Request-A-Deal

Wanted - Realtor acting as buying agent for fixed fee.

  • Last Updated:
  • May 24th, 2018 6:47 pm
[OP]
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Sep 15, 2015
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Abbotsford

Wanted - Realtor acting as buying agent for fixed fee.

Nanaimo region. Of Vancouver island.
Do any realtors want to work for a fixed amount $5,000 or $50 per hour? etc
32 replies
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Mar 13, 2012
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Why is fixed fee important?

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Jan 9, 2002
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mistytalon wrote:
May 3rd, 2018 6:47 pm
Why is fixed fee important?
Well, most REA's work on percentage and buying agent doesn't have to list/promote/host open houses, but still gets that percentage. Check out the $$ of houses on the island. Makes sense...some quick $$ for a smart agent.
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[OP]
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Sep 15, 2015
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Abbotsford
mistytalon wrote:
May 3rd, 2018 6:47 pm
Why is fixed fee important?
So that I, as the buyer, will not be having to pay an extra $10k for the house - due to the selling agents contract with the seller which states that the buyers agent's "finders fee" will be $15k.
I'm happy to pay my agent for the hours they put in. But no more.
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Sep 19, 2005
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DanielM491 wrote:
May 16th, 2018 2:47 pm
So that I, as the buyer, will not be having to pay an extra $10k for the house - due to the selling agents contract with the seller which states that the buyers agent's "finders fee" will be $15k.
I'm happy to pay my agent for the hours they put in. But no more.
Your Realtor will still have to pay a hefty percentage of the transaction fee to his/her brokerage. They cannot simply go to the brokerage and say, "I agreed to work for DanielM491 for $50/hour, so I can't give you your $3000 cut."

You can often find flat fee *listing* agents who provide mediocre sales support (ultimately, they don't care if you get top dollar), but it will be pretty hard to find a really good buyer's agent who will be willing to invest a lot of time and effort for you at a bargain rate.
[OP]
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Sep 15, 2015
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Abbotsford
So where is the transparency in relation to the brokerage fee? I was under the impression that the broker's fee is a flat monthly amount or a nominal fee per transaction?

Define "a lot of time and effort"
[OP]
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Sep 15, 2015
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Abbotsford
retrothing wrote:
May 16th, 2018 3:23 pm
Your Realtor will still have to pay a hefty percentage of the transaction fee to his/her brokerage. They cannot simply go to the brokerage and say, "I agreed to work for DanielM491 for $50/hour, so I can't give you your $3000 cut."

You can often find flat fee *listing* agents who provide mediocre sales support (ultimately, they don't care if you get top dollar), but it will be pretty hard to find a really good buyer's agent who will be willing to invest a lot of time and effort for you at a bargain rate.
Example property - $800,000 house. Commission for this sale $30k split 50/50 between sellers and buyers agents.

Sellers realtor spends 30 hours listing the house, completing 2 open houses, spending an evening reviewing offers and completing the sale. They put some mileage on their car $150. They take photos and post on MLS and their own website $500. They pay a monthly brokerage fee of $500 (usually less). This leaves them with $13,850 for 30 hours of work which equals $461.00 per hour.

The buyers realtor will receive a commission of $15,000 and will also have overheads to pay (Car $500, brokerage fee $500) the rest is in their pocket =$14,000. Lets say a reasonable hourly rate for their service is $50 per hour. This would equate to 280 hours of work in order for the buyer/seller to actually see a worthwhile return on the realtor's service. I would hazard an estimate that the average buyers agent (good at their job) would struggle to spend 60 hours finding a house for their client. Based on this figure the hourly rate actually realized is $230 per hour for buyers agents.
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DanielM491 wrote:
May 16th, 2018 3:54 pm
Example property - $800,000 house. Commission for this sale $30k split 50/50 between sellers and buyers agents.

Sellers realtor spends 30 hours listing the house, completing 2 open houses, spending an evening reviewing offers and completing the sale. They put some mileage on their car $150. They take photos and post on MLS and their own website $500. They pay a monthly brokerage fee of $500 (usually less). This leaves them with $13,850 for 30 hours of work which equals $461.00 per hour.

The buyers realtor will receive a commission of $15,000 and will also have overheads to pay (Car $500, brokerage fee $500) the rest is in their pocket =$14,000. Lets say a reasonable hourly rate for their service is $50 per hour. This would equate to 280 hours of work in order for the buyer/seller to actually see a worthwhile return on the realtor's service. I would hazard an estimate that the average buyers agent (good at their job) would struggle to spend 60 hours finding a house for their client. Based on this figure the hourly rate actually realized is $230 per hour for buyers agents.
A Realtor pays his/her brokerage anywhere from 10% to 30% of their commission, depending on sales volume and their agreement with the brokerage. You've discounted the cost of franchise fees, signage, business cards, advertising, association fees, E&O insurance, cell phone, computers and health insurance to zero. You've also discounted the cost and time involved in getting new clients, and the expense of clients who don't buy or end up tire kicking and don't list.

I agree that real estate fees are high, I just think it will be extremely difficult to find a good Realtor to work for you at a bargain price.
[OP]
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Abbotsford
"franchise fees, signage, business cards, advertising, association fees, E&O insurance, cell phone, computers and health insurance" are all yearly costs and should not be born by one customer. All of those costs are covered in what should be a fair hourly rate.

"time involved in getting new clients" Not my problem nor my expense. It is the cost of doing business. Again, this would be factored as an annual expense and included in an hourly rate.

"the expense of clients who don't buy or end up tire kicking and don't list" This is no different from any other profession who provide a free consultation or similar. Again not a cost that I should bear, if a realtor wants to do work for free good on them. If a realtor wants me to pay for the work they have done for previous customers etc - they have another thing coming .

Realtor fees are not high - they are crazy stupid astronomical. They get paid more than some doctors, engineers, lawyers and the like. And all they need is a 6 week course....

Realtors in Canada are possibly the biggest con men/women around. They will continue to get away with daylight robbery until Canadians wake up and say no. It is a very sad state of affairs.
This will change quick smart once properties start losing value and people have to sell at or below what they purchased for, all of a sudden sellers will not be too happy with Realtors running off with $30,000 of their own money (rather than equity, people are funny and view increased Equity as they do winning a lottery ticket - very strange).
I'm not sorry - I have ZERO empathy for realtors and all of the arguments to support their commission structure have been debunked completely.
I hate government intervention, but it is time to cap the fees charged per property transaction as well as capping the amount of real estate licences per city.
There is no difference in the transaction difficulty, advertising costs, open homes or time spent negotiating the sale between a $400k house and a $1.4mil house. Yet the seller of the $1.4mil house has to pony up an extra $25k in realtor commissions. For what??
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Jan 11, 2017
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No one is forcing you to use a realtor. What’s next, house prices are too high that they don’t make any sense?

Another realtor bashing thread.
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Jun 2, 2006
743 posts
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Mississauga
Bigjaye47 wrote:
May 16th, 2018 7:28 pm
No one is forcing you to use a realtor. What’s next, house prices are too high that they don’t make any sense?

Another realtor bashing thread.
The OP never started bashing realtors until others asked why he was looking for a fixed rate realtor. So he answered honestly. Then others responsed to his opinion, in support of what he was clearly not looking for. So then he provided a rebuttal.

I’m sorry you got triggered by the conversation.
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Jan 23, 2007
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Kingston, Ontario
Sounds like you need to start up a business and offer your services at cost. You would quickly realize, unless you cover things like time involved in getting new clients, expenses like insurance, overhead, licencing, etc your business wouldn't last. I'm not very prorealtor, in fact, I would be happy, as a seasoned home buyer and real estate investor, to have a buy direct system, but as a business owner, I know to steer clear of clients who are only concerned with how much it costs. They tend to be the ones that are a pain in the ass and end up costing you much more time than a reasonable client.
DanielM491 wrote:
May 16th, 2018 6:13 pm
"franchise fees, signage, business cards, advertising, association fees, E&O insurance, cell phone, computers and health insurance" are all yearly costs and should not be born by one customer. All of those costs are covered in what should be a fair hourly rate.

"time involved in getting new clients" Not my problem nor my expense. It is the cost of doing business. Again, this would be factored as an annual expense and included in an hourly rate.

"the expense of clients who don't buy or end up tire kicking and don't list" This is no different from any other profession who provide a free consultation or similar. Again not a cost that I should bear, if a realtor wants to do work for free good on them. If a realtor wants me to pay for the work they have done for previous customers etc - they have another thing coming .

Realtor fees are not high - they are crazy stupid astronomical. They get paid more than some doctors, engineers, lawyers and the like. And all they need is a 6 week course....

Realtors in Canada are possibly the biggest con men/women around. They will continue to get away with daylight robbery until Canadians wake up and say no. It is a very sad state of affairs.
This will change quick smart once properties start losing value and people have to sell at or below what they purchased for, all of a sudden sellers will not be too happy with Realtors running off with $30,000 of their own money (rather than equity, people are funny and view increased Equity as they do winning a lottery ticket - very strange).
I'm not sorry - I have ZERO empathy for realtors and all of the arguments to support their commission structure have been debunked completely.
I hate government intervention, but it is time to cap the fees charged per property transaction as well as capping the amount of real estate licences per city.
There is no difference in the transaction difficulty, advertising costs, open homes or time spent negotiating the sale between a $400k house and a $1.4mil house. Yet the seller of the $1.4mil house has to pony up an extra $25k in realtor commissions. For what??
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Jan 23, 2007
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babybudha wrote:
May 16th, 2018 8:57 pm
I’m sorry you got triggered by the conversation.
Highly doubtful.
[OP]
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Sep 15, 2015
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Abbotsford
I actually already run a business. And no, I can't charge my clients for marketing expenses. I also can't charge my clients a % of the transaction.
I have yet to see one valid point that proves why realtors cant bill their time on an hourly rate (like every other professional)
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Dec 15, 2015
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DanielM491 wrote:
May 18th, 2018 9:39 am
I actually already run a business. And no, I can't charge my clients for marketing expenses. I also can't charge my clients a % of the transaction.
I have yet to see one valid point that proves why realtors cant bill their time on an hourly rate (like every other professional)
No every other profession does not bill hourly. 90% of SALES are commission. This way they only get paid once they sell an actual item.

I could see many people getting taken for a ride hourly. You're now paying before your house is sold. What if the guy sucks, and you signed a 6 month contract with them. They could bill you 40hrs per week @ $50 for 6 months and you still haven't sold your home. Then you still need to hire someone else to sell the home and their hourly starts the minute the page is signed too. What's stopping them from billing exorbitant hours? Spent 5 minutes on your home, that's an hour billed. Open house on a Saturday that 1.5x the rate now.

There are other avenue other than using a realtor, why not explore those. It's a free market.

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