Serious Question

[Don]

My wife is a RE/MAX agent. We both realize the cheese is quickly being
moved in the real estate industry (mainly because of the internet). We
also realize people are getting sick and tired of paying $48,000 to
sell an $800,000 home. We are actually thinking about starting our own
agency that offers absolutely everything a RE/MAX agent offers (or any
"full service agent" for that matter) at a 1% selling fee and of
course a 2.8% to 3% co-op fee (less no agent will show the home to
their buyers). So for my $800,000 home example they would save $16,000
and receive everything my wife provides now. Basically doing the same
thing for less money. This is a different model than traditional
discount agents or help-u-sell etc. They really don't offer full
service. I have to believe with the growing animosity towards the
commissions agents make this will be a welcome alternative. We then
make up for lost revenue by increasing our volume.

Question:
1. Who is doing this now and how successful have they been?
2. What is your opinion of this idea?

If you're a full service agent you probably won't like this post and
I'll get flamed. But you have to admit the cheese is moving.

Thanks,
Don (don't reply by email as it won't work)

[Steve Horrillo]

Post by Don
If you're a full service agent you probably won't like this post and
I'll get flamed. But you have to admit the cheese is moving.

The cheese is not moving. That business model will only work in a buyer's
market. You missed the boat. But it will come back around again. Just go to
www.bbb.com and see all the complaints against these brokers. Most have quit
the BBB because it was making them look bad but some still are members. Home
Discovery was so bad the pulled out and were even smart enough to put a no
archive command in their robot.txt so you can't pull up their horrible
record. I wish I printed it out.

[T&G]

Don,

I have just listed with an agent who is thinking along the same lines as
you. He only charges $2 commission - and the 'catch' is that when we buy
our next house/property that we use him as our realtor (he will make his $
off of the commission from the other property).

Having said that, when you go to his site, you will see a tab marked
'realtor's' - and under that tab it clearly states that Realtor's can bring
their Buyer's Fees to the table - and they will be considered with the offer
of the house.

I've made it very clear that I will be offering a Realtor's Courtesy -
because they do deserve to be paid for bringing their clients to my home -
it's not madatory that I do that - but I want to make sure that the
Realtor's know they are going to be paid (but not at the current 6% on the
first 100,000 and 3% on the balance, as are the rates in my area - a
Realtor's Courtesy is 3% on the first 100,000 and 1.5% on the balance). If
I were to be listing with an agent that charged me the former, I would be
possibly paying out (if my house sells at the maximum of $429,000) $15,870 +
7% GST. However, if I honour a Realtor's Courtesy and sell at the maximum -
I'm looking at $7935 + 7% GST.

Do I think that Realtor's deserve to be paid for the time and disbursements?
Yes. Do I believe that to the tune of $16,981? No. That's more than 1/2
of most people's annual salary! on the sale of one house? Because they hold
a Realtor's license and have a monopoly to the MLS??? I've heard one
Realtor say that he doesn't even have to get out of bed in the morning to
clear $150,000/yr in sales.

Quite frankly - I was going to do the FSBO scene - as we aren't in a rush to
move. However, when my realtor e'mailed me (in response to an open house
e'mail that I sent to a multitude of Realtor's in my area - letting them
know that I was going to offer a Realtor's Courtesy) - I couldn't turn down
that offer (he's done 2 open houses for me, put my house on the MLS, put
some advertising in the local papers....). He's offering everything that a
'Franchised Realtor' does. Will he be fairly compensated? Of course, not
just because I've commited to buying my next property through him - but also
because I've refererred him to each and every single person I know - and I
know he will also get referral listings from me (because I told 15 friends
by e'mail - and they've told 15 friends by e'mail and so on and so forth).

Yes, the internet and e'mail are a wonderful source of information - if you
put it to work for you.

You can check out his site at http://www.can-do-realty.com