Pikes Peak

Sellers Broker Exam, Buyers brokers Exam, love it, LOL.

On the serious side, I am waiting for the law to catch up. Back when dinosaurs roamed the west, I had a Japanese delegation tour my office, I'm positive I've told this story before, but they were highly interested in our commission structure, and why we had it that way.

One area I covered in detail was agency. Later found out they established the policy of the buyer contracted with an agent, and the seller contracted with an agent, and each paid their agent directly, even if they were in the same office, they were considered separate agents and thus no dual agency. Don't know how it is now, but it is a model I could live with.

I would strongly encourage you NOT to do it. I'll share my story.

I was 24 years old in 2002. I put in about $1500 in advertising in 4 atlanta real estate magazines (the small ones you see at the store, Real Estate Guide and Real Estate Book which had 2 editions for North East and North West Atlanta). I got them to agree to float me another 60 days of partial credit witn a down payment.

I closed my first transaction on my 7th week in the biz. Made like 7k.

However... my overhead was huge. It was a monkey on my back. The only way to get buyers is to do passive advertising with some kind of toll free call capture (I used ArchTelecom.com and later Proquest). I got several other agents in the office agree to let me advertise their inventory.

I made like 8-15k a month as a brand new agent in a
booming market. But I could only handle at most 3-5 HOT buyers... and if they were not triple A buyers with motivation, money and equity I threw them off to other agents in the brokerage for a 20% split.

I had NO LIFE. They owned me.. i Was their (female dog). I put about 50k miles on my Grand Marquis I bought that year. Between costs for business (1k a month for remax, 4k a month at my peak, about 600+ a month for car and cellphone costs) I was working like a mad man for about 40-60k a year.

Buyers are great if you have assistants. But you cannot leverage your time or build a systematic business off them. They are the frosting if they are triple A buyers who agreed to sign a 90 day Buyer Brokerage Agreement... but they are becoming slim in this market place.

That system works overseas, like in Germany, where buyers pay the commission, however, our cooperative MLS system and the seller having the cash vs. the buyer needing every penny to qualify, is not geared toward a system where agency is very defined based on who pays the agent. We just seem to muddle along keeping customers confused of who works for whom.

I'm confused on this one Pike. My wifes best friend spent
two weeks with us this Summer. She just bought a condo in
Berlin, Germany. She went to university with a guy who is
now a agent and he took the time to show her the different
area were she could buy. This guy couldn't show her any units
because they are all Exclusive Listings. She had to watch
different sites for ads and then call the listing agent.
This resulted in her viewing 20 diferent condo's with 20
different agents. There is no MLS system. She said she
would much rather have worked with her friend who she
liked and trusted. Agents charge 6%-7% to the vendor/seller for a exclusive
listing, there is no sharing the money with another agent.
Our next visitor this Summer was my wifes niece who is doing
a 2 year apprenticeship in real estate working in the south of Germany and she confirmed the same storey. With english being a slight barrier I understood you need something like a 30% downpayment for a bank to give you a mortgage.

The problem with the Germans is they are well off financialy and they all get 6 weeks paid holidays so we have never ending visitors who dont just come for a week, some come for a MONTH.So next time you are in the Caribean on holiday DONT talk to the pretty German girls or the same will happen to you.

I know, it's an archaic system. Normally you see a buyer commission on a listing like the one below:
Provision:
Die Käuferprovision beträgt 3,57% vom Kaufpreis (inkl. MwSt.)
(The Buyer Commission is 3.57% included is the value added tax.)
Six weeks only? They must be young, the length of vacations is determined by age in Germany, I probably qualify for several months.
I've been there twice this year and miss the beer and food.

Hey, thanks for the post.
I have been trying to figure this out for 5 years and
you sound like you know what you are talking about. I just
ran into my wifes study to see how the commision worked for
her when she sold a property she inherted from her grandmother
and she couldn't remember due to it being 3 years ago,
Bruchsal, Baden/Wuerttemberg.
I'm sure language has been my obsticle with trying to figure
things out. The quality of the food in relatively basic
Open air Gaststaetpe is always superb and the beer speaks for
itself.

We hope to be in Berlin for christmas, the Christmas Markets are a joy to visit and people say WEIHNACHTEN/Merry Christmas as opposed to Happy Holidays which is retarded because it is CHRISTMAS..

Erik: I agree that if you are spending big bucks on advertising and brokerage fees then this just doesn't work as well to do buyers only. But with free advertising like Craigslist and using referral systems and networking groups I think its a definate viable business model. Also getting with a brokerage that doesn't take a huge chunk really helps too.

As for time being yours - well I set pretty good boundaries with my buyers. I also have other agents who handle my business when I'm not available. So I don't feel so stressed and have a schedule that allows me family time. Even if the family just wants me out of the house. LOL

I was just listening to a KW Agent Mountain Interview with a realtor named Bob Cenk. He does about 900k-1m a year in revenue and uses craigslist with Craig Proctor ads for like 99% of his advertising. I am looking into it. The technology may have shifted.. several of the guys in those interviews said they have gotten away from print and call capture to go pure online.. mostly craigslist.

Yes the Craigslist stuff does work. The only trick with it is having enough listings to post. I met with some agents last week to see if I could advertise their stuff in exchange for any listings I come across. They said yes. So I think that I'm going to continue down this path.

Nice thing was that I have passed out 3 listings in the last 3 weeks. So they can see I'm serious about it. Funny thing is that I told all of them I didn't know what would happen and was unsure how many listings I could send across to them since I'm not prospecting for listings. I just didn't want to make it sound like I would make them rich off the idea - wanted to be realistic. I guess you get what you ask the universe for. Now they are happy and I'm happy.