Kate's Commission-Cutting Crusade

Blogger's Note: Kate in the Valley is back -- still house-hunting after five unsuccessful bids, still blogging. In Chapter 3 of her diary, she explains her plan to single-handedly restructure home financing and why it didn't work:

"Want to hear about this great idea that I latched onto?  Well, it turned out to be not such a hot idea after all, but I'll get to that later.  Anyhoo, I thought it would be Super Smart to restructure the traditional home purchase offer.   Traditionally, when you buy a house you just give the purchase money to the seller and the seller pays the 5% commission out of that.  But when you think about it, you are agreeing to pay 5% more for the house, and that translates to a bigger down payment, a bigger mortgage and bigger property taxes every year.  So I figured it would be brilliant to subtract the 5% off the purchase price and pay the agents' commissions separately myself.  Seems like no big deal, right?  Wrong.

Let's say I agreed to pay $750k for the house.  Traditionally, the seller would give the agents $37,500 in commissions and take the remaining $712,500 to pay off his expenses, etc.  I need to cough up $150k for the down and take out a $600k mortgage.  My property tax is $9,375 per year.

But if I just give the seller his $712,500 directly and then pay the 5% commission to the agents separately, the 5% is reduced to $35,625 (saving $1,875) because it is based on $712,500 and not on $750k.  The seller is getting the exact same thing, only the agents' commission is reduced.

My 20% down is likewise reduced to $142,500 (saving $7,500).   My mortgage is reduced to $570k (saving $30k principle and 30 years' interest on that).  My property tax is reduced to $8,906.25 (saving $468.75 each year I own the home).  Sure, it requires a little bit more cash upfront to pay the commission separately from the purchase money, but the savings are meaningful, so I absolutely loved this idea!

Guess who absolutely hated this idea?  The agents. 

Read more: What happened when Kate bid on a house using her new-fangled commission structure...

Their commissions are getting cut to the tune of about $1,000 each, and the comps for the neighborhood are going down a bit. My agent argued that I was only hurting myself by doing this because I was lowering the comps in the neighborhood and saving only a few thousand dollars.  So, let me get this straight: I should pay extra for my house so that the comps are up for the neighborhood?  That makes no sense.  In this scenario, even the seller benefits because the escrow and closing costs are reduced.  The only ones taking a hit are the agents, the mortgage brokers, and the title companies because their fees are all based on this reduced purchase price.  In fact, when you think about it, it's the exact opposite of the cash-back scheme, which inflates all those fees.

Ultimately, my agent begrudgingly wrote the offer.  The house went into multiples and guess what happened?  The seller's agent refused to counter my offer.  Yup, they countered everybody but me.  The house went for a price that I would have happily paid, but I was excluded from the bidding.  Needless to say, it was an idea that was ahead of its time, and I have stopped using it.  When the buyer pool shrinks, the structure may work, though.  Feel free to give it a whirl.

Comments? Insights? Let loose.
Photo Credit: Kate in the Valley

Comments

[Cal]

Kate,

I think the point where the deal runs afoul of 9.7 is that the Seller hires the listing broker and the listing broker is technically the one offering the compensation to the another brokerage (if one is involved) when they bring in a buyer. Therefore your offer does fundamentally changes the structure and compensation offered. Dont get me wrong, if you got an agent that doesnt know the rules they are the one that is going to get in trouble, not you. But it isnt something that will be sweeping the nation anytime soon.

Also on your math there is a lot of "saving" that isnt "saving" at all but instead just paying money sooner (which has an corresponding "opportunity cost" which is unaccounted for). Outside of the opportunity cost there is the tax break consideration on the additional money paid per month in the original scenario (both property tax and extra interest paid) not accounted for. I estimate it is approximately a $100 a month difference under very favorable conditions. If you are willing to expose the extra money not spent initially to market risk (i.e. stock market or bonds) instead of a CD and let it sit and compound I bet the savings would be close to zero.

The end numbers I was using was $28,125 cash sitting in the bank instead of used to pay for the home. There was $162.50 a month difference in interest paid looking at a non-amortizing schedule (yes I know you would be amortizing and it would be less over time but this make it simple) with $39.06 difference a month in property tax for tax deduction purposes.

As for the "becoming a broker" idea, personally I think its great. If you are a member of the BAR you can take the test now (obviously you wouldnt want to do that without some studying) with a law degree you could take the test in 5 weeks after taking a couple correspondent courses. The MLS fees arent horrible (except the darn $500 setup fee) and you'd save a lot more than your above scenario ever could. Check out Allied School or Kaplan Professional Schools for test prep videos and CDs, they also have the correspondent courses if you need to take the classes. Im a big fan of DIY, althought with places like redfin and Buyside Realty the return on the DIY investment is a bit lower but you'll be in full control.

[formerlahomeowner]

Mr Income Stream,

Nice way to put it. Made my point easier to understand (see my previous post).

[Kate]

Cal:

I guess we have to agree to disagree on 9.7. But I definitely see your point on the opportunity costs. However, that reminds me of some additional deal points I considered which included paying all transfer taxes on behalf of the seller thereby lowering the "purchase price" further and gaining additional write-offs for the tax year. Of course, going into that will only cause more readers to doze off. ;-)

On the license issue, I'm hunting for study books now. I would never act as my own listing agent, but on the buy-side it seems like the thing to do.

Mr. Income Stream:

Upon closer review of the comments, I think you'll see we agree on more points than we differ. Where we agree: (1) the flaw with my deal structure was using it in a multiple offer situation (in my defense, mine was the first offer in); (2) prices are coming down; and (3) nobody cares about my spreadsheets or theories. Where we disagree: (1) I think a listing agent will absolutely blow off an offer that reduces his commission by any amount if he can; and (2) I could never ever get a job as a comedy writer, trust me.

[www.BetterVillage.com]

Kate: a problem that keeps bugging me is that you were told by your agent that this was a "multiple bid" situation. They, apparently, were told this by the llisting agent. There are many buyers that understand that "multiple bid situations" are frequently fabrications (I invariably get calls from the jaded when listing commercial property: "Hello... tell me about the property.. yes, yes.. .I know you have multiple offers, blah, blah, blah). Outside of just taking it with a grain of salt, or not "becoming married to the properties" what's a buyer to do? Perhaps there could be a mechanism built into the system that verifies the existence of other actual, current offers? I'm not sure about this, however, as I'm sure a cottage industry would spring up that produces "actual" competing offers. I can respect an auction type atmosphere, but just can't stomach blatant lies.

[Mr Income Stream]

"...Where we disagree: (1) I think a listing agent will absolutely blow off an offer that reduces his commission by any amount if he can;..."

Not if eating and paying the bills are a priority. Here's the dirty little secret. In the vast majority of deals if an agent is full time in the business. very rarely does he get the commission in full. there is always a hiccup in the deal that both parties can't agree on and the agent digs in his pocket to smooth the transaction. Think about it realistically 34k of 35k is a whole lot better than 0k if the deal doesn't go through especially if Master Card or Visa is calling.

I've read some of your blog and your postings here and have come to the conclusion you suffer from too much intelligence, too much time on your hands and impatience. You also should hone your skills in interviewing Real Estate Agents.

Here's a tip wait about 6 months subscribe to DataQuick's forclosure service, comprise a filter of all the zipcodes you find acceptable, hire a new agent and wait for a deal in your acceptable zip codes. Have your agent contact the bank and buy direct probably for a lot less than what you're looking at now, at the rate property is being foreclosed on right now.

With a published report out that states L.A. Real Estate is at least 52.1% overvalued and with the rate that foreclosures are coming back, why anyone with even marginal intelligence would be out trying to buy a house right now is mind boggling.

But too each his own... if you insist then that's the route I would take.

MIS

P.S. Anyone can ge a comedy writer have you glanced lately at the crap on T.V. these days...

[LA Expat In Arkansas]

"I would never act as my own listing agent, but on the buy-side it seems like the thing to do."

Kate: Why wouldn't you act as your own listing agent? Nobody cares more about the sale of your home than you. Why would you list with someone else if you had a license, presumably spending 6% to sell your home as opposed to 3% to pay a buyer's agent. You're spending an inordinate amount of time trying beat the current system through creative accounting, thereby saving a few bucks, when you could be earning your real estate license, taking control of your own house search, and saving some real dollars. Knowledge is power.

[Kate]

BetterVillage:

I am fairly confident that the multiples in my particular situations were valid as I lost the war and the house(s) went into escrow. It's pretty risky to fake multiples if you don't really have any nibbles as you may chase off the one valid bidder. I don't think this is peculiar to home sales though, any time an item is held out for sale you won't necessarily know who you are bidding against.

MIS:

In fact, I have subscribed to foreclosure.com ... the problem I am struggling with on a foreclosure is the difficulty of inspecting the house pre-purchase and the risk of losing earnest money. Thoughts on that?

You are totally right about my patience wearing thin, but no matter how impatient I am the market doesn't move so I am forced to wait.

LA Expat:

Personally, I wouldn't be my own listing agent just like I wouldn't be my own attorney. First off, I don't have any connections/leads. Second, cool heads prevail and it's hard to not be emotional about your own home. IMHO, the only time to be your own listing agent is if it really is your chosen profession.

And, in case you are wondering, there is never a time to be your own litigation attorney, see e.g. http://www.msnbc.msn.com/id/18471265/

[Mr Income Stream]

Kate-

First lose foreclosure.com realtytrac and all the rest. Most of those services are good only for sending someone off to chase shadows. For the best pure real data on foreclosures in SoCal... Dataquick, Retran and countyrecordsresearch.com are by far the best.

As far as inspections are concerned if you approach a bank direct they will accomadate your needs to inspect during the escrow period and if not inspect during your dialogue of making an offer. Should be real easy if the property is vacant and (cough) someone leaves a door or window open. If it's boarded up or still occupied and the bank won't let or can't let you in to inspect it then present an offer as if the house is totally gutted with no power or water hooked to it. Inspection if you really want it is easy. If no inspection if you're smart and savvy means a better deal for you.

The market is moving downward slowly but surely but the real deals from experience are going to come from the banks. Private sellers are far to emotionally invested to provide real deals most will probably go down with the ship clinging to uninformed and false hopes. L.A. property owners are famous for their stupidity witnessed even more so by this ludicrous runup in prices. The stupidity going on now far exceeds a "sunshine tax".

[Agent Scoreboard]

Kate, love your blog and your moxie on your offer.

Somehow I cant get your math to make sense.

712.5 + 35.6 = 748.1k = Total Transaction Cost. OR
750k = Total Transaction Costs

177.5k Cash out of pocket vs. 150k Cash out of pocket?

***This is all exclusive of closing costs***

Savings $1,900? + maybe your property taxes another 500 a year.

Why would you put 80% down on the 712.5k price? to not pay PMI? or get a better loan? LTV is based on appraised value. If the house is worth 750k than you could still drop just 115k down and hit your 80/20 mark.

It seems to me under your scenario that your putting more cash upfront (35 + 142.5 = 177.5 vs. 150k), without any substantial benefit to you, actually your losing the time value of the extra 22.5k your dropping upfront.

I don't know if it makes sense to put up 22k more to save $2,400.

I do like your creative thinking. I have an article that might explain how real estate people look at commission, it might help for the future. http://www.agentscoreboard.com/blog/the-commission-paradox-unabridged/

[Why]

Why use a RE agent? Not trying to bash, just trying to understand. I've sold 2 houses without RE agents, listed the house on MLS, hosted the open houses myself on the weekends, advertised the house as needed in my local paper and hired an attorney to handle the closing work. Instead of paying 6% on the sale, I spent less than $4000 on the first sale and about $6000 on the second sale.

[kate]

AgentScore:

In this scenario, I am already putting 20% down to avoid PMI (see above).

And, actually, I am not putting up $22k more just to save $2,400. You need to look at the numbers again, the savings are across the board: 20% down is a smaller number, mortgage is a smaller number, taxes are smaller (without having to appear the tax board); and commissions are reduced. Then look at the total cost of paying full price commissions. When all is said and done (including the 30 years of interest) it's closer to $30k in savings.

[Cal]

IMHO, Once you factor in everything (which you havent,compounding interest, tax savings, etc) the potential savings is extremely minor. Add into the mix that any offer written like this makes you a "difficult buyer", you either will have to find a desperate seller or overpay. Plus I still dont think its allowed :) .

[Dave P]

Kate, if you really think the agents are balking at losing $2k of a $35k commission, then try your offer but pay the agents 5% of the full $750 asking price. Heck, instead of offering less $2k less than full commission, offer them $2k more, and maybe you get the counter and all the standard buyer offers get shut out. Since your math has you saving so much over time paying the full commission or a little extra should be okay.

Unfortunately, I don't think it will work as well as you'd like. The posters that were Realtors like myself know firsthand how jittery sellers can be. If you present 3 standard offers and one offer that you need a scientific calculater to figure out the true price, that 4th offer better be hell a good. If it's the same money as the simple offer, why bother? People like simple, not complicated. That's the reason they pay the commissions in the first place.

I do agree with you (and other, non RE agent posters) that the commissions have gotten too high. If the market appreciates 50% in two years, we haven't done anything to deserve 50% more commission in that same period.

Traditionally, homes appreciate at a rate similar to inflation, so 6% would give us a fair raise over time, no more, no less. Inflated home values are one of the reasons Los Angeles commissions are usually 5% instead of 6%, and during the boom you would see an occassional 4% (sometimes with the listing agent taking 1.5% since they only had to plant the For Sale sign and wait by the fax...GAWD I miss those days already).

Make no mistake, we Realtors DO earn our commissions. It costs a lot more to market and sell homes than most people realize. There is a reason that FSBOs take longer to sell than agent/MLS listed homes. The poster that has sold two homes by his or her self benefitted from as much from the hot market as any agent ever did. Contrary to what some posters semm to think, a cold market makes homes HARDER to sell so Realtors should get a bigger percentage, not less.

I'm not sure if a flat rate or discount rate is the answer, but businesses like Help U Sell, Redfin, and Zip are going to make us figure it out sooner rather than later. Zip and Redfin are scavengers that take product off the market without putting their fair share back on, but the Justice dept may not let us block MLS access from them. Realtors best prepare for the New World soon.

Best of luck on your search Kate,

Dave P

[Dave P]

Three last things. Cal and Agentscore are right in that you're doing a lot of structuring to save a relatively small amount of money. Factoring in 30 years of mortgage interest savings is incredibly facetious. Almost no one stays in their home for 30 years. Factor in your interest savings for more like 5 years.

And it's definitly structuring the deal to affect the agent compensation. It's the very DEFINTION of structuring. Whether you or the seller would ever be penalized is a different matter. But if most of your savings comes out of the agents commission but the seller gets the same net, how is that not structuring? If the IRS decides the seller also recieved an improper tax benefit, there could be more problems down the line.

And the retired lawyer needs to stop being a diploma snob. I respect his (and my) education, but saying someone doesn't deserve a certain level of income because they didn't spend as much time in school as he did is asinine. If a person is an effective professional in his or her field they deserve whatever the open market will bear.

That is all.

[www.BetterVillage.com, XYZ, PDq.]

A little off-topic, but related: What do the realtors think about the low barriers to entry for their profession. In the medical industry, the bar was lowered and they flooded in... from all over... even from caribbean and other third world "medical schools." DO's and Chiropractors began to walk around calling themselves "Doctor." Health insurance plans began to pay for "therapies" like back massage. There is no real bar in the realtor/mortgage lending world. I've heard stories that people just pay accomodators for their license (agent and broker) without even bothering to read the thin volumes required for a real estate "education". Is this good or bad? My "gut" feeling is that it's bad because it allows the fast buck artists to drag down an entire industry. The "cream" has apparently not risen to the top with this system... unless you consider the cream to be the people good at making easy money at the expense of everyone else. Yes, there are good people that are making good money.. but there are so few!

[Brady Westwater]

First, since the offer would have made everyone involved a party to defrauding both the lender and the government, I can see why the broker and the seller would not counter that offer. Plus why deal with someone who seems to be interested in making a point about than system than in buying the house.

As for the future of full service brokers, there will always be a need for them.

Back when I was an agent myself, some of my best clients were other brokers who hired me - at a full commission - to represent them when they bought their own house or an investment property.

Many agents realize hiring a professional to deal with their own properties can - in the long run - make better financial sense since another agent could be more objective - and less emotional - when it came to pricing, dealing with all the ups and downs of an escrow - and dealing with the personalities of the buyer or the seller.

[Kate]

Brady:

I disagree with your suggestion that this is a fraud. It's not like I am giving the seller $750k for the house and then just writing $1 on the deed; I am merely separating the commission from the purchase price so that I do not have to pay property taxes on dollars that are truly attributed to the agent's commission.

I can't see how the lender is affected at all, but if you care to expand that would be great.

As to the government, they are receiving property taxes based on every single dollar I pay to the seller for the house. There's nothing fraudulent there.

As to the seller, his gain is not affected by my structure. If he paid the commission personally it would be deducted from his gain calculation; because he is not paying the commission, it is not deducted. As such, the seller's gain is wholly unaffected by the structure.

The agent's taxes are based on income and because he is receiving less income on this transaction his tax liability would be reduced in kind.

Finally, I am not more interested in making a point than I am in buying a house. I am interested in saving money by paying a bit of extra cash up front. And I'm sure that many agents in the near future will happily accept an offer like this when there are no other offers -- it's all about supply and demand.

[Cal]

Fraud wouldnt be an issue with the lender as long as everything is disclosed in advance. Basically, the lender needs to know who is getting paid what, regardless who is paying them. If everything is disclosed and they sign off on it, it isnt fraud. They might not sign off on it, but that is a different matter.

I dont know how Brady thinks the gov't thinks fraud would be involved (again, as long as it is disclosed).

Im frustrated with your lack of willingness to look at the issue mathematically, you havent done a full accounting for the money and refuse to do it. You are convinced this is the correct course of action, but refuse to look at it scientifically to determine the real benefit. I think if you did that you would see exactly how trivial this exercise is. (p.s. There isnt one set of variables, there are several sets, you would make a reasonable range of the variables and see the outcome).

IMHO you are optimizing the wrong thing. You are trying to make up for a suboptimal purchase decision by optimizing the purchase.

[Michael]

I think the whole point is missed here. Commissions are always negotiable between the agent and their client. In this case, the client is the seller and they had already negotiated a compensation agreement (listing contract). Here comes Kate and she asking to change the commission rate that has already been agreed to in a contract.

I do not care what business you are in… No one would agree to a reduction in compensation, especially after they had already started working on the assignment and the compensation is specified in a contract.

Do not get me wrong. I really think highly of Kate and her blog. I just think it is difficult to renegotiate a compensation agreement when you are not even an involved party.

[Dave P]

Kate, the fallacy that you seem to be working under is that you think the fair value of the house is $712,500, and any additional price is just the commission lumped on top of the fair value. You're thinking of it like tax on a retail purchase at Macys. The house is worth whatever the open market will bring and the commission paid by the seller is totally separate from the value. Many sellers also make a similar mistake when they try to price their house so they get X amount back to pay off credit cards or buy a car or realize X profit amount. It's worth what it's worth, and you subtract from there. Not add.

You're also making assumptions about the commission structure that you couldn't possibly be privy to. The listing broker may be taking offering the selling broker more than 50%. The listing broker could be taking a flat fee. It may or may not even be a 5% commission.

Plus your offer adds way too many people that have to agree to the deal. Even if the sellers love your deal (I doubt it because people shy away from complexity) the listing broker, listing agent, selling broker, and selling agent would all have to agree to it as well. The seller doesn't have the power to say yes because the commission structure is already in writing. You may also not be aware of how often the brokers/agents agree to give up some of the commission to keep a deal together during the escrow period when issues arise during inspections and disclosures.

The only thing I disagree with Cal on is the fraud issue. I think you're playing it fast and loose with the government there. The IRS has criminal penalties for what they term as "Structuring", and you actually use the word "structure" when you talking about changing the deal to lower your tax base and the sellers taxable gain. Add the agents knowledge of why the normal pricing and commission payment methods were altered and we may have introduced a conspiracy charge. If you think I'm blowing this out of proportion you've never had to watch the video that companies make you view about structuring.

[Dave P]

BTW, I'm not saying that it definitely IS structuring, but the main point is to avoid even the appearance of impropriety.

Also, saying that desperate agents in a miserable market situation will accept the deal isn't proof that it's right. desperation and ethics don't usually mix well.

[sheila]

since you are willing to do the legwork, and since, as many previous posters have indicated, there is a serious "entrenchment" issue with old-fashioned thinking and dedication to the conflicts of interest inherent in a commission structure, especially for a buyer's agent, why not try redfin as an interim solution?

it is ridiculous to "pay" for someone to "find" or "show" you a property when you are obviously doing all of that on your own. and yes, as you say, you are the one paying, regardless of the disingenuous mechanism which makes it appear as though the seller, then the listing agent, is actually paying. this mechanism should be radically changed - the incredible conflicts of interest and opportunities for collusion (many of which i have seen first-hand) between everyone but you are overwhelming. why not either an hourly or flat fee rate (plus documented expenses for listing agents) for all? that's how the majority of the world is paid...

although it is not as radical as changing the deal between seller and their agent, or changing the system to the type of compensation which removes 90% of the conflicts of interest, it is far more feasible, and you only pay for what you need:

http://www.redfin.com/stingray/do/buy

the world is changing, as it always has been. there are those of us who would like a total revolution and others who are willing to make interim steps. i would prefer a revolution in some of these things myself, but at the end of the day, buying a house is traumatic enough, expensive enough and hard enough without trying to single-handedly reform an industry dedicated to keeping its system as rigid and inappropriate as possible. unless you are a trust-fund baby, it is hard to justify the amount of time-away-from-work that this herculean effort will take - you will quickly see all those savings circling the drain in lost wages.

good luck, though, and i hope you make a dent in this mess!

[Mr Income Stream]

Michael wins the "Smart Cookie Award"

[Kate]

Gosh, lots of new and interesting points here. I guess I'll start at the top:

Cal writes: "Im frustrated with your lack of willingness to look at the issue mathematically...IMHO you are optimizing the wrong thing. You are trying to make up for a suboptimal purchase decision by optimizing the purchase. "

I have run the numbers and I am not disagreeing that the savings here are less than huge. You are right about that. It's just that I am willing to deal with all the hassle for these savings AND it's for exactly the reason you point out: Making up for suboptimal purchase. The market conditions were creating the suboptimal purchase and I was trying to optimize the situation even though it was more difficult than just towing the line.

Next, Michael writes: "Commissions are always negotiable between the agent and their client. In this case, the client is the seller and they had already negotiated a compensation agreement (listing contract). Here comes Kate and she asking to change the commission rate that has already been agreed to in a contract...No one would agree to a reduction in compensation, especially after they had already started working on the assignment and the compensation is specified in a contract."

Actually, listing agents agree to reductions in compensation to make a deal go through all the time because a reduced commission is better than no commission at all. However, you raise a valid point about the SPIRIT AND INTENT of the agreement being violated by paying the commission separately. The listing agent likely agreed to his commission believing it would be taken out of purchase money + commission given to the seller. Nevertheless, the LETTER of the agreement is being followed: the agent will still get the agreed to percentage (2.5%) of the home purchase price. (I totally realize that this is why people hate lawyers, by the way).

DAVE P. writes: "the fallacy that you seem to be working under is that you think the fair value of the house is $712,500, and any additional price is just the commission lumped on top of the fair value. You're thinking of it like tax on a retail purchase at Macys."

I am definitely working under that assumption but I'm not convinced that it is a fallacy.

DAVE P also writes: "The house is worth whatever the open market will bring "

But if my offer is the only offer, then that figure is exactly what the open market brought.

DAVE P: "The IRS has criminal penalties for what they term as "Structuring", and you actually use the word "structure" when you talking about changing the deal to lower your tax base and the sellers taxable gain."

When the IRS uses the term "structuring" it has a very specific definition. When I used the word "structure" I mean the dictionary or layman's definition, not the IRS definition. People structure all sorts of deals to capture the largest tax benefit possible, if you follow the IRS rules it's not illegal.

Finally, DAVE P states: "Also, saying that desperate agents in a miserable market situation will accept the deal isn't proof that it's right. desperation and ethics don't usually mix well."

An offer to buy a home should be accepted by the SELLER not the seller's agent. Nevertheless, I am saying that I do not see how this deal defrauds anybody. The only ethical dilemma I can think of is between the seller and the seller's agent because arguably the structure violates the spirit and intent of their contract. But it is between the seller and his agent to determine if the offer falls into the meaning of their contract and to determine if they want to renegotiate their contract so I still don't think there is anything unethical.

Sheila writes: "since you are willing to do the legwork ... why not try redfin as an interim solution?"

I am actually working with a really great buyer's agent who has a greed to take a reduced commission because he does less work. If a house is open for viewing by appointment only, he gets me in and he also gets me more inside information than I can get. But, if I hadn't found him, I definitely would use Redfin.

I want to say thanks to all of you who are commenting. I'm really thrilled to get so many different (and astute!) opinions.

[Mr Income Stream]

"...he also gets me more inside information than I can get..."

How so...? Well actually I know the answer. What I find interesting is that even though he is providing you an excellent service you still find the need to chisel him on his fee. I mean virtually all the information he has is available on the net for a fairly reasonable fee. What you're really saying is I found a sucker and I'm riding him for all he's worth. But hey I understand all's fair in love and war. If he allows it why not. Right?

I take it your an attorney, hope you don't take it personal when people begin to come into your office and say- Hey, I researched all the case law on the net and I just need you to stand in court by my side and by the way since I did all the research I'm only going to pay you 5.00 an hour and since you're licensed you can keep the liability too. That's not a problem is it after all you didn't attend Harvard or Yale so you're really not deserving of a real fee.