Hourly rate: The solution to low real estate commission?
Letter to the Editor
By Inman News, Monday, June 6, 2011.Re: 'My first 3-digit commission check' (June 2)
Dear Editor:
How much is your time worth? Perhaps it's time to include an hourly rate in the buyer broker agreement. It's not too hard to keep track of the time you spend for a particular client performing transaction-related real estate services (not marketing, prospecting, networking, or reading articles about real estate compensation).
The agreement can provide that the client shall pay the greater of the hourly rate calculation and the commission paid to the buyer's broker. If the hourly rate calculation is greater than the (commission paid to the buyer's broker), then the buyer will bring cash to closing.
The trick, of course, is recording your time. It's not too much trouble for a lawyer, but may take some getting used to for Realtors.
Jon Cohen
Real estate broker
Portland, Ore.
| Contact Inman News: | |||
 Email |  Letter to the Editor | ||
All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.
You must login or register to post a comment.
Submitted by Steve & Mary Wiley on June 6, 2011 - 3:20pm.
I belive the key is to give buyer (and sellers) choices - and hourly fees are a logical choice among others. Hourly fees can be a solution for both buyers and sellers.
Hourly fees are best when they are priced for the value being offered - Administrative services being the lowest, showing homes or marketing a home as a middle ground, and writing and/or negotiating offers as the highest.
My company requires a retainer for hourly service, and since hourly charges do build up quickly, it also offers a cap which will not exceed alternative commission-based compensation.
Steve Wiley
Broker / Owner
Smarter Choice Real Estate
Submitted by Manhattan Beach Realtor on June 6, 2011 - 8:34pm.
Charging labor, materials, equipment, fringe, overhead, etc. is a perfectly legitimate contract arrangement. I'm surprised it hasn't been used more in real estate, but changing that paradigm (possible over time) will probably shock both parties, and could alter the incentive-constraint space.
Rob Viglione, Broker/Realtor
DRE License #01852458
SoCal Real Estate Advisors, Inc.
(866) 977-4437
www.socalrea.com
Submitted by Ernesto Berumen on June 13, 2011 - 3:14pm.
While I have not charged an hourly rate or incorporated the model into my business, I do track the number of hours I spend with a client, as well as my mileage and expenditures and overhead for each individual transaction. I use an app on my iPhone and on my Mac called Billings Touch Pro. A couple years ago I became interested in seeing what kind of real profit I was earning per client based upon the my expenditures and the hours I was working for them. I've used the results to guide my business. I know what kind of clients produce a higher "per hour" return, and that in itself is half the battle of marketing. It's because of this extra step in tracking hourly output that I know the type of client I seek, which in turn directs my marketing efforts.
Submitted by garry martin on July 14, 2011 - 10:50pm.
Equity Release Advice Line provides whole of market advice on all aspects of Equity Release and Home Reversion schemes throughout the UK.
http://www.equityreleaseadviceline.co.uk
Submitted by garry martin on August 19, 2011 - 4:44am.
We provide CD Duplication, DVD Duplication and Blu-Ray Duplication service for fast 24 hour short-run orders and CD, DVD Replication Service with unrivaled customer service. You can get an instant quote for your order. Please visit our website for further details.
CD Duplication
Submitted by garry martin on August 26, 2011 - 2:37am.
Cosmetic Dentist Shipley Our vision is to provide the very best dental care using the most advanced technology available. We provide services regarding Dentists Shipley and Dentists Baildon. We also provide Private Dentist Shipley and Private Dentist Baildon. We also specialize in Cosmetic Dentist Shipley and Cosmetic Dentist Baildon.
Submitted by garry martin on August 26, 2011 - 2:44am.
Our vision is to provide the very best dental care using the most advanced technology available. We provide services regarding Dentists Shipley and Dentists Baildon. We also provide Private Dentist Shipley and Private Dentist Baildon. We also specialize in Cosmetic Dentist Shipley and Cosmetic Dentist Baildon.
Cosmetic Dentist Shipley
Submitted by garry martin on August 26, 2011 - 2:45am.
Cosmetic Dentist Shipley
Our vision is to provide the very best dental care using the most advanced technology available. We provide services regarding Dentists Shipley and Dentists Baildon. We also provide Private Dentist Shipley and Private Dentist Baildon. We also specialize in Cosmetic Dentist Shipley and Cosmetic Dentist Baildon.
Submitted by garry martin on September 16, 2011 - 12:26am.
Quick Payday Loans
We are an online payday loan lender of quick payday loans and sameday payday loans for emergency purposes. We offer loans upto £500 which are transferred in your account within 30 minutes. Please contact us for further information.