We recently had one of our clients, who is an asset management company, increase their fee to 1.25% and 1.5% in one case. That means the listing commission gets decreased to anything over that 1% mark. It's only on their Chase properties but those are the ones that are the most work. We sent emails to management trying to plead our case but they simply said if we don't like it they'll reassign those listings.I don't think it's good business to treat their agents that way and we don't just have one or two listings with them. My real concern is that this is just the beginning and their testing this out to implement on all their listings. It reminds me of BPO's and what happened to them. Back when I was doing BPO's they were around $65-70 for an exterior and now at $45-50. It's like that because there's so many agents hoping to get listings they their even doing free bpo's.We all know that if we refuse to do the work for that lower fee they'll easily find other agents that will and it will also effect the other listings we get from them. It's like being stuck between a rock and a hard place with no arms or legs. I really hope this doesn't become the norm but with so many agents trying to break into REO's they'll have no shortage of people that will take the listings for any commission rate.We're definitely not done fighting this but we have to come up with a game plan to ensure we don't hurt future business from them. Does anybody have any suggestions and also is this happening to anybody else?
You need to be a member of REO Pro Network to add comments!
I have noticed that more and more companies are increasing their fees. I think it might have to do with the fact that as they are getting more volume from the lenders they are constantly re-negotiating their deals with them and the lenders are probably asking for more and more from the AM's. Also, now that more agents are getting into the segment they are really driving down the prices paid out.
That's true Tina but those AM's are asking more and more of the agents also. There's an old saying that applies here that goes " you get what you pay for." Increasing the workload while decreasing pay will circumstantially decrease the quality of work from the agents. Now agents will try even harder to double end every deal to offset the pay decrease. If you think the shadiness was bad before wait and see what happens now. They seem to think that us listings agents are easily replaced but the truth is very few people are set up correctly to handle a descent volume of REO's.
Tina Realty > George BellinoOctober 24, 2009 at 2:33am
I couldn't agree more with you George. It is just unfortunate that everyone will be hurt by this learning curve. While the AM's figure this out they will be hurting the bottom lines of the listing agents as well as the clients that they represent by providing them with sub-par service by sub-par agents.
George I have to agree with you. It's like buying leads or paying for all the BPO mills, etc. As long as people are willing to do it or pay for it, the companies will keep cutting the price. As long as there are more agents wanting the business at ANY cost then actual business available, this trend will continue.
Just look at closing attorneys, they have priced themselves right out of the market. Now people expect them to handle a closing for $300 or less. We are now doing the same thing to ourselves!
TBH, some commission is still better than nothing. $30 BPO is still better than none. Just looking on the flip side. Listing agents that have REO listings have so much more opportunity than buyer's agents.
Some is better then none is not always true especially when it comes to reo's. I don't know about you but I value my time and a $30 bpo is less then minimum wage, which I would never do. Unfortunately, that mentality is why we're in this position. Many agents believe they'll get listings if they keep doing bpo's so the fee's keep getting lower and lower while agents just go with it. I can't blame them as if it was my company I would do the same thing. My opinion is if you don't have a steady flow of reo listings now the chances are slim that you ever will. It's extremely tough to get new accounts now and even with 50 current listings it's not easy for us to get new accounts. One thing we never do is an non reo listing bpo. If we thought there was a chance of getting listings that way believe me we would be doing hundreds a month but that's just not the case. It is possible but so is winning the lottery and i'm not buying hundreds of tickets every month. So agents please take a look at what your working for and ask yourself is it really worth it because the fee's and commissions will just keep going down until we take a stand.
I know who you are referring to. Unfortunately they will look elsewhere and since there are so many agents looking for their opportunity to break in. Just as when the market was hot in 2003-2005, a seller could list their home and receive full service for 3-4% total and the agents would do it because it was a "sure" sale. REO is reaching that level. Could you imagine if NAR had their way and made REO available to all agents (or a huge portion of), there would be so much competition we would all be listing properties for 1%.
True but listing a home for 4% isn't comparable because REO's entail so much more time,work and money. I just think it could have been handled more professionally on their end. They didn't even warn us first. Their supposed to be explaining it on a conference call next month. It's just an eye opener that makes you adjust your business plan in order to protect yourself in case it does become a trend. To some people it doesn't seem like a big loss but that little percentage adds up especially when you split every listing 3 ways like I do. But in the end we're still blessed to be a preferred broker with them.
Jason Harper > George BellinoOctober 22, 2009 at 3:24am
What do you mean Jason? NAR is not holding anyone from getting reo listing, I just got a phone call from a guy I know he just got his real estate license in August and went to work with one of the "Big: REO agents in my area. The established REO agent told the rookie to lie in his applications and put that he was over 3 years of experience in real estate and REO's and that other rookies in that office are getting REO listings with only 6 months in the business.
In reality NAR doesn't stop anyone from trying ot hustle and get listings and like Jessie commented in another tread, some agents really hustle their assets to get REO listings and I am sure NAR doesn't regulate that,
Replies
Just look at closing attorneys, they have priced themselves right out of the market. Now people expect them to handle a closing for $300 or less. We are now doing the same thing to ourselves!
In reality NAR doesn't stop anyone from trying ot hustle and get listings and like Jessie commented in another tread, some agents really hustle their assets to get REO listings and I am sure NAR doesn't regulate that,
-
1
-
2
of 2 Next