I find agents often pretend the 50/50 model is more prevalent than it really is, and is more reflective of a brand new agent’s split regardless of which Coast you are on. Many agents use that to suggest that commission is split “4 ways”.

I read an agent’s blog recently that told agents to take a dollar bill and rip it in half to show the client how their money is not what it appears. And yet I’m sure most who do that, do not really get only half.

The concept of the office paying for marketing materials and supplies, went out when agent names and phone numbers started going on the materials back in the late eighties to early nineties. Agent name and photo on it…agent pays, is generally the rule.

My “set up” on the West Coast really is not different from the East Coast over the years, except when I was brand new and didn’t understand how this “works”. I always told my Broker after the fact, even back in 1993, and my Broker always looked at me like “what are you telling me for…you are the one with the client, and the one on street…do whatever you do, just don’t tell the other agents.

If an agent is telling a consumer that they are on a 50/50 spit, the consumer should respond, “Well then I guess you are also brand new in the business, and I would prefer an experienced agent”

What I DO is Consumer-Centric. That I TALK about what I do is Transparency. Big difference, and worth noting, as I find over the last 16-17 years, half East Coast and half West Coast, that Doing it has not ever been a problem. Talking about it, is where Brokers and agents in the office get upset.

No one in an office cares what business decisions agents make with regard to fees. They don’t like advertising or talking about commission issues, the same as a boss in a work place often says, “Now don’t go out there and tell everyone what a great raise I just gave you…or they will all want it, and I can’t afford that.

Agents get upset if their clients hear that another agent in the office is “charging less”, as then their client expects the same. This is true in most offices and doesn’t vary from East Coast to West Coast.

Kim Harris, the Broker, is first…a man and not a woman and second my partner in all things.

I am curious as to what your broker (Kim Harris) has to say about your new “transparent” approach. If you are on any type of split with your broker/owner I would imagine that she would have a say in your business practices. I mean if the broker is paying for your support services (e.g. marketing, supplies, administration, etc.) I would assume that you would have had to receive permission to give money back to clients. Unless of course you pay for everything and keep 100% of the commission dollar yourself. I ask because in most cases the broker/owner has to establish a consistant policy based on their business model. Typically this means that the agent cannot act alone in changing policy without speaking with the broker. In which case the broker would have to allow all their agents to give back money to clients. It sounds like you made this business decision on your own. I was wondering if the other agents in your office are following suit and, if so, what the broker thinks about this new situation. Or better yet, how much money is the broker not getting as a rsult of this practice. Just curious.

Tim

Now that’s something I know how to chew on!! LOVE it!!

I may tackle the Hilary Clinton standing on the Realtor side of the Banks in Real Estate equation as well.

lots of food for the fodder out there…but I used up my blogging time elsewhere today.

I promise…soon…

Mind blowing stuff here. As a ‘client’ I would love to see buyers commissions negotiated separately and paid DIRECTLY by the buyer.

I think what you’re doing is amazing. I didn’t quite understand what/why you were doing at first, but thanks to the dialogue that ensued I was able to get my head around it. I admire you for “putting your money where your mouth is”.

Maybe it’s just because I’m at home alone with my 2 fever ridden toddlers, fever ridden myself, but when you said:

“The true test of a woman is when she refuses a $300 “kickback” on a day when she doesn’t know if she is going to be able to afford dinner for her children tonight. I past that test in the heat of my divorce. Integrity is not about affordability to have it. I look back on that day and am glad for the opportunity to know that about myself.”

……. you brought tears to my eyes. Thank you for your conviction and integrity.

Understand when I talk here it is not personal to you or me, but about the industry at large. I have no clients who are angry at me for the charge for my services, and never have had that in 16 years. Not because “I’m worth it” regardless, but because of my inner sense of value and fairness and application of same. Though I did focus moreso on the buyer side of that equation this year than ever before and the referral part for the first time.

You are being defensive in that second paragraph, and taking it personal. What I need you to see, for the benefit of the consumer and the industry, is that your discussions, as watched by others, will help change this industry as a whole for the better…or not.

Don’t just focus on Norm…or even Ardell…but on who is ANGRY at Realtors generally and why and where is it justified for them to be so angry. It’s not about you specifically Norm, it’s about the industry needing people to invoke change. That is why “we blog”.  If was just about you and me we could have lunch.

On a blog…it is for the benefit of someone who DOES need to be more fair, reading us and implementing new strategies. Many who read do not talk. The internet is more about the lurkers than the talkers. We plant the seeds of change.

Perhaps the issue here is that I don’t deal in $900,000 houses and as I mentioned before our commission structure declines substantially as the sale price increases. There are no $30,000 commissions in Saskatoon. Typically a $500,000 house, which is three times our average pays approximately $8,000. That’s pretty much where it tops out and those are very rare.

When I say that most of the value is in negotiating and managing the contract, I certainly don’t mean that nothing else is important. I don’t need a lesson in providing care and service to my client. I take all parts of my dealing seriously. I’m saying that I have no trouble feeling good that I can bring $4,000-$5,000 worth of value to the client through negotiation and keeping the deal on track.

Please stop calling it “a discount”.  A discount assumes that there is a fixed price for services, and that everything that isn’t that made up number, is a premium or a discount. So just change the terminology a bit. Realize that someone made up that number and it is not a carved in stone “given”.  If you don’t, you will always feel cheated somehow when you don’t end up getting it.  If you feel cheated, then you will have someone who “cheated you” out of it, and you will blame that on your client somehow/somewhere.  The client receiveing a fair price is not about the agent being cheated out of the max percentage available in the market place.  So watch the terminology…it’s key to attitude.

There are no “discounts” and there are no “rebates” as there is no fixed price.

There is a benchmark at 6% with 3% for the Seller’s agent and 3% to the buyer’s agent. But that is just the “retainer fee” or starting benchmark.  It’s a guideline “start” price from which to readjust, as the situation calls for.

Not as the consumer ASKS, but based on the actual scenario without the consumer NEEDING to ask for the adjustment downward.  Fairness cannot be left to “the squeaky wheel getting the grease” because that would leave the quiet and nice consumer with the short end of the stick.

At $200,000 sale price, the system pretty much works and always did. At $300,000, in my experience, it most often works, but sometimes requires a “settle up” at the end. At $400,000, the benchmark holds for some but not for others. Very few clients are fairly charged above that level if the benchmark is used.

My experience to date, of course it’s “a work in progress”.

I kicked my own butt on the property that sold for $207,500. I over did it on that one for my own reasons. I kicked my own butt on another one that sold for $465,000 or so by doing both sides for just under 2%, I did that as part of the experiment of giving the buyer the whole 3% and giving the seller a price more conducive to that clients efforts. Correction: On the last one there at 2% the price was absolutely fair for the situation at hand, but I felt like I had just kicked myself in the stomach because of my KoolAid brain.

Finding the right amount, the fair amounts, is like Goldilocks and the Three Bears. Someone’s gotta lay down in the beds and sit in the chairs and eat the porridge to find the “just right”. It has not been easy and it hurts like hell to do it at times. But I know it’s the right thing to do so others can learn. Others being consumers and the industry at large.

I will start a new thread with more examples, actual situations, especially the ones the kicked my butt.