Real Estate

Lower your Listing/Selling Fees - Use Flat Rate MLS

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Jr. Member
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May 18, 2008
185 posts
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Victoria
Flat Fee Listings, aka Mere Postings, as a REALTOR® are a no brainier.

i/ I get paid $799 up front. $699 on the back end. (my model; however, different models vary)
ii/ I get another listing under my name on MLS®, aka more advertising.
iii/ When the Mere Posting sells the seller uses me to buy their subsequent property (if they are staying locally).

Why REALTORS® aren't embracing offering this service is beyond me. As a consumer its also a great service for those that are willing to tackle some of the work of selling the home on their own.
Marko Juras, REALTOR® & Associate Broker @ Fair Realty, Victoria, BC - "I believe in a competitive marketplace and real estate commissions should be no exception."
Deal Addict
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May 6, 2010
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Markham
Donnie740 wrote:
May 30th, 2014 7:27 pm
Which is exactly why I was encouraging the OP to go out and get his real estate licence. And again in the "woe-is-me" thread about how the OP has no options but to work for minimum wage for the next decade.

living-paying-off-school-loans-minimum-wage-1486842/3/
I think you misunderstood what OP and others said. It's easy to become an agent, not easy to become a successful agent. This retort is a bit like why don't you be a prostitute if you think it's so easy. Anyone can be a prostitute. To earn a decent living and a prosper career as a prostitute, that's a different ball game.
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May 6, 2010
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Markham
eonibm wrote:
May 30th, 2014 9:18 pm
The second is that he will handle the negotiation process. All I have ever seen done as a part of the negotiation process is that the offers are either accepted as is or the offer is signed back at a higher price and sometimes the conditions are changed. That's pretty simple. The main conditions seem to be financing and inspection (but the former is being seen less and less now as people get pre-approval). Once I did ask for the closing date to be moved up a bit and the deposit increased.
Speaking from personal experience, having both agents negotiated in my kitchen, the process is fairly simple. The buying agent will point out flaws to justify the counter offer. The selling agent will point to shiny things and counter the counter. Rinse and repeat for a few times. It was comical even though it hurts my pocketbook.

The experience highlights the problems and lies of the industry. After a few rounds of customary dance, my agent began sweating blood. He began sowing doubts that the buyer will entertain another round. In other words, they will walk and his steak dinner is gone. I'm sure the buyers were pressured by their agent as well.
Newbie
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Jul 10, 2014
5 posts
Toronto, ON
3.0% is according to me a high commission. 2-2.5% is enough for any real estate agent transaction fees is your home sell price is in a large amount. Try to communicate with your agent in a wisely manner and convince him for what you want.
Penalty Box
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Aug 19, 2008
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dec12 wrote:
May 31st, 2014 1:59 am
I think you misunderstood what OP and others said. It's easy to become an agent, not easy to become a successful agent. This retort is a bit like why don't you be a prostitute if you think it's so easy. Anyone can be a prostitute. To earn a decent living and a prosper career as a prostitute, that's a different ball game.

The OP seems certain that Marko is the top agent in Victoria and has been gushing non stop about his fantastic business model. Seems pretty simple - - give your commission back to buyer and sellers.

OP went to all the trouble to post such long winded ramblings in this thread, but he's afraid to get his real estate licence? Doesn't make sense. Maybe he's resigned to just working for minimum wage like this character...

living-paying-off-school-loans-minimum-wage-1486842/
[OP]
Deal Guru
Aug 2, 2010
14534 posts
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Here 'n There
I've never said I was afraid to get a real estate license. I just happen to be very happy in what I do and make more than enough income. And if I wasn't there are a lot of things I would rather do than be a real estate agent.

But that's beside the point. I just don't need one to sell properties myself on MLS and this thread shows you how!
Penalty Box
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Aug 19, 2008
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Captain_Ron5 wrote:
May 31st, 2014 12:59 am
Flat Fee Listings, aka Mere Postings, as a REALTOR® are a no brainier.

i/ I get paid $799 up front. $699 on the back end. (my model; however, different models vary)
ii/ I get another listing under my name on MLS®, aka more advertising.
iii/ When the Mere Posting sells the seller uses me to buy their subsequent property (if they are staying locally).

Why REALTORS® aren't embracing offering this service is beyond me. As a consumer its also a great service for those that are willing to tackle some of the work of selling the home on their own.

The great thing about being a realtor is that everyone is free to choose their own business model. You can't understand why I don't embrace the low margin high volume model - - ironically enough, I'm baffled as to why you'd want to work harder for less money.

On a $500k listing that I'm charging 2.5%, the commission will be $12,500 to me. Your business model for selling the same $500k property will bring you $1498. You're spending more than EIGHT (8) times the amount of time that I am for the same amount of money. My seller is upgrading to an $800k house which brings me 2.5% on the buy for another $20k. Your seller buying a home for the same $800k price only nets you $10k because you give half your commission away to the client. Although more efficient than your listing model, you're still wasting TWICE the amount of time that I am for the same amount of money.

To put this into context for non-realtors - - imagine your boss coming to you one day and saying "Chris, we're reducing your wages from $20/hr to $10/hr - - but don't worry, we're going to allow you to work an 80hr week instead of your old 40hr week" Sound like a good deal to anyone? Doesn't make any sense to me either. And that's exactly what the low margin high volume business model entails.

Do you honestly believe that you can provide the same level of service to forty active listings that I can provide to five? Expecting the DIY home owner to "tackle some of the work of selling" is not something that I would ever consider. I'm the full service professional the seller hired because they wanted me to do the job of selling their house - - not because they wanted to "tackle some of the work" themselves.

You've stated that you don't hold open houses - - which is baffling after the above acknowledgement of using your listings as advertisements to generate buyer leads. You're throwing away the chance at double ending the listing - - and if there's a collateral agreement, that's taking money out of the seller's pocket by waiting for someone with a buyer agent.

More importantly, how is the seller going to feel when you tell them you're not going to bother doing any open house dates because there's not much chance of getting a buyer from it? You might as well tell them you're not going to bother putting a For Sale sign up because most buyers find homes online and not from driving around. Or that you're not going to bother taking any pictures for the listing because people will see what the house looks like when they come for a showing.

The only way to get repeat business and referrals is through satisfied customers. And if someone's property takes longer than expected to sell or if it doesn't get the price they were expecting, who do you think they're going to blame? They're not going to blame themselves and admit the place was a mess or that they priced it too high. It's going to be because the realtor didn't do enough to get their home sold for top dollar - - ie he couldn't be bothered to do an open house.

Number of transactions and sales volume are essentially redundant. I stands to reason that a realtor closing 20 deals would have a higher sale volume than a realtor closing 10 deals. But both measurements are hollow because they don't take into account the profit margin. If it's just about getting a high number of transactions, you can specialize in rentals and grind out a half months rent for commission. Most agents aren't interested in the rental market though. Why? Because it's not profitable in comparison to a buy/sell.

Pumping your tires about 80 listings sounds great, but when all they net you is $1498 it's not much different than doing 80 rentals. You'll have a much higher "sales volume" but the bottom line is the profit will be the same. As I've said earlier, everyone gets to choose their own business model. I don't expect you to understand or agree with mine and "embrace" it for yourself. And by the same token don't expect me to "embrace" yours.
Jr. Member
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May 18, 2008
185 posts
68 upvotes
Victoria
LOL? How did you come up with 80 at $1,498? January 1st, 2014 - May 30th, 2014 I've done 37 ends (22 buyers, 15 sold listings). That puts me on pace for around 80-90 ends.

Out of those 80 to 90 deals approximately 50 will be buyers where I average a commission of over $6,000/deal. I'll have approximately 25 sold full service listings and approximately 15 to 20 sold mere postings (that's not 80 at $1,498). What the average person doesn't see is those 15 to 20 sold mere postings will land me 10 to 15 subsequent buyers and 5 to 7 full service listings.

Yes, I work 80 hours a week but I don't know of too many 28 years old with a net income of $250,000-$300,000/year (where I expect to be this year). Last time I checked with my masters in health care administration from UBC (well respected university) I would be making $90,000 to $110,000 in a way more stressful job, although I would be working less hours.

I don't buy any of your other arguments such as 40 versus 5 listings. With the amount of volume I carry out I just see so much more than the average agent in terms of asbestos, buried oil tanks, financing issues, etc., that I believe it gives me a significant advantage in representing my clients when those issues do pop up.
Marko Juras, REALTOR® & Associate Broker @ Fair Realty, Victoria, BC - "I believe in a competitive marketplace and real estate commissions should be no exception."
Member
Nov 25, 2011
422 posts
60 upvotes
201-8 Sampson Mews, …
licenced wrote:
May 30th, 2014 7:58 pm
Back in 2006/2007 a study was done on the practices of real estate industry. One part of it centred around the education requirements to become a Salesperson and a Broker. The study noted that the standards varied by province some of which were much stricter than others with mandatory courses and exams which created a barrier to entry.

It pointed out that Quebec at the time was about to change their entry requirements to just the writing of an exam with no compulsory courses imposed and recommended that this should be adopted by all provinces – that is, anyone of age could write an exam with no courses imposed upon them. (as an fyi, many states go this route).

That study carried much weight in Ontario (can't speak for other provinces) because a year or two later the courses were relaxed somewhat and went from being a requirement for X number of classrooms hours to all online if one so chose. Many Realtors were vocal about this slide including me - already a Broker when the study came out.

The force behind the study to lower the bar though was much more powerful than us.

The subject is still hotly debated on numerous industry related sites and boiled again last year when the mandatory renewal course requirements were changed from X hours of various courses plus RECO’s in class update course to 'one' online True/False, Multiple Choice session that everyone must take. It took me 3 hours and a bit with interruptions this year.

That is why the barrier is so low.

The organization that published the study requires approval for Copyright clearance before republishing it so it has not been quoted lest I run afoul of that nor have I quoted or linked to it in the event that’s covered as well.
Cool this is really interesting back-ground. Looks like the profession sold out - lower the standards and let more people become realtors = more in license fees for them.
Donnie740 wrote:
May 30th, 2014 7:27 pm
Which is exactly why I was encouraging the OP to go out and get his real estate licence. And again in the "woe-is-me" thread about how the OP has no options but to work for minimum wage for the next decade.

living-paying-off-school-loans-minimum-wage-1486842/3/
How much money the OP is making or his financial situation have no baring on the legitimacy of the argument he is making here. This is not like other threads (or other posters) where people are making far fetched claims based on poor logic and reasoning, the OP is a pretty well thought out post and the discussion coming from it is worth happening. I think you should drop the personal attacks.
Member
Nov 25, 2011
422 posts
60 upvotes
201-8 Sampson Mews, …
To the OP, there are some other things you can do to further complete your research. Take a look at the system in other countries, like the UK and Australia. I think you'll find realtors are less involved in house sales and paid much less. Either way it would be interesting to know comparable commission structures.

It's also worth finding lawyers who will fill out the OREA forms for a formal offer to purchase, at really low fees. For example, when I was researching this I found one lawyer who would fill this out for unlimited house offers for $99. The catch was that you are expected to bring the closing cost business to them but I didn't have a problem with that.

Final food for thought on that last point: why are realtors paid such a large commission for the sale compared to the lawyer who is considerably more well qualified and without whom the transaction could literally not occur (the same could not be said for a realtor)?
Jr. Member
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May 18, 2008
185 posts
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Victoria
michty6 wrote:
May 31st, 2014 10:44 am
Final food for thought on that last point: why are realtors paid such a large commission for the sale compared to the lawyer who is considerably more well qualified and without whom the transaction could literally not occur (the same could not be said for a realtor)?
Lawyer is guaranteed to get paid and doesn't have to leave his or her office. As a REALTOR® you could show 50 properties over the course of the year and not make a dollar, or you could list a property, invest money into it and it doesn't sell.
Marko Juras, REALTOR® & Associate Broker @ Fair Realty, Victoria, BC - "I believe in a competitive marketplace and real estate commissions should be no exception."
[OP]
Deal Guru
Aug 2, 2010
14534 posts
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Here 'n There
Donnie740 wrote:
May 31st, 2014 4:06 am
The great thing about being a realtor is that everyone is free to choose their own business model. You can't understand why I don't embrace the low margin high volume model - - ironically enough, I'm baffled as to why you'd want to work harder for less money.

On a $500k listing that I'm charging 2.5%, the commission will be $12,500 to me. Your business model for selling the same $500k property will bring you $1498. You're spending more than EIGHT (8) times the amount of time that I am for the same amount of money. My seller is upgrading to an $800k house which brings me 2.5% on the buy for another $20k. Your seller buying a home for the same $800k price only nets you $10k because you give half your commission away to the client. Although more efficient than your listing model, you're still wasting TWICE the amount of time that I am for the same amount of money.

To put this into context for non-realtors - - imagine your boss coming to you one day and saying "Chris, we're reducing your wages from $20/hr to $10/hr - - but don't worry, we're going to allow you to work an 80hr week instead of your old 40hr week" Sound like a good deal to anyone? Doesn't make any sense to me either. And that's exactly what the low margin high volume business model entails.

Do you honestly believe that you can provide the same level of service to forty active listings that I can provide to five? Expecting the DIY home owner to "tackle some of the work of selling" is not something that I would ever consider. I'm the full service professional the seller hired because they wanted me to do the job of selling their house - - not because they wanted to "tackle some of the work" themselves.

You've stated that you don't hold open houses - - which is baffling after the above acknowledgement of using your listings as advertisements to generate buyer leads. You're throwing away the chance at double ending the listing - - and if there's a collateral agreement, that's taking money out of the seller's pocket by waiting for someone with a buyer agent.

More importantly, how is the seller going to feel when you tell them you're not going to bother doing any open house dates because there's not much chance of getting a buyer from it? You might as well tell them you're not going to bother putting a For Sale sign up because most buyers find homes online and not from driving around. Or that you're not going to bother taking any pictures for the listing because people will see what the house looks like when they come for a showing.

The only way to get repeat business and referrals is through satisfied customers. And if someone's property takes longer than expected to sell or if it doesn't get the price they were expecting, who do you think they're going to blame? They're not going to blame themselves and admit the place was a mess or that they priced it too high. It's going to be because the realtor didn't do enough to get their home sold for top dollar - - ie he couldn't be bothered to do an open house.

Number of transactions and sales volume are essentially redundant. I stands to reason that a realtor closing 20 deals would have a higher sale volume than a realtor closing 10 deals. But both measurements are hollow because they don't take into account the profit margin. If it's just about getting a high number of transactions, you can specialize in rentals and grind out a half months rent for commission. Most agents aren't interested in the rental market though. Why? Because it's not profitable in comparison to a buy/sell.

Pumping your tires about 80 listings sounds great, but when all they net you is $1498 it's not much different than doing 80 rentals. You'll have a much higher "sales volume" but the bottom line is the profit will be the same. As I've said earlier, everyone gets to choose their own business model. I don't expect you to understand or agree with mine and "embrace" it for yourself. And by the same token don't expect me to "embrace" yours.
You spent your entire post defending your commission rate. No surprise there. Nothing about the subject this thread - the marketing plan.

Other than your litany of personal attacks (always the sign of someone losing an argument) you have spent this entire thread defending your commission and nothing else. You state that 'I'm the full service professional the seller hired because they wanted me to do the job of selling their house' yet you still have been unable to tell us what that job entails other than what I have pointed out in my post #1 How to lower your Real Estate Agent Transaction Fees. At the same time you have a thread on here Thread: 'I'm a Real Estate Agent - - Ask Me Anything' which I resurrected after it died out when I pointed out that you gave extremely bad advice to someone starting out in the real estate industry 4 years ago, Captain_Ron5 and he ended up proving you wrong. So much for you understanding of the industry. And so much for you answering any questions about what you get paid for - your mysterious 'marketing plan'.

Your primary motivator above all else is your commission rate, as you have pointed out. It has nothing to do with the level of service. You actually expect us to believe you turn down listings at 2.5% because you keep your number of listings down because otherwise you cannot provide a higher level of service? Please. That flies directly in the face of how almost all real estate agents market themselves which is to boast about how many listings they have and how many houses they sold in the past year, etc. Let's look at just 3 of the flyers I just got yesterday: One said "Top 1% of TREB Agents for Total Dollar Value" and another said "Gardiner Award & Diamond Award" and yet another said "Chairman's Team Award". So, are these agents marketing the fact that their higher volume means a lower level of service? Hardly! More like, 'Look at how much volume I have. I do a better job!'. But you say lower volume means a higher level of service. So, I guess you are saying we should pick our listing agents, if we choose to, buy first asking them "How few listings do you have?" and choosing the one with the fewest listings, all else being equal, as they'll provide the highest level of service. If we are choosing a buyer's agent, I guess we should ask them the same question? OMG I am rolling on the floor laughing.

Btw, Captain_Ron5 did not state that he declines to hold open houses. He said he does it at the option of the vendor. No surprise you misrepresent what he said. It's a pattern you have shown.
Penalty Box
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Aug 19, 2008
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Captain_Ron5 wrote:
May 31st, 2014 10:32 am
LOL? How did you come up with 80 at $1,498? January 1st, 2014 - May 30th, 2014 I've done 37 ends (22 buyers, 15 sold listings). That puts me on pace for around 80-90 ends.

Out of those 80 to 90 deals approximately 50 will be buyers where I average a commission of over $6,000/deal. I'll have approximately 25 sold full service listings and approximately 15 to 20 sold mere postings (that's not 80 at $1,498). What the average person doesn't see is those 15 to 20 sold mere postings will land me 10 to 15 subsequent buyers and 5 to 7 full service listings.

Yes, I work 80 hours a week but I don't know of too many 28 years old with a net income of $250,000-$300,000/year (where I expect to be this year). Last time I checked with my masters in health care administration from UBC (well respected university) I would be making $90,000 to $110,000 in a way more stressful job, although I would be working less hours.

I don't buy any of your other arguments such as 40 versus 5 listings. With the amount of volume I carry out I just see so much more than the average agent in terms of asbestos, buried oil tanks, financing issues, etc., that I believe it gives me a significant advantage in representing my clients when those issues do pop up.

It was a comparison of mere postings to rental deals to illustrate the low margin high volume model. Both will net pretty much the same commission. You don't mention anything about rental transactions, so it doesn't seem that you're interested in pursuing that segment. Me neither. Nor am I interested in the mere posting segment.

In a market where the average SFH is $650k, when you're closing 90 deals to bring in $300k that's an average of $3,300/deal. A full service realtor at 2.5% commission closing 19 deals will bring in $308k. That's an average of $16,250/deal.

I can only speak for myself but I'll always prefer to close one deal for $16,250 than close five deals for $3,300.

You'll never find a single person who would "embrace" the suggestion of having their hourly wages cut in half and their work week doubled. I'm no different. And that's why I have ZERO interest in a low margin high volume business model.
[OP]
Deal Guru
Aug 2, 2010
14534 posts
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Here 'n There
Captain_Ron5 wrote:
May 31st, 2014 11:24 am
Lawyer is guaranteed to get paid and doesn't have to leave his or her office. As a REALTOR® you could show 50 properties over the course of the year and not make a dollar, or you could list a property, invest money into it and it doesn't sell.
I agree with that statement, especially coming from an agent who not only promotes flat rate listings but welcomes them with open arms and also charges only half what other agents do on full-service transactions (with a credit for the flat-rate listing if you decide to switch). An agent so confident about his abilities that he allows you to end your relationship with him at any time. Other agents require you to sign a contract to stay with them for a period of time. Also, an agent who has provided much valuable input on this thread, publicly identifies himself and doesn't spend his posts defending his commission rate but the topic at hand.

Much more than I can say for the real estate agents on this thread whose modus operandi is to sling mud while not adding any information of any value other than repeating they need to get paid 2.5%. We all get that loud and clear.

Now, go through my post #1 How to lower your Real Estate Agent Transaction Fees and let us know what else there is in your marketing plan other than what you see there that justifies 2.5%.

208 posts and still waiting for you or anyone else to add even one single item.
Deal Fanatic
Jul 3, 2011
5373 posts
2442 upvotes
Thornhill
Captain_Ron5, mind if I ask you a couple questions, I’m not looking for a fight or argument.

In 2010, over on this thread, im-real-estate-agent-ask-me-anything-874105/4/ prior to becoming licensed and working as a Realtor you were an outsider looking in and wrote
Last year we built a home, between me and my dad we invested 2000 hours of physical work and made a profit of $56,800 - the real estate commission was $22,000 and the house sold in 6 days, the agents did a total of less than 10 hours of work.

I closed a deal on a 1.1 million home privately in Jan. It took literally less than 10 hours of work...,
That’s less than 10 hours work on both the other “agent’s” part and yours as a private seller to specifically sell one property. The obvious inference then is that it only takes less than 10 hours worth of work to sell a house.

Fast forward a full 4 years later to the present where in this thread how-lower-your-real-estate-agent-transa ... st18867624 post #46 you stated:
I don't think there has been a week since the New Year that I've worked less than 70 hours. It isn't hard work (driving around, showing houses, meeting inspectors)... it’s literally 7 days a week and at least 10 hours a day.
Per your post #51, your listings sales last year were 38
Having sold 38 listings last year
And for this year, #202 you wrote
January 1st, 2014 - May 30th, 2014 I've done 37 ends (22 buyers, 15 sold listings).
at 10 hours per sale that would translate into a total of 380 hours in total spent on full service and mere listings as opposed to 2,660 hours if working 70 hours a week and for this year so far, a 70 hour work week equals 1,490 hours that when divided by the 37 properties sold returns 39.7 hours on average spent on your mere listings, full service listings and buyer ends.

39.7 hours per end is almost 4 times the only 10 hour number you proffered as the length of time it takes to sell a property prior to you actually becoming a Realtor. While you didn’t mention how many of the listings in any year was a mere listing which at best can only be half of the 10 hours for full service means that the 39.7 per hour average for full service is even higher.

What is responsible for the average number of hours per sale quadrupling?

---------

The next quotes are not to debate your pricing fee, it matters not to me what any one charges, it’s for seeking a clarification of your initial perspective as an outsider looking in to that of an insider looking out. You said once you were licensed your business model would be
70% cash back of my commission minimum. Example (Ontario commission structure):$600,000 x 2.5% to buyer's agent = $12,500 x 0.70 = $8750 back to buyer.

I wonder if people will even understand my concept of 70% cash back when I start in 2 months as a realtor...probably not...sigh...
and on the listing side you wrote
For Sellers – $2000 flat fee for my services...
Now that cash back is limited to 50% and starting at a sale price of no less than $316,000.01. That’s a 28.5% reduction to your originally intended 70% minium, and your flat fee cost I believe is 1% to your brokerage for it’s full service share.

What changed your mind about pricing levels?

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