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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (6832)	11/14/2002 11:39:49 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 306849

However, real estate agents would then expect to be treated like other people who charge this way obviously, they would have to be paid for ALL their time. this is basically not going to happen, so a commission structure will continue to prevail. however, the 6% structure could definitely be downsized in communities where housing prices have skyrocketed. it seems to me that RE agents will be either grossly overpaid (if they sell a house quickly, in which case their effective hourly rate may be in the four figures), or grossly underpaid (if it takes a long time to sell a house, or if the house is taken off the market, in which case the hourly rate is negative thanks to the realtor's costs). of course, if you talk to an RE agent that you just paid a $12,000 commission for their ten hours of work when they sell your house in a week, they will say they were "worth it" because of how fast they sold your house. but by the same token, when an agent complains that they didn't get paid after investing many tens or perhaps hundreds of hours in a client that fell through, one would have to say that the agent's paycheck of zero dollars was likewise "worth it". the individual transactions are thus misleading, especially to homeowners and agents who can't "see beyond the valley". so it is the kind of job that will hopefully average out to a fair wage, even though the individual transactions could deviate significantly from "fair" in either direction.

To: Tradelite who wrote (6832)	11/14/2002 8:44:06 PM
From: Moominoid	Read Replies (2) \| Respond to of 306849

They would probably also then be able to work the same hours as other professionals--no night work (except at overtime pay, maybe), no weekends---no more of this 24/7 stuff that they find themselves doing when working on transactions. Clients would generally then have to get better organized themselves and stop messing around, dragging their feet or doing certain other things that would run up the hourly bill. Most lawyers seem to work very long hours. The advantage of hourly billing or a daily retainer would be that the client would drop to the correct market price pretty fast. Hourly/daily billing encourages the professional in any field to waste time of course. Lawyers also sometimes use success based fees in the US. In the UK you pay if you lose and the other side pays if you win... Different models have different incentives of course. I'm just curious why one or the other. Why do waiters get tips but shop assistants don't. Why don't waiters or anyone get serious tips in Australia David