Broker Experiments with Hourly Fee
Says consumers could save big bucks if they were willing to pay their agents by the hour.
(Boonton, NJ, June 21, 2016) — Chicago broker Gary Lucido says consumers could save big bucks if they were willing to pay their agents by the hour.
Lucido is president of Lucid Realty, a small firm that offers discounted commissions to sellers, rebates to buyers, and hourly fees to anyone who’s bold enough to try them.
For the handful of consumers who recognize the value of paying by the hour, Lucid Realty charges $125 an hour. The buyer agrees to put up a $1,000 retainer. After Lucido has devoted seven or eight hours to the client, the company asks for more money.
Lucido shares his time log so the buyer can see exactly how Lucido is spending his time.
"For the right person, this could save them a lot of money," Lucido says. "The kind of person who chooses to go hourly knows what they want."
Lucido says the hourly arrangement is especially favorable for buyers of high-end properties.
In the case of a $1 million sale, with Lucid Realty representing the buyer and collecting a 2.5 percent commission, the company’s payday would be $25,000. If Lucido devotes 40 hours to the deal at $125 an hour, he keeps $5,000 in hourly fees and rebates the $20,000 difference to the client.
The concept of hourly fees isn’t new. Brokers have been talking for years about changing the way they charge for their services, but the traditional commission model has proven resilient.
"The consumer is highly irrational," Lucido says. "People are very risk-averse. There’s this fear, and they end up paying dearly."
More on Lucido’s experience with hourly fees, plus a peek at fast-growing 100-percent companies and realtor association revenue appear in the June issue of Real Estate Broker’s Insider.
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