Funny stuff, Marc. Have you had anybody tell you they were looking for a house for their parents to buy (who had no intention of moving)?

Alex,

I have heard that several times.

I’m new to real estate investing and found your comments humorous but with a lot of quality information. Thanks!

You hit the nail on the head! When I hear the word “tour” a big flashing red warning light goes off in my head. I just roll my eyes. Here in Scottsdale, I have been told by tourists more than a few times that they want to “kill some time” between golf games by looking at some houses. Thanks, I’ll pass….

Hmm. Sounds kinda familiar!

Good stuff! We have all heard these lines. In reality, if you don’t value your own time nobody else will. One of the things I work with my Agents on is listening and understanding (evaluating) their customers. I tell them all the time I would rather have you spend time with your family or spend time doing something for themselves than being a tour guide. Let another Realtor who doesn’t know better be the guy on the bus with the microphone.

Couldn’t have described “some” of the folks we deal with any better myself. Thanks for a few laughs. We need them about this point

Would really like to see 5 things that make HOME BUYERS/SELLERS Cringe. We are so beyond the age of “commissioned sales people” in real estate. I mean, how much does it really cost to simply drive someone to a house? Certainly not $25,000 and I don’t care how the fee is split! What about flat rate fees with a REAL list of “deliverables” that the buyer/seller will get for the money. I’ll bet the thought of actually working for the client will make Realtors cringe! Not saying that Realtors don’t work, I’m just saying the value proposition needs to be re-looked.

It is very difficult to sell your home when you have nothing firmed up and in the final stages of purchase. How can you sign your home away without a place to go. I guess I just don’t get it. Probably because someone is being too simplistic about what to them is a slam-bam-thank-you-ma’am deal, then move on to the next victim.

I agree with Rick. If the value of the house is down, how come the standard 6% still applies? Re-look at what the realtor really does for his/her money. Think of what this big cut of 6% does to the client’s return on investment. Treasury notes are less than 3%. Who is making a killing in the real world any more?

Rick – The market ultimately determines our fees and how they are paid. If enough people demanded “deliverables” instead of commissions then perhaps the real estate business model would change. However, there have been brokerages that tried this approach and they usually go out of business.

Personally, I would be open to the idea of taking a smaller fee as long as it was paid up front. Similar to how most attorneys are paid. This could make the real estate market more liquid as it might (big might) allow sellers to move their homes for a lower cost. It would also allows Realtors to be compensated for their time and knowledge. The problem with such a compensation structure is that the Realtors would lose a little bit of motivation to achieve a successful transaction because they have already been compensated financially (although not as much). Receiving a commission only upon a successful closing really motivates all parties involved.

Perhaps you should start a real estate brokerage to see if your idea works.

Excellent article,, my sentiments exactly,,I was just told after showing a home which was not listing, after having asked the buyers before showing if they had an agent, they did not. After a 30 minute trip to show a home from our office, they did eventually own to having a Realtor and not wanting to waste her time or gas money. I had to go out that way for something else, had it not been for that I was to say not the least disgusted. This is manners, respect and common courtesy. People are not blatanly dumb and know what they are doing when they set us up for this! They would not like their time wasted in their profession. I told the client’s this as I thought they should know in a polite way. I get sick of the references that Realtors are like used car salesmen, (don’t quite get that, and why offensive everyone makes a living) we constantly are learning and growing in this perplexing state of distressed situations and home selling etc. At least with a used carsales man/woman, buyers go to your lot, you don’t waste your time going to their’s! Enjoyed this take care!

sorry missed a word above..which was not “my listing” should read

I agree with Rick. If the value of the house is down, how come the standard 6% still applies?

I agree with Rick. If the value of the house is down, how come the standard 6% still applies? Re-look at what the realtor really does for his/her money. Think of what this big cut of 6% does to the client’s return on investment. Treasury notes are less than 3%. Who is making a killing in the real world any more?

When I first got in the business I often questioned the 6% commission or whatever it was. I asked many Realtors why we charged the commissions we charge and I finally got a great answer and true understanding of the pricing structure in the business.

It’s really quite simple. Realtors take all the risk in selling homes. The homeowner has no investment in selling their home. The Realtor, and not all Realtors, spend time advising on how to stage the home, spend time and money preparing marketing materials, spends time and money putting together advertisements and then if the house does finally get an offer, they spend a time negotiating the contracting and then dealing with the many issues that happen when things go wrong…which is almost every transaction.

When I opened my brokerage I gave our sellers the option to pay $1,500 up front and 3% to the buyers Agent or 6%. Only 1 out of over 100 listings at the time, took the $1,500. It solidified my thoughts that everyone wants to sell their home, but they don’t want to risk their own money in marketing and promoting their home. Hence the commission structure. I hope that helps to understand this better.