professor24 wrote: ↑I see nothing wrong with a listing agent charging 5% (2.5%+2.5%) if they provide services for their clients. By services I mean Cleaning,moving,garbage disposal,staging etc. These are things that cost money/time and most likely will need to be delegated to someone else. If the agent is just going to list the property and offer nothing else. Then no....they do not deserve it.
I understand if you feel Realtor's are overpaid. Everyone is allowed to have their opinion. I would actually encourage you to pick it up as a career if you think its easy money.
Captain Ron is a very successful Realtor in Victoria. Excellent. Happy for him. His business model works there and I would encourage him to keep doing what he is doing. The same model he is working in his home town, does not work in Toronto. There are literally tens of thousands of agents in the GTA alone. Of these 30,000 or so, I would say 10% of them are doing 90% of the business. The top tier Realtor's literally spend a fortune on marketing because with so many agents around they need to stand out and keep the business coming. Captain Ron's business model would be instantly suffocated in such a competitive market due to the fact that their are thousands doing the same thing he is.
So in conclusion. The most productive and successful Realtor is the one who best markets themselves. Their big marketing budgets do not come from thin air either. They have clients eager to do business with them and pay full pop for their services due to their visibility,Rolodex of past clients and their reputation. While the Realtor's working for nothing are the ones doing nothing.
Low commission is not the enemy. Getting no value for the equity in your home is the enemy.
Excellent comments and you're exactly right - - it's all about value proposition. Competing on price is the simplest thing you can do. Anyone can drop their price to the point where they're listing a property for $799 or $499 or even $99. But I know of very few realtors who come from the renovation/construction industry with the ability/contacts to go in and raise the value of the property by putting in some work.
"Telling" a seller they need to have the wallpaper removed and repaint the whole house, change the kitchen cabinetry and countertops, rip out the old carpeting, change out all the lighting and then fully stage the property is not a value add. Going in and actually doing all of that is. And that's how I'm able to justify a listing commission of 4%-5% or more. Because I raise the value of the property. I always welcome the seller to call around and get their own quotes because I know they're not going to find any T&M that's cheaper and certainly not anything that will defer payment until the property closes.
You're absolutely right about the number of GTA realtors offering the low margin high volume approach. Larry Dale's flat rate concept at RealtySellers was supposed to revolutionize the industry with mere postings but it was a colossal failure and is now out of business. Why did he fail? Because there's so many other low margin high volume realtors offering to list properties for $99 upfront flat rate.