While writing the last post I noticed that a discount brokerage was the selling office. I work for a discount brokerage in the form of a cheap desk fee office. After seven years of losing my shirt working there that discount desk fee doesn’t seem like such a good idea any more.
The upside to my office is that it’s extremely diverse. When I go into the office I hear Spanish, Korean, Chinese, and Russian, being spoken on the phone. I mean I hear a language other than English every time I go into the office.
The down side to my office is that it has a bad reputation for having agents that are looking for a discount desk fee. We’re cheap agents. In my defense, or in the defense of people I asociate with in my office, I do my own property deals. I am my own client so I’m not looking to represent other people. There are also excellent builders, or even commercial agents in my office. It’s cheaper to pay a discount desk fee than to have your own place. After you pay rent, hire a secretary, do the accounting, and keep track of your paper work, a discount brokerage seems like a bargain.
I’m just talking about my experience, but I am hiring a Real Estate agent again today to list my last project. It has my sign in front of the property today and I think that my company is a negative. I’ve been told that other Real Estate companies, or agents from other Real Estate companies avoid agents who work for the company I have my license with. It sounds unfair, but the truth is if I were serious about my business I would work for a serious Real Estate company. I would want my clients or my transactions backed by the best Real Estate company I could find.
With other discount brokerages today there are many who claim it’s unfair, but they don’t really add anything to the present conditions. I think the company Redfin has polarized the Real Estate community to recognize that discount brokerages are not a good thing for our business. It’s not the commission structure that is the problem. To me, it’s the over abundance of untrained, unskilled, new agents that are looking for an easy in to the real estate sales business.
A Redfin representative went before Congress to claim that the Redfin, internet based, business model wasn’t getting a fair chance in the market place because they offer a rebate of the Real Estate commission. The fact is that as a internet based business model they want to collect fees for as little work as possible. Let’s pretend that you as a consumer do your research on line and look at all the pretty pictures on the internet. Trust me they are very pretty pictures. Once you find the house of your dreams you “hire” Redfin to write the offer. They tell you to get an inspection. You do the leg work and are rewarded with a 2% rebate of the Real Estate commission.
Here’s the problem. The agent who is representing you hasn’t seen the house. If they have seen the house they have been a Real Estate agent for about five years who think that the internet business model is what is going to make them money. They don’t, yes I said don’t, have the idea that they are doing a Real Estate transaction, they have thrown into the idea that the internet is the wave of the future. In that belief there is an under lying current that Real Estate agents working for big Real Estate companies are some how out of step. Freinds are not made, antagonism is generated, working the deal is put onto the agent on the other side of the transaction, and there are more hard feelings. The Redfin representative is claiming that’s just not true, but it is.
Real Estate sales is a highly skilled career. Most professional people think that all you need is a high school diploma and some clock hours to be a Real Estate agent. That is true. All you need to be a doctor is to come from a wealthy family. All you need to be a lawyer is to get a scholarship. OK? None of it’s pretty but what makes a great doctor, lawyer, auto mechanic, or preist is hard work, dedication, and experience while keeping the highest level of integrity.
Discount brokerage has it’s place, but if you are going into a Real estate transaction that can either make you one hundred thousand dollars or cost you one hundred thousand dollars you should hire the best.
