You’re point about the public not having a say (and rightfully so) in the salary of Inman execs was spot on. To provide ‘Joe the Plumber’ an equal voice in this forum would be ludicrous; and would it not open the door to negotiations for all of America’s goods? Hmmm, maybe that wouldn’t be such a bad thing. When I get home I’m gonna call my electric company and see if I can barter down the utilities bill…

I really have no issue with a client asking me to lower my commission. The answer is a simple no. I have built a business model and marketing plan around generating a certain amount of income. If they don’t see the value I’m bringing, they can shop elsewhere. This isn’t arrogant, it’s called common sense.

Who negotiates with their doctor, CPA, attorney, grocery store?? No one. You have the right to buy from whomever you want. The market determines value not the seller.

I would love to see us go to an hourly model. If my sellers paid me by the hour, I don’t think I’d have listings sitting on the market and overpriced. Buyers tend not to get distracted by this because they don’t “feel the pain” of paying us.

This is all about educating the client. I sit down with every client for 1-2 hours before we agree to work together. We discuss their needs, goals and I make sure they understand how I get paid. If they’re not comfortable and willing to sign an Exclusive Listing/Buyers Agreement, all I’ve spent is a few hours. I can write this time off to good use rather than driving them around, seeing houses and then finding out they don’t want me to get paid.

Real estate is a service business. Every year I accumulate more knowledge, insights, market awareness and invest in better tools. However, my fee does not go up every year. In fact, given the current market, my fees are lower today due to lower prices. Should I add a gasoline surcharge, multiple trip surcharge, checked baggage surcharge like other industries?

I don’t think the market will go for that and I’m not interested in that kind of business model. The next time someone questions your compensation, ask them about theirs. That usually stops the discussion.

Good luck out there.

They’ll last as long as there are members of the public willing to support that model and members of the industry who find it to be a viable model for their business.

You are darn right Jay, the contract should be between the buyer and the seller. I am a buyer more often than an agent. That is why I don’t want you, the real estate commission, or the state legislature telling ME what can be in MY offer.

If my buyers agent is a terrific guy and I want him to get paid more by the seller I should be able to put that in my offer. And NO ONE should tell me the buyer that I can’t.

My solution – get rid of the middle man, get rid of the broker. I don’t see where the broker adds value to the situation. Have ALL agents trained to the broker level. Essentially I am saying get rid of agents and only keep brokers.

I would allow brokers to form an “agency” to combine costs like advertising but the two tiered commission structure makes no sense.

Under a listing commission there are options we can go over with the seller how much service do they want and are willing to pay for. We have charged as high as 4.5% for a lisitng commission where we took complete care of the property and prsented the home to each buyer and/or agent. We have taken less depending on a what the client wants and are they repeat clients, etc.

We discuss selling commissions separatley based upon how the home is priced and other needs of the seller. We have received up to 4% commission on sales including REOs.

There are to many variables in each listing that are different from other listings to set one dollar value or percentage to cover all listing and sales commissions.

In my opinion, discussing commissions is a far cry from anti-trust price fixing and cartel formation. But I am clearly not an attorney, nor do I play one on TV, the radio or Internet.

Which is exactly why I got direct feedback from the Arizona Associations of Realtors attorney on precisely this topic.

I hear “we can’t discuss commissions” all the time from agents and brokers. I’d love to have someone cite a reliable source or case law precedent that says openly discussing commissions violates any rule or regulation. So far, no one I’ve met or talked to has been able to produce such a source. Ever.

Yes you absolutely can and should advertise what you charge that is way different from discussing it. I may be wrong on this but until I get more information from a qualified source I won’t be leaving comments on public web sites.

The arguments are usually the same; that the real estate transaction process is primitive and inefficient, a throwback to earlier evil times when agents controlled the MLS book (blah, blah, transparency, blah), that the rich and powerful are preventing change, and that the good people of this great country of ours are being ripped off by real estate agents.

There will, however, be one difference this year.

Circa 2005, the conclusion was (I’ll simplify here) that most real estate agents are dumber than a box of rocks (except the enlightened who used HomeGain, et al.), that agents are making way too much money for people with their native level of intelligence, and that agents should, therefore, cut their commissions and repent.

This year, the justification will not be, of course, that agents are making too much money.

This year I’m betting the conclusion will be that those poor home sellers are losing money hand over fist so agents should cut their commissions and repent… and buy some kewl software.

And let’s make it clear, though commissions across the board are negotiable, it’s perfectly legal for me or my company to charge a commission and state that it is non-negotiable. There is nothing compelling me to negotiate my stated commission.

And as an aside, our Buyer’s Agency Agreement does provide for Buyers Agents to be paid “X” and if the listing fee does not cover that amount, then the Buyer is expected to pick up that excess amount and reimburse the sales agent at closing.

Agreed completely. I think I said that?

The reasons I was given yesterday for the idea behind this month’s “emphasis” were shocking and more than a little bogus.

Jay, Steve, Mrs. B – I can discuss what I charge all day long. I can put it on my website if I so choose. That’s called advertising and many, many, many agents and brokerages do this very thing.

I’m not telling anyone what they ought to charge or what their business model ought to be. In fact, I’m saying that it’s none of anyone else’s business how you choose to run your business or how you make your money.

Personally, I find much of the conversation to be gauche in the extreme. There’s nothing I can see that justifies what individuals earn being the subject of such endless public debate.

As I said above, if my 1099 is up for debate then those beginning this debate ought to be prepared to defend their own W-2s.

It’s perfectly legal to proclaim loud and proud, “I charge 3% commission (or 1% or 47%, whatever it is that you charge). You can also say, “I think percentage based commissions suck and the industry should move to a flat rate”.

What I can’t do is hook up with Steve in Phoenix and “fix” our commission rate or form a cartel. Brokers can’t huddle up and say, “Let’s all charge everyone x%”. Nor can we collaborate to exclude others based on their price-model (ie: you can’t “boycott” a “discount broker”).