Transparency

Aaron’s recent post on trust raised some excellent questions, and provided some great insights into the consumers’ point of view.   I though that the comments also highlighted some misconceptions. 

Trust is a funny concept.  The warm and fuzzy quality makes some of us want to dismiss it as a lightweight issue.  Realistically, trust can’t be assumed or demanded – it has to be built through a process.  The challenge is executing the process in a compressed time frame.

Its been said that a consumer can become as educated on real estate as almost any person selling it.  That may be true, but if it is I think that in most cases the consumer in question should be thinking about getting a new Realtor. 

Consumers want value, and many want to understand the process.  Many, unfortunately, don’t have complete information, and think that they are restricted from doing things that they would like to do.

 I think that transparency is key to addressing this. 

 Commissions are as good a place to start as any.  Null commented that 6% is a high price to pay for paperwork when he already knows plenty about real estate.   Now its possible that he is commenting from another jurisdiction, and 6% may be a common commission figure there.  Its way off base for the Vancouver area (so if Null is from Vancouver he’s not as well informed as he thought 🙂 ).  Commissions are generally paid by the seller, and are generally figured on the basis of 7% on the first $100,000 of the sale and 2.5% on the balance.  They are usually split on a 46.5%/53.5% basis between selling Realtor and listing Realtor (buyer’s agent and seller’s agent). 

 What do the numbers tell us? May’s benchmark apartment price was $358,428. Average price was $377, 160.  Let’s call it $365,000.  7% on the first $100,000 is, of course, $7,000, and 2.5% on the balance is  $6,625, for a total of $13,625.  Divide that by the sale price and you get 3.73% across the board, not 6%.

That 3.73% gets split further, of course, since there are generally two agents involved.  The usual breakdown is 1.73% of the total sales price to the buyer’s agent and 2% to the seller’s agent.

As prices go up so does the total commision – but the percentage decreases.  May’s benchmark price for attached proeprties renders a gross commission of 3.5%. For a house, with a benchmark price of $711,245, the across the board commission is 3.13%. Again, in both cases the commission is usually split.

Those splits are further split as the agent, whether buyer or seller, either pays a percentage or a flat fee to the broker.

And, of course, we know that there are more agents than sales. We’ve got 9,167 Realtors in the REBGV. This May, a strong sales month, we had 4,331 sales.   That’s .47 sales per Realtor.

I’m not arguing that Realtors are hard done by.  Nobody is forced to sell real estate for a living.  The numbers speak for themselves, anyway.  As prices go up the absolute commission rises, but the percentage charged decreases.  If real estate prices outstrip the majority of other costs the Realtor gains.  If not, the Realtor takes a pay cut (what he did in 2000 for 3.6% he now does for 3.13%, a 13% drop in price).  Real estate has doubled, and succesful Realtors are doing well, but commissions have not doubled and the number of transactions per Realtor has dropped.

When discussing commissions I’ve used the terms “usually” and “generally”.  Its important to understand that there are no set commission rates.  Discount brokers are permitted, and have full access to the MLS.  You can pay a Realtor a flat fee. You can pay a Realtor on the basis of time and disbursements.  And you can pay a commission other than 7% and 2.5%.  The split offered by the listing agent to the buyer’s agent can vary.  You can design an incentive based commission so that you’re confortable that the Realtor is either getting you the highest price or the lowest price, as the case may be.  As a buyer you can require that the buyer’s agent not accept a commission from the listing agent, and you can pay him directly on the basis of getting a bonus for negotiating a purchase price under list, under assessment, or under appraisal.  Nothing stops you aside from the Realtor declining your business.  You do have to make it worth the Realtor’s time.

 Its worth connecting a few dots at this point: if there are only .47 sales per Realtor, and we know that some Realtors sell tons, and some sell nothing, it could be argued that the more succesful the Realtor is the more he deserves…or doesn’t deserve. After all, does someone need $200,000 per year?  (Mind you, if he’s that good at selling, maybe you want him to sell your place).  If someone’s making only $15,000 per year, should you pay them more than 7% and 2.5%? Does a high income earner equate to better service? Maybe. Maybe not.

Commissions must be disclosed. Consumers must be told how much money their agent is earning and where it comes from.  This is called the duty to disclose remuneration.  Consumers have a statutory right to know how much money their agent is earning on a transaction.  That’s not a “should know”; its a “must know”, “must be disclosed”, “statute bound to be disclosed”.

 In some respects commissions appear to be all about money.  As I bring this post to a close I would suggest that while the absolute amount paid is important, a succesful transaction is perhaps more important.  That’s what the consumer has historically paid for (and paying on the basis of time and disbursements would clearly do way with that).  If you pay less (or nothing) for a poor transaction (or no transaction at all), its possible that you haven’t saved a dime.  Commissions aren’t so much about money as they are about value.

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24 Comments

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24 responses to “Transparency

  1. jesse

    “As prices go up the absolute commission rises, but the percentage charged decreases.”

    Looking at percentages is interesting but it confuses the issue. Ultimately a successful Realtor will be fairly compensated for time and expenses.

    Recently, if a benchmark price went up by $100,000 YOY, the Realtor takes an extra $1250 in commissions compared to last year. With, say, 30 transactions that is an extra $37,500 of annual top line growth. But, A) more Realtors enter the game; B) the commission structure changes; or C) prices drop. So everything evens out long-term though recently I am sure some Realtors have done very well. It will be interesting to see what mix of A,B, and C will happen in the next few years.

  2. null

    Thanks for addressing my comment so quickly, Rob. I appreciate the interactivity that’s offered between an industry professional and the general public.

    If you pay special attention to my previous comment, you’ll note that I said I ‘could’ become as educated as a realtor, not that I am already. (One could argue, demonstrated by my lack of knowledge on commissions 😉 However, I failed to include; on the first 100k, and $%… on the remainder. Next time, I’ll be sure to make my point, or my ineptitude much clearer)

    In your latest post on commission structure and transparency; you address the finer points of how it works and who gets paid what, etc. Now, we all have a much clearer understanding of it, adding to our collective education on real estate. For that, I’m appreciative. But my underlying question still stands, un-answered.

  3. CheapMan

    “As prices go up so does the total commision – but the percentage decreases. ”

    2% of 1 mil is 20,000
    3% of 500,000 is 15,000
    which one do you prefer?

  4. robchipman

    Null – thanks for the input. Give me some time and we’ll address as much as possible.
    Jesse – .47 transactions per Realtor in May. That’s a strong month. Direct extrapolation is 5.64 sales per year. 30 sales per year is 2.5 per month. The average never approaches 2.5.
    We know that as prices and volumes rise more Realtors enter the game, and average transactions drop. The commission structure (as charged to clients) doesn’t change. The commission structure (as split by agents and brokers) appears to change.
    80/20 rule says some Realtors always do well, but high producers will say that calmer markets are more profitable.
    Cheapman – do all the math. Prices have risen throughout my career, but the average Realtor still doesn’t make enough to remain in the business. I can’t see that changing.
    BTW, when I got the 3% I could buy lots of property. Now, at 2%, not so much. The extra $5,000 doesn’t go as far as it used to. 🙂

  5. jesse

    rob:

    I don’t think it’s fair to think that all Realtors are making only 0.47 transactions per month. I would argue some portion of Realtors are only part time so the average for “successful” and full-time Realtors is higher. Also since there are 2 Realtors per transaction that equates to 0.94 transactions per month, not 0.47.

  6. jesse

    Also rob: the word “transparency” applies not to the disclosure aspect of a Realtor’s job but also to the association itself and how it is dealing with member malfeasance.

  7. robchipman

    Jesse:

    Most Realtors make less than .47 per month.

    Also, your math is not quite correct – if there are 100 sales and 100 Realtors, its 1 sale per Realtor. The fact that there are 2 ends to a sale doesn’t change that. If 100 Realtors are each involved in 2 sales, but do it with another Realtor each time, they get 2 half sales.

    You could concievably cut the sales in half and count them twice, as you’ve done. In fact, we do this to a degree, and refer to them as ‘ends” – a selling end and a buying end – but you’d have to divide the commission one more time. The dollar figure would come out the same – total sales/total Realtors x average commission, or, total sales/total Realtors x 2 (2 Realtors per deal) = average commission per every two Realtors.

    Now, apply the 80/20 rule to the numbers. If 20% of Realtors do 80% of the business (and the equation works whenever any Realtor makes more than the average, even if its only 1 guy making .48 transactions per month), then the majority of Realtors make less than the average.

    10 Realtors earn .47 of the average commission each. Say the average commission is $100. Total commissions volume is 100 x 4.7 transactions (for 10 Realtors to average .47 commissions in a month you have to have 4.7 transactions). That’s $470 in total commissions earned and split (somehow) between 10 Realtors.

    On average a Realtor makes $47. But, if 2 Realtors do 80 percent of the volume, they gets $47 x 8 = 376. That leaves $24 in commissions for the remaing 8 Realtors. 24/8 = $3. On a transaction basis it becomes 2 Realtors getting 80% of 4.7 transactions, or 3.76 transactions, leaving .94 transactions to be split between the 8 remaining Realtors.

    Change the 80/20 rule to any situation where a minority of the Realtors make any amount more than the average and you will see the the majority make less than the average as a result.

    Is there more? Of course. The 80/20 rule doesn’t stop applying after the 1st two high producers take their share. The .94 transactions are split between the remaing 8 Realtors on the same basis. 20% of the 8 (1.6 Realtors) get 80% of the .94 (.752 transactions). That leaves 0.188 transactions in the month for 6 of the original 10 Realtors to split.

    I know that looks like fun with numbers to prove the Realtors are hard done by. That’s not the goal. The real goal is to indicate that a) Realtors in general don;t make easy money (there simply isn’t enough to go around) 2) that’s why most Realtors leave the business within 2 years, and c) even if you’re one of the 2 getting the 8 transactions, its not easy, because you have to compete with 9 other guys.

    I think those numbers really have some implications for any discussion about value for service as well as the idea of paying based on time and disbursements.

  8. Marko

    Just 2 points:

    1. Interview more than one agent, tell them you are doing this and negotiate commissions:

    Not sure what breaks you can negotiate with a realtor from the buying side but I know when we sold our home we demanded (and got) an agreement that if the realtor represented both the us and the buyer we would get $1500 knocked off the commission. We also negotiated the commission down from 7% on the first 100k to 6%.

    We were very happy with the service we got from the realtor but I would say the house itself and the couple hundred hours we put in renovating and “staging” accounted for 90% of the sale. The 10% effort from the realtor’s side came in setting up the final negotiation with the competing offers.
    BTW, most of the realtor’s paperwork was done by the conveyance department at the realty office (a point our conveyance lawyer made while grumbling about how overpaid the realestate agents were).

    2. From our experience, both buying and selling our house in Victoria, I would say that the big real estate firms do operate in a way that likely is in violation of the Canadian Combines Act.

    The realtors we interviewed to sell our house all admitted (to varying degrees) that “other realtors” will not take buyers to houses sold privately or to realtors who charge low commissions (read: 1% Realty), as the commission split is either zero or too low. This was also confirmed when we bought our house 4 years ago from a woman who sold privately. She had 2 open houses at a time when the market in Victoria was taking off and had zero agents show up. She ended up selling to us for 9k less than her asking price. This was for a house that was very nice on a quiet street and already reasonably priced.

    When we sold 3 months ago we thought about saving the commission and going with 1% Realty or selling privately but the above experience made the decision pretty easy to go with an agent from an established firm. We ended up getting 4 offers in the first 48 hours we had it list and got 14k above our asking price.

    I’m obviously happy with the outcome but the monopoly the big firms have on the market does leave a bad taste in my mouth.

  9. robchipman

    Marko:

    The Competition Bureau is always looking at real estte boards to make sure that they don’t restrict access without valid reasons and to make sure that they (and their members) don’t fix price.

    I love this thread. Is it collusion when a bunch of agents don’t show a house that doesn’t pay what they consider a satisfactory commission? Its a serious question. If you’re in the oil change business, and I offer you and all of your competitors $2.00 to change my oil, and you all refuse, is that collusion or price fixing? (There is more to that subject, however).

  10. LesserApe

    Well, I guess if you have fiduciary duty to your purchasing clients to help them find the “best” house for them. If we’re arguing by analogy, a good analogy would be a doctor deciding upon drugs for a patient. Would it be right for a doctor to not prescribe a drug that could potentially help a patient because the drug company gave smaller kickbacks than other drug companies?

    Or one could say that realtors don’t have any fiduciary duty. But then the whole discussion of “we want a trust relationship going into a real estate transaction” is kind of silly.

    There’s probably a middle ground, but I’m not sure what it is. Maybe no fiduciary duty, we’ll try to co-operate, but be really careful in areas where the realtor and clients interests conflict?

  11. Craig

    The basic thrust of your reasoning about commissions and whether Realtors make too much, is flawed Rob. Just because too many people get into the industry in good times doesn’t mean that Realtors “deserve” to make so much per transaction (because they have so few transactions per month). Think of it this way, if twice as many Realtors as present were in the business, would they each “deserve” twice as much per sale/purchase (so there was enough to go around).

    The whole matter of competition is irrelevant also. Competition should decide who gets the business not how much they get. In fact, if there was true competition, one would expect fees for service to go down.

    In any event, the average numbers are quite misleading as many people have Realtors licences as a side job. I know a few such individuals myself. They make most of their money elsewhere. You yourself are in the property managment business.

    The logical way to look at this issue is to ask whether Realtors are worth what they charge for their services. Personally, I think they aren’t worth it. If their services a few years ago were worth X, they aren’t worth double X now because prices have doubled.

    Realtors fees should be calculated hourly. The reason that you and other Realtors defend the status quo so vigorously is that very few would pay the thousands per hour (of work on a particular purchase or sale) that are being paid now.

  12. whybuywhenucanrent

    As was noted on the “Trust” post, I’m a little unclear on the commission concept.

    With a “1% realty”, how does the commission work? Does the buyer’s agent only get 1% of the selling price?

    Whybuywhenucanrent?

  13. robchipman

    Craig:

    You’re actually reaffirming many of my points, and I’m glad you put them into focus. I don’t think Realtors make too much or too little. They get paid for success, and the good ones make a lot. The poor ones make very little. That is as it should be.

    I think there are 2 conclusions:

    1) A consumer should not base his decision on which Realtor to use based on perceptions of how much a Realtor earns (especially when the perceptions are flawed).

    2) Similarly, a consumer should not decide what a Realtor’s service is worth based on how much the Realtor earns from all their business.

    However, the idea that real estate is easy money simply isn’t supportable. The numbers show that average commissions are too low to support anyone, math shows that if some Realtors make more than the average (and we know that they do) then others must make even less, and Real Estate Council stats show that most Realtors leave the business.

    Frankly, I find it hard to accept any arguement that anyone providing a service on the open market “makes too much”. Willing buyers of the service negotiate the price that they pay, and the sum of those freely entered into decisions equals the income that a Realtor earns, whether its less that the .47 transactions per month or much much more.

    Competition is relevant. It does decide who gets the business. It does result in lower fees (witness the post afeter yours – 1% Realty implies lower fees, and that’s a product of competition).

    Some Realtors do have side jobs. That used to be prohibited – real estate salespeople were required to restrict their activities to selling real estate – but the government saw fit to apply Charter rights and ease entry to the industry. You might want to ask yourself: if a Realtor does more than one job, do I want them selling my house? Can they show it at any time? Can they answer my calls at anytime? Are they competent enough at real estate to make a living at it?

    You’re right that I sell and manage real estate. I wouldn’t consider my property management business a side job, mind you. It requires additional real esate licencing, and is governed by the Real Estate Services Act, and really goes hand in hand with my sales business. You could just as easily point out that I also do sales management as a third side job.

    The logical way to look at this is to ask: are Realtors worth what they charge for their services. If you treat that as a subjective question (“In my opinion they aren’t”) you’re not really doing the issue any justice. You need to be objective.

    Objectively a Realtor has to charge enough to make a profit (whether reasonable or not) within the restrictions placed by the market (what willing sellers will pay for the service based on what other suppliers charge). In other words, a Realtor has to cover his overhead and clear enough profit to make it worth his while to sell real estate services.

    How the Realtor does this is pretty wide open. He can charge on an hourly basis, like a lawyer. That begs the questions:

    What would a fair price be, per hour?

    How many hours go into a transaction?

    Would you pay the same rate regardless of results?

    I can tell you that I don’t make thousands per hour, unless you cherry pick the hours. I can also tell you that my income has not doubled with the doubling of prices.

    You do raise some very interesting concepts, though, and I’m interested in your answers to the hourly fee questions.

    wbwycr:

    A quick look at 1857 sales over the last 3 days (including today) indicates about 16 from obvious discount brokers. I may have missed a few, but I’m sure I got most. Many offer the selling agent .5%, but some offer flat rates of $2500, and those often exceed the .5%. Some also offer 3.22/1.162 (as close to standard rate as you can get).

    Some of those seller agents wrote and presented the offers despite the discounted commissions because they felt they owed their clients. Some negotiated better splits/higher commissions during offer presentation. Some had buyer agency agreements specifying that the buyer would top up the commission if the seller was discounting it. There is no easy way of telling how many of the 16 sales fell into one of those categories.

  14. robchipman

    Lesser Ape:

    The fiduciary duty is exactly where I was going. I’ll expand on that in another post.

  15. Craig

    Well, I doubt this thread will see much more traffic given the newer threads but I will answer you anyway, Rob.

    I agree with your points #1 and #2. I would, however, add the point – in my view most important – that a consumer, acting logically, should base his decision on whether to use a Realtor on what the Realtor will earn on the consumer’s transaction (and on what he will provide, in exchange).

    I don’t think it is easy to succeed financially as a Realtor. No matter how obscene the commission on a typical transaction becomes, if more Realtors enter the business (which typically happens in a hot market), each Realtor will have to work that much harder to earn a living. Again, that is not relevant to whether a Realtor’ services are worth the cost.

    If commissions were half what they are now, there would simply be less Realtors chasing the remaining vendors and purchasors. The consumer wouldn’t suffer. In fact, the wheat would get separated from the chaff faster. The Realtors that remained would have to do twice as many transactions to stay in business.

    As for the “open market” argument, the problem is that the market isn’t truly open (yet). Licensed Realtors by and large have acted like a consortium, setting the conditions of entry and, more importantly, the going price for their services (as a group). While theoretically, anyone can negotiate lower commissions (and some, like 1% do), in fact the vast majority of Realtors are unwilling to do so and many attempt to thwart undercutting by refusing to show houses listed by those that do undercut. The present system has inertia. Yes, it could be an “open market” but it isn’t there yet.

    In some respects, it is like gas stations and the price of gas. Many are run by owner-operators (Realtors) under contract from big companies (Real Estate firms). While nobody forces anyone to buy gas and while there are enough firms to theoretically ensure an open market, the reality is that the market is far from open.

    I would gladly pay someone $100 an hour for 10 hours to sell my house (assuming a relatively easy sale after two or three opens) plus reasonable disbursements (advertising). I would also consider an hourly rate plus a bonus if a certain purchase price benchmarks were reached. This would, of course, ally the Realtor’s interests more closely with mine. I would hire a Realtor primarily to avoid the hassle of dealing with the purchasor.

    As for purchasing, I don’t think I would use a Realtor at all, if possible. I know what I like and what can generate revenue. I know what I can afford and am willing to pay. I know roughly what the market price is (or can find out easily). I can get the house inspected for a flat fee and a lawyer to do the transaction. My brother and law has done this twice (entirely private transactions, with him as the purchasor) and it has worked out well for both parties on both occasions (they had $50,000 more to make each other happy).

  16. robchipman

    Craig:

    It just happened again! I posted a comment and it didn’t appear!

    Anyway, thanks for your responses. I appreciate them. You are factually incorrect on a few things, and I’ll address them later.

    One burning question: Would you pay me $100/hour to sell your house, up to a max of $1,000, even if I didn’t get it sold? I give you 10 hours of my time and effort (like, say, a lawyer) and you pay me $1,000 (maybe by retainer). After the 10 hours we say “Thanks, great, see ya”, regardless of the outcome, and maybe we agree to extend the contract for a further 10 hours/$1000 (like a lawyer saying “Hey, you win some you lose some. Wanna appeal?”).

    BTW, people are still looking at this comment.

  17. whybuywhenucanrent

    So, about commissions. I’m a little fuzzy. Perhaps Rob or Aaron could make this transparent.

    If a house is sold through a standard realtor agreement, what are the commissions for the following scenarios (I’ll start out with an estimate based on the material in Rob’s “transparency” post). (I’ll round the numbers to a 50-50 split between the realtors, rather than the 46.5/53.5 aplit)

    $100K house?
    * $7,000 total commission
    * 3,500 per Realtor

    $500K house?
    * $17,000 total commission
    * 8,500 per Realtor

    $1M house?
    * $19,500 total commission
    * $9,750 per realtor

    Is this correct, for the standard arrangement referred to in Rob’s original post (except for the 50-50 rounding?)

    How about the numbers for a house sold through “One Percent Realty?”
    * $100K house
    * $500K house
    * $1M house

    Thanks in advance
    Whybuywhenucanrent?

  18. whybuywhenucanrent

    Correction–

    $1M house should be
    * $29,500 total commission
    * $14,750 per Realtor

  19. robchipman

    WBWYCR:

    1% pays out various amounts to co-op Realtors. It could be .5%, $2500, or more. It varies.

    Your numbers are right, otherwise.

    BTW, thanks for the commission on the million dollar place. Apparently Craig’s brother and the seller’s he’s bought form have had $50,000 extra to play with by not using a Realtor. Those houses must have been a lot more than $1 million!

  20. whybuywhenucanrent

    So that would be .5% of the total? So if the buyer’s agent lands his/her client a house brokered by “One Percent Realty” for $500K, he/she takes home $2,500 (instead of $8,500)? I can see how this would be a disincentive.

    Seems to me a discount RE office is shooting themselves in the foot if they don’t pay a full commission to the buyer’s agent. Is this really the case?

    Other Qs.
    * What is a “co-op Realtor?”
    * Have you or anyone in your office served as a buyers’ agent purchasing a house through “One Percent” or another such agency? What were the numbers in that case?

    Thanks in advance,
    Whybuywhenucanrent

  21. robchipman

    wbwycr:

    Buying a property for a client through a discount broker can be a disincentive. It is a problem for the buyer’s agent, both in terms of paycheque and duty to the client.

    Are discount brokers shooting themselves in the foot? Well, if the idea was to take over the world, yeah, they’re shooting themselves in the foot. But if the idea was to wrap up that part of the market thta buys RE services based soley on price, then they’ve got a good market plan. Their horizons are limited, but the system works as far as it goes.

    “co-op” Realtor is the term for the “other” Realtor involved in the sale. You generally ahve a listing agent and a selling agent. They cooperate with each other, hence “co-op”. Its the heading we have on deal sheets and sale reports to indicate who else was involved.

    Yes, we have bought properties for clients with discount brokers. We either recieved a discount commission, or got the seller to pay a higher commission, or got the buyer to pay a higher commission.

    I can anticipate the next question: yes, discount agents negotiate for buyers on full pull commission listings, and they are able to take the full share even though they don’t offer the same thing on their listings. That does tend to stick in some peoples’ noses 🙂

  22. Craig

    Rob,

    Yes, I would pay a Realtor a certain amount per hour, even if the house didn’t get sold. I would want to know what the Realtor was doing to sell the house, in order to be satisfied with the service.

    But, you raise a good point. On reflection, I would likely insist on an hourly rate plus bonus for results. That way, the incentive to sell is increased and the incentive to churn hours is decreased.

    Craig

  23. robchipman

    Craig:

    By allowing that you’d pay a certain amount regardless of outcome you’ve agreed to share the risk that the sale won’t occur. That’s huge.

    By saying you’d want to know what the Realtor was doing to earn the money you’ve said “I want to know I’m getting value for value”, and that’s fair.

    You’re on your way to creating your own commssion structure, and its one that, while novel, is workable. If you were to say to me “I’ll pay you a flat rate per hour for this many hours, provided you show me that you’re going to do certain things, and I’ll throw in a performance based incentive”, I’d be all ears.

    There are two areas that need your attention: how do you determine price (its in your interest (at least as far as my incentive goes) to keep it high), and how do you provide for a co-op agent? You could say “We’ll get an independent appraiser for $295, and offer $5,000 to a co-op broker”, for example. We might simply agree on a mutually acceptable list price. However, you do need to figure something out (the current system handles that already through the split). Right now there is 0 incentive to churn hours and 100% incentive to make the sale.

    BTW, is it just me or do people say “Its in the Realtors interest to make buyers pay more, not because they make significantly more money per deal, but because they make more deals that way”; how come it doesn’t work the other way – “Realtors make sellers take less, because even though they make a little less per deal they make more deals”? 🙂

  24. Craig

    Rob,

    I have experience with Realtors encouraging sellers to take less to get the deal done. “Big” Realtors. The most egregious example was a few years ago, when the market wasn’t as hot (there simply isn’t any need to underlist to sell these days).

    Call me naive, but I don’t think I (working with you) would need a co-op agent. That is the key to this arrangement. You put it on MLS and advertise it in the paper. The vast majority of prospective clients see it. If their Realtors refuse to show them the property (because nothing is in it for the purchasing Realtor), they can offer their Realtor a monetary incentive (hourly or a bonus) or they can simply do the deal privately with me. At this point, I know you are going to start a rant – 😉 – about putting you in a conflict position (i.e. deemed to be representing both sides) but I think that problem can be worked out.

    Voila. The deal gets done and the transaction costs are cut significantly (potentially).

    You and I are likely the last people reading this read…

    Craig

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