Full Service for 1%

I came home today and as usual, looked through the mail.  There was the ordinary bills (yuck!), magazines, no fan mail (rats!) and the assorted direct mail pieces (which I normally drop in the round file).  One piece stood out because it was a picture of a house with the words “How much is your home worth?  Interested, I turned the postcard over and it went on to say “Full Service and Marketing for 1% commission fee”  So what, there are all sorts of discounters out there looking for business.  Not so fast.  The discounter on this direct mail piece was a ReMax agent.  Don’t know about you but this is the first outright solicitation that I have seen from one of the “big brands” brazenly advertising a discount commission.  Anyone else seeing stuff like this? 

26 thoughts on “Full Service for 1%

  1. Russ,
    RE/MAX agents are “100%” (no commission split with the broker with a few exceptions) and are free to negotiate fees with a seller and many do so to compete. The only restriction on advertising a specific fee is a clear disclaimer that the fee offered does not reflect the fees offered by other RE/MAX agents (corporate policy). We are RE/MAX agents and advertise a general concept of fee choices: hourly, fixed and commission (the consulting model). Since we are not specific we do not have to provide the disclaimer. Does the solicitation you received have a disclaimer? If not, it should. This is most likely one agent from a “big brand” operating out of an independently owned RE/MAX franchise.

  2. I recently spoke with a former RE/MAX agent who had to leave due to this issue. His Broker was OK with a mailing like that, but then his Broker received a complaint from another local RE/MAX Broker, and he had to leave when he got the “cease and desist” order.

    This is the big struggle in our industry today, causing me to try to “hold out” as not being part of the problem but rather part of the solution. To have a stake in the future and try new things, one really has to be as independent as I am, and not a member of the Board for the time being as well, for the same reason.

    Being innovative and looking forward, really requires independence right now…though I admit it’s a major struggle. Seattle is a great place to be independent and try new things, as the Seattle area celebrates independence and progress more than any area I know.

    The big names impose major restrictions on agent concessions, more now than ever. The Discount Models could be an option to acquire a “name brand”, but they won’t let me blog LOL…so, I’ve rule them out too for now.

  3. It’s interesting that Ardell mentions the “brands” that won’t let her blog. I’m actualy restricted by my company from blogging or commenting on any issues related to specific discounters or commission fees.

  4. Robert, Ardell…

    Are you serious about the prohibiting of staff to discuss commissions, discount brokers via blogging?

    I didn’t know that. Nor, that it was so widespread. One thing that blew me away was Windermere’s VP of Operations being quoted in the Seattle Times regarding Windermere’s policy of not cooperating with discount brokers. What would a Windermere agent do if their buyer liked a home listed by a discount broker?

    Now real estate firms not allowing Blogging? Just the appearance of this to the public seems to border on Collusion, never mind anti-trust law problems. I would guess the firms are playing with fire by prohibiting Blogging and someone eventually will challenge this, either directly or by accident.

    Russ or Craig, I’d love to hear your comments on this issue and what it means to the local players and moreso it’s impact on consumers.

  5. I think what Robert and Ardell are referring to is the prohibition against discussing commissions with agents from other offices, which could appear to be “price-fixing” or collusion.

  6. Re-max has been doing this for a-while in San Joaquin County, Ca. New agents would send out massive postcards offering a flat fee of $2800 to sell your house. Out here remax is kind of a warehouse of new agents once they get experance they move to a differnt company.

  7. Marlow has it spot on. Any restrictions I have in relation to talking about commissions is specifically because of “possible” appearance of price-fixing or collusion. In that sense, I guess you could say they are trying to avoid starting a fire. 🙂

  8. Colorado is the home base of Re/Max and we are independent Re/Max agents. When we chose our brokerage firm, we interviewed with the major brands and the local boutiques. Some of what I was looking for was…

    1. Well developed and efficient systems we could leverage
    2. Solid local presence/branding (to wrap our team with)
    3. Competitive Commission or split model
    4. A team of advisors and focus on education

    Every Re/Max, Coldwell Banker, etc was quite different and there was 4 or 5 Re/Max offices working in this area. The particular one we decided to go with fit the bill for much that we were looking for. Have yet to see anything that suggests a restriction on blogging.

  9. I work for Windermere, in my office we are allowed to blog but our broker would prefer to have the opportunity to vet what is said. I told him that was out of the question as it defeated the entire purpose of having a blog and he let it go… I’m sure it is yet another issue that varies from brokerage to brokerage. 🙂

  10. Not discussing commissions doesn’t have anything to do with real estate companies trying to stop the public from having this discussion with individual agents – it has to do with the collusion issue which is also better known as “anti-trust law”. Agents within a company are also unable to discuss commissions between them and I’ve personally had to tell other agents to back off on attempting to discuss commissions with me. Apparently not everyone paid attention in their licensing classes so people forget what it’s really all about. Commissions have and always are considered to be negotiable between individual property owners and the agents they choose to conduct business with (or not). It’s all part of the interview process – a consideration of value for service. I think the bigger part of a discussion with a prospective client isn’t always what I charge as a listing agent but what I actually do to show value for the fee.

    Blogging for some offices is a frightening prospect because many brokers and agents aren’t very familiar with technology and there is also the concern from a broker (who is legally responsible for an agent) that they can’t possibly monitor all of the various ways that agents are putting themselves out to the public, what they talk about, and more. As an agent, I like working with RE/MAX Metro Realty because I have flexibility in how I run my business but there is also a trust factor built up between me and my broker because he sees me as a trustworthy agent based on past experience. They know I am concerned about managing liability and responsibility just as much as they do.

  11. Hi Reba

    Couple of items in your comment that are worthy of a reply.

    You said, “Commissions have and always are considered to be negotiable between individual property owners and the agents they choose to conduct business with (or not).”

    That’s not really true. Any broker can set their fee and refuse to “negotiate” it with a prospective client. There is nothing illegal about doing so.

    You also said, “Blogging for some offices is a frightening prospect because many brokers and agents aren’t very familiar with technology and there is also the concern from a broker (who is legally responsible for an agent) that they can’t possibly monitor all of the various ways that agents are putting themselves out to the public, what they talk about, and more.”

    In most larger organizations, brokers certainly are (practically) unable to monitor what an agent does in traditional forms of communications so I’m don’t buy the fact that a broker should have legitimate concerns about an agent blogging. A bad agent is a bad agent and keeping them out of the blogosphere will not cure that fact. On the other hand, good professional agents are a much less risk to their broker regardless of the forum for communication.

    In the end, it comes down to selective hiring which for many brokers is the antithesis of their business model.


  12. Hi Russ, Brokers can set threshold commission requirements and if someone is not willing to negotiate their fee, then that is their own form of negotiation. The public can move on to someone else if they aren’t willing to accept that one agent’s stance. That’s why I say “agents they choose to conduct business with (or not)” because the public doesn’t have to accept if an agent won’t move their individual fee. We had a guy in our RE/MAX office who was eventually asked to leave because our broker’s made it clear they weren’t accepting discounted brokerage fees – although we all still have the right to set our own fees in general. There is just a threshold they require us to maintain. This one guy was basically taking a small fee to put people on the MLS and then not providing much else other than a sign and maybe some flyers. The broker’s choice to set a minimum threshold is due partly to the fact that we have to be able in a transaction to collect enough funds in a transaction that if there is an E&O claim that the agent or broker can meet the deductible of the claim. I’m sure each broker has their own reasons and profitability will be one of them for those that get splits from their agents.

    BTW – someone stated on here that brokers typically have a $30,000 cap on fees from splits. That’s bunk. They change from firm to firm. If an agent is a top producer perhaps they negotiate that kind of cap but I’ve seen contracts from some large firms where the minimum per year is $25000 in splits and then there is a continued smaller percentage split (with no cap) on all other commissions earned. In this case, another new agent was having me review his contract choices, the split was 10% of all continued earnings over the $25,000 required per year.

    You’re right though, a lot of brokers aren’t selective enough in who they are willing to bring into their firms. However, I’ll say too that there aren’t a lot of good people to select from – only about 3 people are still in the business from my licensing class out of 60+ and this is only 3.5 years later. Most everyone I spoke to when I was taking my licensing classes didn’t even realize what it took to be an agent besides taking the class and passing a test. No one had a business plan, a marketing plan or a budget. Most of them looked perplexed when I asked them about theirs – I had mine and I’ve been surpassing many of my colleagues in sales volume. (I’ll hit Platinum Club with RE/MAX this year.) My team has done this by being focused, executing our plan, and being judicious about who we work with as clients and then providing them with outstanding service. I look forward to the day that more agents offer the same level of professionalism.

Leave a Reply