Zip Realty and Ready Real Estate

[Dallas Broker]

Any thoughts on these National Chain Discount Brokerages? I'm not even sure how to approach. All I can say is they are forcing some abrupt changes Nationwide or at least in DFW area.

Do you agree or disagree with their approach to market?

Is their presence forcing you to make changes in your business?

[webmaster]

I have often heard comments that they cannot possibly offer the same level of service while discounting their fees as much as they are. But those comments are from realtors, who for obvious reasons are not fans of the competition lowering the bar.

What is it about discount brokerages that realtors don't like?

[Ryan Ward]

It scares the h*ll out of some who charge full commissions and deliver discount service and it scares those who give great service and information into thinking that soon it will be worth less money.

The public just gets mixed signals and can't make heads or tales out of it.

I think that more models is a good thing - I just want people to say what they are and don't sugar coat it.

Most REALTORS have stories about good and bad agents. I have some really bad experiences with agents from discount brokerages not protecting their clients interests properly. If you are full service, you better deliver. If your discount and a sellers house looks good and is staged and priced right and your in a strong sellers market, maybe you can get away with a discount agent - maybe not. Caveat Emptor!!

[Dallas Broker]

I do not mind matching competition and ultimately putting more money in the hands of consumer but wonder how some of the agents are bridging the gaps in today's real estate market. With the traditional real estate commission plan for newly licensed agents, after giving 50% of discounted commission to broker and accounting for association(NAR, TAR, local, and TREC dues), marketing, website management, licensing, listing, and countless other fees, it is going to become more and more difficult for agents to survive their first year in real estate. Ex. newly licensed agent $100,000 home * 2% commission = $2000 - 50% broker fee = $1000.00 - (average monthly general expense $750(which is conservative) = $250.00 ,at 20 homes/year = $5000 . Even at $2,000,000 first year sales, which is a great and probably well above average, an agent would gross around 20K....and even if you raise that to 70% commission you're only at around 28K.

Many agents view reduction in commission as basically a reduction in salary. To account for loss you must sell more real estate, manage your expenses more efficiently or concentrate on new construction builders offering 10% like Lennar Homes.

Spreadsheet to calculate expenses
Article on Real Estate Budget Planning

[Micheal Pannell Realtor]

yeah i got two of those 10% this week. i made 40 thousand dollars in commission last week. Go me Go Me

[RonnieG]

It's always interesting to see these discussions, and especially the perception that limited services and poor services are mainly the purview of a few "discount" shops.

My own observation here has been that many of the listing agents and offices that abuse and fail to represent their sellers adequately are often affiliated with the larger, established and better known franchises. I have seen CB, KW. Re/Max and a couple of the larger local brokerages get great high end home listings, only to book many of those listings on our MLS with no photos, no virtual tours, no room sizes and little or no other details, even on $600k and up properties. It is all a matter of the individual agents and how much work and money they are willing to put into it. There doesn't seem to be any correlation whatsoever to whether the brokerage is a small mom & pop, a national discount chain, or a well known "traditional" national franchise.

I "discount" my listing rates a little because with a 100% commission plan, I can. Still, every one of my listings goes into the MLS with every possible detail filled in. Every one goes in with at least 5-6 photos on day one, and with more photos and multiple virtual tours added within 48 hours. Full color professionally produced flyers are also provided for every listing. We use the back of the flyers to advertise other listings in different price ranges, but never another property that is comparable to the one on the front of the flyer.

[Real Estate Ron]

The "ONLY" way to beat the lower commission rates is to own your own real estate office and to also to be a 1 man real estate operation. This way, you will be able to offer "flexible" commission rates to most if not all of the sellers and also savings to the buyers. That's what I am doing and it works out very well for me.

In order to save a lot of money, you need to work your real estate business from your own apartment or home. All real estate offices have huge expenses. A lot of them are not making a lot of money because their expenses are astronomical and they exceed their revenues.

Owning your own real estate office right from your own apartment or home is only the way to beat the high expenses of doing business. In the 21 years that I've been in the real estate business, I find that it's not necessary to spend money to rent an office to do this business. One can do real estate right from their own apartment or home. All you need is a business line and a computer and a fax machine and a brain.

You can save thousands of dollars in rent by doing real estate this way. And if you work for yourself, you don't need to work for a ReMax, a Caldwell Banker, a Century21 or any of the other big franchises or smaller non-franchise real estate offices. You will also eliminate a lot of the unneccessary fees that some of these franchises charge to a broker.

Start your OWN real estate office from within your own home or apartment with your OWN real estate firm name. Once you start getting business, you can hire a few more brokers and they too can work from their own home. They too will save money by working from their own home. All that they will need is a computer, a fax machine and a phone and everybody in America can obtain these 3 things very cheaply. And you can give your brokers who work for you a larger split on the commission and make them happy because your operating overhead as a real estate office is low. Then when your real estate business starts getting larger, you can start thinking about maybe renting a good size office. You don't have too, but you have this option.

I work from my own home and I own my own office and I don't have to worry about the other real estate brokers out there who are my competition. I am able to beat any and all of them. I don't offer anything different than they do. Just because they work for a huge conglomerate franchise means nothing. Franchises don't do anything for brokers except take away their commissions. The advertising thing that big franchises claim that they can do is a bunch of BS because "any" broker, big and small, can advertise to sell a listing or to find buyers. The big franchises like to brainwash buyers and sellers thru media advertising by ranting about how good they are and about how they are the only ones who can do wonders for buyers and sellers when in reality, they don't offer anything different or anything more than the 1 man real estate operation that's out there. I myself get a big laugh out of this deceptive advertising. Buyers and sellers are not stupid. They want decent brokers who know what they are doing. They could care less about whether or not they buy or sell a home thru a big franchise or thru a small non-franchise office or thru a 1 man real estate operation. Sellers only they want knowledgeable brokers who know what the hell is going on with the real estate market and who know how to sell their home. And buyers want someone who has access to and who knows what inventory is currently in MLS and someone who knows the real estate market as well. What I am trying to say here is that buyers and sellers want somebody with knowledge to be their real estate broker. Period.

Nowadays, most of the listings that are sold are sold thru co-broking. And co-broking is done thru the internet via MLS. All real estate brokers can obtain MLS thru their own home computers. You don't need to be part of a huge franchise real estate office or affiliated with a smaller non-franchise office to do real estate when you have the capabilities of the internet and if you can own your own real estate company right from your own apartment or home. That's right! You can do it right from your own apartment or home. The only thing that you will need to do to attain this is to get a broker's license. You will have to work for one of the big franchises or for one of the smaller non-franchise offices for a period of 1 to 3 years in order to get your broker's license and then spring yourself free from them and go on your own. That's what I did and it's been working fine for me for the last 19 out of the 21 years that I've been in real estate.
This method is the ONLY way to be able to charge a flexible low commission and make any money in real estate. There are too many realtors out there who are making very little money because they have to split the commission with their office. Imagine if you could keep 100% of the commission or 100% of the 50% co-broke commission all because you own your own real estate office from your own apartment or home. Wouldn't you like that? I bet that you would. I know that I've been doing it this way for the last many years and I've been very successful. I've never regretted it. Plus, I don't have to sell anywhere close to the number of homes that the other brokers have to sell who work for the big franchises and for the non-franchise smaller offices in my area in order for me to make myself a good income. If I want to work harder, I can and I can make more money very easily. If I want to cut my commission rate to 3% or under 4%, I can do this without worrying about the competition. If I can get away with and charge the full 5% commission, I can do that too. I've charged the full 5% commission many times. I get the feel of the buyer first. If I see that they don't want to pay a full 5% commission, I don't charge it. I charge much less then. And I can charge less because my costs are less. My service that I offer is no different than the service of the other brokers in my area who work for the big franchises. It's the experience that counts.

Speaking of experience, a lot of brokers that I've encountered over my 21 years of doing real estate have no clue about anything in real estate or they know very little about real estate. The brokers that I'm describing don't have flexible thinking and analytical capabilities. They don't know how to educate the buyers and the sellers. They have this problem because they are not educated enough to understand and to know what's going on in the real estate market and they know nothing about finance or banking. They aren't analytical in their way of thinking. Most real estate brokers like to make assumptions and statements and they cannot back them up like an attorney can back up a case in a court of law. I get a kick out of all the people out there who claim that they are real estate brokers who know very little or nothing about real estate and financing. There needs to be a higher standard for real estate brokers in the United States just like there is for lawyers and doctors. About 85% to 90% of the brokers who are currently practicing real estate here in the U.S. should be driving an ice cream truck rather than listing and selling real estate. They are a big disgrace to the real estate profession and a huge threat to the real estate market as well as to the buyers and sellers. They do more damage to the real estate market and to the economy and to the buyers and sellers than they do good. Look at what's currently happening right now in the real estate market and in the sub prime mortgage industry across the country and you will see what I mean. Many real estate brokers and mortgage brokers have caused the real estate market to be in the bad condition that it is in right now by inflating the market for the last 10 years to the point where foreclosures have gone up to almost 700% in some areas of the country. A lot of people who purchased within the last 7 years that have sub prime loans are losing their homes. Basically, the real estate market is going to take a nosedive and the American economy is going to go into a recession because of this scenario. And it's all because real estate brokers artificially inflated the real estate market values to the point of domestic economic destruction. But most brokers will deny this claim and they will say that supply and demand caused the real estate market to become over inflated like it is right now. Most real estate brokers and mortgage brokers will not look at themselves as the "cause" of the current problems that exist in today's real estate and mortgage industries. They will instead blame supply and demand on this issue. Only a small perentage of brokers will attest to the fact that the realtors and the mortgage brokers are the "real cause" of this problem. Real estate brokers and mortgage brokers are in denial about this. And they continue to blame others and not themselves for the negative sentiment that exists today in the real estate and mortgage industries. This belief and mentality will eventually come back to haunt a lot of the realtors. A lot of realtors are getting out of the real estate business as I type because there is very little or no business and because they are starving. The good brokers will remain in this business and the bad ones are leaving it. This is a good thing for the real estate brokers who will stick it out during the duration of the bad times which the real estate market is going thru right now. Fewer real estate and mortgage brokers will be working in the real estate and mortgage industry with this type of market. And this is a very good thing.

A good percentage of the brokers out there have got into the real estate business because they believe that they can make a quick buck. It's okay to have this dream, but without the proper knowledge and experience and education nobody can call themselves a competent broker. That's why most sellers want to pay a low commission or even no commission at all and that's why a lot of brokers complain about not being able to make any money. Knowledge is 100% everything in the real estate business nowadays. Then comes marketing and then comes service. If you can offer all 3 of these things in multitude, you will never need to work for any real estate office and you will never have to worry about what to charge for the real estate commission or worry about not making any money in the real estate industry.

I just wanted to give some constructive input about this issue because I find that many real estate brokers complain a lot and they do very little to change things for the better for themselves. In order to be successful in real estate you must invest in yourselves and be different than 90% of the other brokers that are currently practicing real estate. You do that and you will be successful. Or you can keep complaining about the commission percentages like 90% of the brokers out there do.