Comments on: Unstoppable Forces and Unmoveable Objects: Real Estate Commissions

By: mark schwartz

mark schwartz — Mon, 03 Mar 2008 22:01:13 +0000

The whole payout and commission issue is one reason I hung my license with a company that has no deskfees and pays out 97% to the field (namely agents).

No “bricks and mortar” to pay for Connect Realty – The Big Breakthrough in Real Estate

By: Calgary and Edmonton Residents - May I Make a Suggestion? | Phoenix Real Estate and Homes for Sale - Dalton’s Arizona Homes Blog

Wed, 09 Jan 2008 16:49:12 +0000

[...] the customer’s info would cost me $99. That’s not all that bad, not when you consider recent fees that I’ve had to pay out for reasons unknown. Of course, I can’t just accept one [...]

By: IBR Broker

IBR Broker — Fri, 04 Jan 2008 18:51:23 +0000

“But thin margins also leave little room to maneuver on behalf of the consumer. Something needs to change. And is it easier for the change to come from brokers who can continue to streamline until they’re running at top efficiency, or individual agents who likely already are running as lean and mean (figuratively, in my case) as possible.”

In this case there is a thin line between self promotion and actually offering helpful information, so, with that in mind, I will try to keep a healthy balance.

I am the Broker/Owner of a 300 agent real estate company in Minnesota. Most of my agents have their primary office out of their homes, but we also offer full office access for agents on an as needed basis. There is no charge for copies or faxes and we have several high-speed workstations. We plan to go paperless this year and will add high speed scanners to get rid of printers/faxes.

My agents keep 90% of their commissions and can negotiate their fee with clients without brokerage interference. We charge a monthly fee of $125 which covers E&O, 30 hours of CE, Zipforms, use of company signs, Showing Solutions appointment desk, access to two trainers, and all the other usual brokerage-supplied benefits.

Agents are responsible for the bulk of costs associated with building their business and the emphasis is on agent promotion, not company branding.

My full time staff of 4 handles accounting, (agents get paid the same day they bring in the HUD 1) and operations (every file is audited twice.) We outsource whever we can, as long as the quality of service doesn’t suffer.

We don’t affiliate with Title or Mortgage and all our revenue is generated by real estate activities. We are a financially solvent company, even in this market.

I assume there are other similar business models that combine virtual office and brick and mortar philosophies. It’s all about controlling costs and using technology to streamline the process.

For us, it has given the freedom to offer more value to our agents and more flexibility for them to grow their businesses. So far, it has been a win-win arrangement for everyone involved.

By: Chicago Real Estate

Chicago Real Estate — Fri, 04 Jan 2008 15:43:58 +0000

I think working for a good broker fixes any compensation issues you may come across.

I’ve been blessed to work for a truly great broker who I trust completely. There are two of us over here at WeRockChicago.com, and even in the “down” year of 2007, we did about 30 transactions – never a single hitch with getting paid by our broker.

As with everything in this business, from both a consumer’s and practitioner’s perspective, everything comes down to trust.

The good brokers will never have an issue with paying agents in a timely manner, and the poorer brokers will be out of business if they don’t stand by their agents and use proper business practices.

By: Jim Duncan

Jim Duncan — Fri, 04 Jan 2008 12:51:36 +0000

Two thoughts - 1) One of my approaches has been to transparent in my fees and expenses. 2) Virginia has a law that requires disbursement within three days of closing; I have faxed a copy of this to settlement companies before to speed them up a bit.

By: Athol Kay

Athol Kay — Fri, 04 Jan 2008 12:20:19 +0000

Farkakt = “fluffy bunnies” in Yiddish?

By: Teresa Boardman

Teresa Boardman — Fri, 04 Jan 2008 10:51:37 +0000

I have thought about this issue a lot. Consumers do not understand that Realtors sell houses and that real estate companies do not. With some brokerages the agent is constantly marketing the brokerage which reinforces consumer opinion that one company is better than another making it harder for independents to gain traction. Because of technology I am not all that sure we need real estate offices. The easiest way to lower consumer costs and have more freedom is to get a brokers license and go out on your own. I think real estate companies need to become more efficient and provide more for agents and consumers of be disintermediated. I will be interesting to see what they do to survive as the agent population decreases. They will have to make some changes.

By: Chicago Real Estate

Chicago Real Estate — Fri, 04 Jan 2008 08:22:38 +0000

I believe there is another nifty little law or adminstrative rule in Illinois regarding disbursement of compensation.

Brokers must disburse all funds within one business day after receiving notice of the consummation of a transaction.

Don’t wait to turn in that HUD closing statement!

Again, I am not a lawyer and I’m not advising anyone about any laws. Go get a lawyer’s opinion if you are in need of advice on the law in your state. Having been licensed in Nevada also, I can tell you from experience that the laws can be very, very different from state to state.

======================================

Disbursement of Escrow Moneys

The sponsoring broker must keep escrow moneys in an escrow account until the transaction is consummated or terminated, unless the sponsoring broker is instructed by the principals to do otherwise. The sponsoring broker must disburse escrow moneys upon consummation or termination of the transaction, in accordance with the terms of the contract or at the direction of the principals. Disbursement, including disbursement of commissions, cannot take place before the day the transaction is consummated or terminated nor
later than one business day after the sponsoring broker receives notice of the consummation or termination.

By: Colorado Online Mortgage

Colorado Online Mortgage — Fri, 04 Jan 2008 04:21:07 +0000

You can’t buy a house online. Just the marketing can be done online. Buyers will increasingly find homes of interest and agents online, but the rest of the transaction will remain as it always has. So my opinion is that commissions will remain standard. In my own experience in selling homes, I was reluctant to pay a full commission until the broker educated me about what was involved in selling a home. I think educated sellers are willing to pay full commission, but they don’t want to pay a big chunk to an agent who only lists the house on MLS. I think educated sellers will continue to gladly fork over full commissions. They just have to be educated about the finer points — like houses with lots of professional photos sell for thousands or even tens of thousands more, haggled commissions result in lower buyer agent fees which results in much, much less foot traffic, etc.

By: Jay Thompson

Jay Thompson — Fri, 04 Jan 2008 00:42:07 +0000

“Here’s hoping she got paid”

She did — her broker finally caved (or had enough to cover) — four weeks after the title company cut her broker the check.

“This morning I learned that my brokerage is taking an extra 5% out of my commission for my closing tomorrow because the client was referred by agents at another Century 21 office”

How completely and utterly ridiculous. So much for being “independently owned and operated”. And of course C21 will get their franchise fee right off the top — of both your portion, and the referring agent’s portion. The referring agent broker will get his cut too — though we all know he did *nothing* in this transaction.

It’s just stoopid.

Makes a good case for starting your own brokerage and truly working for yourself….