patrick.net

HARM,

It won't be 6%, even if the current system holds. At best, you can probably squeeze 4.5% out as a buyer's agent minus MLS access fees and kickback to your broker.

Astrid,

Actually I was thinking only 3% (buyer's half), but hell I'll take 4.5% if I can get it! Considering the current price of anything halfway decent in CA (rapidly approaching $1million), and factoring in a good 30-50% post-bubble haircut, 3% off is still $15,000-21,000!

HARM,

Then you'd have to pay income tax on that 15-21K...

I think it's better just to pay for direct access to MLS and then negotiate directly with the seller and seller agent, if you only plan to buy or sell 1 or 2 houses.

I have myself wondered taking the realtor course. For very similar reasons. Apart from MLS access, I just want to be an educated buyer. It's neither expensive nor difficult to pass the exam. So the downside is very slim. Just a small investment of time and money. Hopefully I will learn something from a buyer's point fo view.

@astrid,

Dumb question from a (currently) non-Realtor: why would CAR/NAR allow me direct access the MLS if I'm not an agent? How would I pay for such access?

HARM,

You'll have to ask someone else. I assume there are realtors out there who are willing to sell out the CAR/NAR for a small fee.

Get an experienced RE attorney though, either ways. This will be especially important in a down market where you can wring concessions from your seller.

bc,

What did you get access to as a realtor that's not available to civilians via realtor.com or ziprealty?

HARM,

at least in British Columbia, what bc said would also apply - that is, most realtors are "salespersons" who work for "brokers". The broker has the license that allows the office to operate, the realtor has the sub-license that allows him to handle transactions.

Yes, expect to give 50% of the total gross commission you are entitled to earn to the "broker"/office.

What this means is, in order to live la vida loca, if you figure on an even split between the buying/selling agents, you need to be involved in $2,000,000 worth of transactions a year to clear $30,000. Or, to make the big money and rake in $120,000/yr, you would need to be involved in around $8,000,000 a year of transactions.

If you can get that kind of volume as a listing salesperson and manage to sell without getting a buying agent involved, you have hit the gold mine.

As you can see from the numbers above, in a falling market, it is going to get very difficult very fast for large numbers of realtors to make money, because no matter what the prices are, falling volume is poison to real estate compensation for the industry as a whole.

On the other hand, some brokers are going to benefit greatly from an uptick in foreclosure activity - but those will be the brokers, not the bottom feeding salespersons, by and large.

On a side note, I took and passed the British Columbia pre-licensing/sub mortgage course back in 1997. Very educational. I made the mistake of trying to get involved in the mortgage business during the last down market, without significant cash reserves to fall back on. A lot of realtors (say 50%) are about to find out the hard way that the good times do not last.

Hope they've been saving some of their green!

HARM,

Given the time, cost, and annoyance of having to go through getting a sales & broker license, joining a MLS board and paying their fees, and joining a local association and paying their fees...

Wouldn't it be better and more cost efficient to just find a seller (most probably with a selling agent), and then cut the buying agent's estimated fees off of the price and negotiate directly with seller/seller's agent via a personal RE attorney?

If it does become a hard-landing then I will follow that strategy. In a soft-landing, maybe your approach is better.