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I think we will eventually shift to a fee based system where the seller and the buyer pay a prearranged set fee for a list of services, like most Europeans have. It took my agent way less work recently to sell my high-end, well maintained home in a desirable neighborhood than the other home she had that went for a significantly less price but she and her broker received $15K more money from me than the property that took more work. On the buyer’s side, I imagine the buyer’s agent did do more work with my buyer than with a lower end buyer. Frankly, it also isn’t fair for an agent to do a bunch of work and get nothing, either.
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Another important factor is the Listing Broker only gets paid when the property sells. Work on a difficult situation for extended periods of time and the agent gets nothing until the sale. Advertising, inspections, consultations, advances sometimes for inspections or photos, research, etc goes unpaid until the end. Due to an issue with the IRS because a former spouse falsified tax returns resulted in liens against a home of a single mother with 4 kids taking all the EIC and blocking the sale for 3 years. Finally resolved through the Innocent Spouse Rule and we sold the $100K home. Worked out to less than $80 per month commission. However, we helped her out of a bad situation and that made it all worthwhile on our end.
I will state at a glance this entire thing is foolhardy from a lawsuit perspective... for me I think the problem lies in the perception that a buyer's agent is "free" or more commonly I hear, "you're being foolish not to get representation as a buyer because the listing agent does NOT represent you and buyer representation doesn't cost you anything". The issue is the misconception that any RE agent is working for free... they aren't, they are trying to run a business.
The reality is deep down I know the vast majority of RE brokers are not "getting rich" and that they have every right to make money for what they do. It's just very confusing to the layman how the whole model really works end to end.
The attorneys are uniquely unqualified to discuss brokerage, agency, MLSs, and transaction dynamics.
I don't care who they goosed for money in the past. If their complaints were this ineptly presented, they got paid just to make them go away.
Quote:
Originally Posted by Oldhag1
I think we will eventually shift to a fee based system where the seller and the buyer pay a prearranged set fee for a list of services, like most Europeans have. It took my agent way less work recently to sell my high-end, well maintained home in a desirable neighborhood than the other home she had that went for a significantly less price but she and her broker received $15K more money from me than the property that took more work. On the buyer’s side, I imagine the buyer’s agent did do more work with my buyer than with a lower end buyer. Frankly, it also isn’t fair for an agent to do a bunch of work and get nothing, either.
OTOH, major U.S. brokerage franchisers are expanding internationally.
They expect to be quite profitable, or they would not bother.
I think we will eventually shift to a fee based system where the seller and the buyer pay a prearranged set fee for a list of services, like most Europeans have. It took my agent way less work recently to sell my high-end, well maintained home in a desirable neighborhood than the other home she had that went for a significantly less price but she and her broker received $15K more money from me than the property that took more work. On the buyer’s side, I imagine the buyer’s agent did do more work with my buyer than with a lower end buyer. Frankly, it also isn’t fair for an agent to do a bunch of work and get nothing, either.
Actually flat rates don't work well. Hourly rates do though and can save clients a lot of money. I've done commissions and hourly for 15 years and stopped doing flat rates in 2010. I do about 5 hourly contracts a year. Hourly is billed monthly and sellers/buyers pay regardless of whether or not the transaction closes. It costs significantly less to the consumers, but they carry all of the risk.
Actually flat rates don't work well. Hourly rates do though and can save clients a lot of money. I've done commissions and hourly for 15 years and stopped doing flat rates in 2010. I do about 5 hourly contracts a year. Hourly is billed monthly and sellers/buyers pay regardless of whether or not the transaction closes. It costs significantly less to the consumers, but they carry all of the risk.
So....
When I am driving out to preview houses for a buyer, and stop on the way to see if the contractor showed up for the wood repairs on a listing, and I get calls on two other transactions while doing so, who pays?
So....
When I am driving out to preview houses for a buyer, and stop on the way to see if the contractor showed up for the wood repairs on a listing, and I get calls on two other transactions while doing so, who pays?
You gotta stop and start your timer depending on what you are doing.
I bill in 15-minute increments. Doing things down to the minute would be insane and I have a time tracking app on my phone and computer.
So....
When I am driving out to preview houses for a buyer, and stop on the way to see if the contractor showed up for the wood repairs on a listing, and I get calls on two other transactions while doing so, who pays?
What about doing the preview and a neighbor stops to ask about buying then selling theirs. Do you bill twice?
My license regulations prohibit me from practicing law.
My license specifically allows me a very limited practice of law.
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