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California Real Estate Commissions

Due to California’s real estate late market changes the question of real estate commissions paid to agents has become a hot topic. When an agent is faced with lesser number of transactions and lesser volume per transaction it is immediately reflected on agent’s income. You add to the mix ongoing monthly fees an agent has to pay to his broker and you have one unhappy agent who may start thinking of quitting real estate all together. When you have an agent who is looking at the real estate employment section in LA Times, you can be reassured this agent is not going to sell a house in the next 30days.

California real estate commissions made simple at REeBroker.

We don’t like seeing our agents unhappy and unmotivated. We solved the problem of reduced agent’s income by eliminating the entire ongoing broker’s fee scheme, actually we never had it in a first place, and we pay all real estate agents in California 100% commissions.

Why 100% Real Estate Commissions Makes Business Sense In Today’s Market

No, we are not crazy or at least we would like to think we’re not. As a confirmation of our sanity we can report that our brokerage is doing quite well and we have become the fastest-growing brokerage in the country. Our commissions’ policy is very simple. We charge agents $500 per transaction and $135 risk management fees and that makes everyone happy.

We automated all the administrative tasks and support, killed our overhead and gave all agents tools to conduct their business from anywhere they choose. We also removed restrictions on the territories our agents can cover. Now we have happy agents. And happy agents sell more and make more money.

We have a team of over 700 agents, many of whom doing outrageously good job selling real estate. As you can see to solve the problem with real estate commissions in California, a broker has to take a fresh look on the market environment and its own business model.

This is how we did it. We have created a new business model before the latest market change. Our brokerage was started on the premise “what if”. If you are familiar with programming “if”, no pun intended, is a function that tells a computer to perform an operation based on a preset condition. The owner of REeBroker, Anthony Vygandas Razhas, a software engineer, has decided to simulate market condition and play around with factors which may affect brokerage business in the future. Well, to be completely honest, we had a strong feeling that the changes were coming back in 2006. After looking at variables and playing around with numbers, we have decided that the only way to make a real estate brokerage successful in the future is to eliminate overhead. We did that through creation of proprietary Internet-based software, the REeBroker SYSTEM. We have become a first online broker.

The Market Is Trying To Tell Us Something

Let’s look at the California’s real estate employment market again. As realtors, we also have to be aware of the fact that in today’s economy most home buyers are driven by practical principals of getting the best value for their money now. The times when a future value of the home was reassured are gone. People and banks are much more cautious about real estate transactions. Many buyers aware of the fact that they can negotiate realtor commissions with an agent and quite few of them do. If an agent has 50/50 split or 70/30 split and his client is trying to beat him down on his commissions, how in the world an agent can make a normal living? We allow our agents to enter in commission negotiations with buyers but the minimum they have to keep is $2,000 to keep it legal and worthwhile their time and effort.

In 2005 the data compiled by Real Trends has indicated that from an average of 6% commissions on real estate commissions average has dropped to 5.1%. This is a clear indicator that consumers are more conscience about realtor commissions than in the past. These days you can see everywhere posts for 4.5% commissions and who knows what it will become tomorrow. An average broker is making fewer transactions per year and there are no signs of increase in transactions growth overall.

However, this is not the case at REeBroker. Our transactions numbers are steadily increasing. This is not only due to the fact that we are the fastest growing brokerage in terms of number of agents. Our agents are more motivated to sell thanks to our most competitive commissions’ structure in the entire state of California and quite possibly nationwide. We have managed to provide all agents with the most comprehensive support at no cost to them which turned out to be a huge boosting factor in our agents’ productivity.

Despite the market conditions and California economy, REeBroker consistently shows steady growth.

Because of the new lending practices, all California agents are faced with more paperwork and delays in transaction processing. That in turn leads to delays in receiving their commissions check. Wouldn’t you rather have a full-commissions check than a 50/50% split from the previous transaction? Sure you would and that’s what you get at REeBroker.

Valid and Candid Questions About Real Estate Agent Support

How many times as an agent you asked yourself, “Why in the world can’t I get a full 100% commission split, why am I paying all the fees? What am I getting in return, an office space, a phone, a chair, refreshments? Do I really need all that to sell homes?” The answer is you don’t. Our agents successfully sell homes using their home and mobile offices. They spend more time in the field because that’s where your prospects are and that’s where sales happen. Oh by the way, if you are active in real estate, don’t you already have a home office?

If you look at the way an average conventional real estate broker operates and spends its money, you may find yourself back in time, somewhere in 1999-2000. That’s ten years folks! Back then all overhead was easily covered by the higher percentage of real estate commissions, California’s booming real estate market, never-ending stream of transactions, easy lending, assurance of the ever-increasing value of homes and home buyers’ enthusiasm. It’s all gone! But the business model of an average conventional broker is still the same. Unfortunately, agents are the ones picking up the tap for things that are utterly useless.

Realtor Innovation – The California Style

California is a home of entrepreneurs and inventors and Californian ingenuity has become a trademark of our state. What we see in today’s real estate market requires a new fresh approach to real estate brokerage and California’s real estate commissions’ structure. We have pioneered the new online brokerage business model and we have created most comprehensive real estate agents benefits package. We extend an opportunity to all California real estate agents to join us in creating a better future for real estate professionals.

With us agents always come first.