Normally, the site picks up trackbacks just fine… The only reason trackbacks wouldn’t work would be because a site was labeled as “spam” by my spam filter. With that said, I doubt your site is labeled spam and I’d definitely like rain city guide to be part of your conversation! Let me know if it doesn’t work!

Do you accept track backs…. I don’t see a link here, but would like to link to one to add some thoughts to this discussion.

If anyone is headed to Inman’s conference in NYC, January 11-13, 2006, and I’d like to pick up this discussion in person.

I also really like Stephan’s concept: “In my opinion, participants in the real estate market (specifically referring to buyers) are not rational actors when it comes to the payment of real estate commissions.”

And finally, I have wondered if Tony is right; I think that people tend to try new things when markets are doing well, and they tend to keep to what they know when markets are tanking. I’m guessing that buyers in particular will continue to trend away from full cost agents even when markets start to tank.

Just watch over the next year if the market shifts in favor of buyers even more than it has here in Hawaii, you will find sellers gladly paying the 6% just to sell it. Why should a buyer’s agent go to a FSBO or discount broker if there are 20 available listings for that buyer?

Our selling clients can choose between hourly rates, fixed fee or commissions. Over half our clients choose to pay a fixed fee as a retainer and monthly payments until paid or the unpaid balance at settlement. This works because we develop a high level, trusting relationship through education, our technology and market data.

On the buying side, we have clients that agree to a fixed fee for a range of services and they get the difference back at closing. If they can narrow their search down using the internet or other means and are not running us all over creation looking at inappropriate (for them) properties, it saves us a ton of time and time is money.

Finally, I have buyers of new construction paying us a monthly professional services fee for the duration (usually 9 months to a year) of the construction, we manage all aspects of the process with the builder, including change order tracking, walk throughs, closing, settlement and post occupancy punch lists. The entire builders commission is credited to the buyer at closing.

Bottom line: our clients love it and we get paid for the work we actually do. It works and consumers (especially the younger, internet savvy ones) recognize real value in it.

PS: Most clients opt for fixed fee services. None choose hourly. The rest opt for a negotiated commission rate. The important differentiation to the historical model is the power of choice.

More info at Choice3 Realty

First, compensation by commission is contingent upon a purchase/sale actually closing. If the purchase/sale does not close, generally speaking nothing is owed to the broker. By contrast, my hourly fee charged as a real estate broker is not contingent upon a closing. In some cases, the possible reward to the client by opting to hire me on an hourly basis can be very high. However, even when the risk of a sale not closing is low, consumers are still hamstrung by the misconception that the sellers, not the buyers, pay the real estate commission.

For this reason, clients will opt for the commission route (because they believe that the commission is paid by the Seller, even though the purchase/sales price includes the total commission), rather than obligating themselves to pay me on an hourly basis. This has almost everything to do with irrational fear and misperception, and almost nothing to do with the economic realities of a transaction.

In my opinion, participants in the real estate market (specifically referring to buyers) are not rational actors when it comes to the payment of real estate commissions. This has much to do with the historical structural compensation model established by the real estate industry, namely, the offer of compensation made by the listing broker through the MLS. Until commissions on both the listing and sale side of the transactions are separated, and purchasers are empowered to go out and shop for and hire their own agent on whatever terms they choose, buyers will continue to act like lemmings and allow sellers and their brokers to dictate the terms by which their buyer’s agents are compensated.

p.s. – Great job on the blog, Dustin! You are a true innovator and quite an inspiration.