrects it will be ok.
I paid $125/ea for my signs and they are nice metal full color on both sides...not only that, but I have reused them so many times and they still look great....I guess people are too lazy to retrieve their signs these days?
I paid $125/ea for my signs and they are nice metal full color on both sides...not only that, but I have reused them so many times and they still look great....I guess people are too lazy to retrieve their signs these days?
But, if paying by hour, or off a menu, the sign installation and retrieval has to be compensated.
$200 to install and retrieve a $125 sign is not a princely sum.
My signs cost me about the same as yours, but my time and costs to put them out, retrieve, maintain, etc, is part of my pricing.
I personally hate how agents are paid. The only people really benefiting from this pay structure is the big brokerages.
That's not true at all.
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I would very much rather there be a flat fee and ala carte services clients pay for; and the agent be paid in "billable hours". But as someone mentioned, these types of brokerages already exist and the public has chosen to stick with the big brokerages for the most part because there is the perception that you get what you pay for.
