Real Estate Blog - Agents not worth the air they breathe? Critics are wrong!

Home : Blogs : Margaret Woda, Maryland Real Estate : Maryland Real Estate

Agents not worth the air they breathe? Critics are wrong!

Why is there such a giant disconnect between perception and reality, when it comes to the VALUE of good real estate agents?

There is more to selling a home than finding a buyer, and more to buying a home than finding a house. Yet many consumers (and even some real estate licensees) feel that real estate agents are not worth the air they breathe. Just to start the dialogue, let me suggest these as some of the reasons why consumers may not appreciate or respect the VALUE that real estate professionals bring to any transaction:

Becoming a real estate agent is relatively easy and inexpensive (translates to "anyone can do it"). First of all, "anyone" cannot learn the material and pass the licensing test. Consumers do not know how many real estate licensees FAIL in their first year or two and quickly drop out of the business. Many of the best agents have years of experience and advanced training, but consumers don't know what CRS, GRI, ABR and other professional designations mean. And many "rookie" agents bring related skills and training from another career to real estate.
Real estate agents drive around in big fancy cars. Consumers do not realize that a comfortable vehicle is a business expense and tool of the trade, used for chauffering prospective home buyers. Real estate agents do not have a business vehicle paid for by their employer, such as a mail carrier or an ambulance driver, and a privately owned vehicle for their personal use.
"Million dollar agent" is interpreted as agent income - Consumer perception: "All agents are millionaires." This is a misinterpretation of ads and press releases by real estate companies and agents about their sales volume (NOT their income). A typical agent earns about $15,000 gross for each million dollars in homes they sell. Talk about disconnect between consumer perception and reality!
All real estate companies and agents are alike. All real estate agents are no more alike than all mechanics, all surgeons, or all relatives... With limited service and discount brokerages springing up, identifying the VALUE (or not) of real estate agents and companies may actually become easier. In real estate, as in other situations, you get what you pay for!
Real estate agents are greedy. Real estate fees paid by consumers include the cost of operating an office, technology hardware and software, training, agent supervision, marketing costs (including costs for marketing their home), tools of the trade including lock boxes, signs, desks, phones, computers, taxes, licensing fees... and, oh yes, the agents. The agents pay out of pocket for their own operating costs including elective training, tools of the trade (business car, computer, website), business expenses such as buyers' lunches, gas for showing property, taxes, licenses and fees.

Even the U.S. Justice Department seems to think that real estate service should be provided by volunteers who pay for their own training and operating expenses without fair compensation, and that proprietary business tools (such as the MLS) developed by and for REALTORS (at their own expense) should be offered as a public service without any cost to consumers or compensation to those who paid for its development.

How can real estate professionals correct these inaccurate perceptions?

For decades, NAR has failed to communicate the value of real estate professionals to the public, so NAR cannot be relied upon to "fix" this situation any time soon. And, as Jim Towner ponted out in an ActiveRain post yesterday, price comparison is the new latest/greatest tool for choosing an agent, without regard for the VALUE added to a consumer's real estate transaction.

It may fall to each individual real estate agent to educate consumers in their own market about the VALUE that professional real estate agents bring to any real estate transaction.

LINKS:

CROFTON MD REAL ESTATE: For referrals to Crofton MD or anywhere in the D.C.-Baltimore-Annapolis triangle, contact Margaret Woda at RE/MAX Vision in Crofton MD. (410) 451-1900.

Posted by Margaret Woda, Maryland Real Estate on 08/11/2007 04:16 PM

Comments (84)

crofton maryland real estate, crofton real estate agent, fsbo, for sale by owner, featured post

Originally posted at: Fort Meade - USNA - Andrews AFB: Agents not worth the air they breathe? Critics are wrong!

84 Comments on Agents not worth the air they breathe? Critics are wrong!

AUG

2007

Very nice post. We do have the responsibility to market our value to the public. There are plenty of resources out there that try to do otherwise.

"Real Estate Agent are greedy..." this one make me laugh, I cannot even remember the thousand and thousands of dollars I have given away just to keep a deal going! or for that matter the countless hours of working for free!

A very well-written article. Of course, I agree whole-heartedly with you! :)

MW,

i think this is part of the reason..

My best friend is a "part time" Realtor can you help her find us a home?

I agree. I have gone on so many listings where the seller calculates what the commission is and automatically states that I am being overpaid. I then have to go into explaining that not all that commission goes to me personally. I only see a portion of it and even the majority of my portion is used to market THEIR home.

Excellent post and very well written. If the public really knew what some agents make vs the hard effort they put it, they would be in for a shock!

I'm a loan officer and I can appreciate what agents do. I had a client say to me "Well, why do I need an agent? I've already found the house I want." I had a hard time swallowing that statement. I simply told her "Finding a house is not even close to what they are going to do" There is definitely a bad perception and it sucks, people don't realize what exactly goes on. I love the FSBO's who "don't need an agent" and then I see their home sit on the market for 6 months and then they finally get an agent. Would I try to replace the transmission in my car? no...would I go to a guy who says "you pay for the parts and give me $100 to spend 6 hours doing it"? probably not...I wouldn't trust the job he was going to do. I'd probably go to the guy that charges me a fair amount and an amount that makes it worth it for him to take his time and do a good job on my car... Why wouldn't I do the same for an agent? Heck, even a Loan Officer...people want to "fee shop" and I'm only willing to cut my fees so far before it isn't worth it anymore and I would rather focus on my next client. You'll find someone who'll do it for $500 but then they will probably screw it up and you'll end up having to redo the process and/or lose the property you want.

Margaret, you got a "5" on this one from me. It's a great description of many of the misconceptions by the public of our profession and of ourselves. Curiously, with all the bad publicity and misunderstanding, Realtors(R) continue to exist and have their services used. Could it be that FSBO's find out that it isn't as easy as it looks, or that some buyers and sellers actually appreciate what we do?

We are given a bad rap from everywhere. Even Clark Howard gives us a bad rap. We must use Active Rain and everything we can get our hands on to prove that point is not true and grab those clients and shown them we are needed. Great blog.

Jessica - We ALL have experienced this. Sellers see YOUR face and don't think about anything else their commission dollar buys. But I don't recall thinking about that the last time I bought an ice-cream cone - the manufacturing plant, the marketing, the delivery, the retail facility... So it is understandable.

Scott - Obviously the part time frined does not bring adequate value to the transaction! Just say NO!

Lisa - Let's fix that, one agent and one consumer at a time!

Nora - Isn't that the truth! It all goes back to that absurd images that real estate agents themselves created of "million dollar agents" - It maay take generations to undo that marketing mistake!

Judi - You are right... they have NO idea! And that figure is based upon a so-called "full" commission, not a discount fee!

Mario - That's true - I didn't even mention the fall-throughs that we invest time, money and energy in for absolutely NO compensation.

Great article,

I hope that people that visit this website sees this post so they can understand how we feel about all this.

Margaret: I guess that I"m one of those agents that you refer to in your post as thinking that agents aren't worth the air that they breath. Acutally, that's not true. I wouldn't be that harsh.

That said, 12 years ago I looked at what real estate commissions were and did come to the conclusion that it's way too expensive to sell a home. That's why I started my company, ValueList Real Estate Services,Inc.

One of the reasons that I started my company was because nobody could answer me this simple question,"Why does it cost 3 times as much to sell a $300,000 home than it does a $100,000 home? Is there 3 times the cost involved? (Answer, no!) Is there 3 times the work involved? (Answer, no!)

Also, in your post you mention that you get what you pay for. This is simply not true all of the time. Sometimes you can pay too much for the same service or product. Over 70% of my business is repeat or referral and that shows that there can be value in a discount business model.

Bob Mitchell

ValueList Real Estate Services, Inc.

You are right on the money. You have spelled out what a "Professional" agent will do. The problem comes in when folks out there who need us are unlucky enough to be served by a less than professional agent. Sadly, there are a whole lot of them out there.

Brian - Thanks for the 5! Yes, I think that's it. Real estate professionals bring VALUE to a real estate transaction. (Even discount and limited service brokers bring something to a real estate transaction.)

Bob - I'm not at all referring to you! And your input is welcome. Let me try to answer your question: it typically costs about 3 times as much work and $$$ to sell a more expensive home. Financing can be more complex, more contingencies are likely to be involved, more upscale marketing may be required, etc.

You bring value to a real estate transaction - and it is your right and your clients' right to choose limited service and fees in a free economy. But I stand firm in my conviction that consumers get what they pay for. That's why Walmart and Nordstrom both exist - some people settle, by choice or need, and some people want quality. Both are good business models that serve the needs of their customers.

Mario - I posted this to general posts for Localism, so maybe some consumers will see it there. And I generally make all my posts public, rather than members only, so consumers who search for me through search engines can get to know me. Being a 30+ year real estate pro, is very much who I am.

Footnote, added later: Quite a few consumers did weigh in on this post, many anonymously and some not-so-nice. Therefore, I deleted those posts. But consumers are definately reading what we're saying on ActiveRain! I welcome disagreement - it enriches the dialogue - but let's disagree respectfully!

Robert - I think that Bob did a much better job of differentiating himself from the masses than most of us, with his heartfelt explanation of why he chooses to discount fees. I honestly think that discount and limited service brokerages help make the case for traditional full service agents and companies better than we have ever done for ourselves.

Susan - You slipped in there while I was typing a reply into the comments. Thank you - I agree that ActiveRain could be a forum for addressing these issues. Why don't you write a blog for localism, to be posted in your state, and educate one consumer at a time.

Bravo...on the Post (and comments) I feel consumers don't see the value in us, because for the most part, it's customer service to make sure the client gets what they want... so many times the problems and hiccups are hidden from the consumer, because we do our job very well.

There is a market for everyone

This is excellent! I think we need to improve our own image as a whole by doing what we say we are going to do and raising our own standards. No PR campaign or media can reverse the image, let's not rely on that!

Sometimes misconceptions maybe taken when a Realtor makes unkind comments about other Realtors in front of their clients.I have seen this feed back from showings also during Open Houses.When showing a home, remember the seller usually has the final say on price, key-box location,sign,de cluttering and so on.When my client becomes verbal about negatives in a home,I feel it is best to keep my opinions to my self and say this maybe how the seller prefers it. Sellers need to hear negative or positive feed back that is stickily about the homes location,overall appearance,price. Then they may realize their realtor was a professional and they should have taken their advise. We all strive to do a professional job and it shows

Renee - Katerina Gasset said something relevant the other day... "Promises Made, Promises Kept" - I thought of that immediately when I saw your comment.

Bob - Yes, amazing participation in this thread. I'm having trouble keeping up with appropriate answers. You're in Maryland, too - so let's work on Localism to create an education campaign about the VALUE of real estate professionals. I posted this blog, so that might be a good kickoff - and we can expand on one topic at a time, plus any you want to add.

I had to come back in and edit this comment after I saw your next post, Bob. Thank you for the smile this morning!

Margaret,

As always I agree 100% with this post! I was just reading yesterday about the 60 minutes story that gave REAL professional agents a bad look - they were talking about discount brokerage REDFIN (the online service)

I can't remember the exact blog post, but just search for REDFIN and you will get an eyefull!

One of the best things I saw about that brokerage was the fact that they charge for buyers - to show buyers homes, I think the first hour or two are free, then they charge a few hundred bucks to show them more homes - isn't that great!

Gee, I'm so glad I missed that, David - I get SO annoyed when the media undervalues real estate professionoals.

Brian, I agree that low entry barriers and the perception that anyone can do it devalue our industry. (Don't get confused, Brian, because this appears before your post... I just figured it was better to edit this one than enter a new comment.)

Margaret, great post! I think that besides some agents cheapening themselves,many of these other online interloper services that compare agents or have agents compete for clients, such as hungryagents.com also devalue our image and worth to the public and make agents appear as a commodity rather than providing true value to the transaction and the process. I'm all for raising the entry and education standards of the industry.

haha...laughing at Bob's remark...that is excessive. hmmm...

Anyway, Margaret...The ones that compare us are not knowledable anyway. No sweat. We continue on and educate our client's ourselves. It's proof in the pudding when they meet us face to face and see for themselves what we do.

Margaret - I have been reading a lot of blogs lately with this very theme. Every Realtor has the opportunity to change the perception, one client at a time.

Mario, I am not sure if it is a guideline or just a courtesy, but all that clutter does distract from the dialogue. Let's stick to the topic at hand, if that's okay with you. In my earlier days on AR, I used to put that small "I love MD" sign (at the bottom of my blog) on my comments, and someone asked me not to, even though it did not have my name, company or contact info. In the interest of getting along in the "rain", I discontinued the practice, and doing so has not handicapped my blogging, commenting or new friendships.

Bob - I found my delete button. Thanks for agitating! No more GIANT logos on this blog. It is not all about the points (easy come, easy go).

Sally - Hello, again, didn't we meet on another post earlier today?

Paula - Yes, and we need to ask our peers NOT to advertise their sales volume. Thanks for commenting.

All we can do on a personal level is educate our clients and friends and family

Anyone can do it - Depends. Being licensed in TX and AZ showed me a big difference in the abilities needed to acquire a license for real estate. I am sad to say the getting a license in AZ is a very easy thing to do. Go to RE schoool and they teach you the answer to the RE questions. The biggest problem is that all of the revenue that RE licensing bring in goes in the the AZ general ledger. The incentive just isn't there to build a better methodology for bringing only the very best to the field of RE.

Um, Margaret, I hate to be an agitator, but how do you respond to this? Realtor Magazine Online ran an article just two short months ago called Survey: Consumers Really Like You.

I found this article when I went looking for the other surveys that I know exist out there that say consumers want to get their own initial information and THEN they want an agent to come in and negotiate a favorable deal and close a smooth transaction. Not only do these consumers report wanting an agent, they also report significant happiness with their agent.

You ask for the disconnect? I think the disconnect is agents who still believe that their value lies along the entire lifecycle of the transaction. With the advent of the Internet, the front end information is freely available outside the agent's breast pocket. Agents no longer control the entire transaction lifecycle. As their piece of the pie shrinks, so too will their compensation.

Today's successful agents recognize this trend and are using inexpensive automation to "meet" potential clients through the information gathering process, but saving their intensive customer service efforts for the latter part of the transaction -- that part where the consumer is still conditioned to appreciate their efforts. These agents don't seek to "change" the consumer. They adapt to the current reality.

Great post, sometimes I feel like I just do volunteer real estate work. When you go to a Doctor or Lawyer, you're not paying the big bucks per hour for just the work their doing, you're also paying for their education, experience, and who they know/connections. This is no different from our business.

It is up to each of us, every day, to show our value, and differentiate ourselves.

How often do we not let our clients know all the things we do during a listing or a contract? If an agent only calls them when the listing is signed, when an offer comes in, and when it expires or closes, no wonder they think we don't do anything!

The whole industry perpetuates $$$ when press releases and company awards focus on $ volume or $ GCI instead of quality service awards. Our newspaper does a "Leading Real Estate Agents" section every year where the participating agents pay the newspaper to tell everyone their $ volume for the past year! Not me.

Great post Margaret. I've been wanting to write a blog like this for a little while. I always tell people that there are agents that will list their house for less, but I promise you WILL get what you pay for just like anything else. There is almost always somebody out there who will do something for less than another, but you have to look for quality products and services. When it comes to what is often the biggest investment of a person's life, people often want to try and save 2 or 3% commission to an agent but what they'll never know is that they most often would've netted more using an agent. The value of a good agent isn't that hard to see.

Jeff, Thanks for mentioning that so I can clarify. The VALUE is not in the real estate license, but in the advanced training and experience that a real estate professional brings to a transaction. Every day I encounter "the very best" in the field of real estate - the issue, as I see it, is that consumer perception and reality have a big disconnect.

Which brings me to Tracy's comment. I think you bring up another good topic - how some agents are don't "get" what consumers want. I'm getting ready to go on vacation tomorrow, so I may have to leave that one for you to address in a blog. In the meantime, THIS blog is about the fact that consumers don't "get" the value in real estate professionals. And, hey, agitating creates dialogue, so bring it on!

Tracey with an "e" - You are right and, if the U.S. Dept. of Justice and many consumer groups had their way, the real estate profession would be a non-profit instead of a business.

Michael - So true. For some reason, I haven't reached everybody in my marketplace yet, and I've been working on it for over 30 years! lol.

Sharon - I haven't crossed paths with you for a while! Good for you, for not participating in that ad.

Hi, Joe - Sometimes I surprise even myself with the sale price of a listed home - or the purchase price a seller accepts from my buyer. Most agents DO know what they're doing and DO bring value to their client's transaction - often more than the client pays.

Wonderful post Margarat and fully deserving of a GOLD STAR.

The NAR focuses the public relations on how many Realtors exist. Worthless numbers.

One way for the public to realize our individual value to each buyer or seller client is to tell them.

I surely do.

Margaret,

Great post! Perhaps the perception is the way it is because of all the #1 advertising and the me, me, me focus... instead of using the money to advertise the homes they are supposed to be selling.

(You touched on it with the Million Dollar Agent statement.)

Margaret, the public has seen so many bad realtors, now they think all agents are alike. We are having to advertise our testimonials and ourselves more to make sure the public likes us, knows us and trust us. I gave you a high 5 for this one.

Lenn, thank you! That means a lot to me. NAR accomplishes a lot, but educating consumers about the VALUE of real estate agents is not one of them.

Jessica - I have not done our club for several years either, even thought they call it the "Distinguished Sales Achievement Club" - it all comes across to consumers as "these guys are RICH!"

Paul and Michelle - I agree completely!

Kay - Thanks for the five! Good idea, put testimonials in our ads WITH NAMES.

Hi Margaret,

It's our responsibility to educate the clients and customers we work with. The fact that large numbers of agents are in the habit of shouting from the rooftops how they are NUMBER ONE to the point that the public must wonder how so many could all possibly be Number One. How can we expect the public to decipher the reality of our profession. Thanks for posting this one. It sure is food for thought!

I'm thinking the perception is about to change now that it's a buyers market. SOMEBODY has to market all those properties and it won't be the limited service companies. I take pride in being different than the average broker.

p.s. Margaret - you look so much like my beautiful Mom :)

I'm sure this will really help our cause. Oh boy...this combined with the media frenzy should really help the public see us as necessary professionals.

Jennifer, Thank you for the comparison with your mom... supposedly we all have a double somewhere out there. I do think that real estate agents may get a chance to prove our VALUE in this current market. Just for the record, it is not my intent to put down limited service companies, because they serve a nitch that will never choose another broker, and they have value (as far as it goes).

Lisa and Robert, You are absolutely right!

What do you expect - I appreciate you commenting, but I have to delete your comment because I do not accept anonymous comments or personal attacks on anyone. If you would like to comment again, with your name included and without attacking a specific agent or company, please join in the dialogue,

Joe - Thanks for sharing "this" with us in this thread. I did not see that post before. Anyone reading this should click through on Joe's link to see what he's talking about.

Great post - I am amazed at what the public truly think of us.

(Hang with me on this one) It could be worth it!

When entering the real estate market 900 or so years ago. It was suggested to me to get continuing education. Starting with a G.R.I and two weeks of ongoing education travelling 500 miles and paying for my hotel etc etc Thought the whole two weeks each day the professionalism of the Realtor was discussed, supported and more. Yes, the faculty said, we should be held in the same esteem as attornies and doctors.

I was nervous the night before the final day, hoping i would pass the written test. Staying up late into the night reviewing the study notes. The morning came and the group assembled . The instructor passed out the test sheets. Keeping mine face down waiting for the order to start, palms sweating, heart racing. Happy to of completed two weeks of intensive study , broke as could be, but knowing it was worth the sacrifice today to get the esteemed GRI designation.

The instructor announced we would be starting, and proceeded to read the questions and give us the the answers!!

How could this be? aren't we cheating? what about all the study, what about the professionalism. had i payed to get the GRI without earning it.

I stood up and said "Excuse me why are you giving us the answers, aren't we supposed to of studied? what about the professionalism you have professed , what about the higher standards you suggested we hold ourselves to.?

I was a young kid, the instructor called for a break, I was ushered out of the room. dont remember much after that but i know i have never proudly displayed any designation. Ive set the ABR the CRS and a number of others for the education, but i'll be damned if i will ever display a designation until i've earned it.

How about a designation that would be obtained not through the NAR but through a strict requirement of years in the industry, or number of transactions completed , and no enforced complaints with the real estate division. Something to be proud of, something that would truly separate the professional career agents from the weekend warriors?

Chris, I am quite certain that is not the norm! It definately was not my exerience with GRI or any professional designation! I totally endorse your suggestion of an outside organization bestowing some professional recognition on outstanding agents who meet certain criteria, but who would that be? And would it really make any difference in the consumer's perception of agent's VALUE? That is what it is all about, at least for the purpose of this blog.

Rebecca, the income misinterpretation is the one that probably bothers me the most, on a number of levels - For one thing, agents and brokers created this problem themselves and still continue to feed it, and another is that it really is at the core of the disconnect between reality and perception.

Elaine, I'm going to sneak back in and edit this comment to include you, even though it will appear before your comment, because I might not get another chance before I go on vacation tomorrow. Thank you for the compliment!

Margaret, this was a very well written and thoughtfully done article. As a full-service agent, I agree with everything you said. If someone doesn't hold themselves in high regard, let them discount their services. Not me! I spend alot of $$$ and time and expertise to market my client's homes.

I also agree with your comment that it does cost more and require more knowledge to sell a more expensive home. They also take longer to sell, so those expenses are spread over more time.

Margaret, I found my delete button too... It looked like I was talking to myself. :) Now Sally is just laughing at me being serious. oh well.

Congrats on the gold star...well deserved.

AUG

2007

Unfortunately a few bad apples can spoil the barrel. I've had experiences with agents who aren't worth the paper their license is written on.

Excuse me for interrupting, but, to the the person who is in the conversation but does not want to identify herself or hisself- Margaret is correct. It does take more time, more money, more energy, more activities, more networking to sell a more expensive home. Do you sell "more expensive homes"? I do. I know what it takes. We work in the luxury home market and our sellers are so happy to pay our fee just to do the things they do not have time to do including showing the home personally to each agent and their prospect, higher ticket printing and marketing, networking at more expensive events, being the go to person for many chores and repairs,etc that higher end homes need. Not to mention it takes longer to sell a higher end home. That time costs us money. Don't kid yourself that it is all the same!

Margaret- I flagged your post to get featured and gave you a 5 . Brave women you are! Be prepared for some of the agents who discount their fees because they " Feel they are charging too much!" Maybe they need a job at Walmart!

I write a lot about this subject on my coaching blog. It is another very passionate subject for me. I do not discount my fee. We will walk away. We just had a person call us, an expired listing, who was so impressed with all our package and talking to Nestor. But then he said, " well how much did you say your fee was?" Nestor told him and he said, " Well, my last listing agent said X." Nestor says, " and how did that work for you?", then the man said, "SO and SO agent charges less." Nestor Says, " well, then you will need to use them if that is what you are basing your decision on." Well, the man started to backstroke and did not want to lose us as his agent! You get what you pay for! Always!

No matter how much the buyer does on the internet, we are a high touch business based on relationships and if you will get paid what you FEEL you are worth! I know what I am worth! And that is No Discount! Katerina

Margaret, this is one of your finest! You hit the nail right on the head. As a new agent, it didn't take long for me to question why NAR doesn't do a better job educating the public about the realities of being a Realtor. I have never seen such misguidance upon the general public as I have in real estate. I try to tell all of my clients (when the opportunity arises) about the realities of that "huge" commission I get and how rich I supposedly am. Thank you so much for speaking up, every word is as true as "rain". Thanks.

Carol, unfortunately you are right, but we all have a "bad apple" relative and yet the world still loves "family"... when we cross paths with a doctor who is a quack, we find another one instead of devaluing the medical field...

Anonymous, your comment contributes to the dialogue, and Katerina's post may seem strange without being able to see it, but I delete ALL anonymous posts as a matter of policy. If you forgot to log in before commenting, please log in and repost. For the benefit of anyone who didn't see it, the anonymous poster disagreed about increased cost for marketing more expensive properties, and I would like to reply to that:

I am certain that there are licensees who spend no more time or money on more expensive properties, just put them in the MLS and forget them- but most real estate professionals find it necessary to do the things outlined by Katerina. That certainly is true in my market place, where a $100,000 would probably sell sight-unseen and all cash without any contingencies (possibly above list price) to an investor within hours of hitting the MLS - in fact, I have had that happen more than once. MOST properties do require and receive an appropriate level of time and investment on the part of listing agents. It's a fact. Not all agents, as well as consumers, "get" that - thus the disconnect! If a consumer demands more, he/she must pay for it! Thanks for contributing your comment, and I hope you repost after logging in.

Katerina. Thanks for your input! There is nothing I could improve upon in what you said! Very well articulated. And thanks for the vote!

Donna, Thank you very much for your compliment! You can see, even in this thread of comments, that the disconnect is very real. So many people, including many agents, have no clue what it takes to do the job right.

Okay, NOW I am going on vacation! Thank you all.

Good work here. Agree with you. The disconnect is perception, though perpetuated often by "hobbists" who do not aspire to the same excellence as others. Like your comment about NAR's PR efforts, or lack thereof, and truth is we haven't thought much about it. We've been mostly entrenched in Seller perception and market reality recently.

Of course what we do is relentlessly long-hours work evey day that ends in "y." Those consumers that know and undetstand that are the folks we want to do business with... those that think we are the five points above can just go on. Life's too short.

Appreciate this one, and again thanks for commenting on something we recently did.

A very well-written article,I agree 100% with this post!

I posted the comment you disagreed with from my Treo, and had a problem with the login. It wasn't intended to be anonymous. That is not my style.

I'll stand by my statement that you deleted. The average price in my market is substantially higher than in most areas. A 2/2 condo with 700 sq feet is still $300k. I know what it takes. I also know that one of the top agents in San Diego routinely does $2 million+ a year in GCI and doesn't do any expensive traditional advertising of listings, yet still manages to sell 150 homes a year.

The disconnect occurs because agents want it both ways and agents send mixed messages to the consumer. In some many cases those messages are outright lies. How many agents try to justify their commission by explaining that 50% goes to the other agent and what's left is divided again by 50%? Unless you are a new agent, that isn't true. The consumer isn't stupid. They know that agents lie to them. They see what you spend on marketing and know that unless it's a DreamHomes ad, advertising a $300k condo costs the same as advertising a $1,000,000 property.

Your post is full of sweeping generalities. Why not prove your position and itemize what your marketing costs are for your different priced properties and post it here?

If only all agents were so rich -- ha ha. Agents work hard for their money and have to invest a LOT into the business to make a go of it.

Investing in your business is not the issue here. What it takes to market a property is the issue.

He makes his money because he knows how to efficiently sell and effectively close, without having to BS the client. The seller is told up front there will be no traditional advertising, yet they pay his commission.

Discrediting those who have a dissenting voice as having "no clue" in order to justify a weak argument is pretty pathetic. It is one of the reasons those outside the industry, and many within, seek to change it.

Bob Wilson, I think its a matter of justifying what you do... Truthfully it may take you more advertising efforts to sell that $300,000 Condo than the $1M. If you don't justify your marketing, perception becomes reality. Some people want to do it themself, fine... Others want discounts that's fine too.

No matter what you do, your consumer needs to see the value in what you offer. That's in any business.

*** Sorry, I thought I was logged in. . .you can delete the above comment!***

Margaret - This is an excellent post. There is so little understanding among the general public of the real estate industry and the role of the Realtor. It is our responsibility to educate the consumer about our value and to bring value to each and every transaction we participate in.

Sometimes I think Realtors are our own worst enemy. I have had some very bad experiences with uneducated, unprofessional, incompetent Realtors on the other end of a transaction. It is no wonder the general public questions our usefulness.

"Truthfully it my take you more advertising efforts to sell that $300,000 Condo than the $1M."

My buyer was an Internet lead. The LA's marketing efforts that went beyond pricing it correctly and putting it in the MLS where it was readily available to anyone searching the Internet were in vain in this case.

Bob,

Housing prices have gone up and so has my gas bill, my printing bills ( ink is made from oil), my insurance, my expenses have gone up. Again, the question, from what point in your experience is your opinion based on? You say the average condo is 300K. How many 1 million dollar homes have you sold lately?

Again, if you feel you are not worth x fee than you are not. I feel I am worth my fee. I bring a lot more than the basics to the table. You are talking about generalities. Marketing is not the only thing that is done to get a property in the higher price ranges sold. You talk about general expenses and expenses that are itemized. Well, my time is worth about $250 per hour and I have been paid up to $350 an hour for my expertise. So actually if I were to bill as an attorney bills a seller is getting me at a bargain fee! And my clients know that and the main point is that they are happy to pay my fee. In fact, we have been given bonuses to say thank you for a job well done. It is not always about the value of a print ad. If you were to pay a graphic designer and a copywriter to design the ads; it would be a lot more than just the cost of the ad! You get what you pay for! Katerina

Katerina, I didn't say the average condo was $300k. That's entry level. I also didn't say anything about the value of my services.

"You talk about general expenses and expenses that are itemized."

No. I was not talking about generalities. I was specific about the cost of marketing. The point I addressed had nothing to do with your gas bill or your insurance, which do not vary based on the price of your listings. It had to do with the cost of marketing a property and the relationship between the price of the property and the associated marketing costs.

The "you get what you pay for" argument is weak. My buyer would have bought the unit regardless of what the seller paid the listing agent. The sale, as a majority do, stemmed from the property being listed in the mls, not any marketing efforts of the listing agent.

FWIW, my experience spans 18 years, and includes 7 figure sales in La Jolla, Rancho Santa Fe, Del Mar and other high end areas, including my own neighborhood. I had one sale in La Jolla in the $2 mil range where the buyer contacted me from France. He saw the property online, flew out, wrote the offer and flew back to Paris all within a 48 hour time frame. Just like the entry level condo, the marketing efforts of the LA had no impact on that sale either.

Bob,

So did you get a full commission for the sale with your buyer from France?

Margaret is on vacation. When she gets back I am sure she will be responding to all the comments.

We are not in a market right now where I am in Florida where you can just put a listing in the MLS. If people want that they can use a discount broker. I am not a discount broker. The agents that are just putting listings in the MLS are falling out of business like flies. The discount brokerages are falling by the wayside, going out of business. Now is the time when sellers are interested in full services. Again, the value I bring to the table.

If you are selling in the market where you are in CA; you must be of some value because there is good competition in your market. Or else you are taking listings for much less than those around you. Due to anti trust rules I am not going to discuss exact amounts.

So you have sold high end homes, you are an agent, I don't get it, what is your point?

Bob Wilson,

So maybe both the listing agent and the buyer's agent should of been discounted. You didn't do anything but reply to an email, schedule the showing, write the offer and said farewell. At least that's the perception you give. The buyer could of did that without you but you got paid. (full coop, I am sure)

I know you did a whole lot more than that. You are using the way YOUR client found the listing to debate this. Sometimes that's the exception. There's different levels of customer service and also different levels of marketing. I am sure discount brokers don't put listings on front of magazines or throw extravagant parties to shmooze clients and agents. It all comes down to what you want to pay for... There is a client base for each level of service and there is a business for each one too. I sound like a broken record.

Everyone want a value for their hard earned dollar...as a business it is your job to justify it.

One of the things the public does not understand is that Realtors make a personal financial investment in every listing and must keep marketing (i.e. spending money) until it closes. I know that I earn every penny that I make! I have a listing that is near a busy street that was taking longer to sell even priced very well (too much competition that wasn't on a busy street). The seller wanted me to offer it for rent as well. So after months of work and spending to advertise this property, and then the additional costs of advertising it for rent...we finally found a tenant. Yay! But instead of making approx. $5000 in commission, I will be making $1275. This for 4 months of work, or roughly $10.75 per day. I hardly think I'm being overpaid (yikes)!

That being said, I love my job, and I know that when the lease is up I will have the listing (maybe next year the market will be more seller-friendly). So I'm not complaining, just explaining.

I think I will be repeating a lot of what has already been said here - but it's up to us to correct those misconceptions of our industry and no better way to do it than by blogging about it and letting the consumer read and become part of our discussions.

Margaret Woda- Awesome post! I'm glad you mentioned the million-dollar-agent misconception. One of my friends actually described to me that if I sold his $200K home, I would get $12K in my pocket. He still thought the whole 6% commission went to me!

AUG

2007

There should be a higher threshold to attaining a license. I've always wondered about that.

Jeff, I think there should be more up front about what you are getting in to... I think there is a big misconception that this is an easy job with great pay. That's why the class rooms are so packed. People think this is easy.

Frank, thank you. I appreciate your compliment.

Hello again, Bob Carney - You're right - "Class rooms are so packed" because many consumers, and even agents (based upon some comments on this thread) think that being good at this business is easy. To the agents who think that, you're obviously not doing it "right" - you might learn something by hanging around some good agents for a few days.

Jeff - I agree about a higher threshold. State licensing authorities are really only concerned that new licensees become familiar with real estate laws. They don't care, after that. My broker has tried to establish a higher criteria, rewarding with lower fees anyone with an associate broker's license, for example, and it's not easy for him to turn away eager licensees who aspire to be great. If other like-minded brokers set a higher standard within their companies, and communicate that difference to the public, that might help.

Joshua - Tto help clarify where the commission dollars go, take a bunch of shiny new pennies to your listing appointment, and lay them out on the table when you discuss "your" fee with the client - one penny representing each percent, (Or you could use crisp new dollar bills, if you prefer.) If the co-op is half or two thirds of your commission, set those pennies aside, clarifying that the seller is paying that to the broker and agent who bring the buyer, and the remainder is the fee the seller pays to your broker to attract the agent and buyer - which includes access, marketing, follow-up, negotiating, professional advice about pricing, etc. Maybe a visual, such as this, will help.

Rick and Ines - Yes, you are right. Bloggers CAN help clarify why agents do - both limited service agents who have a flat menu of services for all sellers/buyers, and agents who do more. Because all agents are not alike, as you can see just from reading the comments to this blog.

This is getting kinda long-winded, so let me break it up and start another comment for some other folks.

Margaret, unfortunately, the flip-side of this is that 75% of the Realtors in America do fewer than three transactions per year. They often look and play the part of the stereotype.

Bob Wilson - Thanks for logging in and coming back into the conversation. You're wrong, I do not disagree with you, because there ARE agents who don't do any more for a higher priced home or a buyer of a higher-priced home. But I don't believe that to be true in most cases. I think you're overlooking the BIG picture.

Let's take that San Diego agent you mentioned who does $2m and doesn't do any expensive traditional advertising to sell 150 homes a year, as far as you know. 'Don't know that agent, but I do know any agent with that volume is doing something that works (isn't that what consumers want - RESULTS!). He/she probably pays a support staff to handle all the details and follow-up, maybe does targeted mailings you never see (if you're not in his/her target market), perhaps farms an area (again, you don't see that), certainly provides ongoing client care for former clients who then refer other people, or maybe participates in organizations that provide a network of potential clients. No one - not consumers OR other agents - can conclude that an agent's business falls into their laps, and that marketing is the only thing of any value.

You're right, of course, about the mixed messages - it is in the hands of people in our industryto change this. And the "good" agents - whether they are full service or limited service agents - have to do a better job of communicating our VALUE.

Hopefully your suggestion that I itemize marketing costs for different priced properties is addressed, at least in part, earlier in my comment with my short list of "other" things agents do besides market a specific property. If nothing else, more expensive properties require exponentially more of the same - at least in my market. As to sweeping generalities, YES THEY ARE! Thanks for pointing that out.

Joe, that's true - you're talking about real estate licensees, though, not real estate professionals. Differentiation - your point is right on.

Kelly - I can't begin to count the times when my expenses were greater than my income for a case, and that doesn't count the buyers that never bought and the sellers that never sold. Thanks for pointing that out.

Lori - Unfortunately that's true in some cases. Don't you wonder sometimes how they ever got the listing or buyer in the first place, when they don't really know their business or do a good job for their clients?

Bob Carney and Katerina - Thanks for participating in this conversation with Bob Wilson because I don't see any sense in beating a dead horse.

Bob Wilson - Let's set aside, for a moment, the marketing efforts of the listing agents (because you have absolutely no idea what he/she is doing to earn, get, or keep his client's business) and look at what you did for your buyer who flew in from France. Do you think your 18 years of experience was of any benefit in the transaction? How did the buyer end of with YOU as his/her agent instead of contacting the listing agent - your personal website, perhaps, or a referral from a former client that you've kept in touch with for many years? Did you help your buyer gain access? Prepare an offer? Obtain financing? Will you stay in touch with him monthly until he lists the property with you for sale in the future - send him periodic market updates, invite him to your home, refer business to him?

Bottom line, of course, is that we know our own value - are we communicating it to consumers? Apparently we're not even communicating it to other agents!

Margaret, you're so right about what people think about the industry. Real estate unfortunately falls next to car sales men, car mechanics and pyramid schemes in reputation. This can almost solely be attributed to educating the consumer which as you stated above NAR has failed at. One of the best weapons real estate agents have against this type of reputation is word of mouth, when consumers think something is valuable they will use it and keep using it in the long run. So agents must as the conclusion you came to above take the responsibility on themselves. Great blog, keep up the good work.

AUG

2007

Hi, Stephen - Yes, unfortunately, as some folks have pointed out in this thread, a relatively few in our industry have been like the bad apple in the bushel - spoiling it for everyone. It would be nice to have a comprehensive marketing blitz, but one agent and consumer at a time is apparently the best solution for now.

You didn't ask my opinion, but I'm going to throw it out there, for whatever it is worth. Could I suggest that you include your own name along with House Front, so people know YOU and not just your company? Not everyone will take the time to click through to find out your name - and ActiveRain is all about the relationships, which are hard to build with an entity like a company. Feel free to agree or not, of course.

Margaret,great post! Lenders face the same dilemma! I need to come back are re-read this later today. The thing that sets great REALTORS apart from the masses (we're approaching 7,000 licensees in Tucson) is the ability to add value. Thanks again!

Mike in Tucson

AUG

2007

Hi, Mike - I'm sure you're right that lenders have similar issues. By the way, I like your profile - it makes me want to do business with you!

AUG

2007

Great Post. There is nothing more frustrating then having a client (buyer or seller) calculate what 3% of the transaction would be and asking you to hand most of it over as if you don't deserve to get paid more than minimum wage.

Margaret, I came back and just spent almost half an hour reading the point and counterpoint of the comments on this post. I think it may be the most valuable half hour of my Friday! This is the value of blogging. I LEARN so much. And thank you kindly for your remark on my profile.
Much Success,
Mike in Tucson

Hi, Mike - I agree, the comments are sometimes even more valuable than the initial blog - they've certainly been worth reading in this post.

Dacia - So true! Did you see my suggestion in a comment about using pennies as a visual?

AUG

2007

Margaret-It took a lot of reading, but I found the suggestion about the pennies, wonderful! I will carry pennies in my pocket to listing appointments from now on.

It has become one of the great American pastimes to look down your nose at the next guy's occupation and say, "those people earn more than they deserve". Back in the Eighties, the government took a swipe at the Air Traffic Controllers and said "who needs these overpaid guys"? The result was half a decade of airline near-misses and midair collisions.

Isn't it reasonable that we'd expect our trade association, NAR, to make a greater effort to educate the public about the value of what we do? We're encouraged to spend money and time on real estate designations. Shouldn't NAR and REBAC and CRS and other similar organizations work harder to explain the difference between an educated, experienced, savvy agent and someone who just meets the minimum requirements?

AUG

2007

Dacia - Glad you found it. Let me know if it works for you.

Eric - Isn't that the truth! And I agree about NAR, etc., doing a better job communicating what all the various designations mean.

My husband pointed out yesterday, when we were talking about this, that Maryland issues various levels of licenses for plumbers and electricians - why can't they do that for real estate agents?

AUG

2007

Communication....education and a true concern for our clients real needs.......As in any industry, we have the good, the bad and the ugly. The bad and ugly are what the media latches on to. We all know that a satisfied client will tell 3-5 friends about the experience. A dissatisfied one will tell 20. If you are in the good catagory...you do not have to waste time on justification. Most of your clients will be coming from direct referrals and they already know the value of YOU! If anything becomes from the happenings at the DOJ, it will not create more good agents, it will do the direct opposite in my opinion. Those that will find the loophole to extort money from potential clients...more abuse of the system (Hidden assistant fees, advertising fees etc).

(here is a comment that I posted to a private post about this same subject)What would make someone choose a BAD agent? Maybe a friends son, daughter.....???? that needed a little "boost" and you thought you would be a good citizen and help them out? Maybe it was all of the plastic surgury that attracted you to that agent...Hmmmm? Maybe it was the lies they told and you never bothered to verify? Maybe a choice because of brand? (There is a reason why they have to state"each office independently owned and operated" on everything) have you ever head someone say..."hey I just bought an (Insert franchise name here) house!" Nope. Inspect what you expect or....expect to get what you bargained for. The same holds true when choosing ANY professional. You chose them....why wont you take the responsibility for your choice?

Thank you for being brave enough to post publicly.

OCT

2007

Christopher - I just came across your comment here, and apologize for not acknowledging it promptly. I have to chuckle at your last statement - I opened up a real bag of worms, and ended up deleting a bunch of anonymous feedback from localism because it was in such poor taste. In fact, I finally edited this post and took it off localism - but I learned just how angry some consumers are at the real estate industry. It was a real eye-opener for me, who sees the best in people I know in real estate.

Interesting commentary. It applies to my profession as well.

Here's another take on it.

http://rismedia.com/wp/2007-10-26/the-pursuit-of-the-real-estate-truth/

OCT

2007

Goodnes,, Erby, how did you find this old post! Thanks for the link - good article.

Why Margaret, you're comment on the 27th brought it back to the top of the list just when I happened to be reading.

I found it interesting and applicable to my profession as well as yours.

This blog does not allow anonymous comments