Comments on: Billable Hours, Straight Commission, Hybrid or Both? http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/ Tracking Charlottesville's Real Estate Market since 2005 Sun, 12 Feb 2012 23:56:00 +0000 hourly 1 http://wordpress.org/?v= By: Buyers Advocates http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-32367 Buyers Advocates Wed, 09 Feb 2011 01:44:00 +0000 http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-32367 nothing is free - absolutely i believe also that a portion for brokers/agents are dying off nothing is free – absolutely
i believe also that a portion for brokers/agents are dying off

]]> By: Orlando http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25547 Orlando Fri, 13 Feb 2009 03:20:23 +0000 http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25547 There is $500 billion in Option ARM’s that will be resetting interest rates and/or reached 125% cap on loan to value ratio very soon. I believe that we will see some severe declines in housing values in next 12 months. So get ready... a lot of tire kicking and having our time wasted =o( There is $500 billion in Option ARM’s that will be resetting interest rates and/or reached 125% cap on loan to value ratio very soon.
I believe that we will see some severe declines in housing values in next 12 months. So get ready… a lot of tire kicking and having our time wasted =o(

]]> By: Real Estate Relativity » Blog Archive » Theatre of Cruelty in a Carnival of Real Estate - Web 2.0 marketing research, tactics, strategy for the real estate professional http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25421 Real Estate Relativity » Blog Archive » Theatre of Cruelty in a Carnival of Real Estate - Web 2.0 marketing research, tactics, strategy for the real estate professional Tue, 03 Feb 2009 23:04:44 +0000 http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25421 [...] here are perhaps two of the the clearest calls to action to change the status quo–two honest evaluations of the state of affairs with [...] [...] here are perhaps two of the the clearest calls to action to change the status quo–two honest evaluations of the state of affairs with [...]

]]> By: Jonathan Dalton http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25419 Jonathan Dalton Tue, 03 Feb 2009 21:53:13 +0000 http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25419 If I were to go to billable hours for my own business, it only would be "pay as you go." One of the reasons I'm willing to risk considerable time spent without receiving compensation (buyers who don't buy) is my overall structure is able to overcome that (just as stores build breakage and other such items into their own pricing structure.) So working at a billable rate paid only at closing wouldn't produce sufficient income to justify continuance of the business. Pay as you go, however, places the onus squarely on the buyer. It means that when you hire an agent and go looking with an agent, you're going to be serious. This allows individual agents to work with my clients since less time will be spent with people who like looking at homes but may never buy. If I were to go to billable hours for my own business, it only would be “pay as you go.” One of the reasons I’m willing to risk considerable time spent without receiving compensation (buyers who don’t buy) is my overall structure is able to overcome that (just as stores build breakage and other such items into their own pricing structure.)

So working at a billable rate paid only at closing wouldn’t produce sufficient income to justify continuance of the business.

Pay as you go, however, places the onus squarely on the buyer. It means that when you hire an agent and go looking with an agent, you’re going to be serious. This allows individual agents to work with my clients since less time will be spent with people who like looking at homes but may never buy.

]]> By: Jim Duncan http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25416 Jim Duncan Tue, 03 Feb 2009 21:15:16 +0000 http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25416 Pavel - You're absolutely right, and one thing that man/most Realtors don't do is explain how much goes in to <strike>marketing a home</strike> building the infrastructure to market a home and to represent a buyer in their search/transaction. The little costs add up ... quickly. Pavel –

You’re absolutely right, and one thing that man/most Realtors don’t do is explain how much goes in to marketing a home building the infrastructure to market a home and to represent a buyer in their search/transaction.

The little costs add up … quickly.

]]> By: Pavel http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25407 Pavel Tue, 03 Feb 2009 04:04:26 +0000 http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25407 What about the listing agent's side? From time to time I've pondered the following scenario and it's fairness to seller: if a typical listing agent spends $1,000 to market and sell a $250,000 property; and $2,000 to market and sell a $500,000 property - why should the seller of the $500,000 property typically (and I am generalizing here) pay $10K-$12K more in commission fees? It seems to me in the traditional brokerage model the cost of operating a successful business can get very expensive and the result is that the cost is ultimately being passed off to the consumer. Just a small example: 3rd party vendors (such as Realtor.com) charge listing agents sky-rocket high fees (hundreds, sometimes thousands of dollars per year) to "enhance" their listings. In return, listing agents, to cover their costs and expenses, turn around and charge the consumers a "justifiable" fee. (Realtor.com is just one example here... there are so many other entities which exist solely to make money every time a home goes on the market, is sold or purchased). In the end, however, it is a free market out there. As consumer confidence and awareness grows, change will be inevitable. What about the listing agent’s side? From time to time I’ve pondered the following scenario and it’s fairness to seller: if a typical listing agent spends $1,000 to market and sell a $250,000 property; and $2,000 to market and sell a $500,000 property – why should the seller of the $500,000 property typically (and I am generalizing here) pay $10K-$12K more in commission fees? It seems to me in the traditional brokerage model the cost of operating a successful business can get very expensive and the result is that the cost is ultimately being passed off to the consumer. Just a small example: 3rd party vendors (such as Realtor.com) charge listing agents sky-rocket high fees (hundreds, sometimes thousands of dollars per year) to “enhance” their listings. In return, listing agents, to cover their costs and expenses, turn around and charge the consumers a “justifiable” fee. (Realtor.com is just one example here… there are so many other entities which exist solely to make money every time a home goes on the market, is sold or purchased). In the end, however, it is a free market out there. As consumer confidence and awareness grows, change will be inevitable.

]]> By: Jay Thompson http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25403 Jay Thompson Mon, 02 Feb 2009 20:24:51 +0000 http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25403 "Nothing is free. Ever." Not true. I give free hugs. Oh, wait... If I'm honest I want something in return..... Great post Jim. I don't know what the answer is, but I know <i>something</i> has to change. You know the bureaucracy and politics better than I do, but until a significant portion of existing brokers/agents begin dying off, I just don't see it happening. But I hope I am wrong. “Nothing is free. Ever.”

Not true. I give free hugs.

Oh, wait… If I’m honest I want something in return…..

Great post Jim. I don’t know what the answer is, but I know something has to change. You know the bureaucracy and politics better than I do, but until a significant portion of existing brokers/agents begin dying off, I just don’t see it happening.

But I hope I am wrong.

]]> By: Jim Duncan http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25402 Jim Duncan Mon, 02 Feb 2009 18:52:17 +0000 http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25402 Brant - Thanks for the comment and discussion, as always. I keep coming back to this because I feel strongly that change isn't going to happen unless we keep pressing the matter. Thanks for the kind words about my expertise. :) I have not been able to directly translate my (real and perceived) greater level of knowledge into higher fees, as I don't think that consumers are necessarily ready. But ... I have been able to not be dependent on what sellers are offering, so in that sense, I have been able to "raise" my fees. And frankly, you've got me here - <blockquote>In other words, is it possible for something to be valuable under a certain set of circumstances and then not be once the rules are changed?In other words, is it possible for something to be valuable under a certain set of circumstances and then not be once the rules are changed?</blockquote> Yes. <blockquote>So, does the market value more experienced Agents? Absolutely. Are we willing to pay more for their services? Not sure. But we definitely seek them out and try to give them more business.</blockquote> And thanks for framing this matter so well - <blockquote> So, does the market value more experienced Agents? Absolutely. Are we willing to pay more for their services? Not sure. But we definitely seek them out and try to give them more business. </blockquote> Daniel - I couldn't agree more. For example - the buyers who live in Charlottesville who are familiar with the market, able to go to open houses, do some of the legwork should theoretically pay less than the overseas buyers who will likely require more time. Regarding the availability of data - there remain a few examples (locally and nationally) who continue to refuse to send their data through IDX, therefore attempting keep their data behind lock and key. Until they release their information, we're not going to have a truer representation of the full market online (rant/video coming soon) The negotiating for both is likely to be extensive as is the paperwork ... Brant –

Thanks for the comment and discussion, as always.

I keep coming back to this because I feel strongly that change isn’t going to happen unless we keep pressing the matter.

Thanks for the kind words about my expertise. :) I have not been able to directly translate my (real and perceived) greater level of knowledge into higher fees, as I don’t think that consumers are necessarily ready. But … I have been able to not be dependent on what sellers are offering, so in that sense, I have been able to “raise” my fees.

And frankly, you’ve got me here –

In other words, is it possible for something to be valuable under a certain set of circumstances and then not be once the rules are changed?In other words, is it possible for something to be valuable under a certain set of circumstances and then not be once the rules are changed?

Yes.

So, does the market value more experienced Agents? Absolutely. Are we willing to pay more for their services? Not sure. But we definitely seek them out and try to give them more business.

And thanks for framing this matter so well –

So, does the market value more experienced Agents? Absolutely. Are we willing to pay more for their services? Not sure. But we definitely seek them out and try to give them more business.

Daniel -

I couldn’t agree more. For example – the buyers who live in Charlottesville who are familiar with the market, able to go to open houses, do some of the legwork should theoretically pay less than the overseas buyers who will likely require more time.

Regarding the availability of data – there remain a few examples (locally and nationally) who continue to refuse to send their data through IDX, therefore attempting keep their data behind lock and key. Until they release their information, we’re not going to have a truer representation of the full market online (rant/video coming soon)

The negotiating for both is likely to be extensive as is the paperwork …

]]> By: Daniel http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25401 Daniel Mon, 02 Feb 2009 16:43:13 +0000 http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25401 I have a feeling that what products / services agents provide will change faster than the compensation model. The rise of the internet-savy generation, whatever the current economic meltdown does to that generation's perception of real estate, the decline of newspapers, and the availability of data once closely guarded will really change what, exactly, agents will be asked to do for their clients. The services provided will affect the preferred compensation method. But those services may be very different than the traditional drive-me-around-until-find-a-house-I-like model. I have a feeling that what products / services agents provide will change faster than the compensation model. The rise of the internet-savy generation, whatever the current economic meltdown does to that generation’s perception of real estate, the decline of newspapers, and the availability of data once closely guarded will really change what, exactly, agents will be asked to do for their clients.

The services provided will affect the preferred compensation method. But those services may be very different than the traditional drive-me-around-until-find-a-house-I-like model.

]]> By: Brant Meyer http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25400 Brant Meyer Mon, 02 Feb 2009 16:11:11 +0000 http://www.realcentralva.com/2009/02/02/billable-hours-straight-commission-hybrid-or-both/#comment-25400 Jim, I've noticed that you visit this issue time and again - and I think it's well worth the discussion. The fee structure of the agency relationship seems to wholly define the nature of the business and makes change and innovation hard in your field. If change is going to take place, this seems like the place it has to start. I wanted to pose one question in regards to your "rookie vs. experienced agent" issue. You say that both being paid equally needs to change. I would love to see it happen. Here's my question: Can something be valuable while at the same time not be able to be monetized? In other words, is it possible for something to be valuable under a certain set of circumstances and then not be once the rules are changed? Here's what I'm getting at - your experience and expertise is highly valued in this community. As a result, people give you their attention (reading the blog), they seek your advice, and you have access to a number of people you wouldn't otherwise. But does this translate into money? Are people willing to pay you a higher commission for a R.E. transaction? You probably get more business and referrals - but does your transactional value go up? One analogy would be LinkedIn. I think there's no argument that it demonstrates high value. I use it a lot and love it. But, that company has made $0 dollars to date. Would I still value it if I had to pay $15 per month? I'm not sure I would. Part of it's value rests in the fact that everyone uses it AND it's free. Change either of those propositions and my value of it changes. So, does the market value more experienced Agents? Absolutely. Are we willing to pay more for their services? Not sure. But we definitely seek them out and try to give them more business. Jim,

I’ve noticed that you visit this issue time and again – and I think it’s well worth the discussion. The fee structure of the agency relationship seems to wholly define the nature of the business and makes change and innovation hard in your field. If change is going to take place, this seems like the place it has to start.

I wanted to pose one question in regards to your “rookie vs. experienced agent” issue. You say that both being paid equally needs to change. I would love to see it happen. Here’s my question: Can something be valuable while at the same time not be able to be monetized? In other words, is it possible for something to be valuable under a certain set of circumstances and then not be once the rules are changed?

Here’s what I’m getting at – your experience and expertise is highly valued in this community. As a result, people give you their attention (reading the blog), they seek your advice, and you have access to a number of people you wouldn’t otherwise. But does this translate into money? Are people willing to pay you a higher commission for a R.E. transaction? You probably get more business and referrals – but does your transactional value go up?

One analogy would be LinkedIn. I think there’s no argument that it demonstrates high value. I use it a lot and love it. But, that company has made $0 dollars to date. Would I still value it if I had to pay $15 per month? I’m not sure I would. Part of it’s value rests in the fact that everyone uses it AND it’s free. Change either of those propositions and my value of it changes.

So, does the market value more experienced Agents? Absolutely. Are we willing to pay more for their services? Not sure. But we definitely seek them out and try to give them more business.

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