The post was to juicy… don’t mean to piss other realtors off but….
I don’t want to generalize here but I have found my dealings with other Realtors fascinating. I have only been licensed a little over two years and the business I own is run by me as a second profession. It does okay and if I put more time into it I could probably live on it. I am sure that most brokers/agents would call me a discount brokerage because of the listing fee I charge which is WAY below the industry norm. The same holds true for buyers sides, my buyers enjoy large rebates from me.
I come from an engineering background and dealing with engineers all of my adult life has left me with expectations that peers in my professions are well educated. This is not the case in real estate. Frequently I am very frustrated with the lack of professionalism with other realtors in my field.
I feel that the main problem that people have with realtors is the justification of thier salaries. Now the bottom line here is that the vast majority of realtors make nowhere near what most people think they make. Your listing agent doesn’t get 3% of your homesale. He gets a fraction of that and there are many other fingers in that pie. However, we have all agreed that the cost of housing has gone up at least 100% in a short timeframe. So that implies that realtors are taking home 100% more then they used to.
Are they working harder now then they did a few years ago? If they are does it justify that salary increase?
I think not.
In engineering there have been YEARs where I averaged 50-60 hours a week. I feel that if you break down the hourly wage for a Realtor you would see that it is quite lucrative.
Hey I entered the biz because of many reasons, one of them being if I spent half the time in real estate as I do on my engineering projects I could make as much if not more money. Which so far has held true.
sdrealtor is correct in the statement that the profitability perception is DRAMATICALLY higher then it really is. I agree. HOWEVER, I contend that a well educated person can offer consumers VERY EFFECTIVE service in the real estate industry at a much lower commission IF that person can keep the overhead down. Understanding the rules, providing customer service, and being able to interpret the real estate market are part of the essentials here.
I owned a Help U Sell as my first foray into the market. It was successful but as a second business it was TO BUSY for me. So I scaled down and run my own little business and do just fine. My clients save a ton on commissions and are very thankful for my services and professionalism.
I have gone to MANY a listing appointment where the client asks if they would save money doing a FSBO. The answer is ABSOLUTELY YES! However do it right! Get an attorney who is familiar with California RE law and make sure you follow the process to the letter of the law. You will find that this will cost you approximately 1% of the sales price. Get an ad in the paper, call Jeff Karchin to put you on the MLS for 500 bucks and there you go.
Again, I agree with some of sdrealtors points, especially about if you were doing a FSBO and he bought the home off of you, that he could “sue the pants off of you”. Well yeah he probably could. However, again, I entered the industry for this because my analysis showed that there was alot of room for competition. Rather then fight against the traditionalists and do a Help U Sell or I Pay 1, I choose to lay low and fly under the radar…
BTW my sister in law works for Coldwell Banker. She like many other realtors holds Help U Sells and I Pay ones in contempt of the profession. There is this …bitterness that I hear from other realtors about these companies. I have no such angst. I think that if they are successful and provide quality of service then so be it. I have dealt with smart Realtors and idiot Realtors from full service and discount brokerages.
Again, I just have such a distaste with these sorts of terms. Where is the HARD DATA that shows open houses and brokers tours provide x percent of sales. They may, they may not. Where is the HARD DATA that shows an advertisement in the San Diego Union Homes section provides x percent of sales? When sales agents make the pitches at listing appointments that these two tools effectively justify the commission they should receive as opposed to a “discount” commission, all I ask is to show me the hard data.
I would advise that all sellers do the same.
I am not trying to disrespect Realtors. Really I am not. Being in the industry I ABSOLUTELY know the overhead costs and such. I also know the misconceptions the public has.
Still… I think that there is room to run a business in this industry, charge less in commissions and still be successful.
