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Funny how an attorney keeps talking about greed, ethics and how much is "Fair Commission".
Don't understand why you guys keep having the discussion. He is in no postion to decide what a Broker and their client can freely decide is appropriate.
I assure you my ethics are substantially higher than nearly every agent I have ever dealt with. Silverfall seems to have her head on straight and has been level headed and reasonable this whole conversation...she seems to understand that real estate is a service industry and she seems to be serving her clients best interests by being helpful and understanding of what the other party wants. By not being rigid and inflexible I am sure she does more volume than those with the good ole boy mentality....
Times are changing and the internet is/has started doing much of the agents job and has drastically reduced the advertising costs for agents...they can either adapt to the changes like Silverfall or they can cling to a slowly sinking ship like others.
It does not matter one way or another to me bc I am going to get my license but I hope this conversation let's you agents/brokers realize that consumers ARE getting tired of paying too much for lots if things. Every industry is suffering and cutting back on profits, commissions, benefits, etc... People expect when things are tough and they make sacrifices that those who provide services to them share in that same sacrifice...
Times are changing and the internet is/has started doing much of the agents job and has drastically reduced the advertising costs for agents...
Actually this isn't true. It has changed our advertising costs. You used to do old school flyers, small ads in the newspaper, and open houses. Now marketing is professional or good amateur quality photos, video tours, property websites, online floor plans, staging consultations and rentals, texting services so buyers can text to get more information on a property, on and on. Marketing costs are just different.
The internet is such a visually rich medium. The costs are still there but just different.
Apparently listing agents think buyer agent compensation is up for grabs. I've been asked by other agents to reduce my fee 5 times this year. Really...how is this different?
I can't say another agent has ever asked me to reduce my commission without at least offering to reduce their own. Something along these lines:
LA: My client is not going to reduce their price anymore
ME: My client is not going to increase their offer
LA: We're only $X apart why don't we split it out of our commission?
Anyway, I'm tired of arguing with people in circles. Mark thinks it's OK to reach into an agent's pocket and take money he has no legal right to take (yes if you get your own license you have a right to that money). Why? Because he doesn't think we deserve it. Does he have any right to make that judgement? Not in my opinion. He's never worked as an agent and he was not a party to negotiating the contract which established the commission. Agents want to have a contract honored. PERIOD.
I've said my peace. I'll leave this thread to those who have more time on their hands or a desire to keep arguing with someone who will never be swayed.
Times are changing and the internet is/has started doing much of the agents job and has drastically reduced the advertising costs for agents...they can either adapt to the changes like Silverfall or they can cling to a slowly sinking ship like others.
It does not matter one way or another to me bc I am going to get my license but I hope this conversation let's you agents/brokers realize that consumers ARE getting tired of paying too much for lots if things. Every industry is suffering and cutting back on profits, commissions, benefits, etc... People expect when things are tough and they make sacrifices that those who provide services to them share in that same sacrifice...
There is nothing stopping anyone now from shopping for discount Brokers or agents. The Internet has been around at least 10-15 years in the business and we've seen many Discount Brokers come and go. They discount their fees and have trouble paying their overhead and don't last long. There are a few in DFW that have been around for maybe the last 5-7 years but they are not a factor in the business.
People who need discount services can already buy those services at a discount. Most people want a full service agent and choose to pay for full service. What you are suggesting is nothing new and has actually been around for quite a few years. Nothing wrong with discounting your fees if you can stay in business. Problem is many can't and have not.
When you get your license maybe you can figure a way to cut your prices and be the next Walmart of RE.
There are only two parties who are heavily vested in a real estate transaction.
1) The Buyer
2) The Seller.
If there is Greed, its on behalf of the real estate agents...especially as the house price escalates. Any costs of the realtors pale in light of the cost of the property....You think it is greed on behalf of the Buyer...I think its greed on behalf of the seller....Some Agents can pull buyers out of thin air in a down market - and they may be worth it...but many just get a listing, put it on MLS and wait for the buyers agents to come knocking.
Please tell me how a Listing Agent has EARNED a $60,000 commission on a $1,000,000 property for taking some photos and pasting it online. (THIS IS AN ASSUMPTION OF A 6% COMMISSION AND A BUYER COMING WITHOUT AN AGENT)
You can talk about million-dollar homes all you want, but that *isnt* the market that matters. The Phoenix "msa" is the fifth or sixth largest in the country, with homes ranging from a few thousand to a few million dollars.
Last month, 1.18% of the homes sold in Phoenix were over $750k. 42% were under $150k - and commissions even in the lowest bucket are often 5%.
The last $75k property I took a buyer through had a 2% co-broke. I wouldn't quit your day job when you get your real-estate license, because you aren't likely to see many $60k paychecks.
There is nothing stopping anyone now from shopping for discount Brokers or agents. The Internet has been around at least 10-15 years in the business and we've seen many Discount Brokers come and go. They discount their fees and have trouble paying their overhead and don't last long. There are a few in DFW that have been around for maybe the last 5-7 years but they are not a factor in the business.
People who need discount services can already buy those services at a discount. Most people want a full service agent and choose to pay for full service. What you are suggesting is nothing new and has actually been around for quite a few years. Nothing wrong with discounting your fees if you can stay in business. Problem is many can't and have not.
When you get your license maybe you can figure a way to cut your prices and be the next Walmart of RE.
I wont ever be a full time realtor - Its not something I have a desire to do. I am quite happy in my current employment, but the cost for me to become a realtor is negligible, my CLE will likely double for real estate continuing education, I can buy my own investment properties at a lower price, and I can hopefully along the way save the people who ask for my help a little money in commissions.
The big problem with all of this is the "Interference with a third party contract"
There is nothing wrong with a seller negotiating a commission agreement with the listing agent when the home is listed. They are free to negotiate whatever commission is acceptable to both. But then they have a contract.
It is not proper for a buyer to ask the seller to renegotiate my commission agreement
And on the other hand, it is not ok, in my opinion, for the listing agent to later try to renegotiate the commission up
There is nothing wrong with a buyer asking his buyer agent to rebate part of his commission. Buyer is free to ask, and the buyer agent is free to negotiate. And negotiate doesn't just mean agreeing to give away part of the earnings. The agent may, in negotiation, require that s/he be paid an upfront fee which will insure that the agent will be paid. That fee would be non-refundable, but rebated to the buyer at COE, along with any commission rebate that was agreed on.
However, when it comes to an unrepresented buyer, or another agent, asking the seller to renegotiate the listing agents commission, then I draw the line. I have a contract.
The way I see it is the purchase of a house is a contract negotiated between buyer and seller.
The contract between agent and clients is an employment agreement for services, and the fee agreed on is to be paid to the agent, and not used to help buyer and seller pay for a home.
As has been suggested by Marksmu, and one other poster, that if agents don't agree to renegotiate their contracts, they will eventually lose many clients.
Well it won't bother me at all to lose clients that don't want to honor contracts. I'll refer them to Marksmu so he can do that after he gets his license.
As has been suggested by Marksmu, and one other poster, that if agents don't agree to renegotiate their contracts, they will eventually lose many clients.
Well it won't bother me at all to lose clients that don't want to honor contracts. I'll refer them to Marksmu so he can do that after he gets his license.
Well said. And like I said before, when it becomes the norm that an agents commission is up for grabs during the transaction, that is when I quit. You would think an attorney would understand the whole thing about honoring contracts.
I think people like Mark that like to brag about giving away their services for free or at a really cut rate often deep down aren't happy about doing it. When most other people aren't willing to do the same it just doesn't sit well with them. It's the whole counting other peoples money thing again.
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