Real Estate Photography - Charge by percent of sale

[manaheim]

Yeah. If it works, let us know. I'd love to see this happen for all of the services, then maybe people would revolt.

 

[Braineack]

Sure, but Braineack suggested that the manner in which business is conducted in that industry is a scam. I simply raised the question that, if that's a scam, what about other industries? Say an industry like, oh, I dunno'... photography? Personally, I would like to read Braineack's position on that...

A realtor getting paid a fee based on the percentage of the sale price of your home is a scam.

Let's say I sell my house today for 350,000 and I have 50,000 of equity in it.

Realtors in this area often charge 6%, the going rate.

That's $21,000 in commision. That's quite a bit of money to provide the same service for my house as any other they'd sell at an equal, greater, or lesser value. And then alas I come to find out my neighbor sold his house for $300K, used the same realtor at the same 6% fee and the realtor got paid $18,000.

What did I receive for the extra $3,000? Nothing.

The realtor didn't work harder, didn't spend more money to sell it, didn't do a damn thing extra. A realtor can't magically make your house sell above market price because they put in extra effort, it's going to sell at what someone's willing to pay for it.

And in this case that $21K is 42% of my equity in the home.

Now I'm not completely discounting realtors as a profession, they have their moments, and I do understand why there are circumstances where a percent fee makes sense (eg. multi-million dollar listings), but it's all mostly on their part.

But, IMHO, there's no relationship between the price my house sells for and the amount of work that a realtor has to perform to sell it.

Do you perform wedding photography services as a percentage fee of the total cost of the wedding? the cost of the venue? Because that's the same relationship here. Same thing for taking pictures of the house itself, the final price of the house has nothing to do with the amount of service you are providing as a photographer. The sq. ft. of the house does. If the house is larger, then it's assumed you'll take more pictures of extra rooms and you'll get charged accordingly. But doing this service based on the sales price of the house is only a way to line your own pockets without doing any extra work. But since photographers in general don't charge for services like this, I'm not quite sure how I can give you my position on it. If they did, I would tell you it was a scam.

 

[Kolia]

Of course, nobody is obligated to hire a realtor to sell or buy a house...


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[Kolia]

Sure, but Braineack suggested that the manner in which business is conducted in that industry is a scam. I simply raised the question that, if that's a scam, what about other industries? Say an industry like, oh, I dunno'... photography? Personally, I would like to read Braineack's position on that...

A realtor getting paid a fee based on the percentage of the sale price of your home is a scam.

Let's say I sell my house today for 350,000 and I have 50,000 of equity in it.

Realtors in this area often charge 6%, the going rate.

That's $21,000 in commision. That's quite a bit of money to provide the same service for my house as any other they'd sell at an equal, greater, or lesser value. And then alas I come to find out my neighbor sold his house for $300K, used the same realtor at the same 6% fee and the realtor got paid $18,000.

What did I receive for the extra $3,000? Nothing.

The realtor didn't work harder, didn't spend more money to sell it, didn't do a damn thing extra. A realtor can't magically make your house sell above market price because they put in extra effort, it's going to sell at what someone's willing to pay for it.

And in this case that $21K is 42% of my equity in the home.

Now I'm not completely discounting realtors as a profession, they have their moments, and I do understand why there are circumstances where a percent fee makes sense (eg. multi-million dollar listings), but it's all mostly on their part.

But, IMHO, there's no relationship between the price my house sells for and the amount of work that a realtor has to perform to sell it.

Do you perform wedding photography services as a percentage fee of the total cost of the wedding? the cost of the venue? Because that's the same relationship here. Same thing for taking pictures of the house itself, the final price of the house has nothing to do with the amount of service you are providing as a photographer. The sq. ft. of the house does. If the house is larger, then it's assumed you'll take more pictures of extra rooms and you'll get charged accordingly. But doing this service based on the sales price of the house is only a way to line your own pockets without doing any extra work. But since photographers in general don't charge for services like this, I'm not quite sure how I can give you my position on it. If they did, I would tell you it was a scam.

What did you get for that 3,000$ ? You got 50,000$ higher sell price...


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[astroNikon]

IMHO, after working in the real estate market years & years ago, I've found that realtors will tell you to update areas of your house so that it would sell for more. But in reality you put $xx into it, and the house sells for $yy more which is usually less than $xx. But with a higher selling price the realtor gets more $$ out of it, And since it's been updated and is nicer, they have less work to do to sell it. Of course I think that is only a few particular experiences I've had and have seen and various demographic areas are different.

But real estate is the same as other professions. They have their expenses and to list the house in the real estate marketing system, Check for various sold houses in the areas, hopefully do some marketing to sell the house, open houses, etc and hold to sell (3%) for the seller and the buyer (3%). The 3 or 6% is fixed no matter how little or how much effort they put into selling the property.

I recall working with a commercial builder where they gave the real estate person 3 months to sell the house. If they didn't he moved on to the next real estate person. And he had a minimum selling price, which was a bit above market. So after 3 months of effort the RE person could come out with nothing. And one property I recall, he went through at least 4 RealEstate people.

You can sell it by yourself but a real estate lawyer is highly recommended.

I'm curious why it's 3% . can't they be competitive and say only charge 2.5% ?? Which nowadays you can ask that as sometimes they compete with discount brokers.

of course, we're at our own on how much equity we have in our house

and it's up to the market on the selling price of the house. recently the houses in my area in 2009 went for cheap .. $60-90k or so for foreclousures which drove the market prices down. Then the inventory of those houses emptied and the prices skyrocketed to 2007 market values (up to $130 for that same $90k), and then people were bidding MORE for the house, houses going for up to $142k when the seller was asking $130k. Then the interest rate fluxed up and bogged the market down.

It's basically your house is worth the value of the similar houses in your area. So you don't really get much from the real estate person. They will try to push the selling price up, but usually it's market that drives it, unless there is something specific about your house which differentiates it from the others in your area.

 

[Braineack]

What did you get for that 3,000$ ? You got 50,000$ higher sell price...

No it didn't. There are many things that contribute to the price of a house--the realtor's fee not being one.

Even if your relator was able to bring in some client that was willing to pay more for your house, once the underwriter comes in and appraises the house for less, and then they refuse to give the buyer the loan because it's above market price, then what?

Plus IIRC, the buyer's agent tends to get a cut of the fee. So it's actually in their interest to get the buyer to pay as much as possible for the property and not fight/negotiate the price down.

IMHO, after working in the real estate market years & years ago, I've found that realtors will tell you to update areas of your house so that it would sell for more. But in reality you put $xx into it, and the house sells for $yy more which is usually less than $xx. But with a higher selling price the realtor gets more $$ out of it, And since it's been updated and is nicer, they have less work to do to sell it. Of course I think that is only a few particular experiences I've had and have seen and various demographic areas are different.

so let's see, you put all the money to improve the house which makes it to for the agent to "sell" at a higher price and they get a bigger cut as a result. I don't see the problem...

 

[Kolia]

You know it's more complicated than that.

How much would you pay for a given house "sold by owner" versus the same house sold thru a realtor ?

As a seller, how much longer are you willing to wait (possibly paying interests on the mortgage while you do) for a buyer and how much of your time can you commit to show the house (instead of working and being paid) to potential sellers ?

As for the banks appeasing, didn't you notice they tend to hit exactly the contract price ? It's in the banks interest to make an appraisal that moves the transaction forward.

I'm just showing a different perspective. Just because we spend money for a service, it doesn't mean we lost money overall.


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[Braineack]

I never said there wasn't a need for realtors.

My last house sold after its first showing. It wasn't because of the realtor...in fact, the realtor didn't weed out two initial offers that we all knew would never come to fruition, yet we drove out to his office after work and wasted our time with him presenting them to us. He knew better, but the offer was higher than expected and he wanted us to jump on it... wanna know why? he'd make more money for the zero work he did other than putting a sign outside the property and putting it on MLS and letting a few agents inside the house with their potential buyers.

Hell, the offer on my current house was accepted 3 days after they listed. We found it online through MLS on a Friday afternoon, called a random agent, and had her let us see it on Sunday, and we wrote up an offer on Monday that was accepted that night.

She was very useful during the closing process, but the idea that these folks get a cut of the sales price is ridiculous. We figuratively just threw money at her. It honestly makes me wanna change professions.

 

[astroNikon]

REs should do alot of extra work too ... such as checking for leins, best mortgage search if you use them to get a mortgage, checking for issues of the house beyond some house inspectors. many house inspectors want to make sure the house is mortgagable .. and not really looking for problems for the buyer (mold, ant/bee colonies, etc).

FYI, my mortgage company appraised the house I bought for about $15k more than I bought it for.
but I got lucky.
the market value was higher than my purchase price but the market was going up rapidly. It was all timing.

but when demand is high, usually they get by with minimal work.

 

[Steve5D]

My last house sold after its first showing. It wasn't because of the realtor...in fact, the realtor didn't weed out two initial offers that we all knew would never come to fruition, yet we drove out to his office after work and wasted our time with him presenting them to us. He knew better, but the offer was higher than expected and he wanted us to jump on it... wanna know why? he'd make more money for the zero work he did other than putting a sign outside the property and putting it on MLS and letting a few agents inside the house with their potential buyers.

So you're faulting your realtor for trying to get you more money for your house? Oh, what a catastrophe. Yours should serve as a cautionary tale, admonishing sellers to want less.

Seriously, that doesn't make sense.

I don't know how it is where you live but, in California, for instance, a realtor is required by law to present all offers to the seller, and I'm not sure that varies by State.

But you bring up interesting points. The realtor has to list the house. In doing so, the realtor must do a write-up which makes the property attractive. Letting other agents into the house? Well, that takes scheduling, and takes time out of the realtor's day. How many times do we read on this forum "I wouldn't even leave the house for "X" amount"? It's fairly common. Why would you expect a realtor to not approach his business in the same manner?

You're not finding the buyer. You're not generating the required mountain of paperwork. The agent does much more than just let agents into a property on a Sunday...

Hell, the offer on my current house was accepted 3 days after they listed. We found it online through MLS on a Friday afternoon, called a random agent, and had her let us see it on Sunday, and we wrote up an offer on Monday that was accepted that night.

Most people get paid time and a half or double time if they work on Sundays. They don't actually do more work, or better work, they just do work. And they get paid double their regular hourly rate for doing it...

She was very useful during the closing process, but the idea that these folks get a cut of the sales price is ridiculous. We figuratively just threw money at her. It honestly makes me wanna change professions.

I know people who've done it, and are now successful. Unlike the impression you're trying to give, they all work very hard for their clients, and their clients are happy to pay them for that hard work...

 

[Braineack]

What does that all have to do with getting based a percentage of the final sales price? A percentage of the sales price has nothing to do with their services rendered. I never once said they don't perform a service or have to put in effort to get the job done, but that effort isn't going to change because of the sales price of the house. So quit trying to argue that because they actually do work, that they deserve money based on something outside their control.

The realtor who sold the house I bought, also sold the house across the street from us after we moved in. That house was almost 100K less. We can assume she ended up with around $3,000 (6K commision split) less on that sale over my sale. Or in other words, the seller's of my home overpaid her by $3K for the same exact service.

The mere fact they split the fee with the buyer's agent is a red flag in itself. Why should the buyer's agent get paid more money from the seller if the price of the house is greater? Not only does that the seller's realtor want the house to go for as much as humanly possible for their benefit, not yours, the buyer's agent wants the same for their clients. How is that not a scam?

Their fee is done this way, because that's the way it's always been done and you all buy into it because you think you're getting more for your money, but in Reality®, you're not. I won't change your mind, I know this, and I don't really care--I'm not trying to sway opinion--but you asked so there's mine.





With that all said, it's still not a smart way to charge for real estate photography. It doesn't benefit the seller/agent in anyway and only the photographer if the price of the house goes for a lot. Since photographers don't have a national association that monopolizes the way photographers charge for taking pictures of properties, sellers/agents will look elsewhere and find a photographer willing to charge based on a manner that is in a better proportion to the services rendered.

 

[Steve5D]

True, but it's an interesting, if not mildly related, discussion.

How much do you charge for a wedding, or for a portrait session, or for whatever type of photography you do, and why do you charge what you do?

I don't think the OP's idea would work, but I can understand where he's coming from...

 

[Braineack]

How much do you charge for a wedding, or for a portrait session, or for whatever type of photography you do, and why do you charge what you do?

I would come up with an hourly/session rate that factors in time/travel/expenses/processing/etc. I wouldn't base my fee on a percentage of the total cost of the wedding dress or the retail price of the product I'm taking a picture of.



Sorry for going on a rant. I do that.

 

[manaheim]

In our society, we pay based upon percentage for a variety of things...

- tips at restaurants
- real estate commissions
- sales commissions
- extended warranties
- etc.

All of these are societal norms. Whether we happen to think they are a scam or not may be an interesting discussion, but it seems WAY off the beaten path both in this thread and on this forum.

Can we please get back to where we need to be?

 

[Tailgunner]

Realtors are like used car sales men. For one thing, their going to settle more times than most on an offer instead of fighting to get you more money, why? Because that extra $5-10k for example would only net a realtor an extra $100-200. It just isn't worth their time.

We just sold our home after already having moved last year. We wasn't sure if we wanted to commit but the housing market was/is extremely strong in our old area. So we hired a realtor to sell the place, I would have done it my self had we had not already moved out of town. Anyhow, the realtor sat down with us and showed us the Comp sheet explaining what they felt was a good asking price. I told them I felt their suggested asking price was $70k less than what we could get. They blew me off saying it would be over priced and could take longer to sell causing the place to look bad. I told my wife no, we could always come down but couldn't go up. So they listed it for my asking price and the home sold in the next 48hrs. The new owners wrote us a check for the amount minus $3,000 to get something fixed. Not too bad for a high school drop out

Anyways, I think charging a % on real estate photography a bad concept. Why would a real estate agent spend the cash on something they can do for free? Unless it's a multi-million dollars home, no one needs high quality photos. We have bought several homes in the past and each one was listed with crappy photos. If I was to consider real estate photography, I would probably do it for a set price and that price would be based on the size of the property and rooms etc.