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Realtors: How DO they earn their money???

By
Real Estate Agent with HK Lane, Christie's International Affiliate, 760-285-3578 DRE #01329387

Realtors:  How do they earn their money???  I have learned over the years in this business that many, many would be clients do not understand how I get paid.  The perception seems to be that I drive them to a few homes, write up a pre-designed contract, submit it, and collect my 3% of the Sales price!  Boom-da-da-boom!  How easy is that??  Realtors have it so good....

Years ago, when I was leaving New Homes and entering the Resale world of Real Estate, I didn't "get" this.  I would spend hours preparing, hours driving people around, hours educating them about the area and developments and builders etc., then be stunned when they would "buy from my sister, or friend, or the agent that had the Open House."  Where is the loyalty I wondered?  I used to take it personally figuring they just didn't like me.

I now know that most of the time, it is simple ignorance.  Ignorance about the process from start to finish.  I now, educate my potential Buyers by meeting them and having a sit down.  I listen to what they want, how ready they are to buy or exactly what stage in the buying process they are truly at.  It is at that first meeting that I explain how I am paid and why loyalty between a buyer and their Realtor is critical to their best interests..getting great representation.

  • You don't HAVE to use me.  But..after our day today, give me your honest feedback.  Until I do not perform my job to the utmost level of my ability, do not "fire" me by going with someone else.  (The Buyer's Representation agreement comes in handy here, but I have not found them to be as reliable as honest understanding between myself and my client.)
  • I explain how I use my time; the number of hours involved in a single day of showing properties.  The prep work, the update work, the follow up work.  I help my Buyers understand that to be the first one to the most current listings, their Realtor must be vigilant and stay focused on what they are looking for. 
  • I help them understand that Loyalty is a two way street.  I will be all over their needs if they are loyal to me and my services. 
  • I confront them with the fact that playing realtors against one another is not only unfair and under handed, but I do NOT compete with my fellow realtors.  If my potential client does not feel I am equipped to give them stellar representation, I ask them to look for another Realtor who will suit them better.

I have found that helping my Buyers understand how many hours, how much homework, how many years of researching the areas/cities/developments/builders has gone into my real estate expertise comes back in loyalty spades! 

Posted by

 

Kimberley Kelly, RealtorKimberley Kelly,   Land, Ranches or Residential properties in the Palm Springs Valley of California. Follow this link to Meet Kim!

(760) 285-3578

 

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Malcolm Johnston
Century 21 Lanthorn Real Estate LTD., Trenton, Ontario - Trenton, ON
Trenton Real Estate

Kimberley, you mean to tell me that you get paid to be a Realtor? I must be doing something wrong.

Apr 18, 2010 02:43 AM
Ted Tyndall
Davidson Realty Inc. - Saint Augustine, FL
I will help You find the Home YOU want to Buy

Kimberly, there are some that don't get it if you take the time to try and explain.

I was at a closing Friday for a couple my partner showed new construction to, retirement village, and the buyer complained at the end about how much money my partner got paid for doing "nothing".

I still haven't figured out where he thought I fit into the equation.

Apr 18, 2010 02:48 AM
Jenna Dixon
Momentum Real Estate Group LLC - Marietta, GA
55 & Over | New Constructions | Horse Farms

People do not know what they do not know.  I could not possibly pretend to grasp what other professionals do all day that justifies their salaries, I think it is only reasonable to assume that my clients do not know what I do. 

One of the hardest things for buyers & sellers to conceive of is that MY TIME HAS VALUE.  They can get clear on hard costs like gasoline, advertising fees, even the cost of paper & ink seem to fit into their perception.  They just miss the fact that I have to actually, physically & mentally perform to make those hard cost items work.

I have a spreadsheet with time allotments & dollar values assigned for nearly every conceivable task that I perform for a client.  That really has helped.

Apr 18, 2010 03:00 AM
Chuck Gollay
Exit Realty Paramount - Traverse City, MI

Dang, all this time I thought I was a non-profit organization!  Great blog, and very, very true.  Most consumers do not understand how we get paid, or how working with multiple agents doesn't benefit them.  Solid, honest communication between buyers and their agent is the foundation for a long lasting and profitable relationship in which both parties benefit.

Apr 18, 2010 03:00 AM
Rob D. Shepherd
RETIRED - Florence, OR
RETIRED

Sometimes after we explain all and qualify our buyers, we end up just being tour guides.

Apr 18, 2010 03:12 AM
David Saks
Memphis, TN
Broker / Industry Analyst

Many agents earn their money by spending their money, although it's like spending their money on a roulette wheel in this business environment, and the rewards are rare. With the average agent making less than 25k a year before taxes, it's no wonder real estate boards across the country have lost thousands of members, millions of dollars in lost revenue, and thousands of licenses retired. Making money is a little harder now, and it helps to have a good relationship with your client, and a great agent will make money for their seller and save money for their buyer. I also believe in not competing with other agents and always have. By not competing with them you compete for them by creating an ethical and respectable business environment which honors the integrity of the real estate profession and it's community.

Apr 18, 2010 03:28 AM