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November 25, 2009
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Response To: Commission VS Fee-for-service (Blanche Evans - 01/07/2000)

Butttttt...
Posted By: ChrisNewell - 01/07/2000 07:38 AM

The difference in the travel & real estate industries is that travel has always been "pay-before you play", and real estate is a free ride if the agent is not successful in getting the job done.

I suspect that the change will come in a very different way: Most agents don't have a clue as to what they do, or what it is worth, so they will just reduce their overall commission, in the belief that they will be meeting the consumers needs. Those agents will continue to do all the things that they have always done, just making less money for it.

I agree that Fee-for-Service is the way to go from the industry point of view & the consumer point of view. I gladly take a vastly-reduced fee if it is paid in advance, but it is rare indeed that people are willing to pay it.

You folks South of the border could well see a fater growth in this area, but it will still be a long-time coming, over a slow process.

Many homesellers would rather risk paying a 'full' commission on a contingency basis, than pre-pay a fee that is only 25% lower. Most likely because they don't have the $$ to pay in advance.

So, in my humblest of opinions, the Fee-for-Service has to begin in the court of the agents who work with buyers. Make the buyers do their own research on finding homes. Hire a showing assistant to take them through houses, and pay that assistant on a hourly basis. Train the consumer that the showing agent is not able to answer the technical questions, but is merely acting as a tour-guide, so they have to keep the questions until they get back to meet with you, the agent.

Once the need to pay a buyer agent 3% of the sale price is gone, then we can see some significant savings to the seller.

Butttt.... It requires a quantum-shift in the mindset of consumers.


Responses to this Post

both can't save the same dollar
Posted by: SteeleP - 01/07/2000 05:54 PM

My intent was misread
Posted by: ChrisNewell - 01/07/2000 06:17 PM

My intent was misread
Posted by: ChrisNewell - 01/07/2000 06:19 PM


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