Realtor Commission - how much? (properties, brokers, contractors, states)

[austin-steve]

Originally Posted by timfountain

Quote:

Do you feel you are over paid for the work that you do for your employer?
You'll have to ask my customers, but as they keep coming back, I would guess they feel they get value for money.

Thanks Tim. You provided my exact answer for your anti-Realtor rant.

Steve

[Brandon Hoffman]

Is TimFountain also TimtheGuy? Is it the same TimtheGuy who carries around that spectular reputation on activerain?

[PeacePlease]

Thanks Bill. Very helpful. One last question. I noticed realtors have designations after their name (something like GRI, ESQ (sp?) etc)... anyone in particular matters?

Originally Posted by Captain Bill

Brandon answered the question for you, and I'll see if I can add a little. One good method is to ask someone who has sold a home to recommend that realtor to you. If people have had bad experiences they will not recommend one. If on the other hand they have had a good experience, they will recommend one.

Another way is to call the broker of a couple of brokerages, and ask them to give you the names of a couple of their best agents.

When you interview them you can determine very quickly how professional they are.

• They will have a very professional presentation;
• they will show you their marketing plan;
• they will discuss how they will communicate with you;
• they will give you staging advice in a polite but frank manner
• they will advise you on what you need to do to get your home prepared for market
• they will provide you with a comparative market analysis and explain it to you.
• they will give you a price range that they feel the home will sell
• be wary of one who gives you a very high price range when others are at a different level
• you will get a sense of whether this agent cares, by the questions they ask about your needs
• they need to understand your needs so they can work with them
• you will get a sense of whether you can trust the agent

I would suggest that you talk to no less than 4 agents that are recommended to you either through some brokers or friends. I wouldn't want to see you have a bad experience again.

[timfountain]

Originally Posted by austin-steve

Thanks Tim. You provided my exact answer for your anti-Realtor rant.

Steve

My pleasure.

[Captain Bill]

Originally Posted by PeacePlease

Thanks Bill. Very helpful. One last question. I noticed realtors have designations after their name (something like GRI, ESQ (sp?) etc)... anyone in particular matters?

Esq is what you'll see after an attorney's name. It stands for Esquire, and means the person with that suffix is an attorney.


ABR (Acredited Buyer Representative)

GRI (Graduate Realtor Institute)

CRS (Certified Residential Specialist)

ePRO (One who had made a study of the internet marketing and communication strategies, and of the tech tools available)

These designations show advanced education, and a desire of the agent to learn more about the business.

There are many others, but these are the most common and are directly related to residential.

You still want to do all the other research.

[TimtheGuy]

Originally Posted by Brandon Hoffman

Is TimFountain also TimtheGuy? Is it the same TimtheGuy who carries around that spectular reputation on activerain?

No, and what the heck is activerain??

[Want to be successful]

Here is what is involved in the commission structure of a real estate agent vs a full time employee at minimum wage as follow below. These are what an agent would need to do and do not get from the real estate broker/employer.

- Hours worked on a listing or buyers at least 160 hours to years
- Have to pay their income tax like everyone else
- No employer's contribution on social security like an employee
- No employer contribution on health, dental or vision like an employee
- No car maintenances reimbursements like an employee
- No free laptop/computer provided like an employee
- No free desk space like an employee
- No free education like an employee
- No expense account to promote for business like an employee
- No marketing supplies (business cards, sign posts, signs, printer, ink, paper, etc.) like an employee
- No free websites to promote business like an employee
- No reimbursements for required memberships to be a realtor (CAR, NAR, realtor board, MLS and key access to property)
- No business events reimbursements like an employee.

.... All these items above are usually paid for to a salary employee by the employer. A realtor or real estate agent does not have this privilege. They would be lucky if they closed 2 transactions per year, which may bring them down to minimum wage or 0 incomes. That is why the commission of 3% is high. It helps them to survive and stay out of the unemployment office. To expect them to take 1% is really not fair. There is a lot of work behind the scene with expenses.

All those folks who are not real estate agents, you are pretty lucky you have a salary job. Being a real estate agent is not easy as you think. You don't have to worry when your next pay check is or how to get it in today's market.

[HoraceND]

Originally Posted by Want to be successful

Here is what is involved in the commission structure of a real estate agent vs a full time employee at minimum wage as follow below. These are what an agent would need to do and do not get from the real estate broker/employer.

- Hours worked on a listing or buyers at least 160 hours to years
- Have to pay their income tax like everyone else
- No employer's contribution on social security like an employee
- No employer contribution on health, dental or vision like an employee
- No car maintenances reimbursements like an employee
- No free laptop/computer provided like an employee
- No free desk space like an employee
- No free education like an employee
- No expense account to promote for business like an employee
- No marketing supplies (business cards, sign posts, signs, printer, ink, paper, etc.) like an employee
- No free websites to promote business like an employee
- No reimbursements for required memberships to be a realtor (CAR, NAR, realtor board, MLS and key access to property)
- No business events reimbursements like an employee.

.... All these items above are usually paid for to a salary employee by the employer. A realtor or real estate agent does not have this privilege. They would be lucky if they closed 2 transactions per year, which may bring them down to minimum wage or 0 incomes. That is why the commission of 3% is high. It helps them to survive and stay out of the unemployment office. To expect them to take 1% is really not fair. There is a lot of work behind the scene with expenses.

All those folks who are not real estate agents, you are pretty lucky you have a salary job. Being a real estate agent is not easy as you think. You don't have to worry when your next pay check is or how to get it in today's market.

I am not a realtor, but where do we find these jobs that you speak of with all of these bennies?

[Bill Keegan]

Originally Posted by Want to be successful

Here is what is involved in the commission structure of a real estate agent vs a full time employee at minimum wage as follow below. These are what an agent would need to do and do not get from the real estate broker/employer.

- Hours worked on a listing or buyers at least 160 hours to years
- Have to pay their income tax like everyone else
- No employer's contribution on social security like an employee
- No employer contribution on health, dental or vision like an employee
- No car maintenances reimbursements like an employee
- No free laptop/computer provided like an employee
- No free desk space like an employee
- No free education like an employee
- No expense account to promote for business like an employee
- No marketing supplies (business cards, sign posts, signs, printer, ink, paper, etc.) like an employee
- No free websites to promote business like an employee
- No reimbursements for required memberships to be a realtor (CAR, NAR, realtor board, MLS and key access to property)
- No business events reimbursements like an employee.

.... All these items above are usually paid for to a salary employee by the employer. A realtor or real estate agent does not have this privilege. They would be lucky if they closed 2 transactions per year, which may bring them down to minimum wage or 0 incomes. That is why the commission of 3% is high. It helps them to survive and stay out of the unemployment office. To expect them to take 1% is really not fair. There is a lot of work behind the scene with expenses.

All those folks who are not real estate agents, you are pretty lucky you have a salary job. Being a real estate agent is not easy as you think. You don't have to worry when your next pay check is or how to get it in today's market.

This post is silly, and without merit, for several reasons.

First, most employees of most companies do not get the list of benefits & free stuff you talk about.
Second, some real estate brokerage companies DO, in fact, provide at least some of that free stuff.
Third, the median number of transactions for a real estate agent in the US is something near 8 per year.
Fourth, and most important, it's irrelevant. The client shouldn't be concerned with my business expenses. The justification for my fee to my clients is all about the value I provide for the fee I charge. Running my business, making a profit, is MY responsibility, not my clients'. All my client needs to look at is the value I give them in return for the money I charge. To say it's "not fair" to expect someone to take a certain fee is out of line. A real estate agent or broker is free to take whatever fee they negotiate with the client, and clients are free to try to get the best deal they can. If they feel the service they are going to get is only worth x, then they should offer x. The agent can accept or reject that offer, and can attempt to demonstrate their value proposition in order to earn a larger fee.

[SmartMoney]

Originally Posted by Bill Keegan

This post is silly, and without merit, for several reasons.

First, most employees of most companies do not get the list of benefits & free stuff you talk about.
Second, some real estate brokerage companies DO, in fact, provide at least some of that free stuff.
Third, the median number of transactions for a real estate agent in the US is something near 8 per year.
Fourth, and most important, it's irrelevant. The client shouldn't be concerned with my business expenses. The justification for my fee to my clients is all about the value I provide for the fee I charge. Running my business, making a profit, is MY responsibility, not my clients'. All my client needs to look at is the value I give them in return for the money I charge. To say it's "not fair" to expect someone to take a certain fee is out of line. A real estate agent or broker is free to take whatever fee they negotiate with the client, and clients are free to try to get the best deal they can. If they feel the service they are going to get is only worth x, then they should offer x. The agent can accept or reject that offer, and can attempt to demonstrate their value proposition in order to earn a larger fee.

I don't know that I would call the post silly.....and while I agree 100%, it's none of the customer's business how each agent runs their book of business, I do read between the lines the poster is struggling, with tones of bitterness. And let's face it, the general public is not aware just how independent the real estate agent really is, nor the majority of agents do carry their own costs with very few benefits. A real estate company may pick up a few on the list (desk, website, cards and signs), but for the most part the new agent starts out "in the hole" before they collect their first commission check.

The latest trick I am seeing here is on the new home side, and the suggestions are coming from the builder side. A large percentage of new home buyers are very tight on equity. So agents (that weren't already there) are being written into the builder's contract for 3%, and then, listing the home for sale for cost only. The other trend I am seeing more frequently - agents are going with buyers to new home sites and rebating back 2 of the 3% to the buyer. Are these agents', names being passed around like wildfire? How, I don't know. (site reps again, agent advertising?) There isn't much for the Realtor to do on these contracts, but , my last 3 or 4 new homes closings had a 2% credit from the Realtor - different agents - different builders.

It's going to get ugly if they come at Realtors like they did with mortgage lenders. The latest push on our side is a push for a flat fee regardless of loan amount. The CFPB (Consumer Finance Protection Bureau) is not just about lenders, on their list for reform are Realtors, auto finance, and insurances. If the consumer pays a fee for service, change could be coming your way.