How much should I offer as a Cooperating Commission

[SD Realtor]

sdrealtor –

Yes you shoot from the hip as you say… even though just about every reply you have put in this posting has your nice backhanded compliments… no I am not here shilling for clients as you have implied.

Our styles are different. When someone asks about selling a home on thier own, a FSBO, your response is that you could buy thier FSBO and then sue the pants off them. My response is yeah you could FSBO it but cover yourself with a real estate attorney. Additionally yes if you someone wants to just get on the MLS at a low price they can call Jeff Karchin.

I think that people should have alternatives whether it is someone like myself, an I Pay 1, a Help U Sell, or a full service brokerage like a Prudential, or the company you work for. Meanwhile your posts pretty much universally imply that anyone who is not a full service brokerage will be out of business in a slow market.

In one reply you will talk about all the extras a full service brokerage provides but when I ask you to break it down by the numbers you don’t really do that. In another post you talk about all the overhead of a full service brokerage and in another you talk about how two years ago you could literally stick a sign in front of your home and it will sell… however even in those good times that same ease of selling a home justified that full service commission.

Your implications that I will not be around and thus leaving my clients out in the cold in a slow market, and your other back handed comments are you from the hip I suppose. You speak your mind and that is well understood by me.

Like I said we have different styles.

[sdrealtor]

SD ,
Personally I believe you will be around if you choose to be. It sounds like you are bright and ethical which is refreshing. Many of our counterparts are not as we know. When someone asks me about FSBO, my response is always to Go for it if you feel up to it. I explain that the reason RE prices are what they are is due to a relatively efficient market place built and supported by realtors. There are opportunities to “beat the system” and those with the gusto to try are welcomed to. Currently, I also add that the market is much tougher so beating the system is tougher but there will always be successful FSBO’s and you might be one. If someone wants me for my merits so be it, if they know of someone better or a better way I suggest they go that path instead. The bottom line is hiring someone whom you believe will represent your best interests.

The full service brokerages will be far more able to withstand this downturn for many reasons but of course there will be survivors elsewhere. I hope you are one because you sound like a good guy and there should always be room in this industry for people like you.

BTW, IPAYONE won’t be. The founder is a crook only interested in building a company he can sell not building anything sustainable. I went to one of his seminars to hear his pitch. I heard the same pitch many times in the late 90’s in the tech industry.

Personally I prefer the security of having deep pockets behind me in this gig. I know many long time agents that have seen alot of ugliness between clients in downturns. I choose to try my best to insulate myself from those risks both in how I practice and where I practice.

Enough of this topic, there are bigger fish to fry!

[powayseller]

I sold my house with a Help U Sell agent. They were fabulous, and I sold my house within 2 months. I saved $12,000 in commissions over the ReMax agent that I interviewed.

Both agents had E&O insurance, put me on the MLS, and did all the standard marketing. My husband and I were very happy with the work done by Pam McCormick and Gordon Kane at Help U Sell in Poway. People knowledgeable about real estate understand that a “discount broker” vs. a high fee broker is the difference between buying your Charmin at Ralph’s vs. at Costco: the same product, but the higher volume company offers a lower price. The discount broker works on volume. The only difference in service is that Open Houses are hosted by the seller.

I find the back handed compliments very peculiar as well. For some reason, many overpriced realtors, aka “full service” realtors, are immensely threatened by the discount realtors.

I look at it this way: if the 3% guys are really better, they wouldn’t be so threatened by the 1% guys. The defensiveness and backhanded compliments tell me more about the viability of the 3% guys than anything else. With the Justice Department getting involved, the internet, and the proliferation of 1% competitors, the 3% model is soon going the way of the buggy whip.

[sdrealtor]

LOL, talk about backhanded compliments. To clarify, there are VERY VERY FEW 3% guys. The discount brokers talk about the savings over 6% listings which are virtually non-existent in the marketplace and I find that very deceptive. They should be comparing themselves to what is really going on in the market TODAY (Most full service agents, charge 4 to 5% today) not what was going on 3+ years ago. Full service guys aren’t threatened by 1% guys because their business model wont work in the long run on a large scale. Personally, I dont like working with them because every time I have, they disappear as soon as we go into escrow and I end up doing their job for them. Conducting a RE transaction properly requires a huge amount of communication and coordination. I would estimate that I speak with a seller by phone an average of at least once a day during the transaction. With todays sales taking over 100 days, that is 100+ phone conversations with the seller and at least another 100 calls with everyone else.

Sure there will be some success stories but I have seen many reports and market share among full service brokers is increasing over the last few months. In my area, several of the flat fee brokers have disappeared, are looking to sell their business or already have turned over a couple times to a greater fool.

BTW, The 3% model has already gone the way of the buggy whip since around early 2004.

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