"You've Caught the NET!"

head_left_image

COMPENSATION CONNUNDRUM! Are We Worth More Now?

Happy New Week, from Chicago!

Just a question - Are we Realty Professionals worth more to clients now?

A couple of years ago, may agents around Chicago were discounting, some heavily!  We resisted, and maintained our fee (NEVER call it "COMMISSION" Levels) at the same moderate rates they had been for many years, and our business continued to grow.

Now, in a transitioning market, slanted heavily in the buyer's favor, prospective listing clients are looking far less to the "cheapest folks in town."  I am getting far less resistance to what we charge - and clients seem to know, more than ever, that they get what they pay for.

Let's do five seconds of history.  As late as the early 1970's here in Chicago, before Anti-Trust kicked in, each of 8 local real estate boards around our area SET their board commission rates.  Seems hard to believe now - but it was true!    I believe, way back then, the North Side of Chicago Board "set" a commission percentage of six.  Discounters complained, court challenges ensued, the rest is history.

Over the coming 2 1/2 decades, Realtor fee percentages dropped precipitously, as housing prices increased.  Some, on average, in excess of 25% off their earlier levels.  The boom market of a couple of years ago increased pressure to drop even more.

To be a successful real estate practitioner today, there is far more to do, and far more headache.  Web coverage.  SEO.  New Technology.  And on . . . and on!  We have to work harder to generate and market the listings we have, and, with increasing buyer demands after the contract gets accepted, along with tighter lender's guidelines, keep most deals together through the inspection and loan commitment contingencies.  Sellers, themselves, have challenges, especially with those threatened with financial distress, and foreclosure.

My hair stylist just raised her fee 20% with the New Year.  My health insurance deductible has gone up 250% - to $2,500 annually - to keep my near four-figure monthly premiums for my wife and I somewhat stable.  Hell, even the Chicago Cubs, for which I am a Season Ticket Holder, raised their ticket prices 28% - last time I checked, the Cubs didn't really win anything (choking in the 2007 Divisional Playoffs barely qualify here).

Several of my Team members are concerned that taking an increasing posture on our compensation will scare prospective clients away.  Some have intimated we will be viewed as not being sensitive to the many distressed sellers in today's market, including those faced with short-sale, or foreclosure.  A few others agree that we're worth more now, but none without concerns or reservations.

I would be very anxious to hear your take - are we worth more in today's real estate market?  Please let us know!

DEAN & DEAN'S TEAM CHICAGO

Comment balloon 2 commentsDean Moss • January 07 2008 09:55AM
COMPENSATION CONNUNDRUM! Are We Worth More Now?
share
Happy New Week, from Chicago! Just a question - Are we Realty Professionals worth more to clients now? A couple of years ago, may agents around Chicago were discounting, some heavily! We resisted, and maintained our fee (NEVER call it "… more
VOTERS IN CHICAGO, ACROSS ILLINOIS - Are you registered to vote in…
share
Hope you're enjoying your Sunday afternoon, everyone! Just wanted to remind you - here in Illinois, and perhaps where you live, the Voter's Registration Deadline for the February 5th Illinois Primary Elections is fast approaching! The deadline here… more
WHAT'S YOUR NUMBER ONE, FOLKS - Your # 1 Goal for 2008?
share
Hope you're enjoying the weekend, folks - record warmth (50 degrees) expected here by tomorrow! Hey, of all your goals for the New Year - what tops the list? For me - it's "NO MORE BABYSITTING! " Clients, staff, Team members, co-op… more
Contractor Down Payments - Be Careful Before You Hand Over Big Money!
share
Hope you're enjoying the weekend, people! We all have scary stories about contractors not performing their work in a professional, workmanlike manner. My own brother-in-law, in Warrenville IL, is still in court for some shoddy work on his home… more
Come to Chicago! Live in Chicago! Invest in Chicago! There are Some…
share
No, gang, I'm not Mayor Daley! But I got to thinking earlier today. As I was prospecting Expired Listings this afternoon, I spotted a few nice houses, in need of some updating and repair, to be sure, but very livable, right here, in top, desirable… more
Lil' Buddy's Blog - Certain Human Foods Deadly to Dogs & Cats!
share
HEY, YOU REALTORS! REMEMBER ME - I'M THAT FAMOUS LIL' BLOGGIN' DOGGIE FROM CHICAGO, BUDDY HOLLY MOSS! Happy New Year, to those of you with only two paws! My number one New Years Resolution involved that little section of rug, out of the way, and… more
ASSISTANCE, BEFORE ASSISTANTS - If you want to REALLY SUCCEED in Real…
share
Greetings from Chicago! New Year's Resolutions still intact? Good, you're ahead of 98% of the population (you know, those having that second piece of cake after dinner tonight! ) Years ago, when I started in Real Estate, my first broker told me -… more
More Rate Cuts Possible, says FED in December, 2007 Meeting Minutes
share
When the Federal Reserve Board Open Market Committee reduced the benchmark Fed Funds and Discount Rates last month, to 4. 25% and 4. 75% respectively, they left open the possibility of further rate cuts in the near future. Their concern - continued… more
WE'RE ALL AT THE SAME LEVEL TODAY! Now, Work Your Plan!
share
Good Morning, All! Top Producers, Medium Producers. Weak Producers. NON Producers. We're all at the same level, today, the First Business Day of the New Year! Right now, it's not quite 7:30 here in the Midwest, 8:30 in the East, 6:30 in the… more
NO PRINT NEWSPAPER ADS IN 2008! We RESOLVE in The New Year
share
Wow, 2008! Who would have thought, when we were little kids, we'd be here in "THE FUTURE! " Happy New Year, Everyone! The Plan is set (or as they say here in Chicago - "The Fix is In! ") Here are 10 ways we resolve to better… more