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Viewing 11 posts - 1 through 11 (of 11 total)
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  • April 25, 2006 at 10:36 AM #6523
    powayseller
    Participant

    I just came across this gem, and it makes perfect sense. Realtors suffer the most as sales volume continues declining. The rate of change is a leading indicator of worse to come….

    “Sellers have dug-in and won’t budge on their price, as they believe they are entitled to 15% appreciation every year. Buyers look and look and look. They send up low-ball offers, which are rejected by sellers. Nothing moves, and RE agents get paid on the movement.”

    April 25, 2006 at 3:37 PM #24570
    sdrealtor
    Participant

    Yes for many of them. It should be a healthy cleansing of a very crowded field with lots of inexperienced and unskilled agents returning to by the wayside. The funniest part is alot of those that get washed out will be more successful elsewhere. This is a very expensive business to be in if you aren’t a top producer. Lots of underemployed folks in the business right now.

    April 25, 2006 at 4:12 PM #24571
    powayseller
    Participant

    Well, sdr, I hope you will do well. There will always be folks buying and selling homes, and there will always be a need for realtors, although the business model will change to more of a consulting role. It’s a change I would welcome too. I will use a realtor for my next purchase, and hope to do it on a fee per service basis.

    The main problem is getting sellers to be realistic. Why doesn’t the NAR run a campaign to manage seller expectations? Their whole “spiel” of “housing will go up 5-10% this year” set up seller expectations for continued gains. So their goal of keeping the market going has backfired. The NAR needs to reevaluate their advertising. Until sellers understand the market has changed, transactions will be reduced, and realtors won’t get paid. Put some pressure on the NAR to educate the public!

    April 25, 2006 at 5:57 PM #24574
    sdduuuude
    Participant

    > “I will use a realtor for my next purchase, and hope to do it on a fee per service basis.”

    If you are the buyer and you are not intimidated by paperwork, a good escrow agent can do it all for you.

    Also, consider – for you, realtors may move into more of a consulting role, but not everyone can handle it. People do need realtors, even to buy a home. Those who don’t are the exception.

    Selling a home without a realtor is pretty tough, too.

    > “So their goal of keeping the market going has backfired.”

    Very interesting point. I think you are dead-on.

    April 25, 2006 at 7:15 PM #24575
    Farls
    Participant

    1. The slowing market is great for good Realtors. It will eliminate the huge numbers of part-timers and newbies who do 1-2 deals a year. Essentially…survival of the fittest…Just as sdrealtor said…

    2. Many overpriced listings currently on the market are listed by agents that don’t have the skills or guts to tell the seller’s they’re overpriced. (A good agent would get a price reduction fairly fast…or not take the listing at all.) Many are listed by desperate agents who will do anything to get a listing….and get a sign up with their name on it…to fool themselves into thinking they’re actually busy…

    3. Why would any buyer pay anything to a Lawyer or Consultant to buy a house when you can pick your own Realtor and work with him or her for free? When a home is listed the seller already agrees to pay a commission to the buyers agent. It’s built into the price when the property is listed…Not when the purchase contract is agreed upon. You might as well use the expertise of a good Realtor of your choice….

    Farls

    April 25, 2006 at 7:52 PM #24576
    powayseller
    Participant

    #3 is a great point. I have no answer. How would the realtor’s role as consultant benefit the buyer? Sellers are not going to lower their price when a realtor’s fee goes down. I’ve heard of realtors who give buyers a rebate. Perhaps a consultant-realtor will give me his/her commission back as a rebate, and I only pay for the services I used.

    April 25, 2006 at 7:55 PM #24577
    powayseller
    Participant

    This is purely anecdotal, but I think my piano teacher’s wife, a realtor, is falling on hard times. The piano teacher used to refuse weekend lessons. Today he told me he is now teaching on Saturdays!!! Thus, he is taking more students, or having to work Saturdays to get students who are not available during the week. To me, this indicates they need the extra income.

    One more thing: they bought a new house last summer. I can only guess it was bigger than the previous house, since her commissions had been so lucrative for many years.

    April 25, 2006 at 9:42 PM #24580
    sdrealtor
    Participant

    Farls…well said.

    Powayseller….HUH?

    April 26, 2006 at 5:01 AM #24585
    powayseller
    Participant

    What I wrote makes no sense at all. Let me try again.

    A new payment structure would consist of hiring a buyers’ agent on a fee basis. A seller, who uses the “old” 5% commission system, does pay the commission for the buyer’s agent. But then the buyer would expect his agent’s half of the 5% commission to be rebated to him (the buyer), and only pays the realtor for the actual service provided. This is almost a system used by ZipRealty. Their agent rebates the buyer some percentage at closing.

    Realtor salary would get downward pressure. As they do less, they earn less. This may be a welcome change for realtors, who currently spend so much time on marketing their services and driving clients around, neither of which directly benefits their paycheck.

    April 26, 2006 at 12:16 PM #24604
    sdrealtor
    Participant

    HUH? Do you know how unrealistic this is? For it to work the seller would have to pay the listing agent and the buyer would have to pay their agent. The commission system would have to disappear. For that to happen, buyer’s and seller’s would have to pay upfront on an hourly or fixed fee basis. I would be thrilled to be paid on an hourly basis. My income would rise dramatically.

    April 26, 2006 at 1:12 PM #24606
    powayseller
    Participant

    What I proposed is a spin on what’s happening already. Realtors would be paid by the seller. A buyer can choose to use a full-commission agent, or a discount agent, or a fee-for-service agent. Depending on the choice, the buyer gets the buyers’ agent commission credited at closing, and then pays his realtor at closing. But hey, you might have a better plan. I was just writing this off the cuff late last night.

    I have no problem with realtor salaries going up with this method. I would like to pay only for the services I use. For some folks this means paying more, for others less. Looky-loos would have to pay under this method, for they drive up the prices for everyone, with their constant need for handholding and being driven to see homes.

    But enough about my silly ideas. Sdrealtor, I’m sure you’ve given this more thought. If you have an alternate idea, I’d love to hear it. Ideas on changing the mortgage industry? Changing commission strucutre for title and escrow officers?

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