In: Real Estate News27 Oct 2010
The real estate business is quite unique. There are not too many businesses where the sales representative gets paid thousands of dollars for one transaction which might only take a few hours of work. On the other hand, it might take many hours work for a agent to earn their commission. Many people think that real estate commissions are very high and real estate agents don’t work hard for the amount of money they get paid. There are a few things that people don’t like about the fees charged by real estate agents:
1) They make their money regardless of the amount of time spent. Why should an agent get $10,000 if the home sells in 3 days?
2) Homes are more expensive, yet the commission rates are still 5%. Why does the agent make more when home values rise?
3) Most people work 40+ hours a week to earn $45,000 a year. Agents only need to sell 4 homes a year to make the same amount of money as everyone else? This might only be 4 weeks of work?
Most people will agree that real estate agents costs too much money. However, lets examine the brokerages who are doing “mere postings” that offer only $1.00 compensation for an agent to bring a buyer. These brokerages take a few hundred dollars and post the home on Realtor.ca without any consideration about what the seller offers the other agent. They are basically using the public MLS (Realtor.ca) as their own FSBO website.
We pose these question:
Is it fair for a brokerage to post on MLS and offer no commission ($1.00) to an agent to bring a buyer?
Would it be better if these brokerages had a minimum amount of commission to offer an agent to bring a buyer? $500? $1,000? $2,000? $3,000?
$15,000 is a lot of money, but is there a middle ground? Doesn’t $2,000-$3,000 seems right for an agent to bring a buyer?
If the Flat-Fee Brokerages allow their clients to offer $1.00, are they just using the public MLS without regards to anyone else in the business?
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