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Commission justification?

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Choice of Real Estate Model


There’s a post on Active Rain right now that is getting bombarded by the people at housing panic. The post is about an agent that will not cut her commission and the comments are worth taking a look.

When we blog, our goal is to create business, our goal should be to open up dialogue and discussion and THAT is the beauty of blogging.

On a side note……I could also tell you that I don’t accept foul language or offensive comments on my blog and those will be zapped. There is nothing healthier than good discussion without personal attacks and name calling.

So here is a scenario where the consumer is letting us know how they feel and the response from most agents is to get defensive or ignore them but no one has addressed their questions…..how do you, as a real estate agent, justify your commission?

For some agents the answer will be simple: I don’t have to justify my commission, my clients don’t expect me to and they are happy to pay for my services.

What it boils down to, in this world of information, is that there will be different real estate models for different people. There is absolutely nothing wrong with that.

  • If the consumer thinks that they can do the job and do a FSBO – go for it!
  • If the consumer thinks that they can do part of the job and does not want to pay a complete commission – go for it!
  • If the consumer thinks that they don’t have time to handle all the details that are involved and sees value in hiring a full-service Realtor – go for it!

I can tell you that I will not work with someone that does not see value in what I do; before starting our business relationship, where both will have active parts, we would be starting on the wrong foot.

A lot of the discussion went into the direction of the unethical reputation of the real estate industry and the low education standards. We’ve discussed those in length here in Agent Genius and sadly enough, I agree with most of their points.

  • A lot of real estate agents don’t bring value to the table – true
  • A lot of real estate agents don’t know right from wrong – true
  • The one week education requirement is not enough – true

Then the discussion takes an interesting turn with Brian Brady’s post HousingPanic ALMOST Got It Right: How To Overcome Commodization By Employing The Dollarization Discipline.

I will end saying that there are plenty of real estate agents that are educated, are ethical and bring plenty of value to the table. We are out there showing our competence on a daily basis and for those that don’t want to work with us, we totally understand, it’s their choice. There are plenty of real estate models out there and the consumer does have a choice.

Ines is all Miami, all the time. A Miami Beach Realtor® with Majestic properties, Ines authors Miamism.com, PrimeMiamiBeach.com, and MiamismPix.com and is always on communication's leading edge. She goes out of her way to engage and be engaged, often using Mojitos to keep the mood light and give everything she does a Miami flavor. You can find her goofing off or instigating trouble at Twitter, Flickr, Facebook or LinkedIn.

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54 Comments

54 Comments

  1. Chris Lengquist

    March 21, 2008 at 10:25 am

    I believe in choice, transparency and a free economy. Therefore, as you would imagine, I don’t disagree with your post or arguments. Why people get up set at discount brokers or get upset at full-service brokers is beyond me. Choose which model you prefer and use it.

    I don’t drive by Taco Bell and scream out the window “your tacos suck!” because I prefer Taco Via. I mean, isn’t that what people are doing here? 🙂

  2. Ines

    March 21, 2008 at 10:56 am

    Chris – the power of choice is an unbelievable one and we have this amazing country to thank for that. I’m still laughing at your Taco Bell analogy.

  3. Larry Yatkowsky

    March 21, 2008 at 11:21 am

    Marjorie Garber wrote in “Sex and Real Estate: Why We Love Houses” : —

    “Realtors often find themselves functioning as therapists, psychologists, and marriage counselors.”. Stop and think about this for 10 seconds.
    This one statement justifies my commission.
    Good god! With these skill sets we are working for the same money as peasants. My solution – Let’s start a union and strike for justice and pay equity. It’s time we get paid for our cumulative professional capabilities. First thing on the agenda is consumer paid medical and a pension plan. Failing that, a lunch would be nice.
    Ines, you have been appointed the honorary shop steward. .>)

  4. Vicki Moore

    March 21, 2008 at 11:22 am

    I justify my commission by explaining the value I provide in the negotation process, contract preparation and response, and how I intend to keep them from being involved in litigation. I explain the “why.” Why you fill out disclosures the right way. Why you counter offer. Why you don’t accept a particular offer, no matter how good it looks on the face. Why it’s important for the buyer to have inspections/contingencies.

    If they don’t I agree, that’s certainly okay with me. There’s a cost to price. Low price = high cost.

  5. Bob

    March 21, 2008 at 11:38 am

    >”There’s a cost to price. Low price = high cost.”

    Price doesn’t equate to skill, professionalism or integrity.

  6. Larry Yatkowsky

    March 21, 2008 at 11:45 am

    Bob,
    Are we talking about Realtors or Presidents? .>)

  7. Vicki Moore

    March 21, 2008 at 11:53 am

    Bob – You get what you pay for. It was a simple comment and reply to a very complex issue.

    “Price doesn’t equate to skill, professionalism or integrity.” I believe, to a certain extent, it does. Again, complex issue.

  8. Mariana Wagner

    March 21, 2008 at 12:18 pm

    Yeah… That post went overboard, IMHO. I completely agree with everything that you opinted out here. Specifically, ” I will not work with someone that does not see value in what I do” Exactly.

  9. Mark A.

    March 21, 2008 at 12:22 pm

    I read Brian Brady’s post, and I listened to the infamous RE USA podcast with Broker Bryant about this subject. Brian has it right: We, as Realtors, haven’t done a good enough job of explaining our value proposition (at least those of us who actually add value to the transaction) to consumers. A stock broker who commented on AR, made a similar reference (comparing his services to Charles Schwab).
    I will write a post about this on my own blog shortly.

  10. Vicki Moore

    March 21, 2008 at 12:30 pm

    Mark – I completely agree with you. It is all up to us. A brand new agent with little to no experience should be differentiated in a variety of ways, including price, from a long-time veteran. There are many facets to this topic.

  11. Ines

    March 21, 2008 at 1:01 pm

    Larry – you know I LOVE your sense of humor, but in this industry, because of the differences in models and needs of the consumer, it’s important to set ourselves apart from the norm. Wouldn’t it be interesting if we would get paid for our time upfront like many professions? Or for the consumer to reimburse all marketing costs?……that’s another model right there.

    Vicki – those that utilize our services and see the value we bring don’t have to be convinced – those that don’t want to see the value and don’t want to use our services should not be convinced because no matter what we say, it will never be enough.

    Bob – as much as I would like to agree with you, you do “get what you pay for” – I still have in my mind a local seller that hired a discount brokerage and he wanted to show his own house. Everything he said from the time I walked in there with my buyer clients was horrid and the clients ran away scared……too bad, because it was a home with potential and he was not capable of painting a proper picture. He ended up getting a lot less for the house than it was worth, but ultimately he made the decision and walked away doing what he wanted.

    Mariana – it would be a big waste of time for all the parties involved. As an architect I walked away from many jobs because the client was designing the house and was not open to professional criticism and tweaking of their ideas….they did not need an architect, they needed a draftsman.

    Mark – It’s my number one goal to show what value I add to a transaction and I go over it again and again in my blog. Those clients that choose us know and those that read the blog have a choice to make. We have to remember that it’s about the customer, not about us.

  12. Vance Shutes

    March 21, 2008 at 1:05 pm

    Ines,

    It may take a generation to change consumer perception of the value which we, as professional Realtors, bring to each transaction – but that shouldn’t keep us from the effort. We have much to learn from the legal profession (disclaimer here – “I’m not authorized to give legal advice. Please consult an attorney….:) in this regard: There are paralegals, associates, junior partners, and senior partners. Each of these titles connotes both a different perception by the consumer, and a different level of value brought to a legal matter. Each of them brings a different level of compensation to the table. As others have so ably commented, you get what you pay for – or are willing to pay for.

    While the attorney brings experience to their ability to advise their client, they do not necessarily bring a guaranteed outcome. The same is true with professional Realtors – we bring experience, advice, and no guarantee of outcome. Unlike Attorneys, whose bill is to be paid no matter the outcome, our client gets our experience and best effort, and only pays us if we get the job done.

    Again, it may take a generation to bring about a changed perception of our value as Realtors, but we shall not shy away from the effort.

  13. John Lauber

    March 21, 2008 at 1:19 pm

    I think it was Russell Shaw I heard mention a study that stated 15% of people buy strictly on price. No matter what value you may bring to the table, they’re strictly going by price. I wish them well and move on. That leaves the other 85% who may realize your value. I won’t go into limited vs full service (I’m with a full service broker) as there are stories on both sides. I’m with you Ines, it’s about the customer.

  14. Ines

    March 21, 2008 at 1:37 pm

    Vance – I totally agree with you and many of us are going full force to try to change the perception as well as show our worth. The fact that we don’t get paid until a property sells may be part of the problem and I can remember many times in my life where my services were not valued because the customer was not paying for it, both as a Realtor and as an architect.

  15. Norm Fisher

    March 21, 2008 at 2:05 pm

    Ines,

    “The fact that we don’t get paid until a property sells may be part of the problem.”

    This is exactly correct. Since most of us have only one revenue source, our clients who are successful subsidize those who are not. Until people are willing to pay a fair price for the services they want, commissions will likely remain on the higher side.

    I also think it’s time that agents stopped using generalizations like, “we’re worth it.” I accept you assertion that you’re worth it. I also believe that I’m worth it. 🙂 There are many agents in our respective markets which charge the same fee that we do who are clearly not worth it. When groups of agents who don’t even know each other band together to publicly shout “we’re worth it” to people they don’t even know they kind of come off looking foolish. It’s idiotic to assume that all agents are worth X.

  16. Benjamin Bach

    March 21, 2008 at 2:51 pm

    “A brand new agent with little to no experience should be differentiated in a variety of ways, including price, from a long-time veteran”

    Ines, I’m going to disagree with this. If someone who has little experience can still provide value, they will be able to justify the fee they believe they are worth.

    The first time I ever listed and sold a large multi family building – was I experienced selling them? Nope. Did I get my clients 100% of list price ? Yup.

    A 20 year veteran has had a similar property (16 units) for sale for 2 years with no luck . . . He has it listed at a 2% total commission (paying 1% and 1%). He has more experience, but delivers less value. That’s why my clients are willing to pay me *double* what they would pay him.

    I’ve competed in a listing presentation with a company that sells apartment buildings for 2.5% total commission – and I have listed the buildings at a much higher commission – why? Because I establish, and deliver value – and drumroll – a fat bottom line for my clients. Isn’t that what it’s worth ??

    BenjaminBach.com

  17. Ines

    March 21, 2008 at 2:54 pm

    John – and unfortunately for them, a lot of those that fit into the15% category that buy strictly on price, end up making bad deals. And by price it can mean not only commission but listing for much higher than they should. I also wish them well and move on. Without a doubt, it is always about the customer and their choices.

    Norm – talk is cheap – actions speak louder than words…..so let’s get to work! 🙂

  18. Rick Emens (R)

    March 21, 2008 at 3:03 pm

    I was with a very high end CB office (average sale price $1.5m) for over 12 years and left to open a full service flat fee discount brokerage and I’ve never been happier. The average amount of time an agent spends on a listing is 40-50 hours and to be paid a fat 6 figure commission for one sale is absurd. Since I opened my office three and a half years ago I’ve sold properties ranging in price from $140k to $2.2m and in the process saved my sellers nearly $2m in commissions they would have paid for the exact same service as they received from my office. What that equates to is some very happy sellers and a lot of referral business. If someone works the super high end market they should be paid accordingly, but given the current market conditions, paying what most agents feel they’re “worth” could very well end putting many sellers in a short sale situation.

  19. Ines

    March 21, 2008 at 3:04 pm

    Benjamin – the whole experience issue is a touchy one. Because the real estate industry does not rely on education (we all agree that the 1 week course is a joke). So then most of the 20+ year experienced agents will get on your back about knowing more because of all the transactions that they have under their belt.

    I do think experience counts for a lot – but also what your background is. There are unbelievable sales people in the industry, there are others with legal backgrounds, construction and architecture(yours truly) – or people with just great business sense. Once you prove your worth, I can agree that the experience is secondary, but you have to admit that it is worth something.

  20. Benjamin Bach

    March 21, 2008 at 3:18 pm

    Some people have 1 year of experience repeated 15 times. You can’t tell just because of a number. I’ve had 25 year veterans do ridicolous things on the other side of a transaction.

  21. Ines

    March 21, 2008 at 3:56 pm

    Benjamin – 🙂 been there!

  22. Jonathan Dalton

    March 21, 2008 at 5:01 pm

    Experience doesn’t matter if the person has been making the same mistakes for years …

  23. John Lauber

    March 21, 2008 at 5:35 pm

    Exactly Jonathan. I see some “experienced” agents (including my original “mentor”) making mistakes, IMO. Like Benjamin said, where did your experience come from. It doesn’t necessarily need to be FROM real estate. Whatever industry it’s from, may translate well to the job at hand. I was in IT before real estate. Every sale is another consulting project, IMO. Every situation is different and I need to help find the solution, keeping the customers objective in mind.

  24. monika

    March 21, 2008 at 7:07 pm

    It’s an age old problem. Most agents don’t know how to establish and demonstrate value.

    To Rick’s comment, I spend way more than 40-50 hours on my listings and I have never seen a 6 % list side commission…ever. Maybe I work in the wrong area but it is a lot less here. That aside I do believe we must as agents be able to communicate our value and be able to break it down as Brian Brady suggested… dollarization it. We won’t ever get people to understand unless we’re able to do so.
    Like you Ines…I won’t work with people who don’t see the value I bring. So far I have not had a problem breaking it down for them and enjoy good working relationships with my clients. NH is a fiduciary state and I take my responsibilities very seriously. Most of my business is repeat and referrals … that in itself is a testimonial.
    Our industry has a long way to go but there are many well trained, ethical good REALTORS out there.

  25. Bob

    March 21, 2008 at 7:20 pm

    Rick proves my point that price is not an indicator of quality service, professionalism or integrity. 12 years selling high end properties for as much as anyone is charging and now selling the same properties (and probably with many of the same clients), but at lower price to the client. Is the client getting less? Doubtful. is Rick less ethical? Doubt that too. Did Rick’s skills diminish? No.

    Bottom line is that if you have to defend your commission, you have already lost.

  26. Ines

    March 21, 2008 at 7:51 pm

    Rick – that’s exactly what I’m talking about – you made a conscious decision to change your business model and give the consumer a choice. Those customers that knew you and your worth would be happy to pay for your discount model unless of course, they want the big Coldwell Banker name behind them……which a lot of people do value.

    Jonathan – I know plenty of old timers that keep making those same mistakes over and over and their excuse is “can’t teach an old dog new tricks”….could be lame.

    Moni – when you have been in business as many years as you and Jay, it makes sense that you could break down your costs. I can tell you that it will be a nice challenge for Rick and I to do that because our market varies so much. We have listings from $124,000 to $4.2 million and their marketing is totally different as well as the services we include. I just did floor plan renderings for a historic house and staged an older 30’s…..maybe it’s time I break it down.

    Bob – interestingly enough, I do believe that those high paying customers that were happy with Rick’s performance would have stuck right by him no matter what he charged because they saw the value he brought to the table.

  27. Larry Yatkowsky

    March 21, 2008 at 8:23 pm

    What’s strange about all this topic is that the after all my time in this great business the circle just keeps on going round and round………

    Maybe it’s just me.

  28. monika

    March 21, 2008 at 8:30 pm

    Yes ines try breaking it down. you’d probably be shocked as to how fast the hours add up.

  29. Jonathan Dalton

    March 21, 2008 at 8:34 pm

    I think Ines and others are on the right track.

    Either consumers will see your value or they won’t. There are enough who do that you can and ought to dedicate your time and energy with them. As I wrote on my own blog a week or so back, I’m not just an extension of my lockbox. If all you need is someone with a SUPRA key, there are hundreds of other agents you can call.

    At least a couple of them might actually pick up their phone at whatever other job they’re holding.

  30. Ines

    March 21, 2008 at 9:02 pm

    Larry – the ironies of business! the best part of it is that those that do well in real estate are the ones that LOVE what they do and it shows………it’s not you.

    Moni – it’s a challenge…..I’ll take it on

    Jonathan – absolutely – just the thought of so many agents out there that don’t pick up their phones is absurd. We don’t do lock-boxes here, but I can see where you are coming from. Before the consumer can see the value, you need to find it yourself – look at Rick above, thought he was charging too much and changed his model successfully.

    We are only worth what we believe we are worth.

  31. Missy Caulk

    March 21, 2008 at 10:14 pm

    Ines, I don’t like defending my commission and really have rarely had too. The debate on AR is wild. I feel sorry for Kim, glad I didn’t post on it. I don’t like attacks of people, it is petty. Nothing wrong with a good honest discussion with consumers but not in an attacking, deragatoy way. The internet has changed the way consumers perceive the value of what we do, after all ………the listings are everywhere. Many feel they don’t need us.
    Fortunately for us, we must define our value in the eyes of the consumer. I think most of the people, ( not all ) commenting are upset about the housing market in general and it is a way to vent. We must be diligent in our quest to inform the consumers, why and we do what we do that brings value to the table.
    If they want to do it on there own or MLS only they have that option available to them.

  32. Florida Waterfront Real Estate

    March 22, 2008 at 6:20 am

    Providing a quality service is what one should strive to do and what consumers want any thing is less is that less. So when shopping for a real estate agent this is what the consumer is trying to find the agent that appears to be of the same mind. People go to real estate agents because they don’t want to do it themselves and value there service and a fee is expected.

  33. Ines

    March 22, 2008 at 8:26 am

    Missy – there are very few FSBO’s in my area right now, because they have realized that they need all the exposure they can get and paying $300-$400 to place their house on the MLS is not enough. My commission is never questioned, on the contrary, people are willing to pay more to get their house sold quicker.
    As for what’s going on over there – I didn’t like the comment about other Realtors not stepping in to help and answer the questions being asked. It’s her blog and she has not asked for help….I guess they don’t understand blogging etiquette either. The offensive comments should be removed without a doubt.
    There are some great questions and comments there that I would love to address…….but it’s not up to me.

  34. Toronto realtor

    March 22, 2008 at 8:30 am

    Working as one of the real estate agents, I think that ater these years in the business I bring a certain credibility to this profession. The author of this article has point, I don’t like seeing real estate agents as dishonest, mistrusted and useles in this era of the free information. I’m not saying this only because I made my living on being the realtor, but this profession made very important rules and practices that helps the real estate business. Sure, there are lots creative, highly capable players on the market out there without any help of professional, but real estate agent is still not an “antique”.

  35. Bob

    March 22, 2008 at 9:02 am

    I have been an agent before homes were ever on the Internet and consumer sentiment about real estate agents has not changed. We still rank pretty much in the same area as the used car salesman.

    What has changed is the consumers ability to be heard. HP and sites like those are AR bloggers worst nightmare because so many agents write in a condescending manner about the consumer and those comments will see the light of day.

    One of the biggest takeaways from that discussion is that you need to be willing to have whatever you write used against you, therefor you better be willing to own it in public.

  36. Bill Lublin

    March 22, 2008 at 9:23 am

    Ines: It is wonderful to see some articulation and reason to the conversation.
    I have never had a problem explaining my fees to my clients (I don;t justify my commission – I justify to myself why I order a hot fudge brownie for desert) – And I agree that experience is not by itself an indication of skill, knowledge or expertise, (some people can take a week to make a three minute egg) but experiecne can be helpful and designations should be indicative of some level of even theoreticalknowledge. That being said, we do need to explain to the consumer the how we are compensated and what of a commission is being divided, (and why) and what portion of the fee goes to the overhead of the company, and how much goes to the person who secures the buyer becuase they are not familiar with the somewhat complex compensation arrangements that we make between our companies and our colleagues. The really sad part about that whole discussion is not only how little the uninformed consumer thinks we know , but how much they don’t know about what the good competent informed agent with a good well organized company behind them actually does.

    As far as flat fee or alternative business models – I have my own opinions, and I demonstrate them through the company I operate, but I believe that just listing a property on the MLS is no more effective than just sticking a sign in an electronic lawn – Even that business model relies upon the real estate community to sell the property – they (the consumer and that business model) just seem to be of the opinion that there is little value in the efforts of the listing or marketing agents and their companies. And limited service or flat fee, or discount brokers are entitled to charge whatever they want for whatever they do. After all, who knows better then they do what their time and efforts are worth? I just don’t want the consumer to think that we provide the same services when if fact, we do not.

    I only wish that the consumer didn’t view the industry and its members in such a monolithic manner so that the differences between all of these business models could be more readily discerned by the consumer. I just wouldn’t want a consumer to feel that the only difference between these companies was price when there are substantial differences in the type of work and the potential results that they might receive.

    Bit thanks again for making your points so well.

  37. Ines

    March 22, 2008 at 9:56 am

    Bob – it really is surprising that the questions have not been addressed and it’s a real shame. I would be responding to every single objection because there are really valuable points being made. What better place than to clear up the bad perception? There are plenty of people there that will not change their minds and that’s fine, but maybe they could get more information to base their opinions on.

    Bill – the whole point in that conversation is that the consumer really doesn’t know what our business entails and no one is explaining. Talk about an opportunity to explain the process, the details and the obstacles that we encounter in every transaction.

    Now about the other models – it gets a bit more difficult for the consumer to decide what services to pick and it also has to do with establishing rapport with the agent (if you choose to use one). I can tell you that even within full-service companies, the value you will offer as opposed to the one I will offer will be totally different and that’s the real beauty of blogging and explaining your value.

    The “monolithic manner” in which the consumer views the industry also applies to the “monolithic manner” in which they talk about consumer needs – THAT’s the part that intrigues me the most. For someone to say….”your full-service, full-commission model needs to change now because the consumer doesn’t need you” is ironic because there are plenty of consumers that prefer the “full-service, full-commission” model because not only do they not have the time to handle it themselves, they don’t have the interest and are happy to pay for the commission. And THOSE, my friend, are the customers I work with.

    ….Thank you for taking the time to comment and contribute to the discussion.

  38. Michael Zebold

    March 22, 2008 at 10:04 am

    I am not a Real Estate agent but a Mortgage Broker and there is always someone trying to cut my commissions or tries to justify the fees I charge. From what I learned in the business you are only worth what you ask for.

  39. Mariana Wagner

    March 22, 2008 at 11:15 am

    Ultimately, this is a private conversation between me and my Seller. It really is not the business of anyone else. I believe the financial model behind my business is sound, and my Sellers agree.

    re: HP and the AR post… Why should I try to “justify” anything to someone who will never use my services, nor any other RE Agent services for that matter? Makes no sense. I might as well try to convince a Vegan to go deer hunting. Waste of time. (I would rather watch Growing Pains reruns.)

    However, in support of that AR post, I did reply …

  40. Mariana Wagner

    March 22, 2008 at 11:16 am

    (Since the quote didn’t show up…)

    “First… I am paid for selling a home for a seller. If the home does not sell, I do not get paid. I get paid for the acceptable outcome – not for the “specific things I do” to get it sold. (I just happen to know the right things to do – and NOT do – to get it sold.) If THAT were the case, then I would bill my Sellers by the hour whether or not their house sold, which is a HORRIBLE business model IMHO … and of NO good use to the Seller.

    What I charge is at MY discretion. I am a small businees owner and it is MY decision how much I sell MY services/goods for.

    And when all is said and done, commissions are ALWAYS negotiable.”

  41. Ines

    March 22, 2008 at 11:28 am

    Mariana – your responses at AR were great and really give a clear picture. I totally agree with you – a lot of those people want us to justify our pay their way as absurd as that may be. And the whole scenario of getting paid on a performance basis……that’s exactly what we do. The house doesn’t sell…..we don’t get paid, no matter the hours and the marketing dollars and effort that has gone into the property.

    I’m still staying away…..but it’s not easy.

  42. Wade Young

    March 22, 2008 at 8:39 pm

    Mariana– Good article, and I will throw in my experience for reference. I bought a house, and at the time, I didn’t think much of realtors. I found them to be worthless, not worth the commissions they received. My wife did most of the house hunting, as is usual with most married couples. Unfortunately, she couldn’t find anything that fit her tastes, and we HAD to have a house. My wife sent an email detailing the current house that we lived in, and she wanted something similar. We arrived by plane, and the realtor showed my wife the print outs of what she had to for us to look at. The house on the top of the stack — well, it was the realtor’s best — and my wife immediately said that she refused to even look at it. The reason my wife didn’t want to look at it? Well, the garage was attached, and that is something that my wife just wouldn’t accept. Garages belong in the back, you know … circa 1929 … garages should know their place. How dare they be up with the rest of the house! Also, my wife was only interested in 1932 or before. The only thing the realtor had to show us was a brand new house with the garage in the front, but she begged my wife to at least look at the house, promising she would be interested. My wife relented, and well … we bought the house. We also wanted to look at houses in the $200 range, and the house we bought was $405. That’s a balls out real estate lady. The point is that the house was not our dream house, but she knew we would be happy there. The houses were new houses made (sort of) to look like old houses. The neighborhood was great. My son was born there. I am happy to have lived there, but I am also happy to have moved on (in a high rise now). The point is — that real estate agent was worth every single dollar. She knew my wife. She knew what my wife was willing to accept. She knew the area. She arm twisted my wife. She delivered. My wife had scoped everything online, and found nada. She earned her money. I have since changed my opinion on real estate agents. I could never have found that house online, and we spent 4 happy years there. There really are some real estate agents who know an area, and you can’t get what is in their head online, in pictures or descriptions. The good agents are worth full commission and should not compromise.

  43. Ann Cummings

    March 23, 2008 at 5:30 am

    Wade Young wrote: “There really are some real estate agents who know an area, and you can’t get what is in their head online, in pictures or descriptions. The good agents are worth full commission and should not compromise.”

    Wade, that speaks volumes to those of us who bring to the table exactly what that agent did who found you that house that you would never have considered otherwise. Hooray for you and double hooray for her!

    My professional fees are between me and my clients, and I never DEFEND my fees. I DEMONSTRATE my skills, my experience and expertise, my abilities and everything else I bring to the table for each of my clients. Most of my business is repeat clients and word-of-mouth referrals, and that speaks volumes as to my abilities.

    For all we are and all we do and all we bring to the table, I see absolutely no way and no reason to ‘dollarize’ that. How do you ‘dollarize’ all the education and networking we do to stay on top of our game, to stay ahead of the majority of agents in our given areas? Sure, you can ‘dollarize’ some marketing and advertising, and you can ‘dollarize’ the physical hours put into each client, but what about what’s in our heads, as Wade put it? What about the mental and emotional hours put into clients? No way on earth to ‘dollarize’ that!

    And as for trying to answer most of those who left comments on that post on AR, I firmly believe that it wouldn’t matter one iota to those people what any of us would write there as their sole purpose is to bash each of us and rip our profession apart. That’s very clear when you look at the website they all are part of. My time and my energies are better spent with those who really do appreciate what I stand for, and it’s also better spent learning even more ways to bring even more value to my clients by reading and networking online.

    Healthy realistic discussions are great and are also educational – nasty ones have nothing to be gained from them and are total time-wasters.

  44. Blue Ridge Cabin Rentals

    March 23, 2008 at 5:53 am

    People use a realtor for a service and are charged for the service. The breakdown of what all is included is not necessary it is understood.

  45. monika

    March 23, 2008 at 7:41 am

    I agree nearly one hundred percent with Ann except the dollarization part.

    I think especially if you are a new agent you must learn to do it. Is it line by line? No. But in some basic categories you can and should know your value point. I know that for me, doing a CMA may take an average of 4 hours and that is before I even do the presentation and get the listing. I also know what my out of pocket expense is to do that CMA.

    I know what my experience is worth. So what would I charge to do CMA…is it as detailed as an appraisal? Yes and do I charge more? Yes I do. Why?… because of my knowledge of the area, my working knowledge of what buyers are looking for. My years and years of experience… all add up. Can I break my experience down to a dollar value per hour…probably not. My resume speaks for itself.

    Same thing when I’m a buyer agent. I know what I charge and what I do and can clearly articulate to the buyer why they should hire me.

    Like Ann, most of my business is repeat and referrals and that says a lot. But new agents in my opinion need to be able to dollarize what they do. ..the hard part for them is the experience part. They need to be able to say here is what I do and here is why it benefits you…the “why it benefits you” is the value piece the consumer cares about.

    How much am I worth and why that benefits my clients… I need to demonstrate that.
    I would never push myself onto someone who does not value my expertise …saying “next” works for me.
    I’m far from rich and I remember once years ago I tracked a listing and in the end I made 16 cents per/hour. Yuck! I said never again. There is so much of what we do that can’t be wrapped in a pretty package…we just do it and know how to do it.

  46. Ines

    March 23, 2008 at 8:08 am

    Wade- THAT’s what I’m talking about! When you move into an area you know nothing about, it’s crucial to work w/ an agent that knows the area, the other agents, the inventory, and understands your needs. I love to hear good success stories and congratulate you for recognizing the effort.

    Ann- there are some people out there that will never hire a Realtor (and that’s ok). I compare those people to the ones that would never hire an architect and let their contractor do the designing. When all is done and the project is horrible, they realize that they shouldn’t have cut such an important step….but it was still their CHOICE

    Blue ridge rentals- I think the whole argument started about some transactions taking a lot less time than others and how you can justify the difference in pay.

    Moni- I think you have an extremely interesting concept- and like I said before, if only as an exercise, I will take the challenge.

  47. Sue

    April 19, 2008 at 3:56 pm

    I don’t cut my commission. This is a market in which we are definitely earning our commission. I usually defer discussing commission until I am done with my listing presentation. By time I’m done there is little argument. They want all the services that I offer to highlight their home and bring in the best buyer.

  48. CMR

    August 25, 2008 at 8:05 pm

    Background:
    I am in executive search;
    selling for the first time in years.

    You are correct: I’ve already heard several times agents
    will cut their commissions, what I couldn’t figure out was why?
    What’s the incentive?

    I would like to understand the communication gap, however,
    because it’s huge, and hurts everyone in the process:
    ? is it that sellers don’t want to pay the 6%, period?
    ? ?a current survey by Consumer Reports
    states a high number of agents are adjusting commission, without an impact on service.

    In my business, recession requires vast amts. of time spent to educate people,
    and “with so many candidates to choose from”, (part of the same perception),
    why shouldn’t we cut the commission?”

    When I sign on with an Agent I realize the expertise is there.
    If I network and bring in a buyer, however, am I entitled to the other 3%?
    Now that would be fun! More importantly, not
    to cheat my Agent, but to acknowledge my time bringing in a buyer…if
    that were to happen!

    There may be creative ideas that are worth consideration
    on occasion. I want repeat business too, but I’m looking for possibilities here, and always respect a professional. I sincerely look forward to comments, thanks.

    https://www.consumerreports.org/cro/money/real-estate,

  49. ines

    August 26, 2008 at 10:28 am

    CMR – you bring excellent points to this discussion and I thank you for leaving a comment. As you well know, every Realtor will treat their business differently and will have good explanations why they can or cannot cut their commission (keep in mind that a lot of the big brokerages don’t allow for agents to cut them, so a lot of times it is not even up to them).

    The reality of today’s real estate market is that we, as agents, need to be flexible and need to adapt to change. As a seller, you need to make sure that your property is exposed as much as possible and that usually means money out of the agent’s pocket which they will not get back until the property closes.

    You also need to be aware that finding the buyer is probably the easiest part of selling a home – the actual transaction management – making sure that buyer follows deadlines (inspections, loan commitments, etc) is of utmost importance. And keeping a deal alive in today’s market may be challenging.

    I was having this conversation with a colleague in Miami yesterday where we discussed how sometimes dealing with a cooperating agent that is inefficient and inept is more work than doing both sides of the transaction alone.

    You, as a seller have every right to pick was services you are looking for – but make sure you compare apples to apples.

  50. Daytona Beach Real Estate

    November 7, 2008 at 2:18 pm

    I couldn’t agree more! Real estate right now is definitely a hurting market, but it doesn’t mean that the services quality real estate agents provide are not worth commission or that just because times are hard, the work we do is any less valuable. Florida real estate is hurting, but there are still markets where real estate agents can flourish. High end luxury market, etc. Good luck to you!

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Opinion Editorials

Why robots freak us out, and what it means for the future of AI

(OPINION / EDITORIAL) Robots and humans have a long way to go before the social divide disappears, but research is giving us insight on how to cross the uncanny valley.

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Close of R2D2 toy, an example of robots that we root for, but why?

We hate robots. Ok, wait, back up. We at least think they are more evil than good. Try it yourself – “are robots” in Google nets you evil before good. Megatron has higher SEO than Optimus Prime, and it’s not just because he’s so much cooler. It cuz he evil, cuz. It do be like that.

It’s not even a compliment to call someone robotic; society connotes this to emotionless preprogrammed shells of hideous nothing, empty clankbags that walk and talk and not much else. So, me at a party. Or if you’re a nerd, you’re a robot. (Me at a party once again.)

Let’s start by assuming robots as human-like bipedal machines that are designed with some amount of artificial intelligence, generally designed to fulfill a job to free up humanity from drudgery. All sounds good so far. So why do they creep us out?

There’s a litany of reasons why, best summed up with the concept of the uncanny valley, first coined by roboticist Masahiro Mori (Wow he’s still alive! The robots have not yet won) in 1970. Essentially, we know what a human is and how it looks and behaves against the greater backdrop of life and physics. When this is translated to a synthetic being, we are ok with making a robot look and act like us to a point, where we then notice all the irregularities and differences.

Most of these are minor – unnaturally smooth or rigid movements, light not scattering properly on a surface, eyes that don’t sync up quite right when they blink, and several other tiny details. Lots of theories take over at this point about why this creeps us out. But a blanket way to think about it is that our expectation doesn’t match what we are seeing; the reality we’re presented with is off just enough and this makes us uncomfortable .

Ever stream a show and the audio is a half second off? Makes you really annoyed. Magnify that feeling by a thousand and you’re smack in the middle of the uncanny valley. It’s that unnerving. One possible term for this is abjection, which is what happens the moment before we begin to fear something. Our minds – sensing incompatibility with robots – know this is something else, something other , and faced with no way to categorize this, we crash.

This is why they make good villains in movies – something we don’t understand and given free will and autonomy, potentially imbued with the bias of a creator or capable of forming terrifying conclusions all on its own (humans are a virus). But they also make good heroes, especially if they are cute or funny. Who doesn’t love C3PO? That surprise that they are good delights us. Build in enough appeal to a robot, and we root for them and feel empathy when they are faced with hardships. Do robots dream of electric sheep? Do robots have binary souls? Bits and zeros and ones?

Professor Jaime Banks (Texas Tech University’s College of Media & Communication) spends a lot of time thinking about how we perceive robots. It’s a complex and multifaceted topic that covers anthropomorphism, artificial intelligence, robot roles within society, trust, inherently measuring virtue versus evil, preconceived notions from entertainment, and numerous topics that cover human-robot interactions.

The world is approaching a future where robots may become commonplace; there are already robot bears in Japan working in the healthcare field. Dressing them up with cute faces and smiles may help, but one jerky movement later and we’ve dropped all suspension.

At some point, we have to make peace with the idea that they will be all over the place. Skynet, GLaDOS in Portal, the trope of your evil twin being a robot that your significant will have to shoot in the middle of your fight, that episode of Futurama where everything was a robot and they rose up against their human masters with wargod washing machines and killer greeting cards, the other Futurama episode where they go to a planet full of human hating murderous robots… We’ve all got some good reasons to fear robots and their coded minds.

But as technology advances, it makes sense to have robots take over menial tasks, perform duties for the needy and sick, and otherwise benefit humanity at large. And so the question we face is how to build that relationship now to help us in the future.

There’s a fine line between making them too humanlike versus too mechanical. Pixar solved the issue of unnerving humanoids in their movies by designing them stylistically – we know they are human and accept that the figure would look odd in real life. We can do the same with robots – enough familiarity to develop an appeal, but not enough to erase the divide between humanity and robot. It may just be a question of time and new generations growing up with robots becoming fixtures of everyday life. I’m down for cyborgs too.

Fearing them might not even be bad, as Banks points out: “…a certain amount of fear can be a useful thing. Fear can make us think critically and carefully and be thoughtful about our interactions, and that would likely help us productively engage a world where robots are key players.”

Also, check out Robot Carnival if you get the chance – specifically the Presence episode of the anthology.

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Opinion Editorials

BIPOC Gen Zers are using TikTok to create cultural awareness

(OPINION / EDITORIAL) TikTok has become a platform for younger generations to share their cultures, paving the way for a more inclusive society. And they’re doing it one 15 second video at a time.

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Black person's hands holding a phone loading TikTok above a wooden table.

When scrolling on TikTok, you might come across this question posed by a BIPOC creator (Black, Indigenous, or Person of Color): “How old were you when you realized you weren’t ugly, you just lived in a predominantly White space?”

Growing up in predominantly White spaces myself with immigrant parents from the Middle East, I had a warped perspective of beauty. Straight light hair, fair skin, Western features, a stick-thin figure – I internalized my physical otherness as lack.

It wasn’t until I moved to a diverse city for college that I realized this. I saw others speaking different languages, eating ethnic foods and dressing however they wanted without fear of losing their proximity to Whiteness. Exposure to others who didn’t fit “the mold” was transformative for me.

As someone in their mid-twenties, I came of age with social media like Tumblr, Facebook and, ultimately, Instagram. But I’d be lying to you if I said that I didn’t wish TikTok was around when I was a kid.

For reference, most TikTok users are between 16-24, meaning that many are still in high school. While content on TikTok is really all over the place and specifically catered to your preferences (you can feel the algorithums at work as your scroll), one facet that I find integral to the app’s essence is Gen Z proudly showcasing their cultures – aka #culturecheck.

Besides the countless ethnic food tutorials (some of my favorite content on the app!), fashion has become a main way for BIPOC or immigrant TikTokers to fully express their identities and share their culture with other users on the app, regardless of physical location.

Take the #FashionEdit challenge, where creators lip sync to a mash-up of Amine’s “Caroline” and “I Just Did a Bad Thing” by Bill Wurtz as they transform from their everyday Western clothes into that of their respective culture.

In her famous video, Milan Mathew – the creator attributed to popularizing this trend – sits down in a chair. She edits the clip in such a way that as she sits, her original outfit switches to a baby-pink lehenga and she becomes adorned with traditional Indian jewelry. Denise Osei does the same, switching into tradition Ghanaian dress. If you can think of a culture or ethnicity, chances are they are represented in this TikTok trend.

This past Indigenous People’s Day, James Jones’ videos went viral across various social media platforms, as he transformed into his traditional garments and performed tribal dances.

Though the cultures and respective attire they showcase are unique in each video, the energy is all the same: proud and beautiful. Showing off what your culture wears has become a way to gain clout on the app and inspire others to do the same.

The beautiful thing about cultural/ethnic TikTok is that it isn’t just Mexicans cheering for other Mexicans, or Arabs cheering for other Arabs – the app sustains a general solidarity across racial and ethnic lines while cultivating an appreciation of world cultures.

But just how deep does that appreciation go? Some users think (and I agree) that “liking” a video of an attractive creator in traditional dress is hardly a radical move in dismantling notions of Western beauty.

While TikTok trends might not solve these issues entirely, it’s important to note that they are moving things in the right directions – I certainly never saw anything like this when I was growing up.

For whatever reason, Millennials, Gen X and Boomers seem to have a lot of shade to throw at Gen Z. But one thing is for certain – this young generation is paving the way for a more inclusive, more respectful society, which is something we should all get behind. And they’re doing it one 15 second video at a time.

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Opinion Editorials

This website is like Pinterest for WFH desk setups

(OPINION / EDITORIAL) If you’ve been working from home at the same, unchanged desk setup, it may be time for an upgrade. My Desk Tour has the inspiration you need.

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Man browsing desk setups on My Desk Tour

Whether you’re sitting, standing, or reclining your way through the pandemic, you’re most likely doing it from home these days. You’re also probably contending with an uninspired desk configuration hastily cobbled together in March, which—while understandable—might be bringing you down. Fortunately, there’s an easy, personable solution to spark your creativity: My Desk Tour.

My Desk Tour is a small website started by Jonathan Cai. On this site, you will find pictures of unique and highly customized desk setups; these desk configurations range from being optimized for gamers to coders to audiophiles, so there’s arguably something for everyone—even if you’re just swinging by to drool for a bit.

Cai also implements a feature in which site users can tag products seen in desk photos with direct links to Amazon so you don’t have to poke around the Internet for an hour in search of an obscure mouse pad. This is something Cai initially encountered on Reddit and, after receiving guidance from various subreddits on the issue of which mouse to purchase, he found the inspiration to create My Desk Tour.

The service itself is pretty light—the landing page consists of a few desk setup photos and a rotating carousel of featured configurations—but it has great potential to grow into a desk-focused social experience of sorts.

It’s also a great place to drop in on if you’re missing the extra level of adoration for your desk space that a truly great setup invokes. Since most people who have been working from home since the spring didn’t receive a ton of advance notice, it’s reasonable to assume that the majority of folks have resigned themselves to a boring or inefficient desk configuration. With a bit of inspiration from My Desk Tour, that can change overnight.

Of course, some of the desk options featured on the site are a bit over the top. One configuration boasts dual ultra-wide monitors stacked atop each other, and another shows off a monitor flanked by additional vertical monitors—presumably for the sake of coding. If you’re scrambling to stay employed, such a setup might be egregious.

If you’re just looking for a new way to orient your workspace for the next few months, though, My Desk Tour is worth a visit.

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