Yep. I knew you wouldn't answer and then try to put me down in the process of not answering. Your post smacks of smugness all around. I guess you are rich and I'm poor because of how we differ in our thoughts. What an arrogant dude you are. Like I said, you reply like a sixth grader when your views are challenged. Small man complex? "My man" - that's a Red Pear passive aggressive lead in, carry on with your ego. And rally your troops some more to feed your ego. This poor man is heading out on my fourth vacation of the year.

Will you take a vacation from posting also?

The funniest thing to me is he still thinks that Jamie has all these Red Pear Alt accounts that he's running around and replying from….

I've never thought about a transaction in terms of hours spent since we don't bill by the hour, so honestly I can't answer your question.

However, there have been numerous transactions where I've thought to myself if it's even worth it dealing with all the hassle.

I bet you in the end that is likely somewhere around $150 to $500 an hour (range depends on sales price). Not to dissimilar to what a lawyer charges. However, I think that you will find that agents that are top producers or actually know what they are doing won't work for less than $300/hr.

Looking at BLS data, the average realtor makes $65k so average hourly wage is $32.

So if you want to save some money you will be dealing with crap.

For an investor maybe paying by the hour makes sense but man there's a lot that goes on in a transaction where a good agent is worth their weight in gold. Not to mention the non-transaction fees that have to be paid just to conduct business.

I also wouldn't be surprised if choosing to go the hourly rate that the client would end up paying more than if they would've been compensated on a commission basis (say for homes below $450k).

Thank you for your kind words!

We actually launched by offering a flat fee listing service for $500. What we found was that by and large, most sellers needed a lot more help than they thought they did, and $500 was working for like a dollar an hour (Napoleon Dynamite reference). It just wasn't sustainable. There are some folks who will list your property on the MLS in Houston for $99. I think the biggest drawback is that you get zero support.

Excellent post. My only addition is that by law in Texas I cannot explain or comment on the title policy with my client. Unfortunate. Most agents wouldn't know what's going on anyway, but the ones who do have our hands tied.

I've been following this thread with interest because I'm one of those FSBO sellers who hates the current RE transaction "model".

I've shared my story here before, but it's been a quite few years. I actually looked into the "MLS listing model" not long after it first became an option in BCS (I sold my home back in early 2013).

I opted to go FSBO for a few reasons - the BCS MLS at that time was TERRIBLE, my home was in a subdivision that still had new construction (so plenty of "drive bys"), it was built by a popular local builder who had name recognition, and I knew I would be able to sell for somewhere between what I bought the house for and what new construction was going for (that delta was only about $10k for a $240-$250k property).

At the end of the day, I didn't want to lose money on my house - and contracting with a buyer's agent that required a contract for 6% commission would have pushed me into the red. I looked into the flat-fee listing service (which I think was $1500 at the time), but I knew I was going to have to offer 3% to the buyer's agent. And I just didn't think the BCS MLS was worth $1500 at that time. The guy who owned the local flat-fee agency told me that I would have to pay the 3% (which I fully planned to do anyway) as part of my contract with him. He made it clear that he couldn't do business as a flat fee agent without that 3% offer.

I opted to list the house on Zillow, and put in the listing description that I was offering 3% to the buyer's agent.

My experience with FSBO was very disheartening. Every agent in town knew my house was for sale - because they were ALL sending me junk mail offering their listing services. But not one agent called me to see or show the house. I sold the house to a couple who saw it on Zillow and then called me to set up a showing. They told me they would be bringing their buyer's agent to the showing and she expected 3%.

For reasons I won't get into here, their buyer's agent was terrible. But it really left a sour taste in my mouth that these buyers found the house themselves and had to contact me directly to make the showing appointment, but still expected me to pay her commission.

As a side note, when negotiations dragged out because the buyer's rep thought she was being cute by repeatedly low-balling me, I told her to reduce her commission to get the deal done. She responded in shock that I even suggested such an idea, and told me it wasn't possible for her to do that.

At the end of the day, we got the deal done at a price I was happy with (I was able to split the difference between what I paid and the cost of new construction), but I certainly felt like the agent treated me as the "stereotypical" ignorant and desperate FSBO seller.

There is absolutely no excuse for buyer's agents icing out FSBO or flat-fee sellers. But I have no doubt that's exactly what they do.

BTW, I was buying another property in TX, and I had an agent helping me with that. She graciously agreed to look over my paperwork for the FSBO (however, I handled all negotiations and communication with the buyer's agent).

I would have hoped that in 10 years, the flat fee model would have gained more traction. I'm sure it's more popular than it was then, but it really doesn't seem to have the popularity that I think it deserves. I very rarely see them in the area where I live now.

It really should be a buyer pays their agent/seller pays theirs transaction (with the exception of maybe new-construction purchases, which are a slightly different model), but if you look at the columns on the closing statement, it's not. The commission is still typically paid by the seller, and then the seller's agent splits it with the buyer's agent.

I also don't understand why more buyer's agents don't charge their clients by the hour or the showing (on top of any commission for the sale). I don't like the idea of people wasting their agent's time looking at a bunch of properties they don't intend to buy.

Anyway, story time over. I'm just surprised that after 10 years and all of the developments in online listings, remote entry, virtual tours, public reports of sales prices, etc., there hasn't been any real shift in how residential RE transactions take place. My perspective is limited, but the only real reason I can think of as to why is because the RE professionals are preventing it. In other industries it might be called collusion.

As has been stated, a huge chunk of Realtors are retired empty nesters and Instagram heroes. And they wouldn't even be Realtors if there wasn't potential to make quick easy money. The game is to get clients and get paid, not to be competent and actually represent clients well. The reason the flat fee model hasn't caught on is because it's continued to be VERY easy to get licensed and to demand the industry norm 3%. And for the truly competent, 3% is the price their time is worth, whether you agree or not. If an unqualified Realtor who averages 5-7 closings a year can get 3% from those deals, there is no way in hell they are going to entertain a flat fee model. Why? Because they would need to find a new grift.

The real solution is to make the licensing process significantly harder. The industry should be dedicated to backing only the most competent and qualified agents. And any misuse of fiduciary duties and unethical behavior should be treated with FAR stricter punishment for both the agent and the broker. But NAR will never allow that. If you lose even 20% of the agent pool, NAR loses significant standing as a top lobbyist group. NAR has one mission. To recruit as many agents as possible. And that is the problem. If you want to fix the Realtor model, you have to first fix, and potentially replace, NAR. But the consequences of that could have far reaching effects you can't even imagine similar to burning down and replacing any long time structure.

But lawyers have no leg to stand on. Until your industry commits to fixing it's own bad apples and the litigious society they have created (like Realtors, not the majority or the truly competent, but the grifters) which has had profound impacts on every single industry and relationship in this country all the way up to the highest levels o government, you need to sit down and look in the mirror before you start harping on other industries.

I may be far off here but I'll bet there are significantly fewer people considering engaging an attorney the next time they contemplate a residential real estate transaction.

So I am sitting here in Lancaster having just showed my 70+ year old, disabled vet, minority buyers their 13,14,15th house(not picky that is just a dog scat price point) in the $150-175k range. They just off hand informed me that a solid HVAC system was imperative as their heat had been broken since March.
Now like so many others in the service industry, if I don't make a decent wage, I couldn't afford to spend the 7+ rounds of trips I have made to show them property.
Tell me again who this helps.

Buyers in that price range will likely not have representation going forward. And that will push prices like crazy.

Deats99 said:

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So I am sitting here in Lancaster having just showed my 70+ year old, disabled vet, minority buyers their 13,14,15th house(not picky that is just a dog scat price point) in the $150-175k range. They just off hand informed me that a solid HVAC system was imperative as their heat had been broken since March.
Now like so many others in the service industry, if I don't make a decent wage, I couldn't afford to spend the 7+ rounds of trips I have made to show them property.
Tell me again who this helps.

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I'm not even following here... because you have a difficult client the rest of us need to pay you more? This isn't our problem.

Start charging per showing over a certain amount of showings. Problem solved. The rest of us don't need to subsidize these people.

TxAG#2011 said:

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Deats99 said:

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So I am sitting here in Lancaster having just showed my 70+ year old, disabled vet, minority buyers their 13,14,15th house(not picky that is just a dog scat price point) in the $150-175k range. They just off hand informed me that a solid HVAC system was imperative as their heat had been broken since March.
Now like so many others in the service industry, if I don't make a decent wage, I couldn't afford to spend the 7+ rounds of trips I have made to show them property.
Tell me again who this helps.

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I'm not even following here... because you have a difficult client the rest of us need to pay you more? This isn't our problem.

Start charging per showing over a certain amount of showings. Problem solved. The rest of us don't need to subsidize these people.

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If you are not following then you are probably not ready for the entire conversation. The point is if I did not average out, these guys would not get taken care of.

Grow a pear and negotiate for better terms and don't litigate it. Why do I have to conform to your desires because you are unwilling to demand it.

I forgot, you were the guy that talked trash about realtors on this thread then asked for standard realtor advice on another. How did that setback issue workout for you?