Overheard on Bob Rivers this morning . . .
So this morning as I’m driving into the office, I overheard a conversation on The Bob Rivers Show on KZOK in Seattle. The discussion was over a Real Estate agent in the Puget Sound area having sent a bill to a client for $17.85 (or something like that) for supplies used at an open house. After the house did not sell, either the listing contract expired, OR the client cancelled it and received the aforementioned bill. The client called KOMO 4 News and reported it to their consumer watchdog division. And apparently this was news last night. So the discussion this morning centered around whether or not the agent was out of line by sending the bill (I think she was by the way). But as too often happens when there is a discussion about real estate agents, the topic came up of how much we don’t work and how much we’re over paid. And you know, I’m pretty sick of it. So here’s my rant for what it’s worth. (Please understand, I’m not whining . . . this is by far the best career I’ve ever had and I intend to keep it a very long time):
“6% 6% 6% . . . Agents get paid 6% for selling a house. All they do is stick a sign in the yard and wait to collect their check.” Shut up. I’m sick of hearing about 6%! What EVERYONE fails to mention is that 6% is split between the listing agent and the buyer’s agent. So now my 6% is 3%. Oh yeah, and did I mention to you that MOST agents are on a commission split? A what? Yeah, a commission split. Not that it’s any of your business, but my particular office takes 50% of the first $50,000 in commission I earn. EVERY YEAR. Just for the honor of working for them. SO NOW my 6% is 1.5%. Oh and one more thing? We’re self employed. Taxes aren’t taken out of that 1.5%, so another 10 – 33% of that is gone. So now we’re down to 1%. Are you tracking with me? And out of that 1% that’s left over, I’ve got to pay to market your home. I’ve got to re-invest money into my business so I can attract other clients and keep current clients happy. OH and by the way, I also have to put food on the table, pay the mortgage and keep the lights on too. And also, being self employed, we have no benefits, we get to pay those out of pocket too. So as the guy pointed out this morning “Agents are getting paid 6% on a $200,000 home, that’s like $12,000” No fella, it’s more like $2,000. Unlike you in your 40 hour a week job, we don’t get paid for just showing up. The argument could be made that you do. Enjoy your vacation and 401K.
“Agents don’t do any work . . . wah wah wah.” So lets see, over the past week, I’ve installed lights in a client’s home. I’ve hired a landscaper, a carpet guy, a house cleaner and a general contractor just to get the home in sellable shape. My client lives out of state, it’s her mother’s home. I offered to take it all off her plate and let me worry about it, so she had time to grieve. Am I hoping to get paid at the end of it? You bet. But all of this was done on a handshake. Because of years of trust I’ve built with this client. Spending 2 – 3 weeks working with someone before we even have a contract signed just to get their home ready to sell is not uncommon. Not to mention the hours of research to price the home correctly, staging, taking photos, retouching photos, putting together flyers, postcards, entering the home on the MLS, creating the virtual tour, creating video tours, making sure that home shows up everywhere you intend it to HOW you intend it to. Following up with agent showings. Hosting broker’s and public Open houses. Going over to take the dog out because the seller can’t get there before the buyer does. Being on call nearly 24/7/365. And that’s all JUST to attract a buyer. Then when you do have an offer, working with the buyer’s agent and the seller to come to an agreement that both parties can live with. Dealing with inspections, appraisals, septic tanks being pumped, wells being inspected, etc. And don’t even get me started on protecting clients and ourselves from possible litigation.
And the same thing applies to working with buyers as well. Often times we’re dealing with less experienced listing agents and we have to walk them through all of the above just to get the transaction to closing and make everyone happy. Or as Joe mentioned showing a buyer home after home after home for sometimes months at a time. And just when you take a weekend off, they find the perfect home and “Just couldn’t wait”. There is no compesation for that.
I’m often in the office before 8AM and don’t get home before 7PM most evenings. I work Saturday and Sunday. I work holidays. Over the past two years, our office has gone from 130 agents to 50. That’s right, just in our office, 80 more people are out there on the street competing for YOUR job. I’ve seen title and escrow companies go out of business, whole real estate offices shut down or merge with other offices. My personal income has dropped 40% since 2006. I’m scrimping and saving wherever I can just to get by. Because I know that the agents that do survive this market are going to be better for having gone through it. And when you DO hire one of us. You’re going to be getting someone that is a professional.
I’ll be starting my 7th year in Real Estate on the 17th of this month. According to the pros, I’ve never seen a “normal” market. I got in when everyone was getting in. When I would have been one of those dopes calling into a radio show saying that real estate agents don’t work and are over paid. I made really good money (still do). And I got an education. Now I’m in what many agents are calling the worst market in recorded history. So what is normal? For me, normal is serving my clients to the best of my ability. Doing such an outstanding job for them that they are confident to use my services in the future and rave about me to their family and friends. That’s a normal market for me. And I’ll take it every day of the week. So until you’ve walked a mile in my shoes friend . . .