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Re: Retaining wall fees - Real Estate

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The reason real estate agents charge so much is not that the grass is
iridescent green on their side of the fence, but that their business model
is inefficient. As Scott rightly points out, they waste a lot of time
showing properties to people that aren't going to buy. Probably even more
than that, people who are going to buy waste a lot of their agent's time
talking and seeing properties that they don't need to see.

Ultimately, it is ridiculous that I should pay $18,000 in commissions to
sell a $300,000 house. I could buy a new car or install a new kitchen for
that. At $100/hr, that's 180 hours, which is 4.5 weeks work for a
professional. If I hired my agent as a consultant for $100/hr, I might not
waste as much time. We live in the age of the computer - maybe the agents
could make available a database of pictures and video (as i think some of
them do now), and save a few man hours.

The main problem with the hourly rate rather than a percentage of sale idea
is that it does not play into the estate agent mentality of striking it
rich.

Michael


                                                                           
             Scott Maxwell                                                 
             <smaxwell@engin.u                                             
             mich.edu>                                                  To 
                                       seaint(--nospam--at)seaint.org                   
             06/01/2004 07:19                                           cc 
             PM                                                            
                                                                   Subject 
                                       Re: Retaining wall fees - Real      
             Please respond to         Estate                              
             <seaint(--nospam--at)seaint.or                                             
                    g>                                                     
                                                                           
                                                                           
                                                                           
                                                                           




But keep in mind that many real estate agents can go through the full work
of listing a house or showing a house, but not have the house sell (for
any number of reasons).  In such a case, they have just done a lot of work
for no money.  Are you willing to do the full design of a project only to
have the owner cancel it and say "I don't owe you anything because I did
not complete/build the project"...didn't think so.  So, keep in mind that
real estate agents get paid not just by "commission", but also by
"contingency" (i.e. they get paid only if and when it sells).  And as Paul
pointed out, if there is a buyer's agent and a seller's agent, then the 6%
fee is split between the two (typically 50-50)...so many times the real
estate agent gets only about 3% (which if before company's share, etc).

As the saying goes..."The grass is always greener on the other side of the
fence"...to which I usually add "Until you jump the fence and notice that
the grass is really a nice shade of brown".

Regards,

Scott
Adrian, MI


On Tue, 1 Jun 2004 mludvik(--nospam--at)hardesty-hanover.com wrote:

>
>
>
>
> A real estate agent gets ~6% of the price of the whole property for
selling
> it, whilst the total design fee for a new home is maybe 10% of the
> _construction_cost_ (not the land cost). That 10% is the total for the
> architect, engineer, surveyor, etc. Basically the real estate agent is
> getting paid more for selling the property than the entire design team
gets
> for creating it in the first place. Can this be right?
>
> Michael
>
>
>
>
>              "Paul Crocker"
>              <pcrocker@reidmid
>              d.com>
To
>                                        <seaint(--nospam--at)seaint.org>,
>              06/01/2004 11:24          <h.d.richardson(--nospam--at)shaw.ca>
>              AM
cc
>
>
Subject
>              Please respond to         Re: Retaining wall fees - Real
>              <seaint(--nospam--at)seaint.or         Estate
>                     g>
>
>
>
>
>
>
>
>
>
> "If you really think real estate salesmen make that much money
> you should try being one!  But first do some research; divide the total
> real estate commissions by the total number of real estate salesmen (a
> friend of mine actually did this) and you'll be surprised at how low
> their average income actually is and you will understand why there is
> such a high turn over in sales personnel."
>
> As you hint at when mentioning high turn over, the number you arrive at
> when dividing fees by the number of real estate agents is skewed by the
> large number of amateurs and dabblers who enter the field half-heartedly
> looking for easy riches.  Many of these drop out in a year or less when
> they hit a dry spell in sales, or discover they don't want to sacrifice
all
> their evenings, weekend, and holidays driving people around looking at
> houses.  Add to this the number of people who try to do it part time (not
> usually a great strategy), and you get a theoretically large pool masking
a
> number of dedicated full-timers that is a small fraction of the total.
The
> dedicated full-timers can do very well, and take little or no liability
for
> their efforts.  It is a feast or famine profession.  Perhaps it is a
little
> reminiscent of acting in that respect.  Even for the successful, though,
> remember that the percentage taken as fees is generally split between the
> buyer's agent and the seller's agent, and a chunk of the fees they
collects
> are generally taken by their office, so they don't see the whole figure.
> You might look at it as a poorly structured profession that makes up for
> its definciencies by highly rewarding those persevere.  One of the
arguably
> smartest engineers I have know left engineering for a few years to be a
> real estate agent.  Being a smart and social guy, he did pretty well, but
> ultimately found the driving people around who may or may not actually
buy
> anything and shuffling papers around didn't excite him, and he returned
to
> engineering.  Ultimately you have to enjoy what you do.
>
> Paul Crocker, PE, SE
>
>
>
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