Why Do Realtors Make Such High Commission? was featured yesterday and in this morning's Daily Drop. I saw a comment from one of my readers and felt it warranted some discussion.
I appreciate that Thomas said "I think we have to be careful to say how far we go between closings, as the current Buyer/Seller could care less about that."
I realize that the consumer doesn't care. They'd say it's not their fault that we don't close every deal. But sometimes these things are legal issues and so I have to respectfully disagree.
- In the retail industry, subject to community, there is 2-5% shrinkage due to theft or loss of product.
- In the restaurant industry, where I haven't worked so I can't quote a figure, there is also shrinkage.
- In the medical field, 50% of testing is CYA for for medical malpractice.
- In the auto insurance industry there is a % of non-insured covered in our rate.
We all pay the "shrinkage" in our bill in the end.
Add all that up and honestly, its the same thing as pay gaps due to clients who cheat you out of a commission. I earn it when the house is found per my contract, and should get paid then, but nope! I get paid when it closes. So then Mr. Buyer brings in Aunt Sally who got all bent out of shape because they used somebody else. To save family, they put Aunt Sally on the contract. This is real. This is unfair and illegal. Am I going to sue? No. It would destroy my credibility. Its shrinkage and we account for that in our fees, regardless of whether or not the consumer likes it or not, and its common business practice.
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