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That's why the money would go back to the seller as a reduction in commission, not as a kickback.
This would motivate the seller and make them more likely to accept a lower price.
We were just looking for ways to make it easier for everyone.
Oh, now, let's be honest (with yourself, at least, if not with anyone else). Based on what you've said thusfar, you're looking for a way to take money from your agent in order to make the house affordable for you.
I find it mindboggling how many people think it's perfectly all right to agree to one thing up front, then once the job is well underway, try to get out of paying(sellers)/take part of the commission for themselves(buyers). I can't think of any other business where this attitude is so prevalent. I certainly can't see the very people who think this is hunky dory accepting such treatment from their own employers so amicably as they expect their agents to do so.
And who's to say it wasn't 3 months since a closing or 4months till she has another?? This is why in the work place talking about what you earn is grounds for dismissal. Everybody knows what a Realtor makes (in spirts mind you) and it bugs me that folks make comments like this. Would you contribute $$ to her if she only made $1,000 on the deal? Probably not....
All the more reasons why the archaic RE process needs a revamp to be brought into modern times... It's a much different world today and when compensation for realtors is solely tied to turnover/sales to generate any revenue at all, it's going to be painful for all parties involved.
The whole industry feeds itself on turnover and we see how that thinking works great until it doesn't.
There are other options out there. More for sellers than for buyers, because the sellers are the ones paying the listing agent, and the listing agent is the one paying the buyer's agent out of their commission. For buyers, there are rebates available negotiated up front at the time of hiring the agent (before the work is done, just like in the Real World where you would agree to work for your employer in exchange for a certain pay rate and would not expect him to renegotiate that pay rate retroactively after you're in the middle of the job, for example). For sellers, there are agents who work on a discount basis, and there are agents who offer limited service - you pay directly for what you get, up front, in advance, just like everywhere else (except certain kinds of lawsuits). Interestingly, some agents offer both the traditional commission basis and the pay for services up front basis, and reports from them are that almost no one takes the latter, because with the latter, you pay whether or not the house sells, and with the former, the agent is taking all the risk as you pay nothing until the house sells and closes. Surprisingly (or not), most sellers, given the choice, would much rather someone else do the work and take the risk (for which a premium is paid, granted).
MikeyKid, you seem to think you have the answer, so how would you revamp the system?
Maybe the agent doesn't want to be a Dual Agent...I typically do not do this. Therefore, she will have to appoint someone in her office to represent one of the sides and then pay them something. It is unfortunate that most people rank real estate agents lower than a used car salesman on the food chain. I know that there are a lot of people out there who don't always earn the right to be considered professional...but there are many, many who are true Real Estate Professionals. Doing both sides of a transaction means dealing with two sets of people and two sets of problems, needs, wants, etc. When is the last time your employer asked you to do your job for less money and you agreed???? If you believe that your agent is working hard for your business, please don't ask for her to give up $$ to retain your business.
That's why the money would go back to the seller as a reduction in commission, not as a kickback.
This would motivate the seller and make them more likely to accept a lower price.
We were just looking for ways to make it easier for everyone.
The post I referred to said to ask for a kickback.
You don't know the sellers motivation and what they would or wouldn't do.
No you weren't, you were trying to save money. Might as well be honest about it, there's nothing wrong with wanting to save money. If you want to make it easy on everyone, just freaking make the offer and see what response you get. Too much time on here and you'll screw around and lose the house and kick yourself later.
There are other options out there. More for sellers than for buyers, because the sellers are the ones paying the listing agent, and the listing agent is the one paying the buyer's agent out of their commission. For buyers, there are rebates available negotiated up front at the time of hiring the agent (before the work is done, just like in the Real World where you would agree to work for your employer in exchange for a certain pay rate and would not expect him to renegotiate that pay rate retroactively after you're in the middle of the job, for example). For sellers, there are agents who work on a discount basis, and there are agents who offer limited service - you pay directly for what you get, up front, in advance, just like everywhere else (except certain kinds of lawsuits). Interestingly, some agents offer both the traditional commission basis and the pay for services up front basis, and reports from them are that almost no one takes the latter, because with the latter, you pay whether or not the house sells, and with the former, the agent is taking all the risk as you pay nothing until the house sells and closes. Surprisingly (or not), most sellers, given the choice, would much rather someone else do the work and take the risk (for which a premium is paid, granted).
MikeyKid, you seem to think you have the answer, so how would you revamp the system?
I wish I did - unfortunately I don't think there's an easy answer or someone smarter then me would have thought of it already... It's interesting considering how you think what a realtor does compares to a "real world" employment scenario because I don't see any correlation to how I'm compensated by my employer. The closest may be a sales position with draw vs. salary (which I don't do) where you have to sell X products in Y time to come out ahead. Maybe this is somewhat of the agent -> broker relationship, but my understanding is that agents don't draw any salary. They have to close to get paid and I have a hard time thinking of many jobs structured with 0 salary and 100% commission.
I understand the agent's "risk" of marketing of your property and the time investment... Yet, from what I've seen the reality is a "top agent" is just tagging your listing onto existing long term advertising agreements in print or online, so there's no real uptick in cost to them per listing. Besides the initial meeting/inspection, pulling comps, photographs, virtual tours, etc (which often are missing, reused, or very poorly done you have to admit) the time element becomes negligible since showings are coordinated through the "office" which typically is an admin type position just answering a phone and keeping a book.
Once the upfront work is done, the effort seems to be moving onto getting more listings. Basically - this seems to be the formula as the bulk of the reward is geared towards a numbers game of acquiring as many listings as possible. I understand that this becomes much more complicated in the luxury market and high end properties are handled differently with a bit more personal approach... But, that is so little of the turnover in comparison to your "average" property. Most of us are not selling/buying luxury properties and don't deserve to have our realtor's do every showing. I get that and don't want to come off like a jerk - "I'm paying you so get here whenever someone wants to see this place! SELL IT!". But approx. $15k up for grabs on a 300k sale does seem to warrant more personal attention then many folks get.
Some type of balance might be compensation based on time/effort, but that would likely penalize the best of the best... Especially when buyer's agents probably log more pure time with clients. Which puts further imbalance on the compensation, especially when listing agents offer less then half the commission. There's also an imbalance state by state since some close just with a realtor and others would never think of closing without an attorney... The theory here being that the realtor logs more time and effort in a state where folks tend to not get an attorney.
So, yeah - I've thought alot about this over the years... and I don't have an easy answer.
The single best thing that I would like to see happen would be get some oversight on MLS, fine and follow through on realtors not maintaining their data properly (I hear this is supposed to happen but never does) and begin to put more work into a nationally run database maintained centrally for consistency (i.e. realtor.com). How the realtor side of each regional MLS ties into realtor.com remains somewhat a mystery to me... The economy of scale is there somehow. I just don't know how to find it.
I'm not sure what price you're looking at, but for example if the total commission was $12,500 for both sides, the company will probably have franchise fee around 6-8% and the company gets somewhere between 30-50% of the remainder leaving around 6-8k. After that, they probably have to pay a transaction fee. So the agent is probably making about 4-6k and then has their expenses and about 30% in taxes they have to pay out of it. Also, it's 100% commission based so there are no benefits like insurance, company paid gas, vacations, the agent pays for memberships to MLS/NAR, etc. It seems like a lot at first, but the agents typically make about 40 cents to the dollar.
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