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Should Real Estate Agents Charge by the Hour?

James clark March 27, 2015 0

Real Estate Agents RateTraditional transactions provide commissions for successful sales. The agent hustles more for a piece of the action when invested in the outcome. Is this theory well thought out?

Some enterprising agents have begun charging fees plus expenses or hourly rates plus expenses for performing real estate sales duties. The seller controls expenses on readily saleable properties, thus increasing their net proceeds.

The first step in rethinking your remuneration involves verifying the legality of offering this option. This speaks to why an agent needs to take real estate courses.

Different states have different rules regarding the structure of real estate contracts. Review yours. Selling time rather than results may change your licensing needs to consulting rather than sales.

What are the duties of the real estate agent? Learning these duties shows the importance of real estate training:


How does the remuneration structure affect loyalty? Will the agent be more loyal to a commission or a wage? Loyalty is probably net neutral.


Agents must do what is legally requested of them. Sounds more like an employee’s duty than an independent contractor’s duty, doesn’t it?

The distinction may involve the legal aspect of the obedience duty. Agents cannot discriminate on command.

Given agents desire to please their clients and brokers, obedience is probably net neutral as well.

Disclosure or Dealing Honestly with All Parties

There are legal requirements in every state regarding disclosure. An agent needs to take real estate courses every year to remain up to date on these rules and regulations.

Integrity is not for sale by commission or wage. Dealing honestly with all parties is a means to the end of completing a final sale, no blowback from buyers finding hidden defects.

The seller and agent move past the sale with no worries of legal entanglements. This strategy works best for all parties and the structure of remuneration does not affect this duty.


Confidentiality refers to the price negotiation process, not the disclosure of defects process. When the client suggests they will accept a price twenty percent lower than asking, no disclosure is warranted.

The seller can suggest negotiation strategies or price reductions without fear of the agent blabbing this information.

An argument can easily be made that commissions tying the agent remuneration to sales price supports this confidentiality more so than a straight wage. But it’s still duty.

Reasonable Care and Diligence

Professionalism is not for sale. Competency is a function of experience, management, and education, not remuneration package.


Reasonable care and honesty should cover the accounting duty. Keep up to date books, honest books, is simply a minimum standard of good business.

Remuneration structure does not seem to impact the duties of an agent in any profound way. Perhaps tradition keeps us from reviewing options. Do check with your state as to the legality or licensing effects regarding a wage structure.

As a first guess, wage structure would be appropriate for readily salable properties for experienced sellers or very high-end properties for sophisticated sellers.

The sites that require innovative sales techniques or expensive marketing are probably best left to commissions. Think about your process, marketing, farming, closing. How would a change in pay method effect you?

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