May 14, 2008

HousingPANIC Stupid Question of the Day


Would you use a realtor if they worked for an hourly wage, versus trying to steal your money by taking a percentage of the sale?

If so, how much per hour do you think their work is worth? (you know, unlocking those lock boxes, printing things off the internet, pointing out the granite countertops...)

45 comments:

Anonymous said...

20 bucks an hour.

Anonymous said...

Maybe $40/h or so. If they work 20 hours for a sale then that would be $800. Maybe add some expenses.

Frank@Scottsdale-Sucks.com said...

I say we go flat rate at $150/sale. A friend of a friend was a realtor's assistant, meaning she did all of the "work" while the realtor did nothing (probably at home all day snorting coke) and that's what she got paid.

I think that's a fair price.

Hourly is a bad idea since realtors are shysters and will bill you 5 hours for each hour of actual work just like a crooked lawyer.

Anonymous said...

Same as a whore makes about $100 an hour right?

Kent said...

I'd go for $40 an hour - they do provide value in many cases.

Anonymous said...

It really depends on how good the real estate person was . The part that real estate people played in recent years was helping to destroy the economy by doing anything they could to promote a faulty lending and real estate scheme .Yea ,right ,blame it all on the lenders .

The damage that was caused by that profession by all the hanky-panky would by all rights make the commissioned sales people owe every citizen in American a tidy sum .The realtors should work for free for 10 years to redeem themselves of their greedy sins and collusion with the lenders .

But in a normal market in which sales people are just doing a normal real estate job, it's hard to say what a hourly rate should be .It would depend on how much of the costs of marketing or advertising the home was paid for by the sellers .

I think any kind of sales job that is paid by commission only is kinda weird . Sales people can work for 200 hours with customers and not produce any income and than all of a sudden make a sale in 5 hours and make a bundle . On some deals the sales person is worth their weight in gold and on other transactions they didn't do much to earn the commission .

Certainly during the boom the increase in prices gave the realtors a inflated raise on the commissions while most people were not even getting cost of living raises .

I can't come up with a figure per hour because some sales people are worth more than others .

I know that a major Bank years ago tried to process loans by paying hourly wages to loan agents and their production went down so low that they had to go back to paying commissions .

Anonymous said...

$50/hour is good enough. If they drive me around and are honest and do not consider lowball offers "rude and insulting" maybe $100/hour.

For rentals, some brokers like to take 1 month rent as commission, which is a total rip off. For rentals the commission should be no more than 1/4 the monthly rent.

Anonymous said...

I say we create our own listings online supported by donation of people who hates the NAR. Free listings. Somehow grab the data from all the MLS to get it started.

6% is done/but theyre not all bad said...

Id pay the MLS listing fee plus maybe a grand or so, depending on how many 'pieces of flair' they put into it.

Sold a place in N. VA while living in Denver. Would of been a lot harder w/o a realtor. Of course, she was an older woman with 20+ years on the job....not a real estate boom wanna be. She even hooked me up with some really cheap contract work because she was sure she could sell it.

Anonymous said...

Bob Troll at it again with this "pent up demand" bullshit:


"The just-completed spring selling season was quite weak in most markets as buyers remained on the sidelines," Chief Executive Robert Toll said in a statement. "We believe there is significant pent-up demand which is growing."

The U.S. housing market is in its worst downturn in decades, with home prices falling and mortgage defaults climbing.

Anonymous said...

The morons at the FBI are finally admitting that mortgage fraud is a problem. It took them 40 years to admit that the Mafia existed, so at least they're not as slow as before. This $10 trillion RE fraud could have been prevented had the FBI stepped in to stop all the liars loans.


The total dollar loss attributed to mortgage fraud is unknown. But 7 percent of the suspicious activity reports filed in 2007 indicated a specific dollar loss exceeding $813 million, the FBI said.

"The $813 million loss denoted in this report is just the tip of the iceberg, reflecting only a small percentage of financial damage suffered by victims of mortgage fraud," said Assistant FBI Director Kenneth Kaiser, who is in charge of the criminal investigative division.



So if 7% of the fraud cost $813 million, 100% would cost $11.6 billion in fraud just from the crimes that have been reported so far. That's probably less than 1% of the actual mortgage fraud.

Anonymous said...

Whores have different prices. The Spitzer whore was $2000/hr while a regular meth addict street whore is $50/hr.

Anonymous said...

same pay and benefits (none) they give to the illegal aliens who build the junk

Anonymous said...

minimum wage + costs (MLS listing, copies etc.) I would require documentation of the hours worked and the costs incurred.

Anonymous said...

What do administrative assistants earn per hour?

This will blow your mind: a friend found a virtual admin. job that was all RE work. In other words, some lazy real estate office is outsourcing the what little actual "work" they have! My friend found a real job, btw.

keyser soze said...

Hold the ketsup
hold the lettuce
special orders
don't upset us.
Have it your way!

Ah, come on guys....you know damn well you'd pay $50/hr if she pressed her boobs against you, and gave you the 'come hither' look, as is the wont of all good realtor babes.

happy homeowner in the stix said...

I'd rather have an a la carte system so I could pay for them to do things I can't/don't want to do, instead of an hourly rate or flat fee.

Then I could ask them to justify why they want $500 for x service when another idjit realtor will do it for $400, or someone else will also toss in y for that price.

But that's just me.

Anonymous said...

Keep in mind that most brokers require you to be a dues paying member of local associations. It is very difficult to find brokerage that is not affiliated which allows you freedom to choose. On top of dues, most brokerages will skim 36% of your 1/2 of fees before you see anything. Until that monopoly is removed I think 1.5% is fair. Just means if you want to survive and thrive you'll be putting in 40 hours like the rest of working America.

Edgar Alpo said...

I wouldn't mind paying a 2% finders fee. Find me a buyer, you get 2%. Find me a house to buy, get another 2%. The problem is there isn't any way in hell that they will ever find me a house. I've been looking five years, and I have it narrowed down to three dozen houses in the whole town. Now it looks like I am going to be waiting another five years for all the bailout and prop jobs to work themselves out. Where am I going to find a Realtwhore® to hang with me for 15 years? The way it is now, I do all the work and they step in at the last possible moment to take a commish off all my hard work. Dream on REIC.

Latex Chameleon said...

I sort of get how a seller's agent should be paid a percent of sales price. You want to give them a financial incentive to get the best price possible for you, and some seller's agents do go to extraordinary measures to promote your property. That being said, I think 1% is more than fair.

As for buyer's agents? Being that giving them a percent of sales is an inherent conflict of interest (the more you pay, the more they get), a flat hourly rate is entirely justified. Given how easy it is to do what they do, $40 an hour sounds right.

theloknesmonster said...

This is going to be different for everybody.

As a buyer all I need a realtor to do is open the door and take my rude, low ball offer to the seller.

As things are right now, I don't have to pay for this, so $0.

As a seller, I would be doing all the work.

Staging
Marketing
Photos

I would only need the Realtor to list, show, and bring me the offer.

If they absolutely have to horn in on paperwork aspect of the transaction then they can, but not without my complete supervision, authority, and power to condescend to them throughout the entire process.

I'd give them 1% and a whole lot of attitude for their "efforts"...

Anonymous said...

The realtor is not the broker, who is the one who collects the 6%. The person who sells/finds you a house gets far less unless she/he owns the realty in which case he/she is also a broker. I was an unsuccessul realtor in 1977-sold one house and earned
$600...I thought the fees were high, though there is a lot of time spent looking for properties, researching some stuff, but I still thought it was high. If the realtor was encouraged to be honest and supplied as much information as possible, I can see paying 40-50 dollars per hour, but the crap you see on tv shopping for a home shows where they basically keep silent which in my opinion is an disservice to the buyers, they should be given an over the counter sub sandwich maker wage. Oh, well, I was always told I talked too much for most jobs. I like to 'download' people with info so they can be good to themselves in their choices. grandma pkk

Happy Homedebtor said...

Why not make an incentives system - they get $X, $X+$Y for a sale, with a +/- depending on above/below/at list/market price. Hourly you'll get milked, flat fee they're gonna get paid whether they do a crap job or a bangup job.

Incentives ftw - I see noone here's actually got any real experience in the business world.

Wells said...

It depends on how you want to incentivise the agents.

If you want to make a sale fast, a flat rate would do that (since the faster they work, the more sales they make, the more pay/hour).

If you want to make lots of money, than a commission is the best (the more money you make, the more money they make).

That's for selling homes. No one who is buying a home should hire someone on commission (because the more you pay, the more they make)

LauraVella said...

Frank said:"Hourly is a bad idea since realtors are shysters and will bill you 5 hours for each hour of actual work just like a crooked lawyer".


I agree 100% with your statement. Agents will do anything they could to up the billing.

I think a flat rate would be the best solution.

A condo transaction fee $120
A house transaction fee $150

Plus a checklist of duties realtors have to do in order to get the flat fee.

And just like the phone company, we have to fill out a survey on their knowledge, helpfulness and attention to detail.

Realwhores have to remember buyers pay other fees too in buying a house. The closing costs are very expensive and in my opinion, escrow officers do a lot more in that transaction than realtors do.

David said...

13$ - 40$ depending on experience and location.

Latex Chameleon said...

Happy Homedebtor, interesting that you're claiming none of us have any business experience.

Just to quote some of your words back at you...given your answer of "$X, $X + $Y for a sale," why should $X be anything more than zero for a seller's agent? Wouldn't anything more than zero be a "flat fee" that would make some agents think that "they're gonna get paid whether they do a crap job or a bangup job?"

Arizona Jake said...

A flat fee of $500, plus $20 for every house they show to you. I put the $20 fee per house on to be fair to them if a buyer can't make up their mind and has the realtor running around town for several days showing them houses.

Anonymous said...

They should not even exist.

Medo in Mesa said...

"Arizona Jake said...
A flat fee of $500, plus $20 for every house they show to you. I put the $20 fee per house on to be fair to them if a buyer can't make up their mind and has the realtor running around town for several days showing them houses."

JAKE NAILED IT! Kudo's!! The most Realistic win-win scenerio for buyers, sellers, lenders and productivity. Also add: Forward marketing/ hard costs to seller.
Frank, Sorry but you are very Unrealstic..I was shocked at your inexperience in R/E.

Anonymous said...

I was a realtor for 20 years. Very successful, hated most realtors as liars/morons/incompetent. It takes a high school education to do the work. Pay is just right. It is a bruising business. I was honest with buyers and it cost me more sales than I care to admit. Buyers can be willful and think they know it all. Look at this thread, for example. Until you walk in their shoes you can figure you don't know jack. The reason pay is so high is that the brokers are keeping the big bucks. The salespeople are getting the rude dude from buyers and brokers both. Where do you think they get it from? Most salespeople go into it thinking they can help while making some bucks. Most fail at both or are caused to fail by the unfair pay scale. To succeed you have to be ruthless and cruel. Just like the jokers on this thread.

Refuse to buy overpriced said...

In NJ, the Realtors are lobbying for the bailout.

Until they change their stance, I refuse on principle to use the services of a Realtor.

wc said...

Definitely not hourly - flat fee for each service with perhaps a sliding scale for market conditions or how difficult it is to sell the house. Since there would be no more commissions - then perhaps there would be a fee like an application for a loan so that the broker would get something. But there would also be a fee for any marketing that is required.

Anonymous said...

my landscape service charges $25 per man hour. That includes rolling a truck, all equipment necessary to perform any yard maint task.

a realtor would have comparable but likely less equipment expense. on the other hand, i would expect a realtor to have a higher level of education, responsibility, and professionalism than my yard crew.

so, i would expect to pay somewhere between 40-60 an hour. Note that the 60 an hour is not what they would take home. from that they would have to deduct expenses, employer and employee payroll taxes, med insurance, etc. Plus they would likely be working for a service company, so the company's profit would come out of that. at 60 per hour, their gross take home would be on the order of 30-40 an hour. slightly higher if they are self employed.

Anonymous said...

I think a flat rate would be the best solution.

A condo transaction fee $120
A house transaction fee $150

-------------------------------------

don't take this wrong but those rates are a tad low, don't you think? i guess it depends on what types of services you expect for 120/150 dollars. i am not sure, but i bet a car salesman makes more that 150 per sale.

a quick search turned up $250 per deal is the national average per deal amount that a car salesman gets as their cut. this includes all other "add ons" and special incentives.

i would guess that this is about %1 of the average sales price. so, if you want "car sales man" quality service, expect to pay %1 of the property's sales price.....

Anonymous said...

These flat fees, hourly rates, etc. are fine but it's the NAR and the brokerage that gets the biggest piece of the pie, folks. As long as you are forced to pay dues & exorbitant brokerage fees, it will be impossible to live off of this.

Anonymous said...

With a bachelor's degree = $30 / hr.

With an advanced degree = $50 / hr.

Without college degree = $10 / hr.

consultant said...

I'm usually more articulate than this. But you got me going with this question.

Anybody who uses a real estate agent is just too stupid to own a home. That's just the plain truth.

I mean, using a real estate agent is as good a means test as any to certify that you don't have the slightest idea what buying or selling a home is all about.

One of my other favorites is looking at the gutter down spouts on a home. If there are no splash blocks at the bottom to carry the water away from the house, (sorry) I know a idiot lives in the house. They most likely used a realtor to buy it.

So, no, realtors as they are organized today, don't even deserve hourly wages. Until this business is totally reorganized, the current group doesn't deserve to have it's hands in this important business transaction.

Anonymous said...

i think just about everyone here needs to get realistic. this is about division of labor and the fact that the real estate industry has made if very difficult to sell your house yourself.

real estate transactions need to be more of a free market with a level playing field for all.

It may make sense for me to pay a 1% commission because i will likely make more than that 1% doing what I do for a living. If I make less than that 1% then it would be a good decision to take time away from work in order to sell my house. Perhaps my stay and home wife could sell the house.

the problem is that realtors are now a monopoly, effectively locking me out of the real estate market unless I go through them.

if it were a level playing field, then realtor fees would come down because my 3% (my half of the standard 6%) would make it worth nearly everyone's time and effort to do it themselves. My gut tells me that at 1% it makes sense for enough people to use a realtor that there would be enough business to actually support a "realtor profession". even at 2% I don't think I could justify doing it myself but it would be close.

the $100 dollar estimates people are throwing around here are wishful thinking. heck, it cost me $30 to transfer an auto title to my name for a used car i purchased from another private party.

Caveman

Anonymous said...

With a bachelor's degree = $30 / hr.

With an advanced degree = $50 / hr.

Without college degree = $10 / hr.

------------------------------------

uh, i can tell you have a degree of some sort. A degree is just a piece of paper. It helps you get in the door but in the end it is just a piece of paper. Only in academia does it have a high correlation to salary or in a field that is licensed (like doctors, but even then i have met people who finished med school but didn't end up working in the medical industry or even in a job where they used their schooling).

I pay my employees based on their skill set and ability to get the job done, on budget and on time.

My employees all have EE degrees but I couldn't tell you off the top of my head where more than 10% of them went to school. whether they have a degree matters not as long as they can do the job.

Anonymous said...

I'm usually more articulate than this. But you got me going with this question.

Anybody who uses a real estate agent is just too stupid to own a home. That's just the plain truth.

I mean, using a real estate agent is as good a means test as any to certify that you don't have the slightest idea what buying or selling a home is all about.

------------------------------

I would have to disagree with you, on the stupid part not the articulate statement :)

Are you suggesting a brain surgeon should not use a realtor and sell his house instead of operating on people's brains?

of course not. but it does make sense for some people to sell their own home.

The problem is realtor fees are to high because they have erected a monopoly and they should be treated as such. Their listing databases should be opened up for anyone to use for a nominal fee. any realtor that refuses or makes it difficult to deal with a FSBO should be prosecuted and fined.

Anonymous said...

$30/hour.

Anonymous said...

Selling a house, I'd propose that they get a commission based on the eventual selling price and on amount of time it took to sell. Example: House appraises for $400k. I'll pay the selling agent something like $1000 + 50% of whatever it sells for over $380k, minus $1000 for every month it languishes on the market.

Normally an agent won't much care how much the house sells for -- $380k, $400k, $420k is almost the same commission for them. They just want to move the product quickly at any price. With this sort of steep pay gradient, I would rest better knowing they are going to work their butts off to get every dollar out of that buyer, and to do so pronto.

Frank@Scottsdale-Sucks.com said...

This will blow your mind: a friend found a virtual admin. job that was all RE work. In other words, some lazy real estate office is outsourcing the what little actual "work" they have!

Yep, I have a friend of a friend who did the same exact job for a flat rate of $150/sale while the agent and broker did nothing. Therefore $150/sale should be fair if that's all they themselves are willing to pay for their "work."

Frank, Sorry but you are very Unrealstic..I was shocked at your inexperience in R/E.

THANK YOU! That is the nicest compliment you could give me - proof that I've never been a realtor!!

Anonymous said...

You miss the point. Who would drive someone around for $20/hour? You don't have to use an agent. Stop your silly whinning.

I'm guessing those that suggest a flat fee also work for a flat fee based on their personal performance? Why don't we all become communist and work for the same wage.