Shold i stick with one realtor when looking to purchase? (8%, agents)
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"It ain't your money. The seller has agreed to pay for the successful sale. It is true that if you don't buy, I don't get paid. But you always get the whole house and the seller get only what is leftover, more than a few are underwater, so the lender allows us to be paid."
But it is MY money, isn't it, when I am the one handing over a couple of hundred thousand to purchase a home. And for your information, Mr 2bindenver, I want the vendor to get their fair share - I do not want that money going to the estate agent. Why do the estate agents have to be so greedy? Surely getting 6% is simply obscene just to drive me around for a couple of days to show me a few houses hoping I will buy one that they have listed. So they would get say, $12K for less than a week's work. It simply is not right and the simple fact is that both the buyer and the vendor are getting short changed.
I do not mind paying the estate agent up to 1.5% but that is all they rightly deserve.
But it is MY money, isn't it, when I am the one handing over a couple of hundred thousand to purchase a home.
Not once you give it to the seller - then it is the seller's money, which he/she received in exchange for the transfer of the property to you.
What the seller decides to do with HIS money is HIS business...so if he signed a contract with an agent to pay them x% of the proceeds from the sale of his property, what is it to you?
Someone today just chastised me for paying a significantly higher price per gallon at a full serve gas station. He said "Why are you spending your hard earned money to have someone pump your gas for you?"
I said "Because I really didn't feel like pumping my own gas that day. I didn't mind paying someone else a higher price to do the job for me." It was a cold and nasty day, I was tired and my feet hurt, I did not want to get out of the car. That was my choice and nobody else's business.....I knew what I was doing, and I will do that over the winter as well.
Real estate is much the same way. Either you want to pay someone to do it for you, or you can do it yourself, though it may be a more convenient to have someone else do it - isn't it great that we live in a free country where people can charge - and pay - what they feel is fair for whatever service they desire???
If you don't like it - don't pay it....but there's nothing wrong with the people who DO want to pay for it either.
"It ain't your money. The seller has agreed to pay for the successful sale. It is true that if you don't buy, I don't get paid. But you always get the whole house and the seller get only what is leftover, more than a few are underwater, so the lender allows us to be paid."
But it is MY money, isn't it, when I am the one handing over a couple of hundred thousand to purchase a home. And for your information, Mr 2bindenver, I want the vendor to get their fair share - I do not want that money going to the estate agent. Why do the estate agents have to be so greedy? Surely getting 6% is simply obscene just to drive me around for a couple of days to show me a few houses hoping I will buy one that they have listed. So they would get say, $12K for less than a week's work. It simply is not right and the simple fact is that both the buyer and the vendor are getting short changed.
I do not mind paying the estate agent up to 1.5% but that is all they rightly deserve.
Be careful Jane. The states and UK do this process quite differently. The truth of the matter is that breakeven is well over 1.5%. So anyone charging that simply goes belly up. Lots do by the way. You can take a high volume low rate operation and do well...until the economy turns down...then they all go belly up. FSBO has a low penetration which gets worse in bad times.
And just to really screw it up the eastern US and the western US do the process completely differently and there are states like Colorado and Florida who do their own weird thing.
I suspect a lot of people would have a heart attack if they had to pay the monthly bills of the average "busy" real estate brokerage.
And a lot of people forget that no one person gets that full percentage unless it happens to be a single broker/owner selling his own listing with no franchise fees to pay...
A real estate business needs to charge enough money to stay in business - and to be able to make enough profit to withstand the tough times when the market freezes or declines...the basic costs of operation remain the same, and then you have agents working with fickle buyers who use their time, gas, wear and tear on vehicles....only to buy a house w/ the open house agent who they met the first time their agent was unable to meet them due to a previous appointment....
A real estate business needs to charge enough money to stay in business - and to be able to make enough profit to withstand the tough times when the market freezes or declines...the basic costs of operation remain the same, and then you have agents working with fickle buyers who use their time, gas, wear and tear on vehicles....only to buy a house w/ the open house agent who they met the first time their agent was unable to meet them due to a previous appointment....
You just described every business (needing to budget for the tough times, people who waste businesses resources etc).
I find Sales people to be the worst when it comes to loyalty. In my business, I also sell and I admit that I am not loyal unless someone gives me a very good reason to be loyal. Most people in sales claim they are loyal. For example, when you buy a car, do you shop or do you stay loyal? What happens if they explain that they need $1000 profit because they have all of the overhead, mouths to feed, explain about the bad times, etc. Do you really care to hear about it even if you ive them the last look?? People are now looking locally and buying off of the Net.
Occasionally you will nab that fickle buyer when they fall in your lap at your open house. Since that is an easy one, do you give them a break on your rate?? If not, that easy one just paid for the guy who wasted your time. In other words, you cannot take the easy ones and complain about the time wasters. It comes with the territory.
Last edited by MN-Born-n-Raised; 09-08-2009 at 12:45 PM..
Thank you Mr Olecapt, but I do know how the property market works in both the US and the UK as I have sold and purchased property in both countries. I am grateful for your input.
"I suspect a lot of people would have a heart attack if they had to pay the monthly bills of the average "busy" real estate brokerage."
I highly doubt that unless it was found that the monthly bills are excessive because they are unable to work efficiently. I work in the legal field - this is an extremely labour intensive field and many of the legal firms I have encountered are struggling financially.
"And a lot of people forget that no one person gets that full percentage unless it happens to be a single broker/owner selling his own listing with no franchise fees to pay..."
Yes, thank you. You have just highlighted the problem - too many people get a slice of the pie.
I'm not complaining. Why do people always think it's a complaint when you actually try to explain why fees are what they are?
The "easy deal" paying for all the "ones who waste time" much like consumers pay for the shoplifters who cause prices to increase in stores....much like consumers pay higher medical insurance because of the lawsuits/fraud of others....that's the way it works. At the end of the day if you don't turn a profit, if you don't make enough money to pay your bills and provide necessities and some pleasure items, then what is the point? Should we all go to a communistic society? I don't think so - just ask some Russian immigrants what it was like in Russia and why did they come here to live....
When I buy a car, I go where I am treated the best. I purchased a new car from a local Chevrolet dealer about 20 years ago. Six months later I vowed to never, ever purchase another car from them ever again because their service was horrible. A few years ago, I purchased a Honda van from another dealership. I will purchase my next car there from them as well because they have done nothing but treat me well. Sometimes they've been unable to accommodate me because of a full schedule; I understand and do not mind because they treat me well. You bet I will be back to them for my next car.
I also go to local shops when I can to purchase things, even if it will cost me a little more because I want to help local businesses stay in business. I only go to Walmart or similar place when I can't find what I need...I needed an apple peeler last week and instead of looking online or driving to the mall, I went to the local kitchen shop and purchased it there. I probably paid $8 more for it, but yes, that kitchen shop has my loyalty because they are friendly, they often have what I need, and they are extremely helpful....
I go to the same hair stylist that I have for the past 15 years even though she charges $12 more per cut than the cheapos at Wal Mart. She has my loyalty. She has earned it.
I always buy my tires at the same Jack Williams - because they are always accommodating and nice to me. The smaller family owned tire place used to get my business all the time, until the last two times I was there, they were horrible with their service....so I never went back. THey may have better sales, but their service sucks....so I go to Jack Williams instead.
Being self employed for many years, and being married for many years to a self employed contractor, I understand what it costs to be in business, and I appreciate the time people spend to take care of me - and yes, they have my loyalty unless they do something to cause me to break it.
I highly doubt that unless it was found that the monthly bills are excessive because they are unable to work efficiently. I work in the legal field - this is an extremely labour intensive field and many of the legal firms I have encountered are struggling financially.
The basic operating costs for our office are astonishing. To be in this business there are many fees/charges/services that can NOT be avoided because it is expected of them by the clients.
The contract software we use charges a huge licensing fee, as does the tax records database software...not only do they charge the broker a hefty licensing fee but they also charge each agent a yearly fee to use the software. Without it we would be crippled. We need it, they know it...so there you have it.
Clients holler "You charge too much!" then they say "Are you advertising in the New York Times? Are you advertising in the Real Estate Book? Is my listing on the Wall Street Journal?"
People don't realize that a single page ad in the local real estate book is $1,100 per month. Newspaper ads are extremely expensive. The franchise advertises on TV and pays people to design user friendly websites with sophisticated databases. The office has to pay anywhere from $20 to $40 per sign - (even the cheaper corrugated signs are expensive and they don't last as long, need to be replaced sooner) - and then they get stolen, knocked down, torn, plowed over...and they are expected to be replaced. When you have 100+ listings with signs and advertising that needs to be done, the brokerage costs add up. Even advertising online is expensive. One site I checked out for commercial listings charges almost $60 per month for their "basic" listings package. Other sites charge more. Google PPC ads are expensive if you are in a hot market with coveted keywords. Surely you know how expensive a sophisticated multi extension phone system with voice mail is....let's not forget all the licensing fees, continuing education fees, board fees, chamber of commerce membership...it goes on and on and on.
Not to mention the mortgage, utilities, and real estate taxes that need to be paid on the property if you own the building; high rent if you don't. The previous brokerage that I worked for was a small mom and pop with very few frills...just to pay for the rent, basic utilities, software, and typical office expenses it was over $8,000 per month.
This is NOT complaining, just laying out the facts. It's very easy to be an armchair quarterback and say this and that....we have a few former sellers who became agents, and a few months into their rookie licensing year, they are not so smug anymore....at the end of the day, when all is said and done, your average real estate agent is lucky to have 1 - 1.5% of the sale price - to pay THEIR expenses with...
Last edited by KarenRice; 09-08-2009 at 01:28 PM..
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