Every day I am amazed at the questions that I hear, especially the one of how do Realtors get paid? I guess it really isn't that easy. Some of us work on a commission basis, which means that our income is all tied to the sale and closing of a particular home.
Some of us work on a consultative model that allows the consumer to decide if they pay us for certain activities as they happen, say $250.00 for an afternoon of showing homes. Often consumers don't like that way of business because they don't want to take on the risk.
When the Realtor has to take on the entire risk, then they should be well paid, because in a lot of what we do, we don't get paid. As an example, the market has been tough in the last few years and many homeowners do not know if they have an equity in their home or not.
They contact an appraiser and they will be billed $350.00-$500.00 for an opinion of value. That appraisal may not be able to be used for anything except a view of the value of that house on that date. It is one person's opinion. In steps a Realtor and they spend hours looking for comparables that are similar to your house and give you a range of value for you to decide where within that range you want to price your house.
Even though that Realtor did the same work as the appraiser to come up with the information, they weren't paid a nickel when they delivered the bad news. Now, if you like the Realtor and you decide to list the home and we are fortunate in today's market to attract people to the house at that price we will get paid, if we survive the home inspection period and the appraisal of the buyer's lender.
When we take you out in our cars or SUV's those automobiles do not belong to our broker. The broker doesn't pay for our gas and insurance, or maintenance. In fact, in most cases we pay the broker for the privilege of being associated with the broker. In addition, that key we use to enter homes electronically, we pay the monthly fees on those and the yearly insurance.
When we maintain a website to allow you to view properties, our broker doesn't pay for that, we do. when you use my website and buy for another Realtor, you are using more work product but not paying me for it. It happens everyday!
We pay our own health insurance, life insurance, disability insurance, car insurance, etc. Oh, did I mention taxes?
We receive a 1099 from our broker and we have to pay monthly or quarterly and often have to pay a CPA at the end of the year to make sense of it all.
So, the next time you want to ask someone to run you out and show you several homes, understand they are paying their own way. Please be loyal to them and allow them to earn some income for the time you have used.
If you have specific questions about real estate and agency law in the State of Idaho, please feel free to contact us. We are here to help you succeed in the buying or selling of real estate in the Boise Metro area (Boise, Meridian, Eagle, Star, Kuna and Nampa, Idaho).
You can reach me at Tim@TimBurroughsGroup.com or by telephone at 208-409-7653 or if log distance, toll-free at 800-330-8104.
Thanks for reading this article. If you have any comments of how I could enlarge on this concept to make it easier for people to understand, let me know and I revise this post.
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