RealTown's RealTalk

----- Original Message -----

From: Judith Clausen

To: carolyne@carolyne.com

Sent: Sunday, March 02, 2008 5:06 PM

Subject: RealTalk: RE: The future may finally be here ID005MXX

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Subject: RE: The future may finally be here Author: Judith Clausen (Judith@Buyers-Advantage.net) Date: March 2nd, 2008, 10:20 AM PST ID: 005MXX We have a new outfit in town that is advertising all over the TV and radio with ? Pay no commissions ? full refund of buyer commissions?  Website is www.relogic.com. Appears that the Buyer can purchase increments of an agents time,  plus pay a reasonable processing fee at closing, and get the full buyer commission refunded. Somebody called the other day and told me they wanted to buy a house and were interested in having an exclusive buyer's agent represent them.  We had a good conversation, then he said that the next question may end the conversation.  Asked me whether I rebate any of my commission to buyers.  I said I didn't, and that ended the conversation (after I trotted out the usual responses).  Must have seen relogic.  It took me by surprise. Judith Clausen, Exclusive Buyer Brokerage Buyers Advantage Real Estate of Metro Denver Web Site:  www.Buyers-Advantage.net Blog:  Denver Real Estate Blogspot Newsletter: Realty Times Update 303-587-3509 Direct 877-570-3471 Internet Fax 8680 E. Alameda Ave., #1606 Denver, CO 80247 View all available homes in the Denver metro area

JudiB in response to what I posted said:  I truly don't understand what paying an "upfront fee" has to do with whether a listing is over-priced or not. 
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It has nothing to do with it and I never said it does. What I was trying to say is that if I am paying for all marketing and taking all the risk I do not want to take very overpriced listings. I am honest to my clients and if they are too unrealistic I walk. You also said that many agents take overpriced listings, and I said that in my posting also, though you seem to have missed that. My point is that if an agent is not taking any risk by getting money upfront they may not worry as much about whether the listing is overpriced or not. For example, I would like to have 20 - 30 well priced listings. I do not because many sellers either cannot or won't price their home to the market we are in, and my costs are too high to take these listings. However, if I charged $995 upfront for every listing, only my integrity would let me walk out from these listings. Again looking at this companies website, I could easily take 50 or more listings and even if the listings were $200,000 overpriced I would make $50,000 with minimal time or cost. And if a few sold I would make a bit more in the processing fee. They put the listing on the MLS, Realtor.com and their company website. They provide a lockbox, a sign, 100 flyers, and a copy of the flyer on disk for you to print more out. It also appears that the seller shows the home themselves. Again nothing wrong with this, however they say they do everything that any full service Realtor does for only $995. Of course everyone has their definition of full service, but I personally consider mostly self service. I could be wrong but I believe the $995 upfront fee is profitable only with a large volume of listings, and would likely result in the listing agent taking listings that they would normally not take if they were taking the all the risk. I believe this likely would not help many sellers and would just be an extra cost of selling their home.

I also have no issue with upfront fees. When sellers have complained about our commission rates, I go over the fact that I pay for all marketing and take the risk, while it only costs them if we are successful. I have offered alternative plans, for example them paying for the marketing plus my hourly rate for the service I provide. They have so far all turned me down as they start to see they would rather have me take the risk.

I also have no problem with the upfront fee for buyers. My point here is that I think many buyers if they were paying $1,000 for the first 20 hours of work, and $500 for each additional 10 hours, knowing they would get back all commissions paid to the Realtor as a rebate, would pay the $1,000 but then worry about using up the first 20 hours and having to pay for more. I just wonder how many would be so concerned about the costs that they would end up not getting the best deal. And of course if they decided not to buy they lose the upfront money. I do think however Realtors have the right to offer this and buyers should have this as an option.
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JudiB also says Yes, there will always be someone coming up with a plan to drum up more business.  I never saw that as a BAD thing...and it's particularly not a bad thing when IT HELPS ALL THE PLAYERS INVOLVED.
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I again agree to a point. I have never had a problem with 2% companies, full commission, the upfront costs, hourly or any other. I am not sure they HELP ALL THE PLAYERS INVOLVED. For example we have a company that puts your home on the MLS for $699. The seller chooses what commission to pay the buyers agent. The seller shows the home and gets the contract from the buyers agent or directly from the buyer. When I go to list the home six months later the seller says the listing agent said that by being on the MLS all agents must show their home no matter what the commission is. They could not understand why they did not get a buyer. They were on the MLS and were paying a $100 commission. It seems to me and in many other situations the ONLY PLAYER WHO WAS HELPED WAS THE LISTING AGENT. The others only felt like the winner at the beginning.

Again, I have no problem with any alternatives and will be glad to offer them. The only problem I have is whether it is a conventional or alternative method being used is when the supplier of the service is not truthful of the benefits and shortcomings.

Disclosure is the main thing.

Regards,
Jeff Launiere, P.A., e-PRO
Keller Williams Realty
Tampa, FL
813-469-3163
MailTo:Info@SweetHomeTampa.com
http://www.SweetHomeTampa.com

"The Flat fee MLS segment has grown considerably in the last 2 years. The underlying reason is financially driven as many consumers are upside down on their property and have no commission “wriggle room”. 

If you are wondering why we have Flat Fee Brokers it's not because of "wiggle room" it's because our Rules have changed.  The buyer doesn't need to "beware" any longer, they have their own representative the EBA or ABR.  You know the guys who over-sold all our listings for the past 7 years.  Get a grip, a flat fee representative is a rouge representative to all consumers.  And now that we have a special little box for the seller to check saying they are NOT represented we have more "flat fee" real estate broker models using the MLS as an advertising tool instead of a marketing tool.  Now to add insult to injury we by default disseminate all the seller ((information)) over the Internet through our Board approved FREE web designed websites.  Actually if the truth were known, what does the MLS actually do that the WWW doesn't do better?  Oh I almost forgot the Commission and DOM is not on the WWW only on the MLS!  I wonder what would happen if more agents offered 1% selling fees?  The buyer would never know. Right?  So lets say the buyer is working with an EBA and the buyer calls their EBA and tells them about this house they found on the net.  The buyer doesn't know what the commission is.  Right?  But lets say the commission offered is inadequate for the EBA!  Do you think the EBA should be allowed to fleece their client for more commission if they feel the 1% isn't enough?  What if the buyer went directly to the listing agent?  Isn't the buyer willing to beware of paying more than necessary to get what they want THE PROPERTY!  Or does the EBA agreement make Buyer Beware NULL and VOID?  The sooner buyers become aware of the fact they pay all the commission anyway, because they are the END USER, the sooner they will understand the deck is stacked and their EBA is stacking it higher.  Any seller willing to work with a Flat Fee broker will get exactly what Flat Fee offers, a flat fee buyer.  I got a good question for everybody.  If both parties are trying to get the most for the least, then who determines what the most for the least really is? If you leave that decision up to the buyer and seller nothing gets done.  Maybe that's why we have so much inventory and DOM and real estate models that create more confusion from the consumers point of view!  Do ya think?

Robert King

Broker/Consultant

Charles Rutenberg, Realtors

Clearwater, Florida 

----- Original Message -----

From: Hans Oscarsson

Why would you want to meet one on one with someone who's just a "tire kicker"? "Nothing lost"? What about your time?

In  the southeast, where I travel most, the best coverage is the Sprint Air Card.  I haven't traveled west or north of Tennessee, but Sprint is the best one in this area.  I've heard that Verizon and AT&T have had issues with complete coverage.  My guess is that, not all do all things.   I pay $61/mo (including all taxes,etc)

Lee Pitney, NL Pitney Realty, Clearwater, FL  www.ILoveFeatherSound.com

It all depends on what you want.  I wanted reliable coverage coast to coast, including where I am now, in the Adirondacks.  Only Verizon could give me that.  AT&T only reaches as far north as Albany which doesn't help me.

I'm enjoying this conversation and appreciate the different insight....

I wanted to add an observation here, there is a broker in my area that is not only advertising flat-fee, low-priced listings to the home selling-public, but also advertising to agents that they can get paid the same-day they take the listing.  In one agent testimonial, an agent brags about how he took $300 per listing multiplied by 60 listings per month, all while getting paid within minutes after turning-in the listing contract. 

My only question is how do you service all those listings?  The business model I'm accustomed to says devote lots and lots of hours to the needs of each client, leaving only room for about 3, maybe 4 clients at any one time.  I'd like to be able to have 100+ clients, but the way I do business means I would have to hire 20 assistants.  The way I do business isn't exactly making me rich, either, but I have lots of very satisfied clients.