This Past Sunday I attended a house warming party at a home I had assisted the buyer in purchasing. She had gutted the kitchen and updated baths as well. Among the guests were the General Contractor who did the work and a few of his sub contractors. Along with friends and neighbors of the home owner.
As with any gathering cordial conversations emerged around the room. I over heard my date speaking with the contractor, what I heard was "the Realtor got 6% and didn't do anything". What I heard next was followed by a general consensus of yes the Realtors get too much money for the little that they actually do.
I know that feeling after all that was the whole reason I applied for my license in 1988. In the early 80's when interest rates were 18-20%, real estate had crashed, gas was high, my then partner a builder developer was in a forced early retirement. We set about buying homes direct from sellers and had them carry notes, we then fixed and flipped. Sometimes we would look at listed homes and I can tell you the arrogance of some of the Realtors was outright criminal.
They were the self appointed gatekeepers. You played by their rules or you were out. At the time the logic behind pricing was rather mystical. More equivocate to this scenario Fred down the street with the exact same square footage and lot size, got X amount and my place is of course better than his so I want $20,000 more! And so this is how a Realtor would pick a value. My issue was always if the Realtor actually even presented my offer to the seller? At that time you had to take them at their word. Also there were not buyers and sellers agents. Mostly they listed it and then sold it, you were at their mercy for complete disclosure.
Fast forward 32 years later not exactly the same game. The technology has catapulted us into an era of tightly calculated values for all homes. This knowledge is available to most anyone who can hook up to the Internet. A very popular website came out in the early 2000's and was the first to my knowledge to give anyone the price point value of any home in the US. What the general population did with this knowledge was a perfect storm with the sub prime loans and is now referred to the Real Estate Bubble.
Trust me if it was that easy everyone would be a Realtor. Which could explain the used car salesman mentality of some agents. My point is it is not an "easy job" and you don't make a lot of money for "doing nothing". Some months I work 14-16 days straight with out a break. Sometimes I go days with very little contact usually when the media has declared interest rates will be dropping so don't buy now.
Regardless I still have to pay my RE dues and many fees to be able to show houses to prospective buyers. My RE dues have to be paid just to be able to answer those unlimited questions and give out Free Comparative Market Analysis for my clients.
Or how about the gas and insurance for my car so I can show 15 houses to a prospective buyer from out of state, who changes their mind about moving here. Or the client that wants to list their house at a price that is 20-30% over market value because he knows it is worth more than Fred's house? Or the buyer that wants to look first before getting qualified for a loan, then falls in love with a house that he can't financially qualify for.Guess who gets the grief for that fopau?
A RE agent gets paid a gross after paying for Errors & Omission Insurance per transaction and the broker has taken their cut. Mr. Obama needs his cut! Being an independent contractor in the RE market is like being on the high wire without a net. Yes, that all cash commission looks like a lot of money but the reality is after I pay for my Health Insurance $861.00 per month plus all my other monthly bills there is not much left over. I am not a Realtor to make a fortune. I want what every American wants a chance to work and pay my bills.
There is obviously a need for Realtors or they would have been replaced with Sell it Yourself companies, long ago. My theory is human nature still can't quite get on board with full disclosure and sometimes a middle man/woman is the only way to get the deal done. Some transactions go rather smoothly and may only require 60-70 hours of my focus, but I can't say they all do. And to be available 24/7 for all your questions, finding you a home you can afford and a
lender when you have been turned down by most? Or my VA Veteran first time home buyers who I help buy a home with no down payment and no closing costs? Or the home owner that needs to Short Sale their home quickly? Or the home buyer that I negotiate with the bank for a big price reduction of the sales price?
To you I am Priceless!