Thanks Debbie for a very informative blog!
Why Do Real Estate Agents Make 6% When They Only Put Up A For Sale Sign?
This last week I was again reminded of just how some people think. Someone wrote a letter to a relative of mine trying to persuade my relative to sell their house to them. In the letter they said that the real estate agent told my relative the house was worth "X". But they said it wasn't worth "X" because the agent didn't use the right comparable properties, the carpets needed to be replaced, they didn't like the cabinets, they would have to change out the tile floor, etc. And then the bomb....and plus the real estate agent is going to be charging you 6% for putting a sign in the yard so just sell the house to us!
Of course by this time my blood was boiling. I said to my relative, "Ok.....I really want to buy the car you have for sale for $10,000 but I don't like the tires, I'm going to have to buy new ones so let's deduct $800 from the price. And, I don't really like the seat color so I am going to need to buy some seat covers, so lets take another $100 off the price of the car. And, if you have to advertise in the paper that will cost you about $100 so we can deduct that too. That is what the people are saying to you about the house you have for sale! It's a house not a car and I don't care what you like or don't like!"
So, what do I do when I put your house on the market:
I spend a couple of hours preparing the paperwork and the CMA for our initial consultation. After I meet with you to present my information and have the listing agreement signed, here is a brief rundown of the activities that are involved with your home being sold:
Take photos of the property
Edit, crop and input the photos into the MLS
Input the listing into the MLS
Install the lock box
Order the sign to be put up
Create 800# recording for the home (call capture system)
Create the virtual tour
Advertise on Executive Properties website, craigslist, Realtor.com, ActiveRain, Trulia, Oodle, Backpage, etc.
Install flyer box at sign
Attend meetings with local agents and take an agent tour of the property
Hold open houses
Call agents that have showed the home for feedback
Update seller weekly
Receive offer and present to the seller for negotiation
Once the offer is accepted and we are in contract here are some of the things that I will do:
Order the Natural Hazard Report
Order the pest inspection
Order the home warranty
Check on the status of the appraisal
Check on the status of the home inspection
Prepare the disclosures for the buyers agent and buyer (below are a few of the important ones):
- Transfer Disclosure Statement
- Statewide Buyer and Seller Advisory
- Mold Disclosure
- Supplemental Statutory Disclosure
- 13 Seer Disclosure and Letter
- Supplemental Tax Disclosure
- Inspection Waivers
- Lead Based Paint Disclosure
- Market Conditions Advisory
- Earthquake Hazards Disclosure
- Smoke Detector/Water Heater Disclosure
- Agency Disclosure(Did you know that there were so many items needed to complete your file and to protect you? Missing one item could be very detrimental to a seller if they were to be sued by a buyer.)Work with the buyers agent to get the disclosures backWork with the appraiser, lender, title company to assure the transaction closes on time
Accompany seller to the title company to sign paperworkWHAT? THERE'S MORE??I didn't even mention what is involved with a short sale! If a short sale situation then the fun begins! I will gather paperwork from the seller, compile the documents to fax to the bank. I then hand write your loan number on the top of each of the approximately 90-100 pages and fax to the bank. Wait 30 minutes for the confirmation only to find out it didn't go through, the receivers fax was busy. Repeat 4-5 times until successful. Call the bank two days later and wait on hold approximately 1 hour to confirm the fax was received. AND, yep, you guessed it, they never received my fax! It must have gotten lost somewhere in cyberspace so repeat the entire process again.Call the bank at least once a week, waiting on hold sometimes as long as two hours for updates until bank issues approval letter.There's more! I may not be finished just yet...I must repeat all the above steps if there is a second lien-holder involved.When I close a file, it is usually 3-4 inches thick! I also have hundreds of emails and have spent hours on the phone with all the different parties involved.Now...this brings us to the 6% commission that agents sometimes make! Well, did you know that the 6%, that goes to the buyers agent, their broker, the sellers agent and their broker. Yes, four different people split my 6%. I almost forgot to mention the best part! That I work on a contingency basis. What's that you ask? Well that means I do all of the above and hope I get a paycheck in the end. How would you like to go to work everyday, pay for everything upfront out of your pocket, do your job well, hope and pray everyone else involved does their part, and then hope your boss pays you? That's what it's like for real estate agents.So please, don't ever ask me why I make 6% by only putting up a for sale sign in the yard!