All Forum Posts by: Adrian Tilley

@Stephanie Dupuis

I understand that agent's fees are not technically "fixed" - they are allowed to negotiate their fees. I would bet that if the NAR had its way though, that wouldn't bee the case. Nevertheless, the point is that agents don't negotiate their fees. The marketplace is set up so that doesn't happen. Go to an agent and tell them you want to sell your house for 3% and see how that goes. My argument is that agents are simply overpaid for the education required to do the job. They are paid similarly (or more than) say, a pharmacist, which requires at least a masters degree, or a nurse, which requires at least a bachelors, while only needing 1 month's worth of classes and 1 test.

@Jerry W. I would never argue that someone is evil for trying to make a living. However, I see the current system as being pretty much "fixed" - it is very hard to attempt to pay a realtor less and try to get a house sold. Seems like the situation in your town is that there are too many agents for the number of sales!

Welcome Joseph, lots of knowledgeable people here on BP and in Denver - if you can't learn it here you don't need to know it!

@Tosin Olatunbosun

A big +1 for that. It probably acutally takes less time to find a house for a $1m+ buyer because they don't want to spend time looking at 100 houses.

Your proposed system is the way to go, now just to design it and convince all those with an interest in the current system to give it up.

@Stephanie Dupuis I don't think lowering commissions per se is the right way to go, I just think there should be genuine competition. Probably the best way to do it would be to force buyers to pay their own agents. That way, each party would be free to pay whatever they think is fair. I'm sure the details would have to be worked out, but that's where I would start.

I disagree that all the "good" agents would leave the market, as I think those that are the best and most efficient would survive, and I think you would see the very low producers leave.

To bring in another point that hasn't been discussed, listing agents do far less work (excluding the marketing) than even buyers agents. No showing houses, no driving around with tire kickers, just hire someone to take pictures, list on MLS, and wait for feedback from the showing service (I realize this is an oversimplification).

The analogy to attorneys is no good because attorneys don't have a set price like agents. You can find attorneys for $100, $200, and $500+ per hour, on a contingency, or for a flat fee. You get what you are willing to pay for and afford, there is no de facto "set price".

I'm not saying that agents should never advertise or wouldn't have to if there were fewer (advertising occurs in almost every industry), but that is frequently (including in this thread) cited as a major cost because it's so hard to find clients.

Finally, I should say that I'm coming at this as a new agent. I got my license partly because the returns are so good. However, I hate seeing inefficiency and distortion in the marketplace (there are many examples of this in our economy, which I think are a major driving factor in the issues we see in our country today, but that's for another thread), and I think this is a major example of inefficiency.

@Edward Hamill Actually, I addressed MLS fees (minimla), CEs (free at my brokerage), marketing costs (a result of too many agents in the market), and I don't know why you would pay "lockbox fees" - don't use lockboxes that require fees! Even if you assume 2/3 costs, that's still more than $50/hour - more than the going rate for a lot of professionals. All that available for 1 month's education and a thousand or 2 in costs.

I would suspect that the average agent is not rolling in dough because it's so hard to get clients, because there are so many agents, because commissions are so high, etc. I think lowering the commissions would solve many of these issues.

@Jon Holdman Agreed. There is certainly no guarantee of any pay in selling houses or REI.

@Jon Holdman I agree that there is more to be taken into account. However, I think one of the main reasons agents have to spend so much time/money on marketing is (as stated above) there are so many agents, because the pay is so high.

If there were fewer agents, they could be more selective about who they take on and how much time they spend with lookey-loos.

@Ryan Shuchman I think that the high pay draws a lot of incompetent people into the business.

@Account Closed Sorry to hear about that experience. I had a similar one when I was not an agent and unrepresented. I think agents take unrepresented parties less seriously for some reason. Not really sure why.

@Account Closed Yes. Straight enough? =)

Not sure who that was directed at - was there a particular question that didn't get answered?