Question of the Day: How will 3% commissions (instead of 5-6%) affect you?19617
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 WGAN ForumFounder & WGAN-TV Podcast Host Atlanta, Georgia |
DanSmigrod private msg quote post Address this user | |
 WGAN Question of the Day (All) Question of the Day: How will 3% commissions (instead of 5-6%) affect you? Hi All, The WGAN Forum Question of the Day for Monday, 18 March 2024: How will 3% commissions (instead of 5-6%) affect you? Dan |
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 WGANStandard Member Osaka, Japan |
Meidansha private msg quote post Address this user | |
| My guess, probably not good. In Japan there is a 3% ceiling on commissions. Real estate agents almost never spend money on photography. They usually ask the owner to pay directly (which like never happens). It also zaps enthusiasm to appeal the property online in general. Most agents I know are busy playing golf to try to talk to a small number of rich people to secure deals rather than appeal to the public in general. Their Instagram accounts are full of pictures of how nice their staff are and virtually no pics of houses. |
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selder76 private msg quote post Address this user | |
| Honestly I don’t see how it would affect real estate photography in general other than perhaps lowering the acceptable investment in photography from a high end package to a lower end package. Ultimately if you are hustling correctly (find more biz when it is slow), you should be able to pull in more agents desperately willing to get a sale and willing to invest to do so. If you’ve built your business on being the hot, new real estate photographer who comes up with flashy angles and appeals to newbies, then you may struggle as the influx of realtors will likely be stagnant/less appealing. If, however, you’ve built your business over obtaining loyal and higher end realtors from the start, my guess is you’ll be just fine. |
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denlee private msg quote post Address this user | |
| This impending change should make no difference to the number of homes listed for sale and the corresponding demand for photographic services because sellers want to sell and buyers want to buy. It will however eliminate the majority of agents who have relied on buyer-side commissions, which until now were negotiated for them by the listing broker, a practice that has existed in the US for more than 100 years. When sellers in the US are no longer blackmailed into paying the buyer's broker, the system here will soon closely mirror the real estate business models in the UK, Australia, and New Zealand, where there is little to no buyer representation by agents, although many buyers are represented by an Attorney who they pay for themselves. The following numbers demonstrate clearly what will happen here. There are currently 600 agents per 100,000 people in the US, which is outrageously high by world standards, but only 75 agents per 100,000 in the UK. The figures in Australia and New Zealand are similar to the UK. Agent productivity in the other countries is also vastly higher with UK agents averaging 60 closed transactions annually compared to just 12 in the US. Based on that statistic alone, I predict that at least 80% of agents will disappear in the US, but it could be higher. The remaining agents will do substantially more business, so a client who was ordering one photo shoot per month could easily be ordering 5-6 per month. Accordingly, now is the time to cultivate our relationships with the likely survivors. Note: the proposed NAR settlement includes only around one million of their 1.5 million members. Notable brokerages not included in the settlement include Berkshire Hathaway, Exp Realty, Howard Hanna, and others. It also does not include the approx. 500K brokers/agents (primarily commercial) who are not members of NAR. |
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 WGANStandard Member Los Angeles |
Home3D private msg quote post Address this user | |
| I concur with @denlee that over time, the way RE is sold in the US will evolve to be more like Europe, including lower commissions and a move toward the listing agent being the ONLY agent on many transactions. But there is one key difference between here and Europe. In America, you don't need a bonafide reason to sue people, costing both sides money even if there is no solid justification. A move toward "double-ending" deals may inspire an increase in post-sale lawsuits. Buying RE is the biggest financial transaction of most people's lives and a single person handling both sides is rife with conflict of interest. Brokerages won't like either the liability or cost of these lawsuits and may subsequently require that buyers either have their own agent or attorney. Seven states in the US already PROHIBIT double-ending and more may move in this direction. Big brokerages have fought this for years, but now may move toward supporting it. As @selder76 concludes, if "you’ve built your business over obtaining loyal and higher end realtors from the start, my guess is you’ll be just fine." Quality always matters. It's the first level of differentiation. But it's also important to push your business beyond residential RE. Virtual tours deliver value in many fields. Five years ago I never would have expected our largest project for 2023 to be a cemetery.  |
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Vanaman06 private msg quote post Address this user | |
| This shouldn’t affect RE photography at all. Listing agents should still get the same commission. Yes they charged 5-6% but usually half of this went to the buyers agent. Now they will just charge 2.5-3% | ||
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WGAN Forum Founder & WGAN-TV Podcast Host Atlanta, Georgia |
DanSmigrod private msg quote post Address this user | |
| Video: What the NAR Settlement means for Real Estate Media Providers? | Video courtesy of Upmarket Business of Real Estate Photography Media | 8 April 2024 --- Video: What the NAR Settlement means for Real Estate Media Providers? |
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