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A friend with a Harvard MBA was selling his house and thought that the standard real-estate commission structure where the commission percentage goes down as th
by ShabbyDoo 16y ago
A friend with a Harvard MBA was selling his house and thought that the standard real-estate commission structure where the commission percentage goes down as the price goes up was absurd. He negotiated a commission structure where, up until the price point where simply slapping a sign out front with that price quoted would result in a sale, the commission was 2%. From there on up, it was 10%. So, the agent had a stronger incentive to find a buyer willing to pay a high price. My friend ended up selling for a low-ish price, but he didn't pay much of a commission.
The biggest difference between the standard real estate model and the standard headhunting model is exclusivity. A headhunter is motivated to "throw paper" at a hiring manager when multiple recruiting firms are competing to fill a role. I think that retained search may be a better option, but it's rarely used at lower levels for some reason.