All Forum Posts by: Rachel Weiss

 finally a good answer 

Thanks to everyone who took the time to answer. The explanations I got are about 1- the value and 2- the expenses, self-employed, no health insurance/vacation.

I have a question though. The process/work is the same with every transaction; it doesn't make a difference if the house is 100k, 500k, 1mm, or 2mm. The fact that commission is percentage-based is weird because why would someone doing the same thing make double as someone else? c

In other words, I do understand when the realtor fee for a 400k is $20k. but when I sell a home for 2.2M and I pay a realtor $110k things start to not make sense. Yes, I do flip homes for this price. average Americans earn this amount in a full year! 

For those asking, staging is paid by us. 

in the case you are describing where you put money into an event, making a large amount of money seems to be appropriate given the risk you took with that 50k. 

In my case, the towns are extremely desirable and there are tons of buyers  eager for any remodeled home. so why is a realtor that makes 2 showings and pushes a few papers deserving of 60k pay? I cannot for the life of me understand this. There is absolutely no out of pocket cost to them and they take 0 risk. 

 I don't want to sell without representation. I'm happy to pay a reasonable fee. Am I the only one thinking 60k is unreasonable????

 what are marketing costs? I pay for staging... when costs do the realtors have? 

My main question is why is it acceptable to pay 50-60k for the listing agent? Who earns so much money for 20-30 hours of work? I would love to negotiate a lower fee but I don't want to upset them. I can tell it is not common to negotiate because the realtors I am working with know that in the past, I used a realtor who charges less (and also gives less than great customer service), and they keep telling me how bad she is and that you cannot give proper customer service when she plays the volume game. And they are not offering me a better deal. It seems like everyone is doing the standard rate and no one is challenging it. There's only that one person that is known to charge less than the standard rate but her service sucks. 

As for the period of sale time, in this market everything goes within a week of being listed unless there's something wrong with the property.

Hi everyone, We are new flippers in desirable towns where remodeled homes sell for 1.8m - 2.5m or more. I am having trouble understanding how paying the realtor 100k in fees on the resale alone (not including what they get paid when they are used on the buy) is acceptable. I searched other threads on BP about this, and the explanations were about a 400k home, for example, that works out to a modest amount per hour. However, this explanation no longer makes sense when it comes to homes that are much more expensive. Why is it not common to negotiate flat fees that are more reasonable? Why is it not enough for a realtor to get paid $10k for their service? I think that's a nice amount of money for their work. There is no other  profession where someone makes so much money for doing so little. I find it difficult to wrap my head around, and I'm looking for a better solution. 

I understand they service builders/flippers by advising them on what's best for their investment and managing the selling process. Still, even lawyers don't pay such high fees for professional time spent with clients.  

And I'm assuming the comp is typically 1 point, i.e. 1% of the loan amount?

Appreciate all of the responses. Can anyone point me to reputable lenders to start with? I don't want to mess up with my first clients....