Why aren't there more (any!) 'a la carte' agents out there??

28 Replies

This is kinda a poll - more than a post.  I'm curious to know why more agents aren't willing to work (when they can under their broker) or why more brokers don't allow their agents to work "a la carte" - or a fee for service structure.  There are clearly far far far more agents than transactions out there.  Yet I can't find a broker/agent willing to do a 'fee for service' type contract.  I'm really curious as to why an agent would not offer their services (negotiation strategies; staging guidance; reviewing offers etc etc etc) on an hourly basis?  I'm not talking 'chump change' here - I'm thinkin' $100/hour for 'consulting' services.  

Enlighten me please . . .

90% of transactions go through about 10% of agents. So you are not going to get the 10% who are successful to change their business structures.  Those not in that 10% are not worth what you.would pay them. Thus your conundrum. I do actually offet an hourly rate, but it is $350 an hour. I have 3 to 4 people use that structure with me per year. They are usually other agents who have me consult on flips.

Interesting . . .  $350/hour is close to what I might pay my lawyer . . .  I will say that NO agent I've ever worked with was 'worthy' of that kind of $$ for the 'less-than-stellar, but adequate' work they did selling a property of mine, and at least one of those was "agent of the year".  Still  Of those 90% of remaining agents, a good portion of them probably have a decent number of transactions/year; for a few years.  Seems to still leave alot of room for optional business structures.  

In Chicago we have been offering an hourly rate a little above $100/ hour for several years. We are probably the only brokerage doing that.

There is an entire field of economics devoted to irrational decision making. It's called behavioral economics. In this case the consumer over estimates the risk of an hourly model costing more than a traditional commission model. Therefore, I find that only really analytically smart people are doing this when they are fairly certain that they won't need much of our time. The rest think it's too risky.

When it comes to hiring real estate agents I've observed all kinds of irrational behavior.

On the agent side...well, the average real estate agent is not the sharpest knife in the drawer. They cannot wrap their head around the notion of the value of their time. Also, they prefer an uncertain big payoff to a certain but lower payoff - even when they on average earn more per hour if they just charge for their time. Makes no sense. It's the same reason people gamble.

I also flatly reject the notion that you don't want to work with any of the bottom 90% of the agents. Agents fall into the bottom 90% for any number of reasons. Sure, you don't want to work with the part timers or the ones that are truly bad (there are many) but some are in the bottom 90% because they are not good at promoting themselves, yet they are very good agents.


There is an entire field of economics devoted to irrational decision making. . . . . Also, they prefer an uncertain big payoff to a certain but lower payoff - even when they on average earn more per hour if they just charge for their time. Makes no sense. It's the same reason people gamble.

 Exactly my point!!  Must be why I don't gamble.  Also - I am a very analytical person; scientist by profession.  I have the time, and the smarts (which I don't think really takes much) to sell my own properties.  But, I do like having an agent to confer with, to be sure I'm not missing something. Too bad you're not in Milwaukee!

Perhaps I should start charging for my consulting time? It is something my investor clients get for free, because it is something I truly enjoy. Sometimes it is startegy, sometimes construction issues, almost always landlording skills.

The issue is that most agents are not suited to work with investors. Andit's easy to see why: selling a 500k home to a family requires much less skill than than buying a good flip or rental property - for much less money and commission. I burnt through a number of agents when I started out ten years ago and I was shocked by how little they understood about investing. Eventually I retired from my W2 on rental income and became licensed myself. I started to see the agent world from the inside. Yes, many of them are not the sharpest tool in the shed and it is true that there is a huge performance gap between agents. But it is not 90/10 - the notion is correct, but it's mathematically incorrect, because there are literally over a couple thousand agents in Milwaukee that do less than 5 transactions a year. But because there are some many it makes up way more than 10% of the volume. The contracts I am being presented by co-brokes are sometimes riddled with errors and mistakes. Many have little understanding of what they actually do. And what kills me - they won't answer their phone! We have been lobbying for higher standards. There should be a minimum requirement of 24 transactions a year to sustain a license. That would eliminate probably over 70% of agents out there, however the remaining would struggle to absorb the volume. In the end it has to do with the consumer behavior - often I speak with residential clients that ended up in a real estate trainwreck and I always ask them on how they chose their agent. And the answer always is it has been a friend of a friend. Skills are never a factor. How it seems like a good idea to use social connection as a criteria for what is one of the most important financial decisions in a consumers life escapes me. Is that how they choose any other profession who takes on a task with high stakes, a doctor, a lawyer? 

I have had the pleasure to work with some outstanding agents over the last couple years and while they are all doing well, they fail to develop the kind of gravity you would expect to see from their completley different level of skills and performance. They are literally ten times better, more experienced and more professional than most of their peers - and will still loose out to a consumer who has a friend of a friend with little to no experience! 

I have been a global business developer in the world of construction equipment for the first half of my life's career and have watched Kubota take over the global excavator market country by country since the 90s against a field of 30+ competing brands by offering a product that costs 5% less, has a slightly better initial quality and about similar performance. This industry is so much more sophisticated and has translated a slightly better mousetrap into market share. This is a staggering difference to the RE agent landscape where vast differences in knowledge and performance seem to have almost no effect like the consolidation effects you can observe in almost any other industry. 

Part of the issue is probably a lack of measurement of agent skills. Zillow's agent star rating system is an attept into that direction, but is founded on the fact that agents pay for Zillow engagement and so the behind the scene dynamics lead to results, that are not in the best interest of consumers. There are a number of horrible agents I know (some with questionable ethics) that have cultivated Zillow reviews and can show 50 five start reviews, while some really good agents don't look well on Zillow at all, simply because they don't pay for Zillow and consequently do not cultivate the plattform.

@Gary Lucido @Marcus Auerbach   very thought provoking posts.. as a broker for 44 e Hm years LOL.

I have seen many variations of compensation.. i have owned 3 brokerages personally.. 

And i do business in many states from Oregon to South Carolina and every where in between 200 plus transactions a year.. so I transact with many many agents.. 

What I find is this is highly regional.. LIKE in SC the thought of not having a 3% BAC just about floors the agents there.

and listing less than 6% same.. I am pioneering this now.. as i build new construction and hand listings to my agents so i got them down to 5% and they are offering 2.5 % bac and we still get sales.. 

In Oregon and west coast commissions are negotiated all the the time.. Its up to the agent .. some will some wont.. 

And for sure just like wholesaling there is an allure that real estate sales is some huge money maker.. well it can be for some but as stated above its not for most..  And for sure there is a BIG difference in a commercial broker who specializes in investment properties and the average agent that sells homes for retail purposes.. RESI agents have to focus on marketing themselves first and foremost becasue in this market listings are money in the bank plain and simple. 

Commercial agents build a long list of HOPEFULLY loyal investors that follow them and know when Jay the commercial broker sends them a deal its been somewhat vetted and not a waste of their time.  The REsi agents  dont know about income property generally and should not be expected to unless they are going to focus there..

Now Gary I am very curious of how you do your hourly rate gig.. do you work like a Lawyer and ask for a retainer and then bill against the retainer... I know just getting buyers to sign buyer brokers agreements is tough as they just dont understand it .. I can see sellers going for this though.. I certainly would not trust the average resi buyer to just pay .. simply becasue they are not wired that way everyone knows real estate is run on commish.. so like i said curious how you do this.. 

And of course one thing that makes RE work is your paid for results no closing no pay.. so i get the hourly rate sale does not close and your still paid.. 

I think the major stumbling block to the model is the absorption or start up.. you would need many clients to get this to work.. I would be curious as to what the average billing is to a buyer or seller for a completed transaction.

Also in IL were the attorneys have a lock down on the closing process agents do NOT do as much work as in other states 

not by a long shot.. Same with any attorney closing state.. Most agents have no CLUE how title and escrow actually works because they don't need to attorneys control it all.. Commercial brokers will know more becasue they have to... 

they get the contract and hand it off and the deals i have done there i get inspection addendum's written by the attorneys and boy that is very dysfunctional.. no explanations as they are getting flat fee's and spend zero time doing what needs to be done to keep transactions together the little things the public does not see. 

but anyway thought provoking.... 100.00 and hour is a pittance to a seasoned agent.. don't see that flying.. but to a mid level or starter who comes from a back ground of getting paid by the hour.. I can see that.

I look at myself when I made my first sale in 1975  I was bagging groceries in high school for 1.35 and hour.

my first sale in Real estate i made 600 dollars and calculated that it took less than 8 hours and then did the math and thought wow ... this is what i am going to do for my life and I will never get stuck working by the hour.. 

It is stressful though has not all been wine and roses.. some great years some pretty lean years.. I have done a few transactions.. one specifically i remember were i brokered a 65 unit townhouse deal to a developer and made 300k fee..

that took me no more than say 40 hours max.. but i have spent hours on deals that i made ZERO.. so i guess like i said if you had 10 to 30 clients your working with LIKE an attorney and billing them all all day long.. you can make your 500 to 1000 a day or 10 to 20k a month which to me is bare minimum to be in this business..  And of course depends on price points.. I can see why wholesaling is so prevalent in low value asset category who is going to do all this for 1k commish on a 30k ghetto dog.

@Jay Hinrichs , yes we ask for a retainer up front and bill against that. When the account runs low we get them to replenish. We do this on both the buy and sell side. On the sell side they also have to pay our out of pocket expenses like photos.

It's not the only way we work. In fact, it's a small percentage of our business so there is no minimum volume required for us to get this model to work for us. Our rate can be anywhere from $125 - 150/ hour and we charge for ALL our time, including travel. I just don't think real estate agents are worth more than that. How much does a typical 40 hour/ week agent generate in the year with commissions? Probably less than $125/ hour.

The advantage of the model is that it aligns the interest of agent and the client. Clients won't waste our time and when we tell them their listing is overpriced or this property is a good deal for them to buy they don't have to worry about us just trying to get the commission. 

Also, the problem with the traditional approach is that the easy clients subsidize the difficult ones. This eliminates that problem. In many cases it's the client that holds all the cards and determines whether or not a deal closes. The agent has little control - life events, inspection issues, appraisal problems, ego.

Originally posted by @Gary Lucido :

@Jay Hinrichs, yes we ask for a retainer up front and bill against that. When the account runs low we get them to replenish. We do this on both the buy and sell side. On the sell side they also have to pay our out of pocket expenses like photos.

It's not the only way we work. In fact, it's a small percentage of our business so there is no minimum volume required for us to get this model to work for us. Our rate can be anywhere from $125 - 150/ hour and we charge for ALL our time, including travel. I just don't think real estate agents are worth more than that. How much does a typical 40 hour/ week agent generate in the year with commissions? Probably less than $125/ hour.

The advantage of the model is that it aligns the interest of agent and the client. Clients won't waste our time and when we tell them their listing is overpriced or this property is a good deal for them to buy they don't have to worry about us just trying to get the commission. 

Also, the problem with the traditional approach is that the easy clients subsidize the difficult ones. This eliminates that problem. In many cases it's the client that holds all the cards and determines whether or not a deal closes. The agent has little control - life events, inspection issues, appraisal problems, ego.

I can for sure see this in the investment real estate space or flipper space.. when I had my shops.. I can't tell you how many times when people would contact my agents fresh out of guru school.. and talk a BIG game  we are going to buy 20 30 properties we are building a team blah blah blah.. when in fact most of them borrowed the money for the course and are now trying to do business with smoke and mirrors.. real investors that have money if you lay this out the right way will probably go for it..

and SELLERS I can see that for sure.. but then again in the retail resi space so many people just are clueless and or really have very little liquidity that even sending you 1000 bucks up front could be a risk and stretch for them.. I mean just look at those that get all nervous with EM deposits even though they are not going to lose the money ..

Anyway.. like I said I sure could see it for higher end more sophisticated sellers that actually have money.

and a great way to shed tire Kickers.. and BS I am an investor type people that really have no means or capacity. 

Lastly how do you handle buyers.

take one of my new builds that I sell for 500k... and the co brok agent is on the clock.

our BAC is 2.5  so 12,500... the buyer has only spent say  10 hours at 150 and hour  so 1,500.

what do you do about the 11k  does the seller retain it.. or who gets it..

as a broker you can't give commissions to your buyers at least in our state..  and as a seller I am not discounting the property it will screw up my comps.. so curious how you navigate that.

Now I guess there could be the envelope with cash and a wink and a nod.. but most unsophisticated buyer sellers are going to have issues with that as it wont sound right ... ???

thanks for answering my 50 questions.. I am thinking if this works maybe I try this model in my market.. since our average prices have risen to 400k or more.

@Jay Hinrichs , indeed our buyers get the co-op commission and it's totally legal in most states, including Illinois where we operate. So on a $400K deal at 2.5% that would be $10,000 which would cover 80 hours at $125/ hour. A serious, no-nonsense buyer should totally consider this.

Interestingly, most of the people who pursue this route with us are extremely analytical types: quants at hedge funds, engineers, accountants, lawyers, etc...

Originally posted by @Gary Lucido :

@Jay Hinrichs, indeed our buyers get the co-op commission and it's totally legal in most states, including Illinois where we operate. So on a $400K deal at 2.5% that would be $10,000 which would cover 80 hours at $125/ hour. A serious, no-nonsense buyer should totally consider this.

Interestingly, most of the people who pursue this route with us are extremely analytical types: quants at hedge funds, engineers, accountants, lawyers, etc...

Ok so seller is not screwing up his comps.. and the BAC goes to your office were you deduct I suppose your hourly fee then rebate the difference if any to your buyer.. and if for some reason you put more time into it than the BAC  then the client comes out of pocket to buy a home ??? I suspect that would be rare at those price points though.,  

where I can see this for sure is with agents on BIG teams that are beginning their carrier they get cash flow ( IE they get paid I suspect from you weekly or monthly out of the retainer).... ya I can see this.

and as you said your blue color FHA buyer with minimal cash savings is probably not your target.. but sophisticated number crunchers.. I like it.. !!!! I need to check with my state exactly how we could do this.. I know for sure we are not allowed to share commissions or pay referral fee's.. but maybe there is a work around.

Originally posted by @Kelly G. :

Interesting . . .  $350/hour is close to what I might pay my lawyer . . .  I will say that NO agent I've ever worked with was 'worthy' of that kind of $$ for the 'less-than-stellar, but adequate' work they did selling a property of mine, and at least one of those was "agent of the year".  Still  Of those 90% of remaining agents, a good portion of them probably have a decent number of transactions/year; for a few years.  Seems to still leave alot of room for optional business structures.  

Probably most agents are not worth paying that kind of money. But if you're working with and agent that has an investing background and you lack experience, it's totally worth it. A while ago, there was an agent who prevented me from buying a crappy deal. I would have lost my shirt if I wouldn't have followed her advice. I would say there's way less than 10 % of agents with an investing background. So they would be very hard to find them or have them work for you. 

Originally posted by Account Closed:
Originally posted by @Kelly G.:

Interesting . . .  $350/hour is close to what I might pay my lawyer . . .  I will say that NO agent I've ever worked with was 'worthy' of that kind of $$ for the 'less-than-stellar, but adequate' work they did selling a property of mine, and at least one of those was "agent of the year".  Still  Of those 90% of remaining agents, a good portion of them probably have a decent number of transactions/year; for a few years.  Seems to still leave alot of room for optional business structures.  

Probably most agents are not worth paying that kind of money. But if you're working with and agent that has an investing background and you lack experience, it's totally worth it. A while ago, there was an agent who prevented me from buying a crappy deal. I would have lost my shirt if I wouldn't have followed her advice. I would say there's way less than 10 % of agents with an investing background. So they would be very hard to find them or have them work for you. 

expecting residential real estate agents to be experts at income producing properties is not realistic and not advised.. if your looking for investment property you should only be dealing with investment brokers .. there are designations for them or resi agents with the investment designation.. 

Although frankly sfr to 4 plex is pretty vanilla and most anyone should understand how these work.. especially if your a buyer..

Wow!  What an awesome discussion!  Lots of good points out there, but hard for me to go back and pick out who said what . . .

Some clarification from my view point: I'm not really an 'investor' (maybe some day) I had 1 SFH rental - more out of necessity, cuz I didn't want to sell at/near the bottom after having to buy (also out of necessity) at the top-top-very top!. So now I'm selling it . .

But I've bought now 4 houses in my life (a small pittance compared to a serious 'investor') - so I come at this Q from the 'retail' side.  But I'm not sure that really matters (retail vs investor)

I find that the whole (retail) RE market is rigged - against the buyer and the seller and favors the agent who expects to make thousands of $$ with little 'work'.  On average, I doubt that the agents who made $$ on my transactions put in more than 12 hours of work.  And even when I try to do my 'due diligence' - in 'hiring' a Broker w/ 20 years experience and all these accreditations, classes, awards  "x" transactions/year; knowledge of 'local' market etc - they STILL  screw me - selling me a house at $10k more than it's value because they skewed the comps they showed me!  If they're making $$ on my transaction, I shouldn't have to double check their work!  My only recourse is to take them to small claims court - good luck w/ that!

I think the RE market could be Greatly Improved - by going to a 'fee for service' structure.  I'm sorry but Any professional who thinks they should earn $300 - $400+/hour da%^n well better provide that level of service.  But more often than not, the RE agent will tell you time and again "i'm not a lawyer and I can't give you legal advice".  Then why am I paying you a 'lawyer's' fee?  Further, with the Buyer's agent and the Seller's agent working maybe  30 hours total (combined), at even 5% commission (split) on my $175k house, that's $8,700 tacked onto the price of the house and nearly $300/hour each for the agents. That's NUTS! (IMHO). Gee - that's not $$ going into my pocket and it's My Asset!. Yet I know - even though I will sell my house FSBO, that I will HAVE to pay the buyer's agent at least 2 - 2.4% or I won't get a buyer.  the whole darn system is rigged.  The public has been kept "ignorant" and sold this scheme that they "must" have an agent to buy/sell real estate.  . . .  sellers are discouraged from going FSBO (no selling agent to pay) or a 'fee for service' structure, cuz the saved $$ "screws with the comps".  Or the agents feel they need to make "500 to 1000 a day or 10 to 20k a month which is bare minimum to be in this business"   Really!  you think you Need to make $10-$20K/MONTH to be in business -   at My expense!

. .   It's all rigged. 

I think if you took the big $$ Out of the profession, everyone would win. . . . Well, maybe not the top 10% of agents, but hey . . . the rest of us will take that $$ to the bank!

way past my bedtime . . .

Good Discussion

Kelly

Originally posted by @Kelly G. :

Wow!  What an awesome discussion!  Lots of good points out there, but hard for me to go back and pick out who said what . . .

Some clarification from my view point: I'm not really an 'investor' (maybe some day) I had 1 SFH rental - more out of necessity, cuz I didn't want to sell at/near the bottom after having to buy (also out of necessity) at the top-top-very top!. So now I'm selling it . .

But I've bought now 4 houses in my life (a small pittance compared to a serious 'investor') - so I come at this Q from the 'retail' side.  But I'm not sure that really matters (retail vs investor)

I find that the whole (retail) RE market is rigged - against the buyer and the seller and favors the agent who expects to make thousands of $$ with little 'work'.  On average, I doubt that the agents who made $$ on my transactions put in more than 12 hours of work.  And even when I try to do my 'due diligence' - in 'hiring' a Broker w/ 20 years experience and all these accreditations, classes, awards  "x" transactions/year; knowledge of 'local' market etc - they STILL  screw me - selling me a house at $10k more than it's value because they skewed the comps they showed me!  If they're making $$ on my transaction, I shouldn't have to double check their work!  My only recourse is to take them to small claims court - good luck w/ that!

I think the RE market could be Greatly Improved - by going to a 'fee for service' structure.  I'm sorry but Any professional who thinks they should earn $300 - $400+/hour da%^n well better provide that level of service.  But more often than not, the RE agent will tell you time and again "i'm not a lawyer and I can't give you legal advice".  Then why am I paying you a 'lawyer's' fee?  Further, with the Buyer's agent and the Seller's agent working maybe  30 hours total (combined), at even 5% commission (split) on my $175k house, that's $8,700 tacked onto the price of the house and nearly $300/hour each for the agents. That's NUTS! (IMHO). Gee - that's not $$ going into my pocket and it's My Asset!. Yet I know - even though I will sell my house FSBO, that I will HAVE to pay the buyer's agent at least 2 - 2.4% or I won't get a buyer.  the whole darn system is rigged.  The public has been kept "ignorant" and sold this scheme that they "must" have an agent to buy/sell real estate.  . . .  sellers are discouraged from going FSBO (no selling agent to pay) or a 'fee for service' structure, cuz the saved $$ "screws with the comps".  Or the agents feel they need to make "500 to 1000 a day or 10 to 20k a month which is bare minimum to be in this business"   Really!  you think you Need to make $10-$20K/MONTH to be in business -   at My expense!

. .   It's all rigged. 

I think if you took the big $$ Out of the profession, everyone would win. . . . Well, maybe not the top 10% of agents, but hey . . . the rest of us will take that $$ to the bank!

way past my bedtime . . .

Good Discussion

Kelly

The average agent makes about $35k per year. Im sure if you want to use an average agent, you could negotiate very low fees. There are plenty of discount brokers out there.  

If you want to work with say a top 1% agent, that will cost more, just like any profession.  Those of us in the top 1% certainly feel we are worth what we get paid.  I actually have agents who are clients of mine.  They could collect a commission themselves, but they know Im better at what I do than they are.  When someone uses my consulting services at $350 an hour, a 3 hour consultation is typical and they probably net $20k higher by doing that consult. I had a buyer this year who wanted to offer list price on a property, I got him $200k off the list price. Pretty sure I earned every penny on that one.

Sounds like more of the issue is you dont know how to distinguish between average and quality, and over pay for average.

Here is a question....if it is all so rigged....then why do I, as a top 1% agent nationally....use agents in other markets when I buy and sell there, when one would think Id be more than capable of doing it myself? Is it because Im ignorant too?  Am I victim to the scheme too?

Everyone has opinions. I do not focus on consulting work even though I am asked on the commercial real estate side.

The reason is simply I make much more money transacting than consulting. Usually someone has gone on their own and they get in over their head mid transaction and start researching someone to help.

I do not want to consult and help clear up a mess mid deal for a 10k to 15k fee when I make usually 100k or more a transaction in commercial real estate. It doesn't make economic sense.

I have a certain ideal client. My ideal clients tend to not think like residential buyers. They tend to be worth millions to tens of millions or more and have very high incomes. Some with rental properties approach 1 million a year in some cases after expenses. What these clients want is service and expertise.

I do not need all buyers in the Universe to see value in me. 1,000 could think I am overpriced but 10 might want the relationship and at 100k a pop per deal,per year I am doing well. I value time more than anything. Anyone that contacts me and wants my expertise but in the same breath tries to devalue my services within seconds goes to my trash file. Also I do not work with what I call (secret buyers). They want to use my time,energy, and expertise but do not want to show their capabilities or qualifications to me.

I find it interesting that some buyers have a sense of being secret and arrogance about them. I have some that say they understand why I want what I do before working with someone but they do not want to give it. Conversely I have others that give what I want RIGHT AWAY with no issues at all. I typically find if a buyer has to have power and control in  a process they will be very difficult to work with and suck up most of your time.

I would rather find clients that fall into my way of doing business that I have developed over 15 years in the commercial real estate space.

I get contacted almost daily with new potential clients. A certain percentage maybe 40% go on to the next stage solidifying a relationship. There are a lot of flaky buyers out there even ones that have money.

Case in point one this week did not want to give financials so we stopped there. I do not put resources behind people that want to stay a mystery. The next day another new client sent financials right away and we are proceeding forward. A buyer is just not a transaction. A broker/agent representing a buyer needs to see things as a long term relationship and will  see if working together makes sense. If a broker/agent ultimately takes on relationships that suck the life and energy out of them and do not make them happy then long term it is not good for their well being or career. 

I will add in a few points....

1. If you have a good agent you will think their job is easy.  90% of problems I solve without my client even knowing about it.  So they see it as easy, but have no idea what goes on behind the scenes.  I would say getting a property under contract is 25% of my job.  My job is to get it to the closing table which can be difficult, and you don't know which way it is going to go until you are already in it.  Some deals took 10 hours of work, some took 200.  You have to have the mentality that it all evens out in the end

2. Most agents can't control what they charge. I would guess that 80% of agents work for a large brokerage which has minimums according to their contract.  I own my own brokerage so I can do what I want, and my agents are intelligent enough to do what they want without my permission, but I have a small team of very select agents.  The brokerages I have talked to over the years all required an administrative approval to charge less than the rate their company charges.

I would have no problem charging per hour. Most clients don't want to pay that way though because the nature of the beast is at the end of the day they most likely are ending up paying for nothing. Until it pays off. For instance a client tells me they are looking for a SFR in a specific area. I say "I'll see what I can find" and start looking. I of course setup an auto search and start checking the hotsheets etc (maybe 30 minutes because I am digging a bit and want to make sure my comps sound right). No big deal, most won't complain about paying that chunk.

However the next step comes up. I know Jack is a big player out there and has a load of them. He sells if the price and time is good. So I go to the diner he has coffee at and chat him up. Currently he is happy with his inventory but if I find some farm land to let him know. I stay and chat for 45 minutes (obviously just phone calls are not relationship builders). I leave and head the office, dig through some sites and run off to lunch. Ted happens to be there, he goes to auctions and gets me the skinny on a couple that went at the Orleans County tax auction last week. He gives me 123 Main, 456 Elm and 789 Maple. They sold for 3,000/2800 and 2500. To Joe, Larry and Moe. I chat a few and head to the office and dig into the history of each and what the new out on them was. In Orleans you pay a portion of taxes as well as a premium, plus the price. I figure them out and call Joe, Larry and Moe and chat to find out what they want for them. I also figure out what they are worth fixed up. Joe and Larry want to flip them themselves, Moe will sell, but he wants full Retail price like it is all fixed up, in it's current condition (Real funky ifyaknowwhatimean). He does mention his brother tried being a landlord and failed miserably, now he is hanging onto a place he can't get out of. He's a bartender at Red's (they have a great avocado dip). Looks like I need an afternoon snack. 

When all is done I head to the office and and put in 4 hours of time, 2 cups of coffee, an avocado dip, lemonade and 46 miles travel on the clients bill. Turns out the bartender brother is so far underwater even his "owner finance plea" is so bad I would be a fool to get a client involved in. 

So even at $100 an hour they are getting a bill over $400 for zero results. While I would not mind doing it that way, I haven't met a client that wants to be charged that way. Especially investors, they want results and will pay for them. Gamblers hope for the big pay off that may show up with a $100 bet on my conversation with Jack. There are some sites that do the per service thing, but they are finding it difficult because every phone call a client makes gets charged $25. That's just a tip line not actually talking to someone who knows those players or what value the houses have.  

Just my 2 cents and good luck in finding what you are looking for. I think many agents would be agreeable to a different pay structure (as long as their brokerage has no issue with it). But most clients think that we handle things in 15 minutes when in reality a boundryline agreement with a neighbor may cost, 24 miles, 3 trips at 30 minutes each, a bottle of Makers Mark, playing catch with the neighbors BermesHuskLabraSpaniel and a 15 minute consult with the clients attorney who has the form.

So . . we are clearly talking different scales here.  @Russell Brazil - Clearly you are dealing with much higher $$ properties than I am. At the level you are dealing - I probably be OK paying your $350/hour - you're talking about saving more than I might even pay for a property! That's a very different animal. Further - even I would not likely buy or sell a property in a market I am not familiar with. I sold my house in CA FSBO - no agent help, cuz I lived there for years and had time to study the market before I sold. I'm now trying to sell my rental in Milw - a market I know Nothing about - so I'm looking for an agent to 'consult' with: what's the retail market like, where's it been - where is it at; how are houses moving; what kind of buyer am I likely to attract etc etc etc. Yes - you'd be 'capable' of handling your own transactions in "other markets" - but you are clearly Not ignorant which is why you use an agent in "other markets" (and maybe even in your own). You're not likely to be a 'victim' of the scheme either because you are an insider; you know how the business works. As I tried to explain in my last post; I'm talking more about the 'retail' side with your average joe/jane doe home owner/buyer who knows next to nothing about this business. I 'maybe' know just a little more than jane doe, but not too much. I am at risk of falling prey to the 'scheme' which I think operates more at the 'retail' home buyer/seller level than the investor side - but I may just be showing my ignorance of the investor side here too.  

BTW:  "ignorant" - does not mean dumb or stupid; by definition, "ignorant" simply means uninformed or uneducated;  I am clearly ignorant of the Milwaukee RE market - 

Same for @Joel Owens ; you are dealing at a much different level. I am tiny little small fry here - again - I'm Not an investor; I just happen to own 1 SFH rental that I am now selling, in a market I am unfamiliar with; but not unfamiliar (read ignorant) of the process.

@Brie Schmidt - good points - and I think your fist one, at least for me, is part of the problem I Want to know what my agent is doing and why.  But then, maybe I'm not your average jane doe buyer/seller.  I like the details, I like to understand what's going on and I will/have fired an agent making decisions or hiding information behind my back - Not that You are doing that, please do not misconstrue this.    and yes, most agents do work for the bigger brokerages and have no say in how things work.  I avoid the larger brokerages (generally). 

I consider myself pretty savy - sure I miss some things, but I learn and move on.  and clearly I thought that I had vested each agent I've worked with; and yet I've usually felt screwed in the end.  

@Kelly G.

"I Want to know what my agent is doing and why. But then, maybe I'm not your average jane doe buyer/seller. I like the details, I like to understand what's going on and I will/have fired an agent making decisions or hiding information behind my back"

When my lawyer attends conferences and meetings and reads law things, then comes back and says "I edited your lease paragraph 4 due to some case law, this is better". I say "Cool, thanks. Bill me". When my electrician says "I bought this wire even though code says we could use this one, It's better". I say "Cool thanks, Bill me". When my mechanic says " I had to put new gaskets on your headers and tap out some old bolts" I say "Cool, Thanks. Bill me". When my painter says "I bought some wacky tacky something or another..... and I like to ensure that.... (drone on for 5 minutes)... Because I read this....... A guy once told me..... I saw an article......".. I interrupt him and say "Is it done?"...

"Yes"

"Cool, thanks bill me"

In the military it's called "Commanders intent". You have people that you trust to follow your vision. If you don't trust them, then find someone you do. You empower them to make decisions they stand by in their professional opinion on your behalf. They are never the cheapest, but if you hire the cheapest you get to follow them around and add a job of micromanaging to your list of daily activities.

CEO's of multi million dollar companies golf 3 times a week, shop for cars mid day, get suits tailored, hop a jet to fly fish, have perfect haircuts every week, volunteer at a shelter passing out food, get photo ops and make company motivational videos. The owner of a corner grocery store works 13 hour days, 7 days a week. One of those provides direction, the other manages every aspect of the business to include who sweeps and mops and what paper to order for the cash registers. 

Just my 2 cents. 

I am sure most of you know this story:

"The Graybeard engineer retired and a few weeks later the Big Machine broke down, which was essential to the company’s revenue. The Manager couldn’t get the machine to work again so the company called in Graybeard as an independent consultant.

Graybeard agrees. He walks into the factory, takes a look at the Big Machine, grabs a sledge hammer, and whacks the machine once whereupon the machine starts right up. Graybeard leaves and the company is making money again.

The next day Manager receives a bill from Graybeard for $5,000. Manager is furious at the price and refuses to pay. Graybeard assures him that it’s a fair price. Manager retorts that if it’s a fair price Graybeard won’t mind itemizing the bill. Graybeard agrees that this is a fair request and complies.

The new, itemized bill reads….

Hammer: $5

Knowing where to hit the machine with hammer: $4995"

To Brie's point, if you watch anyone who is good at something, it looks very easy. Who was it to suggest that at the Olympics an average person should compete in all disciplines just for comparison purposes?

Come on... $350/hour? Really? That’s $700k a year., if working 50 weeks per year.

You worth $700k a year? (MORE than many surgeons, attorneys, and other folks at the highest end of the pay spectrum are paid).

The only way I would pay close to that is:
1). You guarantee me the results I want. To the “T”
2). You’re basically at my beck and call
3). Provide extras - the ultra-personal touch.

I just love when people try to super overcharge for their services. There’s good pay, then there’s greed. #LetsBeReal