[quote=pri_dk][quote=urbanrealtor]
So the true taxpayer cost of Realtor activities is transparent and clear?
Riiiigght.
[bunch of macro economic/GSE/policy stuff and how it affects the real estate markets][/quote]
Absolutely, the government influences the market for real estate. Like most here, I believe it has too much influence.
But I was talking about, and responding to, the points about the individual compensation for real estate professionals. There’s a difference.
Government activity has almost no influence on agent commission rates. The rate is always an individual agreement between clients and the agents.
Of course the two markets are related, and one could argue that government activity increases the volume of transactions, and thus provides more need/demand for real estate services. But that is only a tangential effect of government policy, at best. And there is no government policy that inhibits people from becoming agents, entering the (labor) market, and competing for the same pool of compensation.
[quote]However, the reason we are able to make over $100k per year at 3% per deal […][/quote]
We have 9% unemployment, and agents are making an “easy” 100K. All you have to do is take a few classes and pass a test to become an agent. So why aren’t more people doing it? If the government were handing out money, why wouldn’t more people be in line to take it? (thus driving down commissions as more agents compete…)
Give yourself some credit. Your job is harder and/or takes more qualifications than you describe. At least to make a living at it.
I generally don’t have a high opinion of real estate agents. The ethical practices you point out in this very thread are a perfect example of why. But, individual practices aside, I see nothing to support for the claim that the compensation of the profession is supported by the government. They earn it.[/quote]
The MID, tax credits, mortgage guarantees and purchases, downpayment assistance, bank bailouts, FHA, and the myriad housing programs set up to “prevent foreclosures” and artificially inflate housing prices most definitely affect the income of people who earn commissions on RE transactions.
Most RE agents are paid on a commission basis. 5% of $100K is $5,000; 5% of $200K is $10,000. One can easily argue that houses are overpriced by at least $100K in many areas due to the govt’s interventions in the mortgage and housing markets.
Add to these artificially inflated prices the fact that housing transactions would screech to a halt if the govt stepped out of the housing/mortgage market, and you’ll quickly understand how “individual compensation for real estate professionals” is absolutely subsidized by the govt.
Funny how you think realtors work so hard and “earn” their money, yet criticize what public sector workers do.
Imagine a world without realtors. Now, imagine a world without teachers, cops, firefighters, etc. Who provides the greatest benefit to society? You honestly think these public employees don’t “earn” their money, but *commissioned* salespeople do?
