With all due respect, why do you give Prudential a large hunck of your commission?

Amen. Team DiMuria! You get what you pay for. If an agent has a prospect or a task for the day.

Say they get a buyer. What all sellers want. A buyer. Are you going to go sell a house that you make $500 on, or $1000? If you have 2 listings, one is payinjg you $500 and one is paying you a $1000 which are you going to work on today? You only can do one.

When folks take a discount because it is their sister or brother in law or because they are going to give limited service and advertising, whose home do you think will sell first?

The one paying the most. Think.

Sorry, but too many are missing the point entirely.  You might want to read the report released last month by the DOJ [url=http://realestate.about.com/b/a/000122.htm]at this link[/url] or my series of blog posts that will summarize the 78 page report.

The implication that any particular price, rate or percentage is appropriate for "full service", or that any pricing below that reduces services simply isn't acceptable.  It's also not acceptable to assume that someone charging less AND providing all the customary services is not recognizing their "worth."  Our worth is precisely and only what an informed consumer says it is.  To assume anything else is business suicide.  AT&T used to have a lock on their market too.

The DOJ report, among other things, specifically discusses the lack of efficiency improvement related cost cuts in our industry due to technology and the internet.  I am well aware of my worth to my clients, but I also have been able to implement cost saving technology improvements in my business that allow me to be flexible in my service fees and probably generate a better bottom line than someone charging more.  

Then there's the argument about the huge rise in real estate prices.  It's impossible for a consumer to see the value in 6% of a $600k home sale today, when the same home generated a 6% commission at $400k five years ago with precisely the same amount of work on the part of the real estate people.  The real estate agent comment on 60 Minutes that postage and gas have also gone up simply doesn't do the job in explaining the value of that extra $12k.

The Prudential comment brings up another facet.  A real squeeze could be developing on large brokerages.  With downward pressure on commissions, and agents demanding more support for their split payments, we may see many more small and one-person agencies in the future.  The larger companies may find their agents leaving or lower margins in this new world of real estate.

There's no point in getting into an ethics discussion about choosing homes to show based on the commission.  You either understand your duty to your client and live by it, or you don't.  A buyer representation agreement setting out a minimum fee, with buyer making up any difference allows one to serve their client up every home that might meet their needs.

It's all about doing what works for you, and if the consumer sees enough value for what you charge, you'll prosper.  If not, then there's always insurance or mortgage careers.

James, I get your point completely.  Thank you for validating my position.  Commission is much like Market Value - only worth what someone is willing to pay and set by the consumer.  The diversity of the Real Estate Broker models we are seeing isn't necessarily a "bad" thing, it's change.  I can't say if it's "good" either.  It simply gives us more choices on how to manage our career & life.

"Then there's the argument about the huge rise in real estate prices.  It's impossible for a consumer to see the value in 6% of a $600k home sale today, when the same home generated a 6% commission at $400k five years ago with precisely the same amount of work on the part of the real estate people. "

Yes, the prices have gone up a lot in the last 4 years and down in the last year.  I am making 15% less on the same house as last year.  The Real Estate business has changed a lot in the last 5 years too.  I started in the RE field 16 years ago and the average commission was 6%, as it is today.  Notice I say average, the same as today.  And it is still negotiable, last I looked.

The ups and downs are the cost of doing business -  Even people who are not in the Real Estate field know that everything has gone up in the last 5 years!  But I doubt that most people know what the average real estate agent spends their money on.  In most cases we pay for everything!  Office expenses, office supplies, office equipment,  board fees, continuing education, licensing fees, E&O insurance, vehicles and vehicle expenses, telephone, marketing, advertising, signs, etc.  And we don't get paid until after the house closes.  Our clients also expect a certain professional look, so we have added expenses in the way we dress and the cars we drive.  Would you get in a 1990 Chevy van with a guy dressed in jeans and a t-shirt to look at houses?  Most people won't.

I have no problem with giving people a choice as long as they get the true facts on what their choices are. People already have a choice to go to McDonalds or Hamburger Hamlet, JC Pennys or Macys,  Tune Up Masters or their mechanic, Urgent Care or their family Doctor... Most people know what they are in for when they call Help You Sell.  For one low price they will give YOU everything YOU need to help YOU sell YOUR house.  I think you get my point.  But the problem is that companies that have been dubbed discount brokers are trying to convince people that there is no difference other than price.  Help You Sell would never say that, they know what they do different and so does the consumer.  And if that DB happens to be a national company is that agent (and I am hoping it is a licensed real estate salesperson that is answering those calls or emails) licensed in the state they are soliciting?  Each state has it's own real estate rules, regulations and laws.  To protect the public.

Also there is a miss conception that my job as a real estate salesperson has not changed in the last 5 years.  That we are doing the exact same things, the same amount of work  - that is just not true.  Technology has changed how we all do business and if we are doing it the right way this takes up a great deal of our time.  Not less time.  So I am now adding hours onto my day.  I should cut my pay for working more because the DOJ says it is easier now?  How many of us use to come home at spend the evening with family or in front of the TV?  Remember those days? Now we spend our quiet time doing our Internet marketing, emails, websites, or catching up on the newest technology.  Because our clients expect it of us.

After the 60 min. segment I just can't help asking: Do you Remember when?

We use to have full service gas stations - for one price they pumped your gas, cleaned your windows, checked under the hood, topped off your fluids, checked your tires, and even had a mechanic standing by if you needed one - then the gas companies figured out they would make more money by cutting out these services and with that employees (all under the guise of saving us money) or you could elect at some gas stations to pay more for your gas and get full service.  Did cutting out the services save us a penny on our gas prices?  No I don't remember a price reduction at the time they cut out the services and now we do all the work because we have to not because we have a choice.

As long as we give our clients a choice (full serve or self serve) and they know what they are getting, we are doing our duty to our clients.  

Jana

Quote"

The Prudential comment brings up another facet.  A real squeeze could be developing on large brokerages.  With downward pressure on commissions, and agents demanding more support for their split payments, we may see many more small and one-person agencies in the future.  The larger companies may find their agents leaving or lower margins in this new world of real estate."

Is it full service or limited service cash rebate? or is it just good old competition in the marketplace catching on in the real estate industry today.

$10,000 cash home buyer rebate below

http://www.dallas-real-estate.net/index.html

Vance