Posted by unregistered user at 1/13/07 10:26 a.m.

If Redfin can hang on and stay in business, realtors as they exist today will be out of business. I challenge Dalton to produce meaningful data that show anyone thinks they got good value from a realtor, whether on the buy or the sell side. Even if Redfin don't survive, this is the way most of us will buy and sell houses in the future.

Posted by unregistered user at 1/25/07 5:45 p.m.

I am a Realtor in Metro Detroit. Unlike the previous poster, I will say my name . . . Al Block of RE/MAX First.

If all there was to transacting real estate sales is web info and a handshake, then Realtors as we know it would have long ago went into extinction. This is not the case. We have no monopoly. We control nothing. Buyers and sellers CHOOSE our services. I have never heard of a Realtor put a gun to the head of a prospective client (or real estate agent for that matter--there is a difference--a Realtor subscibes to the Code of Ethics of the National Association of Realtors who polices any violation of it). We fill a need. Especially in the Detroit market. A skilled Realtor has experience from selling many properties (I have sold over 700 in 17 years), so I think I have seen almost every situation and know how to protect my clients and also save them money. The average home owner or buyer maybe will complete a handful in a lifetime. I sell more homes in one month than you may in your whole life! Who brings experience, skill, knowledge, and insurance to the table??--Redfin, Zillow, I don't think so. Don't get me wrong, there is lots of room for every business model. There always has been. Do you think discount brokers are new to the game? They have come and gone, and some do well and I welcome the competition. Anyone who has experienced the dealings of a smart, highly skilled Realtor can tell you they were worth their weight in gold. Don't take my opinion. Go to this website and check out a survey that was conducted randomly on consumer's view of their Realtor and real estate transaction:

www.realtor.org/pac.nsf/pages/ConsumerRe
search

You know, there is an old Southern saying, "Its a sorry dog that can't wag its own tail." Well I'm waggin' the tail of Realtors and also my own. Need a great Realtor in the Metro Detroit area. Call Al Block at 1-800-SOLD-678 or go to my website. www.alblock.com

Posted by REindexDotCom at 2/7/07 1:53 p.m.

Dear unregistered user:
First, I'm a Realtor.

Your personal experience emerges from the apparent emotion in your comments. I tried to do a deal this week that the other agent mishandled and lost. I can relate to your idea of poor agents.

Here's a breakdown of an average agent's income from a basic transaction.
IF a deal closes, and the agent gets paid.
An example: $300,000 sale at 5%. 1/2 to the listing office and 1/2 to the selling office = $7,500
Many agents only receive 1/2 of what the office receives which = $3,750
The office pays the rent, phones, signage, and advertising from this.
If the deal takes 60 days to close then that is 3750/60 = $62.50 per day (7 days/week) for the agent
62.5 / 8 hours is $7.82 per hour. That is a whole lot less that your mechanic, your plumber or your Oil Changer, but who thinks of it that way.

If an agent works in an 100% office they would receive the $7500 for their 1/2 of the sale. But, then they pay a desk fee, buy their own signs (at least $25 each), their own advertising, a phone fee or their own phone line, website, internet advertising, etc. The $7500 still turns out to be less than most people make at an average job. Agents have to do a number of deals at the same time to make a reasonable living. That is why good agents appear to be busy, they are.

The Red Fin model increases the number of deals necessary to make a living as a real estate agent.
Why? Because Red Fin says a little from many is ok, for them. Yeah, good for one corporation, but not the industry. Would you like a cut in your paycheck?

I think Red Fin, selfishly, is taking advantage of a public misperception.
On the average, real estate is not a business with a short sales cycle, and where the salesman only fills out paperwork.
I have personally worked with buyers for a year before a sale was closed and others who bought homes the first day we looked.
I have also had property that took a year to sell and others that have sold before they actually were on the market.

When you have a smooth deal, your agent has done their job like a nice hotel treats you. You are relaxed and comfortable and you aren't aware of all that had to be done to get you there.

Just some ideas.
(Al Block, I added you to three towns in Michigan on REindex.com. Your two listings and your office towns.)
Best wishes,
Heath Coker
www.REindex.com, The Site Engine
www.CapeGroup.com Its a beautiful day on Cape Cod!

Posted by unregistered user at 2/8/07 10:34 a.m.

This was just too rich for me to pass on making a comment. The writer above notes that pay for a real estate agents:

"... is $7.82 per hour. That is a whole lot less that your mechanic, your plumber or your Oil Changer, but who thinks of it that way."

This some classic real estate foolishness and indicative of why consumers are filled with RAGE when confronted with agents these days. If this agent is to be taken seriously, then it would seem that this transaction took the agent over 480 hours worth of labor to complete (60 days, 8 hours a day...). That's a far cry from what most agents estimate a transaction to be. Average transactions are usually 20 to 40 hours which is spent driving around, doing home tours, transactional and paper work, and negotiating. Redo the agents math above using reasonable estimations of labor (say 30 hours) and a 50% commission split on the $300k home and you've got a very respectable $125 an hour or nearly 250k annualized at 2000 hours of work (40 hours a week, 50 weeks).

Importantly, there are no full time agents that are on 50% desk split in the Seattle area. Full time agents pay a monthly desk fee of $300 to $1200 a month (depending on if they are Skyline or Windermere agents) and then keep 100% of their commissions. Further, $300k for a home is far below the MEDIAN price in King County. Using real numbers for Seattle, a $425k home and a 100% commission plan, that agent is looking at a 3% commission of $12,750. This means about $425 an hour for 30 hours of service. The rate may be a little lower if you deduct the $1000 for desk fees that month…

Therefore, 50% of agents in Seattle, therefore make more than $425 an hour when conducting transactions. Wow! Who would have known?

This amazing compensation rate continues to flabbergast us all - people who buy $1M homes in Seattle are paying upwards of $1000 an hour for their friendly agent services.

Anyone would be pressed to find a lot of high powered attorneys from Perkins or PGE that have a bill rate of more than $500 an hour. Further leading to consumer exasperation with the real estate industry, agents have been known to claim that maybe 'attorneys are overpaid.' Of course they overlook the fact that attorneys billing at those rates have completed high school, a 4 year college, and 3 years of law school. Moreover, at these high bill rates you'll find resumes with some of the most competitive academic institutions in the country. At one point the head of NAR indicated that maybe even doctors are overpaid… Can I start a list of ways in which a physician is different from the real estate agent that brags about their 60 hours of training or their e-PRO certification?

So why do agents feel victimized by consumers rage over compensation rate? One source of the disconnect relates to how agents define ‘work' vs. how a consumers defines services received. Most agents think they are providing service and doing work when they are 'marketing their business.' This is where HouseValues, marketing seminars, cold calling, doorbell ringing, and the nefarious 'agent relationship building' comes into play. Some economists estimate that agents spend upwards of 75% of their time on these activities which have nothing to do with rendering services in a real estate transaction.

What an agent really means by 'selling homes' and 'relationship building' is that they will infiltrate your day care, health club, and church to befriend you so that you come to them when its time to sell. As many as 1 out of 76 people in some states are licensed real estate agents. Further, because you have a personal relationship with your agent, they will put a major guilt trip on you when it comes to talking about their compensation. A thorough discussion of the industry collusion on the commission levels requires more space than we have here, so we'll skip that and try to finish up here.

Posted by REindexDotCom at 2/9/07 10:28 a.m.

Ok, the comment above seems logical. But how do you know which 30 hours are needed in th 60 days that it takes for an average closing.

An agent must be available every day, all day. So, yes, is seems like 30 actual hours, but in fact it is all 60 days.

The "unregistered" comments made above would probably prefer that we bill like a plumber or a lawyer for what thye think are actual hours. The problem is that until the property is actually under agreement, you don't know which hours the buyer will show up or when other agents will need to show it.

"Unregistered" is probably a Z ill ow employee.

Best wishes,
Heath Coker
www.REindex.com, The Site Engine
www.CapeGroup.com Its a beautiful day on Cape Cod!

Posted by unregistered user at 2/12/07 6:20 p.m.

I surely did need a realtor when I bought and sold my first, second, and third homes over the past 10 years. I believe anyone new to home buying should invest in a good realtor. But, I am also under the impression that too many "I can work from home!" people jumped onto the realtor band wagon, flooding it with inexperience and greed. Basically, I no longer trust real estate agents as I have in the past. I now find automation like Zillow and Redfin to be more "trustworthy," especially given the satisfaction guarantee. Crazy eh? I will try Redfin when I sell the home I am in now, and I won't be surprised if it is a pleasant experience.

Best,

Tim Roth
Seattle (Fremont)

Posted by gymshoe at 3/4/07 9:37 a.m.

Tim Roth, ...where do you get your information?

"... there are no full time agents that are on 50% desk split in the Seattle area."

That is simply incorrect. Many companies (large ones like John L. Scott, or Coldwell Banker Bain) base your split on your tiered production. Even if you're a full time agent, if you don't hit a certain production level, you'll be on 50/50, or 60/40, or 70/30. Once you hit your sales quota, then you'll be bumped up to a higher split such as 90/10 for the remainder of your fiscal year. If you hit your quota with only one month to go in your year, then you only get 90/10 for that one month.

Please get your facts straight.