Hello and thank you for reading my post. As a Broker I control the fee structure of my company (as all fees are negotiable) and feel that it is warranted in this market.
My feeling is that I can still make money by advertising, etc. and only charging a monthly fee instead of the typical 6%. MLS inclusion is optional and my services are not downgraded because of the fee only structure. I am not anti-agent, but I do not have any in my office and feel that most jumped in our market when it was booming and the Broker's were taking on anyone and everyone to accomodate the masses.
I have a team of professionals to assist me and I own my office that is smack in the middle of the market I am offering this proposal to, which is the luxury seller and honestly do not like working with Buyers.

Thanks for you time and I'm open to questions or suggestions.

have no idea what your trying to ask here

Okay, so what are you charging a month to your sellers, and how do you expect to compensate a selling agent??? Or do you plan on making their buyers pay their commission...or are you going to sell all your own listings?

Your post is short on facts and makes little sense. Try reading what you wrote and then writing it again this time paying more attention to expressing your questions.

I felt that the explanation was fine, but I can put it in more simple terms.
I have no agents.
There will only be a monthly charge for all my services.
MLS is optional to the client.

I would probably assume that this suggestion should have been placed on a consumer site, rather than a Real Estate. Why should I expect someone else in our profession to expect less than what the person down the street is charging.
I own my office and don't mind taking less for doing the same thing that you would do in a transaction.

Sorry, but I also think it is unclear what you are asking. The only question in your above two posts is: Why should I expect someone else in our profession to expect less than what the person down the street is charging?"

Looking at your business model, if you get paid by the month, it seems like you make more money the longer your listing goes unsold.

Has your model been profitable for you? How many luxury homes have you listed using your monthly fee plan? Do you get paid extra for bringing in the buyer?

I personally don't think it will work because you have no incentive to sell the property quickly (in the buyers eyes) and for your business, if it sells right away, you're margins will be too thin. On top of all that, you will never grow to a large company because you won't be able to attract the kind of people that are able to sell a property quickly.

I still don't understand how cooperating brokers will be compensated...or do you plan on not cooperating with them, or telling them to have their buyers pay the commission, or what?

No need to be snarky - I just don't understand how this is going to work.

Hi SCBroker,

I've been in this game for about 17 years and have seen just about every business model imaginable. Here’s my 2 cents worth!

First, let me say if you could get enough people to buy into it you would have a nice cash flow going!

If I understand correctly you want to charge your sellers a monthly fee instead of a commission when it closes!

If you charge a monthly fee to the seller you in essence are getting fees up front, and if I were competing with you on a listing I would use that against you by stating that I believe in my service enough to market their property at my expense and get paid when it closes.

Next, I’m a big believer in paying the selling agent 3% or what ever the going rate is in your market is. As a listing agent I have always believed that all agents are like my customers and I want to take care of them. And the best way to do that is be easy to work with and be sure they get paid.

I think if you allow your sellers to not pay the selling agents their full commission you lose the power of the MLS! Which in my opinion is worth it’s weight in gold!

I have also found that selling real estate is a numbers game and lead generation is a critical part of ones success and based on your financial goals will determine how many leads you will have to generate. There are a lot of ways to do that, from direct response marketing, to calling and visiting fsbo’s and expireds, to farming! (as I’m sure you know)I suggest that you take a look at yoru market to see what percentage of the market is paying, 5%-6%. And if it's like my market about 97% of the sellers are paying full commissions.

I honestly don’t think the public is ready for a different business model, (even though they gripe about the commission) but if you do, and are willing to spend the money to brand that and create public awareness you will probably be able to pull it off.

The other thing to consider is will the public believe that you can sell their house? Or will they possibly feel like jlknauff
said and see it as you have no incentive to sell their house?

I hope you don’t take this as being negative against you; it’s intended to be food for thought!

I wish you the best with your venture!

So you put my property on the market for six months and fail to sell it. I paid you a few thousand bucks and got what in return?
I don't think most sellers are that stupid or careless with their money.

Thanks for all the posts and I never intend to sound rude or course. Reading someones emotions in a post is not advisable.
This is about education and I'm here for help - if you think you can then please offer it, but don't throw out comments that do not warrant help.
I am not trying to pull anything nor do I feel that I am not giving my clients 100% representation. My ads are seen in duPont REGISTRY, Unique Homes, Wall Street Journal, New York Times and rated #1 on google under various search terms.
As a broker for 17 years, I have experienced the changes and don't feel that my idea is too far offline.
I've had and have multi-million dollar listings and if I plan to do this for a reasonable (and I mean reasonable) fee on a montly basis then my clients will save thousands in real estate commission.
The co-broke fee would be a decision the client. I have no control over their decision on having agents sell their home (remember I am the one marketing nationally, not just locally. I a member of the MLS and it does help, but also if the home is priced correctly and the savings taken in account this could help the seller sell in less time. I am also a builder, so there is no way that I haven't covered my experience in guiding a client in how to price their home. As we all know, they can ask whatever they want, but they may not get it.
This is not about ripping my client in any way. I just want compensated for my advertising, expenses and hopefully make some money after all is said and done.
I have spent thousand's in the past to advertise one property only to have the wife drop the listing after her husband passed away because he really liked me. I had that home plastered around the world and where did that get me - also, I'm not a broker that has hundreds of agents to do the work and then I sit back and collect the money from them and it is a common practice for there agents to pay fees or advertising costs. In this case, does anyone feel as if an agent that is just starting out in the business is paying thousands to properly advertise that home nationally and locally. Everyone is well aware how this business model is profitable to brokers or they wouldn't be doing it or putting a business on every street corner.
Someone can disagree, but let's be honest....money is really the game and I've done very well, so this is just something else I think will be very sucessful in our current market.
Lastly, all of us look at FSBO's as the cheap ones. What if I am offering them these extended services for a fraction of what they would pay themselves to market that home without looking as if they paid less than a full commission. My website alone receives over 200,000 hits a month.
Sellers are careless and stupid if they are hiring an agent at 6% and taking the chance that they will not do exactly as they say they will. There are large companies here and I can assure you that they do not advertise in the national publications that I do. They put it in the local paper & MLS (hoping another agent will sell it).
I'm a gambler and for roughly $3000.00 for one year - I would weigh my risk of not selling it for two years to earn the savings that will come with what I offer. I recently sold a 3.2 million dollar home and my famous client found my ad in the duPONT REGISTRY while at the airport waiting to board his plane. The buyer liked working with me so well, that I now represent him on all is purchases and I've gained a friend.
One more point and I'll close - in 90% of my transactions I was a dual agent and I have never had E & O insurance or had a complaint levied against me.

Thanks for reading.

So 90% of your clients are smart for choosing you as their agent and accepting dual agency, which as we all know, is NO agency.

How can you afford all this national advertising with only a monthly fee and still make money? I know that just one ad in the Sunday edition of the NYT is pretty big bucks.

SCBroker,

If you're doing so well with your current methods, why change? Ultimately, you'll just have to try the new system for a year or so and see if it works. There's really no point in speculating or debating just for the sake of argument. Report your results back to us after the plan has been in operation.

SCBroker, what is your web address?

I'm not trying to get in a spat with everyone. I just wanted opinions. Yes, my performance in the past was outstanding and now the market has changed. I have not told one un-truth and dual agency is easy to do - basically list the property and secure the purchaser myself. They never had a problem with it, so what is the big deal.
I've really made a mistake posting here and hate to waste my time as well as everyone else's. I'm not prepared to wage a battle with everyone that posts and I don't think I have to keep typing to prove myself. Let's leave this subject right where it is - as you said, I've done great and will continue to do so. Pick up a duPont REGISTRY and view my latest full-page ad if you question my facts. Thinking outside the box is what it is all about - not just 6%.
http://www.premierpropertiesofsouthcarolina.com

I'm certainly not trying to wage a war. I am wondering how one makes enough money to live off of by advertising in big newspapers and charging a small monthly fee that evidently adds up to much less for the seller than a typical commission.

I would like to KNOW. For crying out loud, why post something like this without being willing to answer questions in more than a general sense????

I'm living now and doing it without the guarantee of selling one thing in the next six months. No different that any other realtor should really be doing if they are representing their listing by advertising. Million dollar homes do not just show up in the local paper.

I've broken the situation down as far as I care to do it, so if you - or anyone else cannot help - don't write. Spend you time on another thread please.

High-end homes I don't mess with.There is a glut of them on the market right now trying to unload.As a broker e&o is required in some states and not in others.

High-end homes is a feast or famine market.When the market is good you are living high on the hog,but when inventory starts building up you have to lay out major bucks to move the higher end homes.

I don't sell luxury homes but I have friends that have been doing it over 20 years.What they do is tell the sellers if they want all this expensive advertising to pay for it upfront and if the house closes they will deduct the valid written reciepts off of there side of the commission as credits.

Luxury sellers are notorious after you have major cash invested of dropping out early on a listing.This forces them to put skin in the game.If they were thinking of screwing you you will find out now instead of later because they have to pay the cost.It wouldn't suprise me to see the sellers sign a listing only to cancel the listing after the broker has spent the money on advertising and then try to sell it to one of the callers to screw the broker out of the commission but sell there home.

The only way I would EVER drop serious cash on a high-end listing up-front is they would have to list at a realistic and aggressive price which alot won't do.

I will admit I was a little stupid to build my dream office and focus on the luxury market, but this is what I had knowledge in and the market was still booming at that time. Now I can't back track because everyting I have done or focused on has been in the high-end bracket from SEO, my sites and advertising.

I do have a few that I sell for friends that are not high-end, but I just do that to help and usually charge a flat fee for those.

In Arkansas, advance fees better be spelled out so far as exactly what you will do and will not do. Then, you better do it!
More than one broker lost their license for LIFE and $10,000s of $1,000s of dollars in fines, plus indictments for fraud.
An Arkansas RE lawyer's advice would be ,"Don't even think about it".