Picture this…main watering hole for the agents of a large Brokerage office…”Happy Hour!” The agents are having a drink and sharing their weekly war stories. Let’s listen in:
“So Freddie, didn’t I hear you nailed a ‘hogger’ this week?” “Yeah baby, you heard right…I’m at the house, a $475,000 listing, putting up a rider on the sign that says ‘Great N’Hood,’ and a couple drives up and wants to see it. Ms. Homeowner was just leaving to get groceries and told me to go ahead and show it, so I did. They liked it and said to write up an offer. I showed the offer to the sellers and they went with it. So…I didn’t have to split the commission with another agent…got the whole 6%, $28,500 for myself…hogged that one!”
See, in a normal situation, the listing agent lists the house at 6% and when a different agent brings a buyer, the selling agent gets 2.7% ($12,825) and the listing agent gets 3.3% ($15,675). The listing agent is the one that covers the marketing expense of the house. Only makes sense the listing agent should get more…to offset expenses , right?
The listing agent probably took pictures (no cost?), made brochures ($15. ?), provided copies of the disclosure document ($5.?), had a yard sign installed ($40.?), spent a couple hours working with the home sellers, before the listing was secured, showed the home a few times (4 more hours?), took calls from other agents who showed the home (two more total hours?), wrote the offer (another hour and a half?), and will attend the closing (another 2 hours?). So, a total of 11.5 hours. But I usually find an agent will spend about 20 hours per deal. So lets say the agent worked 20 man hours and had total expenses of $60. Landing the hogger means he made $28,500 - $60 = $28,440 divided by 20 man hours = $1,422 per hour. Yeah baby, hog it up!
Most buyers don’t understand this whole process. They’ll sometimes be working with their agent but attend an open house or call to see one from the info on a sign and the listing agent shows them the house, writes the deal and gets a “hogger” on it. The agent the buyers has been working with, sometimes for months, gets absolutely nothing and the agent that wrote the deal…spent maybe, a couple hours with the buyers, gets the big reward. Bad deal, this?
Agents are supposed to not only ask a potential buyer if they have an agent, they’re suipposed to defer to the other agent, if there is one. Then, if there is no other agent, the listing agent is required to disclose to the potential buyers, on an “Agency” document, how the process works…and…have the buyers sign it. But do they? The Hoggers are in waiting…c’mon uninformed buyers…line up!
When you start working with an agent, if you’re happy with them, have them set up all showings and situations for you. That’s the only way they can get paid. Don’t hand over the pay to some agent you don’t even know, who hasn’t done a thing for you. And, if you do look at a home while in the search process, if the showing agent does not ask you if you are represented by another agent, let your agent know about it…the showing agent is either derelict in their procedure or unethical or plain stupid? Would you want to reward someone like that?
One more thing (I’ll bet many readers are wondering about this), If a listing agent was happy with the normal way home sales pay out…and…an unrepresented buyer comes along…and…the offer is less than the sellers want…why wouldn’t the listing agent offer up all or part of the 2.7% he wouldn’t have to pay out to another agent, to help his sellers? We do here…we do even more…check us out?
Beware…the “Hogger” may come your way?
Next: How to get the best deal when qualifying for a mortgage!
Ed
Tags: anoka, behind on mortgage, cash flow, contract for deed, distressed, first time, first time home buyer, foreclosures, home, house, investors, market, minnesota, MLS, mn, mortgage, pricing, ramsey, rates, real estate, realtor, redemption, rentals, REO'S, short sales, St. Paul, twin cites, washington county
August 8th, 2011 at 5:45 pm
Thanks for the post
August 8th, 2011 at 6:06 pm
Thanks. Hope you do well in whatever Real Estate matters you’re
involved it!
Ed
August 17th, 2011 at 8:16 am
I appreciate any response to the postings. I’m not here to “amaze” anyone…just want to bring the truth to
those with Real Estate problems. Thanks for your note.
Ed
September 28th, 2011 at 3:47 am
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September 30th, 2011 at 5:47 am
I haven?t checked in here for a while as I thought it was getting boring, but the last several posts are great quality so I guess I will add you back to my daily bloglist. You deserve it my friend
October 3rd, 2011 at 4:41 pm
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October 19th, 2011 at 6:31 pm
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October 20th, 2011 at 9:35 am
Thanks for your note, much appreciated. There’s a lot more to learn about the shenanigans that go on in
the Real Estate business. Hope you come back to look again…and…best of luck with your studies and future
success!
Ed
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October 30th, 2011 at 1:04 pm
Interesing article and Nice blog greetings!
November 9th, 2011 at 10:50 am
The title of your blog: (» “Yeah Baby…got me a Hogger!” - Metro Homes Market) seemed intresting so thats how I ended up here!
November 9th, 2011 at 3:34 pm
Thanks for taking the time to reply!
Ed
November 10th, 2011 at 9:08 pm
Have you ever thought about publishing an e-book or guest authoring on other websites? I have a blog based on the same topics you discuss and would love to have you share some stories/information. I know my readers would value your work. If you are even remotely interested, feel free to send me an e-mail.
November 14th, 2011 at 11:35 am
Thanks for your note. See my response at your e-mail address. I also welcome your take on any
of the postings; your opinion about the topics. You may want to add something?
Ed Klein
November 14th, 2011 at 11:35 am
very well read and a nice topic.
November 14th, 2011 at 10:48 pm
very well read and a nice topic.
November 15th, 2011 at 9:36 am
Thank you Gordon, appreciate your comment. Perhaps you’d care to give us you opinion about the post content?
Did you know these things? Have you, or anyone you know had Real Estate issues similar to a post content?
In any case, we’re glad to be of help!
Ed Klein
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November 17th, 2011 at 3:48 pm
Contact me at: ed@metrohomesmarket.com or call 651-770-5000
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