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.

My understanding is that in excess of $60 billion was paid out to realtors in the form of commissions last year. However; the avg. realtor's income went down! With all of that "easy money" floating around it's bound to attract the "I was looking for a career change anyway" crowd. However; if you were in a field that might create a "natural market" for yourself like local insurance agent where you had already earned people's trust it might be a nice fit.

That is....... after the bubble implodes and all the flakes and posers have been run off! Rest assured that many of these folks will be long gone before we even flirt with the "bottom". Volumes (the life blood for realtors) are already drying up.

I think you'd learn more and have more fun moonlighting at Home Depot. With wage + employee discount on fixins for your new house, you'd probably earn/save about the same money and have a better long term knowledge return on the time spent.

@DinOR and Tsusiat,

I thought I'd made it clear in the thread intro (and hopefully funny as well), but I'm not looking to go into the Realtor biz --I just want access to the MLS and "insider" info for my own benefit as a buyer, plus to cut out the buyer's agent/broker from the equation.

As astrid & Randy H pointed out, this may not even be necessary, given the MLS's diminishing control over listings and the option of using a good RE attorney in lieu of a buyer's agent. Even so --as bc pointed out-- it certainly cannot hurt to have an agent's license from a consumer self-advocate POV, especially while they're so easy to get.

Speaking of good RE attorneys (representing the buyer), what's the best way to find one in your area?

HARM -

I could tell the tongue was planted firmly in cheek, just thought I'd point out how difficult it is to make the "big money". A lot of people go into real estate without even realizing they are deluded about receiving 6-7% of each transaction.

HARM,

Thanks and don't think for a minute that you or practically anyone else that posts here would seriously ever consider being a realtor! If someone here though feels an uncontrollable "urge to sit for the exam" (all 10 questionsof it) just contact me through the "normal channels" and I'll send in the "retention prevention committee". 100% guaranteed.

Speaking of good RE attorneys (representing the buyer), what’s the best way to find one in your area?

Referrals. If you know anyone you trust who has rental-income RE, they'll probably know some good RE attorneys.

By the way, unrelated to the current thread, has anyone else noticed the sheer numbers of California bubble blogs? There must be 100's of them! Half of them are from the BA. I just did a search yesterday because I was curious, and the numbers compared to just a year ago are phenominal. I take this as a good thing. It can only mean that the top was reached a while ago, and all the people left out are PISSED, want changes, or want some sort of assurance that there's tons of others in their same predictment. They seem to carry the same themes as this one- people that sold and rent, renters who are priced out, and people who are planning on leaving the state. The last group of people seemed to be signifigant too.. not great to hear forme anyhow.

It was Abe Lincoln who said: "A man who represents himself has a fool for a client"...

As I have mentioned before listing agents will do everything in their power to sell a home without paying a fee to a selling agent. Since this is the case most desirable residential and investment property is sold by the listing agents (who keep the entire fee).

What I always do is get my foot in the door by letting the listing agent know that I am not working with a Realtor. Then I try and get in front of the Seller and make a deal with a quick close where the Seller cuts the listing agents fee since I am representing myself.

If HARM gets a real estate license and we both buy identical $1mm condos in Pacific Heights with the sellers getting $940K he will pay a lot more than me since he will pay more than half of his $30K commission to the govt. (Social Security, Federal, State, etc.) and pay about $350 more in property taxes the first year and have his property taxes go up by more than $7 more per year every year…

@FAB,

If I get the license but don't actually practice the trade/join an agency, am I legally obligated to represent myself as a buyer's agent (for commission/tax purposes) in my own private transactions?

If so, what if I just get the training but forgo taking the license exam? Do you think it's still worth it?

FAB,

Then you're getting the Seller to drop the $1M selling price to $970K or something in that ballpark?

I was talking to someone at one of the "exclusive" RE firms and they were complaining about a huge increase in just what you're describing...I think.

They were also saying that sellers were increasingly cutting out the selling agent entirely, instead using an attorney, and offering the agent a lump-sum "settlement" which (according to her) isn't worth their time or money to fight. Of course, these are more the $4M+ types of places she's talking about...rich people with lots of lawyers.