Recently by Glenn Freezman
Alternative Compensation Models: Quick Math
by Glenn Freezman
A large part of what I think about every day is how our industry can create new models that are fair to both home buyers and the agents who serve them. For me, alternative compensation models are creating a doorway that allow agents to do a better and more fair job of representing their home buying clients while still getting paid in a manner that is respectful of their professional status and the hard work that they do.
Alternative compensation models are basically real estate agreements that allow money to be shifted in a different way. For example, if an agent were to take the money that was earmarked for their commission payment at the closing of a deal and put it on the table as a refund or rebate for the home buyer do you think that would get the buyer's attention? Of course it would. However, the average Realtor isn't in the business of working for free (at least not on purpose!) so this agreement also means that in exchange for that possible rebate, the home buyers need to pay their agent directly for his or her time and assistance on an hourly or task based agreement and that if they make it all the way to the closing table then the refunded commission goes back in the buyer's pocket to cover closing costs or anything else.
As a champion for home-buyers and alternative compensation agreements, I'm often challenged by Realtors and homebuyers alike regarding who ends up paying what at a typical real estate closing. The most common belief is that homebuyers don't pay the commission costs that go to the sellers and buyers agent - because that money ends up coming out of the seller’s pocket.
While I won't argue that that's what the mechanics of the deal look like, I will point out that every single cent involved in the transaction came out of the home buyer’s pocket first. Pretty simple math: no home buyer = no money to pay the agents.
I posted this on Active Rain at https://actvra.in/fpd if you would all be so kind to add your comments.. Thanks in advance. It is also on the Tomes Commmunity at https://www.theconsultingtimes.com/blog/archives/2011/07/always-leave-something-on-the-table.html
I posted a blog on active rain https://actvra.in/ffn.
It's alo posted on the Community Exchange, your comments are appreciated. Thanks in advance to Cindy, who has not missed one yet!
I just posted this on Active Rain and I would like some commments if possible, here is the link, thanks in advance, Short URL: https://actvra.in/dxJ
Glenn
I also posted this blog on Active Rain if anyone would care to comment, thnaks in advance.
Glenn
Check out my new post on the Times Community. Comments are welcome!
I had a chance to catch up with an old friend of mine earlier this week and he shared with me a story of the challenges that he and his wife are having finding a new house. It’s probably worth mentioning that he has been trying to sell his current home for over 5 years and was almost genuinely shocked when an offer was made on the property a few weeks ago.
So now he and his wife are on the prowl looking for a new home and he reports that he’s had more fun getting a root canal. Never mind that the stress of looking for just the right home in the right place has he and his wife a bit stressed out but on top of it his wife has hired her best friend to be their Realtor for the deal...
Continue reading this article on The Times Community, Active Rain and Trulia and The Evolutionary Times.