Comments on: Real Estate’s Independent Contractor Model Broken

By: Patti Gray Whann

Patti Gray Whann — Sat, 24 Apr 2010 14:16:02 +0000

Hi!
I am a broker and owner of a real estate business. i opened up 2 years ago in upstate New York. I am a small boutique business. I spent 4 years with Century 21. Otherwise I was a social worker for 17 years. Perfect match, this is a people business. I agree that this model is broken and the government has no more money and that we are going to see that agents are no longer independent contractors. I am in the building business as well and they just put in our New York State budget 1 week ago that General Contractors will not be able to hire IC on the job. Everyone will need to be an employee..They have run out of money with workers comp and unemployment. they need to reach out and stop the bleeding with IC’s. Brokers have always skirted this law..When NAR comes out in print saying we have nothing to worry about is criminal. We all need to pay attention to what is happening.

By: Randy Whiting

Randy Whiting — Wed, 21 Apr 2010 18:28:13 +0000

With all sorts of people out there changing one thing about the status quo and calling it a “new spin” I really enjoyed reading about your business model which is authentically a breath of fresh air. You’re right that managing brokers are not taking enough ownership of those who represent them more than any amount of marketing they do on the internet or in print; the Agent. Quality control among agents is sub standard and with the rapidly changing regulations surrounding real estate it seems to be only getting worse. I had an agent the other day that argued with me til he was blue in the face that the tax credit was not a refund but a reduction of taxable income. He actually called his mortgage person in front of me and had to leave with his tail between his legs. This is a full time agent who has been in the business for years. Besides that I read and write a lot in the blog world and am shocked at the false information that these “guru’s” give out to unsuspecting buyers on a blog site who are getting even worse information from the agent they have. Not to analogize with a stigmatized industry, but if you look at the car sales business, the salespeople are in most cases 100% commission (no base), and the added draw is that they are employees so they still receive benefits. To an agent that is doing well enough to live but not afford insurance, this would be a huge plus. Many agents are doing well, but not well enough to afford insurance or to get themselves looked at by a physician or a dentist which adds a lot of stress and risk to a person’s life. It gets to a point where you can smell the desperation on them, and that sent is not attractive to clients. I give you kudos for not only implementing this business model but spreading the word. There are enough boutique shops out there that could adapt this model and maybe even change the way this business is run eventually. Best of luck!

By: Bill Fulton

Bill Fulton — Tue, 20 Apr 2010 22:26:33 +0000

Down here in Orlando many real estate aents, includin myself, have oped to join low cost agencies where a small monthly fee is paid as well as a transaction fee. Other than that we keep 100% of the commissions. But you are right, the agents have to market themselves and web marketing is unique. And most agents down here are starving also.

By: Victor

Victor — Mon, 22 Mar 2010 15:29:00 +0000

Thanks for your response. Unfortunately they can’t gain experience from an exam either. The Illinois brokers test is surprisingly easy (at least when I took it). I hope you are right that it will weed out the bottom feeders (esp. my mother in law).

cheers,
v

By: Gary Lucido

Gary Lucido — Mon, 22 Mar 2010 15:20:47 +0000

Basically, they’ve raised the bar for what used to be called agents and brokers and changed the titles. I think it’s a good thing. The barriers to entry are way too low. This might weed out some of the bottom feeders who give us all a bad name. I’m actually amazed at how much critical information was left out of the original training.

Unfortunately, they can’t train/test for customer service skills nor market knowledge.

By: Victor

Victor — Mon, 22 Mar 2010 15:05:14 +0000

Gary, What do you think will be the effect of the upcoming Real Estate Broker law, requiring all Agents to get their brokers license, and brokers to receive further education to become a “managing broker?”

In you understanding of the new law, will there be a different employment or agency agreement between broker and managing broker? Or will the relationship be the same as it currently is, though with different names and increased education?