Not a REALTOR®? Never been a REALTOR®? You Won't Understand!

By
Real Estate Agent with Dockside Realty VA 0225142975

Not a REALTOR®?  Never been a REALTOR®? You won't understand! That's right, unless you are currently working as a REALTOR® or have been one in a prior life it is very possible that you will not understand the difference in the gross compensation and the net compensation received by those of us working as REALTORS®.

You know about one number...what we supposedly earn from a transaction where we represent one or both parties. It sounds exorbitant to some, perfectly acceptable to others.

What many do not learn about (and this goes for those that are thinking of becoming real estate agents because they think we make so much money) is the expense side of the equation.

Expenses??? Yes, indeed. Gas is merely one. No matter whether the price is $1.50 a gallon or $4.50 a gallon, when you have buyers in the car the distance from one house to another is the same mileage no matter the cost to get there.   

Classes are usually not free. They come with a price tag. Even for those that do only the minimum continuing education classes there is a fee and most of us do not settle for the minimum. Is it preferable to have an agent that works hard to keep up with changes within the industry? That takes hard cold cash. We do not want to perform our jobs minimally. I know I do not.

There's another little item called E&O Insurance. That stands for Errors and Omissions Insurance. Every single time we perform a real estate function we put ourselves at risk of making an error or omission. Even if we never have had a complaint and have been in the business for 20+ years, paying all that time, we will continue to pay as long as we are REALTORS®.

Is there a cost to being a REALTOR® instead of being a real estate agent? Oh yes, and it is not cheap. For instance, I pay dues to the Fredericksburg Area Association of REALTORS®. I pay dues to the Virginia Association of REALTORS®, and I pay dues to the National Association of REALTORS®. This is not a one time expense. It is every year, year after year.

Our multiple listing service is indispensable. Would you even consider working with a REALTOR® that did not belong to the multiple listing service in your area? I doubt it very much. Is that a freebie for us? No! We pay and we pay plenty for this tool.

Do we need computers at home, Internet connections, fax machines, printer/copiers? Again the answer is yes. Do we need cell phones, decent well running vehicles, and a digital camera. Of course we do. Does our company provide all of these items (or even some of them) for us? No!

Do we need a presence on the Internet? Without a doubt! How else are buyers going to find us? We are told that 85% or so begin, and possibly end, their search for a REALTOR® there. If we are to survive that is where we need to be.

Do we need to be on the Internet in order to sell our listings? I really believe so. After all how many sellers are interested in listing their property with an agent that doesn't advertise on the most used source to attract buyers?

Is a portion of our social security paid for by our company? No! We pay the full amount ourselves. Every penny of it.  

We do not receive sick pay, health insurance, vacation time, personal days, dental insurance, or any of the other benefits that many employed folks receive and do not want to lose.

If we have a dry spell, and in this market there are many agents that are coming up dry, there is no recourse to unemployment compensation.

This is not meant to be a litany of REALTOR® woes. It is to merely shed a little light on the truth. We receive the compensation that we do because it costs to do this job. If there is not sufficient compensation who will do it?  

Do some receive more compensation than others? Of course and that is true in almost every single field. Are there some years we receive better compensation than other times? Also true.

This post is only to discuss some of the expenses we incur. It does not cover everything and absolutely nothing about the time commitment we must make in order to have some degree of "success". 

We survive the lean times hoping for (and working hard towards) the more prosperous times. Most of us do it because we love it and there are many, many pluses.  

I will tell you about them in a future post.

Posted by

 ©Copyright Kate Elim 2015

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GET MOVING WITH KATE!

540-226-1964 cell

lakeanna.kate@gmail.com

For easy property searches check out my web sites: katesellslakeanna.com

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lakeannacountry.com

Comments (88)

Karen Steed
Tallapoosa, Bremen, Waco, Buchanan, Temple, Carrollton - Tallapoosa, GA
Associate Broker Haralson Realty

As the end of the year approches, It is only right that we review our expenes vs. our compensation, as we try to plan for 2011.  If a business can not make an profit, the business will not be around very long.  Unless the business has a rich uncle...

Dec 07, 2010 12:11 PM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Jeffrey...Thanks for your comment and happy holidays to you also.

Kate

Dec 07, 2010 12:25 PM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Sally...It's a good reminder for all of us that most of us really do deserve what we earn (and possibly more).

Kate 

Dec 07, 2010 12:30 PM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Bob...I've noticed that sometimes those that are walking away with the most are the ones intent on paying me the least.  Interesting!

Dec 07, 2010 12:33 PM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Mel...Yes it is great that we have choices in how we handle our business.  It makes it more interesting because so we are able to do it the way we want. Liking so many aspects of this business enables me to perform a variety of services for my clients.  That's the most rewarding for me.  It differs for others and they fill a need for some buyers and/or sellers.

Kate

Dec 07, 2010 12:37 PM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Missy...Those that do not understand often think in terms of our gross income never giving a thought to the fact that the net is often substantially less.  Nevertheless, for many of us it is still worth it.  We are doing something we enjoy doing and we are being compensated.  Thank goodness!

Kate

Dec 07, 2010 12:42 PM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Claudette...Yes, a list would be great for "newbies" or those thinking of getting into real estate.  The list would need to be much more extensive then my few remarks.  It would also need to be balanced by the positive aspects of this career.  As you said, and I heartily agree, it has its rewards.

Kate

Dec 07, 2010 12:52 PM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Ellen...Yes, our expenses have gone up.  Certainly our fees have increased along with the cost of many other things.

Kate

Dec 07, 2010 01:04 PM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Pam...You are right.  I certainly did not know all that was involved prior to becoming a REALTOR.  Glad I am though.

Kate

Dec 07, 2010 01:06 PM
Erika C. Harris
First United Realty - Douglasville, GA

Kate, great post. However, I'm not sure if you're addressing Realtor issues or the usual real estate agent issues. With the exception of Board dues, any agent would have the same expenses.

I may be in the minority here, but I have walked in the Realtor shoes, and saw no benefit- just simply paying dues every year to put the Realtor logo on my business cards. So, to date I'm just an agent- not a Realtor.

In my area, the majority of the clients do not know the difference between Realtor and realtor/real estae agent and board membership is not required to be a part of mls. (I am a member of both mls's in our area.)

And I do agree- it costs us to do this job, but every business has it's expenses.

Dec 07, 2010 01:11 PM
Tom Waite
Thomas Waite Real Estate Broker - Cypress, CA
So Cal-Apartment Bldg Investments

Yeah, its expensive and we don't make much money...but hey...

I COULD NEVER GET OUT OF SHOW BUSINESS!!!

Dec 07, 2010 02:47 PM
DeeDee Riley
Lyon Real Estate - El Dorado Hills CA - El Dorado Hills, CA
Realtor - El Dorado Hills & the Surrounding Areas

Great job, Kate.  Our company has a pie chart of showing what we as Realtors pay for different things and how much we really end up with.  May be something we need to keep front and center for our clients to see.  And now that you've made me think about it, something I should add to the buyers and seller sections of my web page.   

Dec 07, 2010 03:46 PM
Tony Lewis
RE/MAX of Valencia (Hall of Fame) 30 year Valencia Resident - Valencia, CA
Summit Real Estate Santa Clarita & Aliso Viejo

There is a bond that our club of Realtors share.  We feel each other pain and joys!  Most of us are givers and care about the clients we serve.  I am proud of our profession and dedicate myself to promoting the image and public perception that we are seen.

Dec 07, 2010 06:42 PM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Fernando...Yes, short sales.  That's like venturing into the world of the unknown.  You have no idea how it will turn out.

Kate

Dec 08, 2010 05:48 AM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Corianne...It certainly is different from day to day.  And I agree that is what makes it challenging.

Kate

Dec 08, 2010 05:49 AM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Lorainne & Loretta...Many agents do not even know how many of their buyers do not buy simply because it would be too discouraging to know.

It is important to have some idea though so you can get a better feel for what is working for you and what is not.

Kate

Dec 08, 2010 05:53 AM
Kate Elim
Dockside Realty - Spotsylvania, VA
Realtor 540-226-1964, Selling Homes & Land a

Hi Timothy...I feel the same way about real estate as you do and I've been licensed since 1986.  I'm sure you'll feel the same way years from now.

I certainly agree that we do not receive enough schooling nor often enough training before we are "set loose" as you so rightly put it.  When I began I worked for a company that required two full weeks of training prior to starting.  The training covered a multitude of things including role playing, mock scenarios, writing contracts, etc.  It helped tremendously.  My first broker was a full time broker, no listing nor selling.  She concentrated on helping us.  That was all invaluable.

Kate

Dec 08, 2010 06:02 AM
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Kate this post should be a reality check for anyone entering the business.  Many of these points could be use to overcome some sellers objections.

Dec 09, 2010 11:01 AM
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

We certainly do not get to keep all the gross and it can be a long time between checks.

Dec 11, 2010 03:10 PM
Dennis Neal
RE/MAX, Big Bear - Big Bear Lake, CA
Your Home Sold in 21 Days or We Sell It For Free

This time of year I get many yearly expenses that are due. I've never understood why they do them so near Christmas.

Dec 17, 2010 06:59 PM