But, my broker doesn't allow. . .

Ok, here's what I'd like to see:

An agent tries to list for their 6%.

If that does not get results, they look at creative financing, like lease options, seller financing (wrap-aitd, land contract-installment sale) etc.

The 6% solution does not work all the time, for what ever reason.

Best Regards,

Brian Gibbons

Quoting Jack Harper:

St. Lawrence Properties says:

If I go work for Chevrolet, I would be foolish to ask, Why don't You Sell Fords?.....If there is a not another type of Real Estate Business Model in your community, then maybe you need to bring one it.

Jack Replies:

Actually, this is not at all what I am asking. ...

I am wondering where you got the idea that I work for a full service brokerage and I am foolish to want it to operate like a menu or LSDB company. This was never even part of the discussion.

Regards

JH

Jack, I do apologize. I made my assumption because IT IS ILLEGAL to speak to another broker in your service area about Business Models! THIS IS A MAJOR DOJ INFRACTION. You may only discuss this with the people directly in your brokerage. Please tread lightly here. Broker have gone to jail over this!

The Real Estate business model is ever changing and should be. I am excited about the future of our industry and look forward to the new ideas and models that are and will immerge.

I am a managing Broker in Virginia and that is the law in this state. I field questions and empower agents to solve problems every day. I had a scary thought reading Paula's comments..............all roughly 2.4 million licensees out there unsupervised and doing their own thing. We have enough of that happening now and our industry is suffering for it. There is a place for Brokers and Brokerages. Not every agent wants to be a broker(licensed to run their own shop, if you will), nor should they.

If we brain storm that possibility does that mean there are no Realtor licensees and everyone has to have a Brokers license? Or are there only Realtor licensees and no Broker licensees? Does every agent run a corp. or LLC, and each is in charge of themselves with noone supervising? And if they don't follow the rules or The Code of Ethics is that ok? Does the consumer file a complaint against them individually(that might be the up side from a Brokerage point of view), no more deep pockets............... Mind you this is not meant as sarcasm, I am truly running the scenarios through my head to see if there is another way that makes sense.

I hope this conversation continues and I get lots of good ideas from the thinkers out there.

Be well

Gwen

Quoting St Lawrence Properties:

Jack, I do apologize. I made my assumption because IT IS ILLEGAL to speak to another broker in your service area about Business Models! THIS IS A MAJOR DOJ INFRACTION. You may only discuss this with the people directly in your brokerage. Please tread lightly here. Broker have gone to jail over this!

Jack responds:

St. Lawrence: (sorry, I would refer to you by name but none provided), there are a couple of issues with your message. First, the infraction as you call it would exist in the case where two or more licensed professionals from two or more companies got together and discussed specific commission percentages or specific fees charged for specific services. Nothing in this message thread even hints at any such discussion.

Next, there is an almost legend-like myth that makes folks in our profession afraid to openly and in a non-collusive manner even talk about anything to do with our various business models. It has taken on an almost paralyzing nature. Note: we have not nor will we ever hold any discussions that would attempt to fix prices or boycott other brokerages. That would be illegal. What we are doing is to have an open and intelligent (sometimes) chat about changes to our industry that may or may not be evident to us.

Finally, if you or anyone else feels that the discussions we are having in this thread are an attempt at price fixing - please feel free to not participate. Then you will not have a problem, will you?

Sorry for the strong position. I am just not willing to allow fear mongering take hold when it is not called for. If we were, as you hinted, violating the law, then I would agree with you. We are not, and so I don;t agree.

JackH

Jack,

At the risk of sounding like a marketing message or appearing to be promoting a product, a service, or even a revolution I would like to express my opinion and answer your three questions.

1. Does the real estate business model need to change?

Firstly it seems to the question is not does the real estate business model need to change but rather IS the real estate model changing. With all the blogs, discussion groups, and news we receive from Inman, RISmedia and the rest we see a change in the industry taking place.

There was even a posting the other day by a new entry "who for appropriate reasons shall remain nameless" into the "franchise/network" real estate model advertising to have 50,000 agents added to the network within the next year. This entity places Brokers in each of the 50 states and allows agents to "hang" their licenses with these brokers for either an annual, monthly, or per transaction fee. Services provided to the agent appeared to be none, supervision of the agent appears to be nonexistent, and possible violations of state laws in the future seem to be only a matter of time. A serious services to the agents in order to attract and However they do allow for 100% commission to the agent.

Change is not novel as we noticed changes take place from the broker-centric model (with a yard sign showing the name of the broker and 6 inch high letters and you were lucky if you could get an agent rider attached to the sign with the agent's name in 2 inch letters), to the agent-centric model (where the agent's name on the sign was much more prominent than the broker's name), to where we have evolved today (and frankly should have been all along) to the client-centric model.

2. What would those changes look like?

These changes will be market, economics, and profit driven. Brokers must continually find ways to reduce their expenses as the model to attract top producers brings less and less to the broker's top line and even more important even less to their bottom line. While giving away more of the commission the broker still has to find a way to provide the necessary services to the agents in order to attract and retain top producers. This is the dilemma! As a broker how do I operate my business with less income more costs and still run a "profitable" business?

So basically the changes will look like this:

1. Smaller offices with reduced rents,
2. Fewer business machines (fax machines, copy machines, coffee machines, and phone systems) eliminating purchase costs and maintenance contracts,
3. Lower utilities (gas, electric, phone service) based on smaller office footprint,
4. Top producing agents working from home office locations using the latest technology to maintain contact with their broker as well as their clients as well as their farm (which used to be a physical area but now is a database)
5. Higher commission splits (if not 100%) with desk and transaction fees for services provided,
6. Professional sources of assistance (Help Desks) that agents can contact for support versus relying on the broker knowing everything about how every piece of technology works,
7. And finally Internet-based advertising to get the biggest bang for the buck (Century 21 recently announced that they are withdrawing all television advertising and concentrating on electronic advertising).

3. What would your ideal brokerage look like? What types of benefits, business structures, compensation, and the like would appeal to you?

Hopefully I can answer this question with a list:

1. 100% commissions,
2. Reasonable desk fees,
3. Reasonable transaction fees,
4. A help desk that can help me figure out solutions to my problems and assist me with the latest tools and technology,
5. A broker who is profitable, principled, ethical, honest, and is as concerned with my success as his own,
6. A website that will allow me to attract buyers, attract listers, communicate with clients, market my listings, and market my services,
7. A mortgage broker that will ethically qualify my buyers, keep their word on rates and points, and service my referrals in an honorable fashion,
8. And finally an industry cleansing of unethical systems, brokers, and sales associates that will finally return the respect and dignity to the Real Estate Agent that we once enjoyed.

I apologize for being so long-winded but your questions allowed for catharsis that I have long been awaiting.

Sincerely,

John

John Veyette - Thanks for the excellent and well thought out feedback.

JH

So John Veyette invested his time and thought process to provide us with a glimpse into his "dream" business changes.

How about you? How would you answer the following questions?

1. Does the real estate business model need to change?

2. What would those changes look like?

3. What would your ideal brokerage look like? What types of benefits, business structures, compensation and the like would appeal to you?

JackH

I just joined this site a few minutes ago, but I can already see that those participating are giving, for the most part, thoughtful discussion responses. This is great!

My response to the question: Does the real estate business model need to change would be a resounding YES! We were just discussing this very topic amongst ourselves in the office today. What is happening in our office seems to be a very good trend. I think it is going to make us one of the premier offices in our community, and it has seemed to almost happen naturally over the course of the last year.

Our agents are gravitating in these challenging times towards specialization. I don't just mean - get your ABR. I mean true specialization.

For example, we have a few agents who want only to deal in leasing, and when they see folks who need, say help with their homes because they are moving due to a foreclosure or pre-foreclosure, those leasing agents are walking down the hall and giving those clients to those of us either specializing in REO's or short sales.

Bottom line, when agents share, actually share, relationships with their clients, everyone wins. It seems to be happening almost naturally with our office agents.

Let's take me for example: 20 years in the business as a "jack of all trades", right? I have gravitated toward working with short sale and loan modification clients. When I get calls on my listings, I share those leads with the agents around the office.

In return, the leasing agents are sharing their clients and relationships with me. And, the Broker is sharing out his sphere with those in the office who have the expertise to service his clients/contacts.

I joined this office one year ago, from a traditional office where everyone operated independently. My present office didn't have a meeting and say, "ok this is how we are going to do it now". But over the past 12 months, with agents in this office who look to "be of service first", this is what has evolved.

It fascinates me, because I doubt that as an office all agents realize what is happening, but there were three of us talking today and we are starting to see, that each individual is becoming more specialized and also more educated and esteemed in their areas as a natural draw to what they do best in this market.

Interesting, huh? What do you all think about this?

Thanks for reading and commenting,

Nancy Ramsey