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Flaw in your plan: what if the deal doesnt work out? who compensates the agent? The 6% fee is amortized over the 9 clients that didn't work out - each has phone

Flaw in your plan: what if the deal doesnt work out? who compensates the agent? The 6% fee is amortized over the 9 clients that didn't work out - each has phone calls, paperwork, organizing, travelling. From the agents perspective: Its a much harder job than you imagine. You have no control over the quality of your product, or its pricing. Also you can do just a few visits per day. From the landlords perspective: When you own several properties you will have better things to do with your time than do a real estate agents job. Anyhow the issue isn't with real estate agents. Its with asset inflation vs wage stagnation. Start complaining about that instead !

rabbimarshak 12y ago
The is accounted for in my plan. Showing 9 prospects means that the deal didn't work out for 8 of them. And 6% fee is fo sales, not rentals. Phone calls and travel is a fixed cost now as both are now unlimited for a monthly fee, and most likely incurred whether there is deal flow or not (most have mobile and monthly metrocards regardless). Please clarify your last point...
- sokoloff 12y ago
  The relevant cost of the phone calls, the paperwork, and the travel isn't paid to AT&T or Staples or the metro. The cost that matters is the time involved. And that's far from unlimited for a monthly fee.
  - rabbimarshak 12y ago
    Precisely. Argument is that compensation should be based on time and not % of rent.
    - sokoloff 12y ago
      That's philosophical. Is the agent being paid for effort (input) or results (output)? Either can work. Take the case of an agent that spends twice as much effort (and has the unit vacant for twice as long). Should that agent be paid more or less than an agent that fills the vacancy quickly and efficiently? As an engineer/executive, I'd much rather be paid for the results I generate, not the typing that I do.
      - rabbimarshak 12y ago
        My argument is that the results generated are not a product of the skill of the agent, but of the intrinsic demand for the product. Supply is very limited, and demand is extremely high. The unit will move itself, regardless of effort extended by the agent. As an engineer / executive - you would only rather be paid for results if you are a good worker and your output is positive. If your output is poor, or you produce shoddy work, you probably would prefer to be paid for time on the job.
        sokoloff 12y ago
        If your hypothesis is completely true, why not become a broker and offer "1/2 fee" services? You'd still bank $500+/hr ($1MM a year full time equivalent); landlords would sign with you because they could charge an extra $100-150/mo rent while tenants would still save money overall versus those antiquated businesses charging full fees. You'd have an unstoppable competitive advantage...assuming of course that your hypothesis is perfectly true and that the broker is really banking almost $7K for 6 hours of work. My wager is that you'd find yourself falling well short of the million in annual income that your half-fee business plan would predict.

rabbimarshak 12y ago

The is accounted for in my plan. Showing 9 prospects means that the deal didn't work out for 8 of them. And 6% fee is fo sales, not rentals. Phone calls and travel is a fixed cost now as both are now unlimited for a monthly fee, and most likely incurred whether there is deal flow or not (most have mobile and monthly metrocards regardless). Please clarify your last point...

sokoloff 12y ago
The relevant cost of the phone calls, the paperwork, and the travel isn't paid to AT&T or Staples or the metro. The cost that matters is the time involved. And that's far from unlimited for a monthly fee.
- rabbimarshak 12y ago
  Precisely. Argument is that compensation should be based on time and not % of rent.
  - sokoloff 12y ago
    That's philosophical. Is the agent being paid for effort (input) or results (output)? Either can work. Take the case of an agent that spends twice as much effort (and has the unit vacant for twice as long). Should that agent be paid more or less than an agent that fills the vacancy quickly and efficiently? As an engineer/executive, I'd much rather be paid for the results I generate, not the typing that I do.
    - rabbimarshak 12y ago
      My argument is that the results generated are not a product of the skill of the agent, but of the intrinsic demand for the product. Supply is very limited, and demand is extremely high. The unit will move itself, regardless of effort extended by the agent. As an engineer / executive - you would only rather be paid for results if you are a good worker and your output is positive. If your output is poor, or you produce shoddy work, you probably would prefer to be paid for time on the job.
      - sokoloff 12y ago
        If your hypothesis is completely true, why not become a broker and offer "1/2 fee" services? You'd still bank $500+/hr ($1MM a year full time equivalent); landlords would sign with you because they could charge an extra $100-150/mo rent while tenants would still save money overall versus those antiquated businesses charging full fees. You'd have an unstoppable competitive advantage...assuming of course that your hypothesis is perfectly true and that the broker is really banking almost $7K for 6 hours of work. My wager is that you'd find yourself falling well short of the million in annual income that your half-fee business plan would predict.