Hourly rate for land rep, why are we paying $$$

[oasis1frog]

Just have an offer on my house, the agent commission is over $15000. I shall be generous say the agent worked 20 hrs on this deal, it works out $850 per hour. The "reason/false pretend" is a good agent will make more than he/she will cost you. But the buyer will have a maximum price he is willing to pay, the agent can negotiate until his face turns blue but the top price is the top price, all he can do is to bring the offer closer to the top price. So why are we paying $$$load of money to a task that almost anyone can do ? How much you think is a fair hourly rate for land rep ?

 

[AUSPROP...]

you have worked out an hourly rater but the rep is a business not an employee. he carries all risk for the sale, cashflows it until it does settle and bears all overheads. Seriously how many agents out there do you think are grossing $1.6m p.a.?

As a side thought... would you prefer if the agent had laboured tirelessly for 6 months, put in hundreds of hours, stressed you out and delayed your sale plans and then achieved the same sale price?

 

[jaycee]

Just have an offer on my house, the agent commission is over $15000. I shall be generous say the agent worked 20 hrs on this deal, it works out $850 per hour. The "reason/false pretend" is a good agent will make more than he/she will cost you. But the buyer will have a maximum price he is willing to pay, the agent can negotiate until his face turns blue but the top price is the top price, all he can do is to bring the offer closer to the top price. So why are we paying $$$load of money to a task that almost anyone can do ? How much you think is a fair hourly rate for land rep ?

make more than he/she will cost you ? what does that mean ?

 

[Perp]

You don't pay an agent for their hours, you pay them for using their expertise, contacts, profile, and company backing to achieve a result.

I also think it's a myth that many buyers have a fixed top price in their mind, from which they won't budge. Every buyer should, but I bet they're actually in the minority.

If you feel that agents are such a waste of money, why didn't you sell privately instead?

 

[Perp]

make more than he/she will cost you ? what does that mean ?

I think oasis1frog is referring to a line that many people use, which is that if you use an agent and it costs you $15K, a good agent should get you at least $15K more in sales price, than you'd get via a private sale.

I don't use this argument because it's so theoretical, and unverifiable.

I just think that you need to get your property visible to the largest possible audience of buyers, and that necessitates being on realestate.com.au, which requires using a real estate agent. I also believe that selling real estate is a skill that most amateurs under-appreciate.

 

[Propertunity]

So why are we paying $$$load of money to a task that almost anyone can do ?

I think you might have answered your own question. If almost everyone could do it - why aren't they then? As Ausprop said the agency this guy works for pays rent, window displays, wages, insurances etc.

How much you think is a fair hourly rate for land rep ?

They don't get paid by the hour - they get paid for a skillset as Ozperp says. For every buyer that buys the first house a REA shows them there will be a buyer that looks at literally dozens and dozens of houses and still does not buy.

Your complaint reminds me of the guy who went to the dentist to get a tooth filled because it was hurting. The dentist did his work and was done in 15 minutes. The patients was presented with a bill for $160.00
The patient was outraged. $160.00 for 15 minutes....thats $640.00 per hour I demand an itemised account!
The dentist said OK and quickly made out an invoice that stated:

Filling one tooth cavity $20.00
Knowing how $140.00
Total $160.00

 

[jaycee]

or the guy who goes to a specialist about a migraie he's been suffering for 20 years ?...

the specialist does a few simple physical checks on the guy and says "aha"
pulls out what looks like a black & decker drill .. goes through his drillbits and pulls out the 1/16th" drill bit. He then grabs the guys head, dterine sthe exact spot & drills a hole into his skull a certain depth.. le's go of thg guys head and the guy says "hey it stopped, after 20 hyears, it stopped !" Thanks the doctor and leaves amazed. Gets a bill for $995. He cant beleive it, for 15 minutes, that's nearly $4k per hour... He queries the bill. The doctor offers to itemise it

1. Drilling hole $45
2. Knowing hwere to drill and how far to drill $950

Suppose the guy could have just drilled it himself and it would have cost nothing !

 

[oasis1frog]

These are very lame excuses. Your taxi driver doesn't charge the hours he spent on knowing where to go, he charges you what's on the meter, your airline (pilot) doesn't charge you the hours he spent on learning to fly, the airline (pilot) charges you the distance of the journey, and this the same for many many other jobs.
If you can't beat them, join them. REA empire, here I come .......

 

[Player]

If you can't beat them, join them. REA empire, here I come .......

Make sure, however that you are mindful of the 80/20 principle.

It is likely that 20 % of the rea's are accomplishing 80 % of the result$ and fee$...........ensure you are in that 20 % or even higher in the commission chain, say top 5 %

 

[nonrecourse]

or the guy who goes to a specialist about a migraie he's been suffering for 20 years ?...

the specialist does a few simple physical checks on the guy and says "aha"
pulls out what looks like a black & decker drill .. goes through his drillbits and pulls out the 1/16th" drill bit. He then grabs the guys head, dterine sthe exact spot & drills a hole into his skull a certain depth.. le's go of thg guys head and the guy says "hey it stopped, after 20 hyears, it stopped !" Thanks the doctor and leaves amazed. Gets a bill for $995. He cant beleive it, for 15 minutes, that's nearly $4k per hour... He queries the bill. The doctor offers to itemise it

1. Drilling hole $45
2. Knowing hwere to drill and how far to drill $950

Suppose the guy could have just drilled it himself and it would have cost nothing !

Jaycee;
Kudos for that post brilliant.

 

[Rockstar]

..........and then there was the old artist in his seventies who was commissioned to paint his latest work for 20k which he knocked over within a few days.

The client was concerned that he had not spent enough time on the painting. After being confronted on how many hours it had taken - the old man replied "seventy five years"

 

[jaycee]

These are very lame excuses. Your taxi driver doesn't charge the hours he spent on knowing where to go, he charges you what's on the meter, your airline (pilot) doesn't charge you the hours he spent on learning to fly, the airline (pilot) charges you the distance of the journey, and this the same for many many other jobs.
If you can't beat them, join them. REA empire, here I come .......

That's because we are all undercover REA's and don't want you to blow the insider information that this is the only industry left in whch the public are totally scammed and we actually do no work at all - keep it down... otherwise when you become an agent there won't be any work for you.

I'm not quite sure, but I think I have heard that you aren;t forced mto use an agent if you don't want to.... better keep that quiet too

 

[Dazz]

I just think that you need to get your property visible to the largest possible audience of buyers

I'd have to politely disagree with you there Tracey.


I've had numerous REA's try that one with me as the Vendor, but I found it wasn't true. I wasn't looking for 400 couples traipsing thru the joint having a sticky or gathering comparables or just popping in for a squizz or the neighbours who always wanted to go thru the joint.


I was looking for that rare individual who was serious about purchasing my place and called me up for a private appoitnment to see thru the place. It's the opposite of an auction. The Vendor starts high as possible and slowly creeps down until he finds his highest buyer. Trolling the internet for all and sundry IMO isn't the smartest technique for finding that rare individual who really wants the title deed you are selling.


As for oasis1frog, I'm with you buddy. You've been hosed IMO to the tune of 15K. That's alot of after tax cash. $ 300 p.w., every week for a year you've just handed them. That's not small.


I like the fact that RE can still be transacted the good old fashion way. I haven't sold anything for over 7 years now, but if I ever do again, I'll be doing it myself, and the only form of advertising will be via a sign on the front of the block and a small newspaper ad where the Buyer will be asked to submit their top offer to a PO Box #. No internet, no agent, no SMS alert, none of that.

Why - cos of two reasons - 1. I won't be forced to sell and will not unless I receive an offer with conditions that suit me, and 2. Nothing is ever sold until the Vendor puts his squiggly on paper.....everything prior to that, that the REA does is preliminary gumpf IMO.

 

[JIT]

Interestingly, in all of the 5 properties I've been involved in purchasing in the last 4 years the vendor's real estate agent has ended up working on my behalf to negotiate a deal on price/terms to my satisfaction...and the vendor has always paid the agent for this service to me .

It's been like having a buyer's agent working for me for free!

I have very little faith in real estate agents, or their counterparts...buyer's agents (bigger purchase price = bigger commission???!!!...unless they are fee-for-service...).

Neil Jenman wrote a great book called ''Don't Sign Anything" on real estate agents, well worth a read before you buy/sell anything.

I'm also waiting for someone to write "Confessions of a Buyer's Agent", would be an interesting read.

And I'm not sure you can compare a real estate agent to a dentist, pilot...or even a taxi driver for that matter.

It only takes a couple of weeks and they call themselves ''professional'', a month later they are like ''senior consultant''!

 

[Rolf Latham]

I will bite

The reality is that while that person may have worked 20 hrs on THAT deal, how many hours did they work on that didnt bring any bacon, let alone all the other stuff thats been mentioned by others.

In comm only type situations, you only pay for a result.

Payment by the hour for nil result is likely worse outcome for all parties ?

I see the same idealogy in my own industry................the problem with it all is that the majority of mortgage brokers earn less than 40 k a year, I cant sese the REA industry being any different.

ta
rolf

 

[Kristine..]

G’Day

There are quite a few agents which charge a flat rate for the job eg www.realestatelawyers.com.au which charge $4,400 and www.gogecko.com.au which charge up to $5,950

Oasis, you have chosen to engage an Agent which charges on a commission basis, not a flat fee or an hourly rate, so why are you now complaining that they did what you engaged them to do at the rate you negotiated with them?

When we bought the house I am now sitting in, we had been looking for nearly twelve months and all the local agents had our details. A new sales rep at the local Barry Plant agency rang us on a Tuesday afternoon and told us about two new listings. I immediately drove past both houses, we inspected one at 6.30pm and put in an offer. By the Friday we had exchanged contracts.

For us, that was twelve months looking. For the Agency, that was twelve months worth of keeping in touch with us. For the particular sales rep, he still spent about 40 hours on the deal from first ringing me through until final settlement. For the owners, it was an amazing result for which they only had to clean the house once and they did not have to have any further inspections, a great relief to them.

I am sure that they felt they got their money’s worth. I know the Agency earned their money – and they were the only local Agency which had bothered to keep in touch with us, so a good result all round.

In the ten years we have lived here, fewer than five houses in this neighbourhood have come on the market. We paid full asking price then and everyone was happy.

What a pity you’re not happy with the job done for you.



When I worked as a Buyer’s Agent I spent endless hours doing what the client engaged me to do – drive to and inspect houses, prepare reports, negotiate contracts etc. By the time a deal was settled, I probably earned about $5 per hour after expenses and for that I had to have the full Estate Agent’s Licence, insurance, and experience. Many years experience. Knowing where to drill. Same thing applies as a Mortgage Broker. If I charged my customers an hourly rate they would be shocked at how much time goes into each and every deal. As with any business, you can’t make a living on each deal alone, it has to be continuous deals providing small amounts of income.


Your sales rep will probably be paid 15% of the Agency commission. Hardly a princely sum. They and their Agency have to make many, many sales over a year to earn an income.

I would thank them all profusely, send chocolates and bottles of wine, and recommend them to all the neighbours.


Seems like they did a great job for you. And congratulations on achieving a sale so quickly in today’s market.


Cheers
Kristine

 

[Perp]

your airline (pilot) doesn't charge you the hours he spent on learning to fly

Sure he does; if he hadn't learned to fly he'd get paid $10 or $20 an hour. He gets paid much more than that per unit of effort because of his skills and responsibilities.

the only form of advertising will be via a sign on the front of the block and a small newspaper ad where the Buyer will be asked to submit their top offer to a PO Box #.

Good luck with that one, Dazz. I look forward to hearing of your success with this method.

 

[auror]

A patient comes to a dentist with tooth pain.
Dantist : Two of you teeth are inflamated and we need to remove them
Patient: And how much will it cost?
Dentist: Seven hundred and fifty dollars for both.
Patient: What? Seven hundred and fifty dollars for 10 minutes of work?
Dentist: Well, if you like, I can pull them out slowly!

 

[Dazz]

Good luck with that one, Dazz. I look forward to hearing of your success with this method.

No wurries.

The grumpy old codgers who are most likely the only ones who could afford to buy my IP's, don't own a computer and wouldn't know how to spell internet. This is exactly how they used to purchase property back in the 50's and they are more than comfortable with it.

It all comes back to "know thy customer" Tracey.

 

[oasis1frog]

It's not a whinge or a complaint, or may be it is, just making a conversation in the coffee lounge.

As for oasis1frog, I'm with you buddy. You've been hosed IMO to the tune of 15K. That's alot of after tax cash. $ 300 p.w., every week for a year you've just handed them. That's not small.

Since you put it this way, now it hurts.