I am the founder of Forsalebyweb.com. Change in the industry has been met with resistance. Yet, cumulatively, the current mortgage market, slow sales, hybrid commission models and rise in web-based companies will create dynamic changes as the industry
re-invents itself.
The next few years will bring new ideas and innovation to an industry where all that is needed is consumer acceptance.
In theory it makes sense ..the more agents get paid the harder they work. This is the traditional full service/full commission theory. But in reality, after 12-15 days agents get lazy/tired because they work on contingency. They NEED to focus on getting new listings. The only thing left in "full service" is waiting for sellers to discount price to align with buyers' expections. Everything else is unnecessary redundancy which has little/no effect on getting properties sold for the highest price. It just makes the agent look busy so as to support the idea of a full service. I am open to clarifications of my assumptions. Sol P. Sek Forsalebyweb.com, CEO/Founder Where You Name Your House Values!
Randy, Professional fees, admin fees, service charge fees, commissions, flat fee, low fee, whatever stigma you want to call is compensation offered for services provided by the agency. The problem we face is that there is no standard definition of full service. Additionally, full service from 10 years ago might no longer be effective in today's context. I see with traditional models ( this includes traditional fixed commission and traditional flat fee companies ) is that there's no incentives for performance. There's absolutely no standardization of quality of service. Case in point, with traditional "full service" there's really no incentives for agents to work hard/perform because the compensation is contingent on a successful sale. That's great! Problem is, after the initial excitement or upon the diminishing rate of buyers ( after 12-15 days ), many agents give up/become tired and move on to new listings. The only "full service" realized is when a sale actually takes place which is often by chance through mls or web. So the contignent fee/full service/traditional full commission has its inherent weakness. Similarly traditional flat fee companies on the other hand have no incentives to provide great service. They collect their fees and wait for buyers to come. Only upon buyers finding the property do the agency move on towards closing. So if full service implies getting a deal closed then I believe all models provide full service. My concern with both models is that neither is performance based. There's no incentives for the agent to maximize output after the initial excitement phase. Please advise if you see things differently. There are always exceptions to the assumption but I think we can agree that today's compensation models lack performance drivers. Sol P. Sek Forsalebyweb.com, CEO/Founder Where You Name Your House Values!
Steve, You are right on about the listing agent capacity to sell ONLY his listings to increase his own profit. Per the following statement: >>> 4% is more than 3% if you use the old math I learned. So selling your own listing nets more, even if the sell side is at 1%.>>>> Problem is we have something called fiducial representation which means the agent shows all the houses on the market that match what the customer wants. I don't think everyone else ignored this, only we were talking about "full service" representation, not selective service/listing representation.
