The main point I wanted to make is that these people are top 2% producers and they are discounting.

C21 Click it is a great example of changes in our business.
It's not the consumers fault for wanting to pay the least commission. It's the agents responsibility to find a low cost way of doing business. As with any business the company that can do the best job at the lowest cost prevails. There's frequent comparision of discounters to Walmart and 6% to Macy but that's not going to work much longer as people can touch and feel the differnce between a Walmart and Macy sweater. real estate isn't tangible so we can't compare service in the same light.

Realting, this is so true. As I've said many times before, I was able to charge 1.5% (for the listing side), provide FULL service and be profitable. I found ways to significantly reduce my overhead; ways that did not affect the service I offered my clients.

Maybe this would be a good thread to start... "Ways to reduce overhead so that you can compete (if you wanna) with the discounters." I could probably come up with 10 or so... anyone else?

Well here is my take on it.Nar did a survey last year and the overwhelming top 2 things buyers and sellers needed help with was 1.Negotiating the contract 2.Mls access to see the properties to buy or open up the home for sale for maximum exposure.

Almost everything else the homeowners thought they could effictively handle themselves.There is a saying in this world "time is money".You are either a person who has less time and more money so you pay someone else to do tasks or you have little money but alot of time so you do things yourself for a lower cost(try to anyways).With the middle class evaporating and leaving a majority in the lower-midde to poor class that put's alot of people in the do It yourself class and very few in the well off class who will pay more to have everything done for them.

I think with the doj lawsuit and easy mls website access provided by every agent that in the future mls listing and contract negotation will be the 2 agent primary functions.I am seeing alot of listings in the agent remarks that say listing agent is negotiating contract only and has minimum participation in the listing.

Nar knows that if the mls was blown open agents would basically become contract for hire salesman and commission would erode.That is why they are trying to pass minimum standards that everyone would have to meet,the definition would make it very hard for discounters to meet the requirements thereby keeping the commission average up.

Some agents offer ala carte services and many different programs.I think having to many programs can be confusing for the sellers and buyers and too much to keep track off for the broker/agent.

I think many in the future will have a contract negotiation fee and a full service fee to choose from.Think about this say you have an 800k house and the regular commission is 3.0 percent on the listing side so 24k.You offer contract neogtiation and nothing else 8k,the seller is elated as they feel they can save 16k in money,you the agent spend 0.00 dollars on marketing,doing open houses etc.

I know many agents that could care less what they charge as there primary business model is to bring in suppplemental cash to grow there investments to a point where they no longer need regular r.e. sales and can do investing full time.

Now if you wanted to start a brokerage that you eventually wanted to sell of that is a different thing.I see negotiating the contract only as a big part of the future.

Jennifer,

I wrote on another thread that most people don't shop commission as much as we think they do.



You gotta grab the bull by the horn and pull the cat by the tail.



Here's a fact that most of us seem to forget. Most agents sell only a couple of houses a year they have no motivation to WANT to offer low cost ways of doing business. I don't have any stats to back this up but I know agents that have no intention to ever want to cut cost. They only want to sell a couple of houses a year charge 6% on $250K and add a few more thousand in income.

My assumption is based on watching how online transaction management has failed to reach market acceptance. Many agents STILL DO NOT have or want to own a website or offfer transaction management on the web because they don't WANT TO.

These agents that charge 6% and offer no websites or efficiency are the reasons why we have such negativity towards the industry.

The only way to cut cost is to create systems. Whooops! That's where the industry fails becaus ALL OF US ARE INDEPENDENT CONTRACTORS and we don't have to follow systems. WE DON'T WANT TO FOLLOW SYSTEMS which is why we as an industry cannot do well.

There's a compelling reason why all the new online brokerages are employee based ( not independent contractors ). That reason is so they can legally "force" people to follow their systems.

If Progresshomesellers.com isn't enough here comes
http://www.iggyshousebeta.com

This site will put flat fee brokers out of business. Why pay flat fee when you can get it free? I thought there was a catch at first then looked more into it. There's no catch. This company is giving away the whole enchalada.

It's run by the same people that started Buysiderealty.com.

Sure we can. It's up to the agent to show that our service is worth it. You're getting what you pay for either way. Are there instances where FSBOs have smooth transactions? Sure. But they are few and far between. I bought my home from a FSBO before I was an agent. They lied about there being hardwood floors under the carpeting (which they took with them with my permission), and it was plywood. They lied about their house being ready when I asked for a delay in the closing and it wasn't. I vowed never to buy a home without an agent after that.

I think if the MLS was blown open you would see a lot of brokerages leave the MLS system. Why should I pay to use MLS when FSBOs can list on it for a couple hundred dollars.

Oh, really? The reason they are employee based is because if they were commission based the employees would make nada.

So are you saying that employees for these companies are making money while hundreds of thousands of independent contractors are making no money? If the employees follow their systems the employees make money. Compare to century 21 or coldwell banker, re/max, or ERA systems where there's no guarantee income EVER.

I suppose you could argue that the employee systems are forcing people to make money.

If these online companies did not make money they could not afford employees. If you have listings you control the market.

Real estate teams that are independent contractors working in franchises also hire "employees" that are also licensed agents to follow their systems. It is all about systems. This year my wife and I want to hire two licensed assistants and also two independent contractors to be buyers agents. So we will use both employees and independents to work our systems.

In my market in Indiana the average house is $120,000 with $70,000 to $90,000 being a starter home. The agents in our RE/MAX office are pretty much all old guard. They are all pretty rigid on their commission. I know in some markets RE/MAX has become some of the biggest discounters. Not in Evansville.

There is a small fsbo/discount realty office that has started to franchise nationally in Evansville. This franchise has a nice hook in getting listings. They seem to be best at the real low end and the real high end of our market. In two years they have grown faster than all of the other offices and are catching up with RE/MAX. They are now sixth in the market.

Realting has me thinking about breaking ranks with my fellow RE/MAX agents locally and beating them (fsbo/discounters) at their own game. The longer I wait the worse it is going to be for me.

Coolcat, smart thinking. If you want to do well you'll have to turn the back scratching business into a real business. I look at everyone as a competitor. When I find a true die hard worker I call him up to work for me.

Superealtor brings up a powerful ( maybe you missed it ) about negotiation. It's a need in the business. What I do is give away a lot of the stuff that people don't need. But I make up the difference in the need category.

I bet the local franchise that is growing in your area is to pulling everybody in. Discount or not they want their business.

No, I'm saying that the employees make a salary. Who knows how little they are paid an hour but they are salaried workers.

Discount Brokers: (Local News Item) Federal authorities in Canada have recently launched an investigation into the Canadian Real Estate Accociation (CREA)as to whether or not the association is being anti-competitive by making it difficult for “discount brokerages” to operate.

Federal Authorities will now consider whether the association has engaged in, or is engaging in, a practice of anti-competitive acts, or has committed or is about to commit offences by restricting access to their MLS data base.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

The U.S. Dept of Justice has and is conducting similar investigation and it would appear that the Canadian authorities are now following the same path.

Both the U.S. DOJ and Candian authorities have the same mandate and share information, as franchisees and other firms work both sides of the (Can/U.S) border.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .