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I pay no corporate or franchise fees. No 20%, 30%, 50% split. No compulsory group marketing fee.
No paperwork fee. No over-priced mandatory fees. E/O at cost.
I don't mind competing on price, because my margins may well be better than margins for the agent who has to pay 30%--50% or more of their generated commissions to others.
If your costs are lower then certainly you can afford to work for a lower commission. Only a small percentage of agents are their own broker though and can leverage such an advantageous cost structure. Many brokers don't compete with their agents because many agents won't hang their license with someone who competes with them.
BTW, I'm not sure if you've ever mentioned this . . . is it just you in your brokerage or do you have agents under you?
Quote:
Originally Posted by MikeJaquish
What firm management should never do:
Disparage other brokers for their fee structure with price-fixing approaches.
Encourage illegal boycotting of firms.
I can't say I've witnessed or heard of any brokers dictating to their agents these approaches. The agents I've seen do it seem to take on the task of their own volition.
I can't remember the last time I looked at the co-broke fee in MLS prior to having to fill out the form from my broker that requires that information. I'll get paid what I'm going to get paid. I'll make it up in referrals if the fee is on the lower end of the spectrum.
I wouldn't list my house with Redfin, but I would certainly make sure my house was listed ON Redfin. Fortunately I'm right on the edge of their coverage area. I've found Redfin listings to be more timely and comprehensive than anything locally listed on Realtor.com. Their listing updates are often within minutes, and they send very timely updates out as well on pending contracts, price changes, sold listings, etc. I haven't found that with Realtor.com at all. Oh, and the "walk scores" are pretty handy for househunters too.
If your costs are lower then certainly you can afford to work for a lower commission. Only a small percentage of agents are their own broker though and can leverage such an advantageous cost structure. Many brokers don't compete with their agents because many agents won't hang their license with someone who competes with them.
BTW, I'm not sure if you've ever mentioned this . . . is it just you in your brokerage or do you have agents under you?
I can't say I've witnessed or heard of any brokers dictating to their agents these approaches. The agents I've seen do it seem to take on the task of their own volition.
I can't remember the last time I looked at the co-broke fee in MLS prior to having to fill out the form from my broker that requires that information. I'll get paid what I'm going to get paid. I'll make it up in referrals if the fee is on the lower end of the spectrum.
I work alone. I haven't yet tried very hard to bring anyone on.
We pretty much must look at the cobrokes.
We have to disclose any variations from what we enter into our BA agreements to clients.
I recently helped a client with new construction.
Commonly here, new construction offers 2.5%. Sometimes 3%. I didn't know, so while we were sitting there, I said, "Hey, what are you paying me?" Yes. Just like that.
In unison, two onsite agents said, "4%!"
My head spun... And that was material to my client's interests and I am glad she heard it immediately.
We have to disclose additional inducements like a commission level that surpasses a stipulated amount, graduated commissions, bonuses, cruises, etc. Clients have a right to know if they are in a place because of inducements offered to their agent.
OTOH, if the cobroke is much less, client has a right to know if they could be on the hook for any additional out of pocket money, as it may influence their offer.
Sorry, but that doesn't seem to make sense. If its a guaranteed amount how does the buyer's agent get less?
You're right, it doesn't. I was thinking of the RE who sold our house. We bargained the commission down from 6% to 5.5% but she left the buyer's commission at 3% and her own commission at 2.5%. I was thinking of her portion when I wrote that but it should have been the buyer's portion which did not change.
There are plenty of incompetent agents that charge a lot of money. However, my experience has been that agents who have nothing to offer except for a low price . . . well . . . offer a low price. Personally, I would recommend concentrating on finding an agent who's capable and honest and then negotiate the best possible rate with them. Choose the agent first, worry about the commission rate second.
I also agree with you that agents can't hide houses but they can poo-poo them. I've overheard conversations where that's happening. It's not supposed to happen but it does.
This being said, Mike J. is 100% right. There's no such thing as a "discount" broker because there is not a standard or typical commission by law. Commissions by law are 100% negotiable and are not set by anyone. As there is no set standard to discount from then by definition there can be no "discount" agent. It's semantics really but he's right.
they just discount what they do
It's interesting seeing some of the unintentional information errors in this very thread.
Redfin will get you no better exposure than any high-service brokerage with syndication agreements.
Redfin rebates a portion of their commission, or just doesn't charge it in the first place, to the Seller. Has no effect on Buyer agent's psyche nor compensation.
I am beginning to get frustrated by being a high-service broker that now has to have a lengthy explanation about compensation with my Buyer clients. And all because some low-service brokerages and the Sellers who only see compensation figures think it's no sweat to offer 1% to a Buyer's agent.
It's interesting seeing some of the unintentional information errors in this very thread.
Redfin will get you no better exposure than any high-service brokerage with syndication agreements.
Redfin rebates a portion of their commission, or just doesn't charge it in the first place, to the Seller. Has no effect on Buyer agent's psyche nor compensation.
I am beginning to get frustrated by being a high-service broker that now has to have a lengthy explanation about compensation with my Buyer clients. And all because some low-service brokerages and the Sellers who only see compensation figures think it's no sweat to offer 1% to a Buyer's agent.
How often does that happen, Bo?
I have not had sellers request a reduction in cobroke. Mostly, they want to be sure I offer the most common cobroke on the market.
Gee, but I NEVER hesitate or mind discussing the clients' money. I'm pretty open about compensation.
I can recall the shock and horror when rules passed requiring agents to disclose bonuses and other inducements to their clients. It was educational and I like the transparency that horrified so many licensees.
Redfin is a very powerful platform, I use it for home shopping exclusively. However, I've never tried selling a property through them nor know anyone who has, but I'd imagine they'd do a pretty good job pushing their own listings, especially if it's a market where Redfin is well known.
I wouldn't list my house with Redfin, but I would certainly make sure my house was listed ON Redfin. Fortunately I'm right on the edge of their coverage area. I've found Redfin listings to be more timely and comprehensive than anything locally listed on Realtor.com. Their listing updates are often within minutes, and they send very timely updates out as well on pending contracts, price changes, sold listings, etc. I haven't found that with Realtor.com at all. Oh, and the "walk scores" are pretty handy for househunters too.
It's not hard to get your house on Redfin's website. They're a brokerage. So, their website receives a fee from any MLS they are a member of. Potentially, you could be outside their "service area" because they don't have an office near you but because they are a member of the MLS in your state they still show your house on their website.
As far as how quickly the site updates . . . any brokerage's website will update just as fast and be just as accurate because they're all getting the same feed from MLS.
Quote:
Originally Posted by MikeJaquish
I work alone. I haven't yet tried very hard to bring anyone on.
It will be interesting to see if you take on any other agents if they are equally as flexible on their commission. Probably not since they will need to split with you and their cost structure will be quite different than yours because of it.
Quote:
Originally Posted by BoBromhal
they just discount what they do
It's interesting seeing some of the unintentional information errors in this very thread.
Redfin will get you no better exposure than any high-service brokerage with syndication agreements.
Redfin rebates a portion of their commission, or just doesn't charge it in the first place, to the Seller. Has no effect on Buyer agent's psyche nor compensation.
I am beginning to get frustrated by being a high-service broker that now has to have a lengthy explanation about compensation with my Buyer clients. And all because some low-service brokerages and the Sellers who only see compensation figures think it's no sweat to offer 1% to a Buyer's agent.
The Redfin advertising is VERY misleading as well. They advertise "SELL YOUR HOME FOR X%!!" but when they show up to your house they tell you that X% is only their side. Everyone I know who has called them assumed X% was the total commission.
Quote:
Originally Posted by bmw335xi
Redfin is a very powerful platform, I use it for home shopping exclusively. However, I've never tried selling a property through them nor know anyone who has, but I'd imagine they'd do a pretty good job pushing their own listings, especially if it's a market where Redfin is well known.
The guys who started Redfin worked at Microsoft (I believe might have been some other big tech company like Google). It's no surprise that their website is great. If only the Redfin agents I've dealt with where as good as their website.
Quote:
Originally Posted by MikeJaquish
How often does that happen, Bo?
I have not had sellers request a reduction in cobroke. Mostly, they want to be sure I offer the most common cobroke on the market.
I've definitely seen Redfin listings with a co-broke less than the most commonly seen amount. It doesn't happen everyday but I also don't see that many Redfin listings in my market. Commissions are negotiable. There are definitely agents in these parts that want to earn a minimum amount and in order to get that will often reduce the co-broke fee.
The biggest culprits in my market are the "entry only" brokerages. These guys will for a fixed fee enter your house on MLS and do not really do anything else. They don't arrange showings. They don't negotiate for you. They don't offer advice. They pretty much just type the information into MLS. I don't even think they take the photos (most of them are absolutely horrible photos so I assume the owners are supplying them). These listings offer compensation ranging from $1 to more than the most commonly offered co-broke amount but 90% of this type of listing offers less than the most commonly seen amount.
...
It will be interesting to see if you take on any other agents if they are equally as flexible on their commission. Probably not since they will need to split with you and their cost structure will be quite different than yours because of it.
I dunno if that is a really much of an issue.
I do a ton of stuff that I amortize myself, working alone, that I could share with an agent or more and realize no additional expense.
And, I have a decent Class B office space that I could easily run 10 agents out of, and I am covering that overhead handily myself.
Two variables that I would need to address:
1. Competing with my associates.
That would be a trust and character issue, and I think I have the ability to make reasonable accommodations or yield the business to the associate.
I would have no problem guaranteeing to associates that I would deliver enough business to them to cover their expense of associating with me.
2. E&O increases. But, compared to some firms who treat E&O as a profit-generating mandate, I would be very competitive.
Whenever I hear someone say, "This is an expensive business," I cannot help but laugh. No. No, it is not.
People make non-productive and expensive choices, and look for a place to put the blame.
Bigger hurdle....
You may have inferred over time here that I am rather hard-headed regarding proper and ethical business methods.
You would not be in error. I can carry my overhead, and can do business as I wish. Slick & Sleazy does not appeal. And, I don't want to be a paperhanging gallery, scraping a few bucks a month off 100 people who would faint if a deal fell into their laps.
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Quote:
Originally Posted by MikePRU
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I've definitely seen Redfin listings with a co-broke less than the most commonly seen amount. It doesn't happen everyday but I also don't see that many Redfin listings in my market. Commissions are negotiable. There are definitely agents in these parts that want to earn a minimum amount and in order to get that will often reduce the co-broke fee.
The biggest culprits in my market are the "entry only" brokerages. These guys will for a fixed fee enter your house on MLS and do not really do anything else. They don't arrange showings. They don't negotiate for you. They don't offer advice. They pretty much just type the information into MLS. I don't even think they take the photos (most of them are absolutely horrible photos so I assume the owners are supplying them). These listings offer compensation ranging from $1 to more than the most commonly offered co-broke amount but 90% of this type of listing offers less than the most commonly seen amount.
Maybe a different region?
I did a little fooling around with this this morning, and in my county over the last year, well over 90% of listings have offered 2.4% or more to buyers agents.
This is one of the unforeseen consequences of the price-fixing 60/40 split that was introduced with the advent of buyers agency. It put a Phat Listing Commission in the crosshairs for easy economical competition.
Almost universal in the National Listing Percentage Culture is a 50/50 split.
60/40? 3.6%/2.4%? And, in a sellers' market? Logically, indefensible. But, people have the right to make that choice, based on the value they perceive.
Bear in mind, though, the real stumbling block is not the co-broke, as much as the notion that the buyer may chose not to kick in anything over the co-broke. "No?" "No problem. Next!"
Last edited by MikeJaquish; 02-28-2017 at 01:04 PM..
There is a broker in my city that charges 1/2 a percent . He has decades of experience. He has many excellent reviews on zillow . It seems this could likely be better than going with Redfin as the listing agent commission would be 3 times as much .
Many people mentioned that he is an excellent negotiator too .
I should of also noted that the home is not in great shape so I realize that I'll have to take a lower price over a remodeled home . Luckily though it seems quite a few of the homes on the market seem to need work too.
Inventory seems low from what I keep hearing and the market seems pretty strong right now.
Of course I'd like to sell quick but wouldn't want to take a huge discount just to sell quick .
If we were in a declining market then I might feel different .
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