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hopefully when these flat-fee sales agencies and FSBO eat up enough of the market share, RE agents will start a new trend in contracts that are fair to both parties... 6-8% of all of 15 years worth of equity is insane and completely unfair to the buyer and seller both... I have yet to see any realtor do 15,000 worth of work on the sale of any one home, ever! And paying 2 $15,000 commissions on a $500,000 sale is ridiculous to be frank
First of all, look at the buyer’s agent. You are paying for 2 things and 2 things only! the first is someone who navigates these waters regularly, someone who has experience in RE to donate her time to the task of getting you in a new home... the second is a shark, a stone cold negotiator who can get you the best deal every time and can guarantee that you will never pay a penny over market value to get a home. That is the absolute best performance you can hope to get from a buyers agent. The expenses are nil, short of drivers of hummer H3s most RE buyers agents have minimal expenses and so you are paying for their time. Granted the time with any given buyer might be extensive, you might walk through a dozen homes or more before they even understand each other’s expectations and considerably more if the buyer is unrealistic about his needs.
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Then you have the seller's agent,
1) Buyers almost always come to them... 95 of 100... Is that a premium you'd pay for? To have a buyer actually show up? Absolutely, but what’s it worth? No real work answering the phone.
2) Advertising: creating virtual tours, listing that look impressive, sites that people see, paper advertising, radio tours... etc
3) The art of the pitch, a smooth operator that can minimize your flaws to maximize returns
4) Again the experience to negotiate the paperwork, facilitate with a broker, price the home correctly and talk knowledgeable about the area...
I want to know if everyone agrees that both agents do the same amount of work, if both agents deserve the same fees, what portion of a 15k commission is basic cost and what portion is icing... who thinks that the commission system is fair? Do realtors like taking 50-150k properties which yield low commissions? How many realtors are dissatisfied with the feast-famine income bump thing? Especially now that the feast has all but dried up?
I work as a buyers agent, listing agent and sometimes both sides. I do not consider the commission I earn per transaction. I earn my pay for the work I do. I agee that on a per transaction basis it can seem out of whack, but my annual net income is based on the work, and this is how I see things. When I help keep you vacant home clean & tidy or help a new owner move in or run up to the HOA office to deliver docs it is all part of the job. There are many things out of the "real estate transaction" that go into what I earn.
This conversation is ignorant and offensive. Zillow should delete this type of bashing of hard working professionals. Yes professionals. Certainly there are bad apples in every bushel.I used to work in the bookkeeping department of a large RE company for years. The top agents who were there before I got there and still there years later when I retired were worth their weight in gold.jkonstant hit the nail on the head when he said he earns pay for the work he does. It's the package of earning a living in their business.These agents have hefty dues and costs to run their business. There is no retirement fund. There are no insurance benefits. They pay for their hired help (like receptionists and bookkeepers) and thei hired benefits.When one of their transactions goes smoothly, that is a rare blession. I have seen them spend hours on end day after day handling problems made by their clients poor choices to keep deals together and make it seem easy. Deals that would have blown up and fallen apart if it was not for them. I have seen them tactfully guide their buyers out of bad lender choices and guide them to lenders that save the buyers huge savings. I have seen them and heard them talk their sellers out of bad negotiating and guide them into better choices to save them sometimes more than the commission on the sale. I have seen them work non stop day after day in and out of the office working hard long before I got there and long after I left working on each and every one of their files. Whether it is a buyer or a seller file, it made no difference each getting detailed attention.
I never saw them playing on their computer games or chatting on blogs, just business business business day after day after day. Many of the people never had a clue what it took to handle their business. Some did. Especially when a big problem came up and the agent, because they knew what to do, handled the problem. Many sellers, no I'll say most sellers never realize how much money the top agents save them. Many sellers think they can do as good. But after years of being the proverbial fly on the wall, there is not a seller out there that can not benefit from a top agent. I'll say that about buyers too.The top agents I saw are highly skilled professionals and business people who run their own business at a top level.
Couldn't have said it better myself bgooding
To answer your question...depends on if you have the ability to surf the net, look up comps, watch your market, and can take a non personal look at what you are trying to do. The ability to negotiate without taking anything personal, and a clue how to market your property. if not get an agent... A realtors worth is in the eye of the beholder. IMHO
I think you will have a hard time finding a lot of people who are not realtors who would tell you that their agent was worth what they received for their part in the transaction, especially with the access to information that buyers now have. Buyers' agents probably get an even greater share of undeserved reward.
I sold and bought a home with the same agent several years back......he made $25K and he most certainly did not do enough to warrant that type of commission. I found the buy house without him and my selling house sold in less than a day. He got us nothing upon closing, meanwhile my friend's REA gave them a weekend at a B&B.....yes, we did not contact him when it was time to sell that house. I didn't pay too much attention to the commission at that time cause 1) I was still an ignorant buyer/seller 2) I was getting enough from the sale that it wasn't a major concern/or on the radar. Going forward at least I have the info to negotiate the commission and or just do without the REA altogether.
Most Realtors have minimal expenses? Really?? E & O per year depending on company can be anywhere from 1000 - 2300 a yr. Have you advertised in your local newspaper? Do you know how much they charge Realtors for real estate ads? Hmm, easily for weekend ads on one property can be $85 to $150 . Realtor office fees vary from 5% to 50% of any commission earned. The lower the fees usually results in monthly desk fees anywhere from $200-$600.
To belong to one board and MLS is easily $1000 per year. Multiply that by belonging to more than one board. Realtors are self employed therefore they pay their own social security and self employement tax on top of the usual federal and state tax. Then there is the gas. Especially now with gas prices going higher. Easily $75 to $300 a month depending on how many clients are taken out not to mention the wear and tear expenses on their vehicles. Then there is flyers, mailers for particular properties, virtual tours sellers demand, depending on property and how long on market can rake up a tab of $500 or more per listing. The national average salary of a Realtor is around $45000......10% make $100000 or more per year. The average Realtor does between 5 and 15 transactions per year. Granted there are deadbeats in all professions.
Of course the consumer are reaping the benefits of being able to surf the internet for free for listings since the Realtors are paying for it through their individual boards who provide the feeds of their particular listings to several sources. Then comes a new model in real estate.....another blog....
I think with the MLS going off monopoly status and the information now available on the internet we will get a consensus on what if any commissions will be paid in the future. The way I see it is that there are x number of homes for sale and x number of buyers. Realtors cannot affect either. They can't make people buy homes and they can't make people sell homes. They can however connect the two parties and help make the transaction go more smoothly. If the two parties more and more can find each other in the marketplace unassisted and if the two parties can work together and get through the process alone or with an attorney then RE agents will be in trouble. My guess is that there will always be full service RE agents but I think in this market people are pulling back the curtain and finding that the Wizard is not what they thought.
A good one, about $200k per year (for a good portfolio of listings and sales).
A poor one, about $15k per year (assuming they are working 60 hours a week for the full year).
Wanna know why people bash realtors? Take this for example:
This Training Will Teach You How To:• Get Control of the Buyer Appointment from the Start• Only Work With the "A" Leads – Use a Buyer Qualification System• Qualify Like a Master Buyer's Agent (Save Tons of Time)• Champion Agent's Buyer Interview - 41 Questions that Will Save You at Least 41 Lost Transactions Wasted With Lookie-Lou Buyers• Use a Master Coach's "Exchange of Commitments" Conversion Tactic• Master the Art of Dealing With Non-Qualified Prospects• Handle Objections to Getting the Appointment (BUYER SCRIPTS)• Explain Agency to a Buyer (SCRIPTS)• Handle if the Buyer Wants Representation (DIALOGUES)• Explain the Exclusive Retainer Agreement - Lock Them In (SCRIPTS)• Handle Objections to Signing a Contract - 10 Scenarios (SCRIPTS)• Find the REAL Reason Behind a Buyer's Objection• Plus much more, including 62 pages of tools, handouts (the same ones Dirk uses), scripts, and dialogues you can use as your own.
With most of the agents I have seen, I've been treated just like this. I am a lead being "processed". End of story. Look at the video too, because that's the body language I get. Apparently, if you pay, you also get tips for dealing with "wishy-washy" buyers. ACT NOW!
On a $15 Mil plus home, about 1% for good, about .05% for poor.
On a $15k home, about 6% for good, about 1% for poor.
In between? Well, in-between... you know..., it should be some kind of curve function...
Now if we just had a better way to screen qualifications and what service one could actually get from a given Realtor...
I don't understand why anyone would waste their money advertising in the newspaper anymore.
I also don't want to hear your complaints about gas prices. Everyone else is paying them too.
A realtor is only worth what a buyer or seller is willing to pay them.
NTETS says that you pay for only 2 things:
1) Someone who navigates these waters regularly
2) A stone cold negotiator who can get you the best deal every time
If those were the only two things you were paying for... and I don't agree that they are... those are two very important things to have.
What is it worth to have someone who knows the waters and can keep you off the shoals, and make certain you arrive in your home port, safe and sound?
What is it worth to have someone help you negotiate a deal that makes you feel as though you did better than you thought you could do on your own... saving perhaps $5,000, $10,000 or substantially more?
Or perhaps, because this "navigator" knew the waters so well, steered you clear of a $500,000 home that had potential resale issues (a basement bedroom, asbestos, structural issues...) and instead steered you toward an unnoticed house with poor curb appeal listed for $430,000, that had been sitting on the market for 240 days, negotiated an 80% off the list price deal, and found you a contracter to fix the bad curb appeal for only $8,000, and made your house the sparkling gem on the street? Just how much did they save you?
What is that worth?
This conversation is ignorant and offensive. Zillow should delete this type of bashing of hard working professionals. Yes professionals.
Here's what i find offensive. You think you're professionals, but there is nothing "professional" about the profession.
Does the profession require advanced college degrees with tests that fail at a minimum 50% of the people who take the test to qualify for licensure? NO. Is there any real discipline for wrong-doing? NO. I looked on my state board - the only licenses lost in the past 2 years were for idiots who bounced their check for licensure and for convicted felons who tried to get a license.
Does the profession submit itself to individual malpratice liability. NO. You only are subject to E&O. You complain that your E&O insurance costs you 2K per year. LOL. My malpractice liability insurance, as a partner at a cpa firm costs me 6 frickin figures. Try absorbing that. REA's are given free passes for whatever they say. The next time I hear a REA on this board say that a house is a good investment I will be submitting them to their state investment regulator for prosecution. A real professional never, i repeat NEVER gives advice for which they are not qualified. When was the last time you saw a REA with a CPA or Series 7 license?
Get off your high horse
While I believe the original intent of this thread was to bait by someone who has no idea what they are talking about, some of the posts are legitimate.
fourier makes an excellent point. When I was a wee agent grasshoppa, we were "strongly encouraged" to go to all those BS seminars and become the best we could be. Puhleez. It's not me, I can't stand sales tactics myself, so I didn't pay my $2500 per session to make someone else rich. Some say that's why I'm not a top producer, but frankly, IDGAS.
As far as the MLS monopoly, that just cracks me up. We pay for it. If you guys want to pay for it, by all means, have at it. By us paying for it, you can look up houses on any real estate web site. If we didn't pay for it, there wouldn't be any listings to look up.
Depends what you do with the body! If you break it down to just mineral and chemical components, about $4.50 (U.S. Bureau of Chemistry and Soils)
65% Oxygen18% Carbon10% Hydrogen3% Nitrogen1.5% Calcium1% Phosphorous0.35% Potassium0.25% Sulfur0.15% Sodium0.15% Chlorine0.05% Magnesium0.0004% Iron0.00004% Iodine
When broken down into fluids, tissues and germ fighting our bodies are worth more than $45 million. Heck the marrow alone could yield you $23 million, based on 1,000 grams at $23,000 per gram.
Does that help?
"Here's what i find offensive. You think you're professionals, but there is nothing "professional" about the profession."While I agree with the statement to a point I feel it’s a bit harsh. I will further it by saying there are professionals in the RE industry. Just as example Elv!s mentioned.The problem is( as I have said time and time again) that there are not high enough requirements in regards to licensure. The “system” as it stands is more or less a fraternity that thrives on its sheer number of memberships The NAR collects dues from members and benefits by making it easy to become an agent. So it is of interest to the NAR to have the lowest possible requirements to carry a license. I cant tell you how many agents I have met that were former Avon ladies or tool salesman at sears and thought it would be a cool idea to sell houses and because it didn’t take that much to find out … they figured why the hell not. What does that say for the industry? “we don’t care who gets a license as long as they are paying dues to the NAR” The Brokers usually don’t have any out of pocket expenses because most agents are commission only. If I am a broker… do I care if the guy shows up with his shoes on the wrong feet? Hell no … as long as he/she makes me money.
The system itself is a conflict of interest to the clients it ultimately thrives on.
With most of the agents I have seen, I've been treated just like this. I am a lead being "processed". End of story. Look at the video too, because that's the body language I get. Apparently, if you pay, you also get tips for dealing with "wishy-washy" buyers. ACT NOW!Ask yourself if you really need an agent to represent you. If you feel that you can handle it on your own, just hire an RE attorney, escrow and tittle company to transfer funds and deed of trust that you are buying. During normal market in 1999, I'd sold one of my properties in Maui without any agent representing me and the buyer. I discounted 3% of the selling price back to him. In Hawaii, it is mandatory to do Termite inspection, land survey to determine if there is any encroahement issues. As a future seller again, I would go the same route saving me 3 to 6% and calling my own shots.
I listed my home on the MLS and paid $499 to do so. That seems a bit high but so be it. I just always have thought that paying 6% of the value of every single home that sells in the US seems a bit insane. It jacks up the prices as people hate to lose money. Home sells in 2001 for price plus 6% then in 2004 for 2001 price plus another 6% and so on. When times were good I think folks just thought it was the cost of doing business. With these bad times and the information available on the internet I would be very worried if I were a RE agent.
dfors, the person you listed that with was a broker. If that person didn't have a broker's license, wasn't paying his/her MLS dues, it couldn't be done. This is what the whole DOJ ruling was about. The NAR was trying to push those people out of the MLS because they weren't full service. It obviously didn't work. Nonetheless, they still have to be brokers in that state and pay their MLS dues.
Sorry Marci, Elvis and other RE agents,
I might be a bit jadded right now. My good friend is a RE agent and he worked his butt off trying to sell my home for 12 months. I let him go and dropped my price 3.5% to reflect the decrease in commission in a FSBO. I sold the home within a month with no buyer commission either. I presented an inspection to the buyers and they got it appraised. I printed a sales contract off the internet and took them to the title company. Closed in 20 days.
No need to apologize. Obviously, the price was the issue, not the agent. It doesn't matter how good the agent is, an overpriced house is very unlikely to sell.
Dfors2, you got very lucky. I have had a few go that way but I have also had them go south quickly. I am just glad to have a friend that is an established broker and another that is an attorney that specializes in RE just in case.and FYI for next time do NOT use a hodge podge RE contract. get your hands on the contract that is accepted by brokerages in that state. It could save you a real headache later. I have a friend that is going through a suit for the last year because of a discrepancy. My attorney said if he would have used a "FAR BAR" then this whole thing wouldnt have been up for debate.
The Brokers usually don’t have any out of pocket expenses because most agents are commission only. If I am a broker… do I care if the guy shows up with his shoes on the wrong feet? Hell no … as long as he/she makes me money.The system itself is a conflict of interest to the clients it ultimately thrives on.You forgot to mention that brokers charge a "DESK FEE" which averages 150 to 200 dollars a month from all agents so that he can pay his rent and pay his/her administrative assistants that answers the phone. "ReMax real estate it's a great time to sell how can I help you" LOL!
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