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Options are good, but are they bad for business?

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Real Estate Professional | 09 Feb 2015, 09:07 AM Agree 0
Alternative payment structures are the latest trend commanding the real estate industry’s attention, but some agents say offering services at too low a cost is simply bad for business.
  • Erik | 09 Feb 2015, 11:46 AM Agree 0
    I believe in different pricing options but
    Hourly! Lmao
    How does that work as realtors don't have 9-5 jobs but rather are on duty 24-7?
    Why not bill by the minute?
    How about $300 for a cma!
    The real cheap clients are usually the most demanding/worst in my opinion.
  • Mal | 09 Feb 2015, 12:02 PM Agree 0
    Here's the problem charging a hourly rate. Unless everybody is on board it's not justifiable unless you charge buyer's an hourly rate as well. Then you can make a living. As for a flat fee, sure as long as it is high enough to make a living. If you think charging someone a couple thousand dollars to sell their house is sufficient, well good luck and I'll see you on the unemployment line.
    And as for price fixing because we charge a commission, how do all dentist and lawyers and the guy that fixes your car, that's right book value.
    They charge by what there chart or out dated book says for that procedure or problem, no matter how fast they can do the job.
  • Scott Simmons | 09 Feb 2015, 01:35 PM Agree 0
    It all depends on the client and the actual deal. I had one client looking at a 100 million dollar island and I was willing to work on a flat fee of 250k. Do you really think he would pay 6%? Client was uber rich and uber cheap real estate mogul which seems to go hand in hand sometimes. Would I do a CMA for $300? No. Clients want choice and I see nothing wrong with offering them options. Sometimes they do not care other times they really care. One has to be flexible if one wants to be successful. One model for all may work for some.
  • Russell | 09 Feb 2015, 02:18 PM Agree 0
    Hourly rate? How many billable hours would log in a week . Will clients pay you for driving, doing market research , educating yourself to keep them safe , showings and listings that go no where etc. ? The answer is no- try billing your client the instant you pick up the phone (lawyers) or try billing them a diagnostic fee (mechanics) .
    We are not lawyers or mechanics. We get paid for results - we ONLY get paid for results.
    Consumers should stop fixating on what commision we charge and focus on what we do not charge. How much did you mnake on the last listing that did not sell or the last buyer that never bought a house?
    If every consumer interaction resulted in a payday - we could live quite comfortabely with a 1% commission !
    Let the weak agents cut all the commision they want when they get off work at their regulr jobs.
  • | 10 Feb 2015, 07:05 AM Agree 0
    Hourly rate will work only for an industry that doesn't change too frequently. In a real estate market that changes so fast, and new market information required for every deal ( new listings and new sales for comparison), who is going to pay for the hours of continuous researching and market updates.
  • | 10 Feb 2015, 10:45 AM Agree 0
    Humm, last time I reviewed a lawyers bill; he did charge for research; per e-mail; phone call etc.... The invoice even had different rates depending on who at the office was billing time.... He also gave the option of only getting paid for a positive results (which of course has built in extra margin) Can it work in real estate.... not sure? The market will determine that.
  • consumers don't waste | 15 Feb 2015, 05:48 PM Agree 0
    Can't make a living on flat fee commissions??? Just work harder you have been spolied with ur unjustified monopoly that suckers have been paying. Prices of real estate went up and the service/skill of realtors is relatively the same. FLAT FEE and save ur money!!

    No more than 1000-2000 per transaction . Time for agents to actullay work 10 times harder too justify $2000 fees They act like they are Surgeons in a field where u don't even need a high school diploma to become a agent!!

    Look up reslaes , list ,sit back ,maybe tour and taxi service and wait for a fat cheque...those days are coming to a end as the market is speaking
  • Robert. | 15 Feb 2015, 08:05 PM Agree 0
    Absolutely right! If the industry is so adamant about protecting the consumer they should start with eliminating part time Agents who don't have the time to commit to the real hours it takes to do the job right.
  • Frank | 15 Feb 2015, 08:08 PM Agree 0
    Buddy is back badgering Agents but FAILS to tell us what he/she does for a living. Has done this in other posts as well.
    Perhaps a full time welfare recipient.
  • Dan Fraleigh | 16 Feb 2015, 08:19 AM Agree 0
    As a seasoned realtor, I have come to the realization that even my well established portfolio of clients want choices. In most cases, choice doesn't mean cheap - it simply means options. The most important message the consumer is sending "every industry" is that the consumer is prepared to shop around and they are more willing to spend the time (interview) to make an informed decision. I feel the "relationship" still plays a major role in the consumer's decision on who to hire but it is not the sole factor. It would simple be putting your head in the sand to pretend that cost doesn't play into the final decision. My advice is to observe the various business models being proposed in your market place or elsewhere and decide what works best for you. Ultimately, whatever business model you develop, you must feel your time and service is being valued or you will simply resent your workday. Don't forget, that as a realtor, you have choices too - not every client may fit your business model, and that is just part of doing business in a competitive world. Embrace change without losing your authenticity - your clients will respect the time and effort you have put into defining your fee and services. Just remember - choice might just mean clarity.
  • Bill Hubbard, Century 21 Executives in Vernon BC | 16 Feb 2015, 08:41 AM Agree 0
    25 years ago my mentor taught me that commission cutting was for people who could not sell. Today I welcome the different business models in our business. Companies and Realtors have to decide who their customer is. There are some people that come to the table and they have only one question, "How much?". There has to be a company and a Realtor that services that customer. When a need arises a business will appear. That customer does not believe in the value as much as price. In our office we have decided that that customer is not our customer. Our customer is one who asks, "What value do I get for the fees you are charging?". We have chosen the other end of the consumer spectrum to service. We make no bones about it, we are not the cheapest but we are the best. I think as Realtors we should all embrace the alternate business models and decide who our customers are and go after those customers. If a Realtor/Company wants to sell price then sell it and be the cheapest. If you can't make money at that then that is just ego business and silly business. If you want to sell value then bring the best value and services to the table and make money. After all the purpose in business is not to do the most transactions. It is and always will be to make money.
  • Dinosaurs | 16 Feb 2015, 11:00 AM Agree 0
    25 years ago prices were much lower and commissions were still very high but seemed less bloated. The service provided by a realtor has never been justified to pay 4-6% ...I repeat never has been JUSTFIED!!! Review resales and aim for that on listing or selling , Taxi/tour !!!...I am sure there are great agents ,but no matter what .... for the type of transaction no one is worth 20,000-50000 plus.

    I have used flat rate services and the REALTOR worked harder than the EGO agent I had before. Charged 1,000 to list and sell a total of 2,000 and the agent had all the answers,always gave great advice, experienced...the problem ego agents don't want to give up 20,000-50,000 plus ..they always say you get what you pay for ..dinosaur talk
  • Denis, full time REALTOR | 16 Feb 2015, 11:04 AM Agree 0
    Frank you're right, (Buddy) "consumers don't waste" is an Insatiable quack
  • 1,000 transactions!! | 16 Feb 2015, 11:22 AM Agree 0
    Consumers make sure you google for a flat rate agent ,check out his experience, qualifications etc,..he will do the same job for $1,000..the ego agent wants a new suit,pay his mortgage for year or so... if that is what you want to do go for it!!! pay his ego fees for a service a high school student could accomplish with 3- 6 months of training...think about if u could access the monopoly on resales how hard would it be to come up with a price for ur home or shoot for on buying??? taxi/transit urself to the showing and open the bedroom doors urself on the tour!!!!!! Can't blame the ego for feeling threaten that their model of selling and buying is getting competition and consumers are smelling the fees

    many industries have gone through it...Stock services ,even lawyers,teaching all is being changed with the internet... keep those bloated fees in ur pocket too pay ur mortgage,kids schooling etc!!!

    think about this the lawyer charges 1,000 approx. and he carries out a big part of the transaction.
  • NOT a dinosaur | 18 Feb 2015, 01:03 PM Agree 0
    If it walks like a duck and quaks like one, it probalbly is....take the taxi tour, open doors etc. but when something goes wrong...reach DEEP into your own pocket. I know plenty of E traders who thought they could manage their own fees etc. and they have lost everything! So much for their kids college fund........and I have heard all the horror stories of the consumer thinking wearing a Realtor's hat is easy....puff!!!
  • Another fool has spoken | 18 Feb 2015, 01:47 PM Agree 0
    another fool has spoken that if u do low service you come out wrong...because that never happens with the high flyer,commission , ego broker!!! grasping at anything that will keep their bloated fee system...I will give there are stronger closers but to me that just distorts the market
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