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AaronS, we do a lot more than just bake cookies. Marketing, presentation, displaying your home to clients, coordinating closing. You can't put a price on a well marketed home.
Hi Miki, I'll play your game. Let's say I'm trying to sell my home, which is valued at today's market at $250,000. 3% of that is $7,500. Just how much does $7,500 buy me in good and services? Let's see.
Yard Sign (2 color, 2 sided, iron frame): $102 Neighborhood signs (20): $110 Brochure boxes (12, in case I need 11 extra): $25 Balloons(17", 72 ct... realtors love balloons): $12
Listing on MLS (Deluxe): $399
Just listing the bare necessities brings me to a little under $650. That leaves me $6,850 to buy advertising at undiscounted rates in my local real estate rag I pick up at the supermarket.
Before you get up in arms about having to be at home to show my house, I live within one mile of my job and can arrive for a showing at a moment's notice. My wife and I are neatniks, so having the house clean and tidy for showings isn't an issue.
And if the buyer comes to the table without a buyers agent? That's another $7,500 in my pocket. So after deducting perhaps $5000 from the sale of my house in purchases and time lost, I will come out $10,000 ahead if I remove realtors from the sale of my house.
Wow. Add in zero dollars for a craigs list add, and I would say that Aaron pretty much nailed it.
Bill...short posts. People like em.
It's not just about cost of marketing but that is part of it. It's about the time spent to do those things, the legal liability we take on for our clients, the knowledge and skills involved in real estate, the ability to handle trouble shooting when problems pop up, and the knowledge of how to manage a transaction.
Honestly, I'm worth my money moreso because of my knowledge and experience than anything else. That's why I'm getting paid. Other agents could copy my marketing (which is exceptional) and still not be able to do the things I do.
So how about you pay for all the marketing you want done upfront and then when the property sells, your realtor reimburses you dollar for dollar each and every dollar spent. No...that never flys. Sellers want Realtors to invest their money ...their personal dollars upfront and then if the house doesn't sell...so what...seller has had a nice place to live and the realtor is out a lot of money. If realtors charged by the hour, sent a bill ....just like an advertising company, accountant, lawyer....would be more fair all around. Lawyers charge for expenses...so should realtors. Realtors should be paid for their time....whether they are showing, marketing, driving around - add in the gas, negotiating, meeting with clients, etc. Much fairer concept in my humble opinion.
AaronS, we do a lot more than just bake cookies. Marketing, presentation, displaying your home to clients, coordinating closing. You can't put a price on a well marketed home.
Guess I'll never be a good agent. I never learned to bake cookies!
The value of the agent can't be measured in a traditional sense. Currently an agent has put me in touch with a property that hadn't even listed. The only reason I'll be able to buy this property, if I do, is her knowledge that it existed. In the past, when I bought and sold it went very quickly. I'd much rather pay an agent more "per hour" to complete my transactions in a timely manner than have him "earn" his money. The agent who is worth the most will require the least apparent effort, so valuing him based on time spent (on that specific transaction) and the expense of ads, signs, etc., are a poor measure of the value of that agent. All the unquantifiable (is that a word?) benefits are what makes him worth his fee.
If we paid agents by the hour and billable expenses, the best agents would make the least money. There would be less incentive to work quickly and efficiently. Personally, I'll take the current system any day, as a buyer and a seller.
Hey AaronS.. Let me know when you sell your house as a FSBO.. I'll make sure I make a offer 10% less because I know you are saving 6% on a Realtor commission.
Then, Kdzgon asked if the agent's commission is reasonable for the services provided? She says that the costs of being a Realtor shouldn'treally count, by comparing it to someone who says they need a raise because their credit cards bills are too high.
The cost of doing business is priced into everything consumers buy.
If you call in a plumber to do a job, the price of the job includes the plumber's:
Time
Materials
Pro-rata business overhead ( place of business, truck, tools, business licenses, union dues, phones, office equipment, someone to answer the phone, advertizing , business insurance, benefits, fuel, waste ( estimates that do not materialize into jobs and deadbeat customers) ......
Consumers choose to hire a professional plumber or DIY. Outcomes will vary.
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