Did I mention this is how I make a living and feed my family?

By
Real Estate Broker/Owner with Cornerstone Business Group Inc 0225086119

I often wonder if home sellers and home buyers have any idea how Realtors make a living. Very few, and I mean verrrrrrry few, of us are on salary. That means we only make money when a deal is done.

OK, with that said, if a buyer is a tire kicker looking at 30 houses because he is bored, that equals no money and wasted time. Also, when an "investor" calls in for that $16000 (just had this one) house, there is no money.  And, the buyer who is trying to find that diamond in the rough equals no money. The rental client who wants to see 20 rentals before making a decision, equals negative money. I hate to make this all about money, but that's what business is. We also need to feed our families, send our kids to college, pay car and mortgage payments and buy groceries.

So, buyers, sellers, rental clients if we don't seem to be enthusiastic when you call, it might be because:

  • You're not pre-qualified to buy, which equals no money.
  • You have no idea what you want and you're not quite sure if you really want to sell or buy, equals no money.
  • You want an owner to hold his rental off the market for 3 months for when your current lease runs out, equals no money for anybody.
  • You can only look at properties from 4:15-5:00 on Tuesdays and Thursdays, and you want to look at 15, equals no money.
  • You have to have your parents look at every property a week later, equals no money.
  • You want to look at properties $100K over your pre-qualification letter, equals no money.
  • You want to look at properties in 6 counties in 3 hours, equals no money.

You see where this going? Realtors make a living by selling or renting homes. If they can't sell or rent, they can't eat, pay mortgage payments or buy gas. It really isn't a pro bono business. A Realtor works with a client (In VA, that requires a Buyer's Broker Agreement, or a listing contract. The key word is contract.), and the client buys, sells or rents a property. If that doesn't happen, the Realtor goes home and writes the day, days, weeks or months off as a business loss which she cannot deduct on her taxes. 

Did I mention this is how Realtors make a living and feed their families? So, if you call an agent, consume his time for weeks on end and promise him nothing in return, don't be offended if he cuts you off and doesn't give you free stuff any longer. Like all businesses, he needs to meet the expenses of being in business when the day is done.

 

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Rainmaker
1,123,227
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

There is absolutely nothing wrong with discussing money with (particularly) buyers.  If they don't understand how we get paid (and most folks don't) then it's up to us to educate them.

Apr 17, 2016 08:16 AM #32
Rainmaker
531,001
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

Very true.  I am surprised at how many homeowners don't understand the process at all.  They bought a house, 3, 5, 10 or 20 years ago, and never really thought about what had to happen for the agents to get paid.  In fact, I had one seller last week not know that they could call any agent to show them a home that they wanted to see.  They were frustrated because they had called the listing agent 3 times with no response, which could be a bad example because who does that?  I digress....after explaining that I can show them any property on the market no matter what company or agent has it listed AND that they do not pay for buyer representation?  NO brainer.  Of course, I gained a buyer that is loyal to me.  Because I explained the process of how I work and get paid.  

Apr 17, 2016 12:08 PM #33
Rainmaker
1,823,622
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

I am working with someone right now who drove me crazy looking at houses and then finding something wrong with them.... off and on for a year or more - then she went to an open house w/o me and bought another house from the agent holding the house open - She gave me the listing on her house ... because I am so patient and because I "am her friend...." Sigh... Then she has asked me to cut my commission and throw in a home warranty.... I DON"T THINK SO!!

Apr 17, 2016 01:22 PM #34
Rainmaker
1,534,490
Amanda S. Davidson
Amanda Davidson Real Estate Group Brokered By eXp Realty - Alexandria, VA
Alexandria Virginia Homes For Sale

Mike, I have over the years been caught up in every scenario you list above and it's rough. I have found that when a seller is asking for some of my commission that when I say no, this is how I feed my family that they tend to take a step back. I think hearing "family" makes them be able to relate on some level. I'd love to know more about the $16k with no toilet...can only imagine what other issues sell with it. Yikes!!

Apr 17, 2016 11:37 PM #35
Rainer
180,243
Melissa Spittel
Coldwell Banker Residential Brokerage - Westminster, MD
"Achieving Results Together "

So much truth here. I think most "buyers" believe we are salaried or receive a regular paycheck. Little do they know.

Apr 18, 2016 11:53 AM #36
Rainmaker
571,936
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

I love the frankness and honesty of this post.  Very few clients understand how we make money and how much time we put into our jobs...and that we have to spend our time wisely so that we can earn a living!  This spring so far I have had three people contact me who may 'possibly' move to the KC area and would I show them some houses and tell them about the city???  That is hours of my time with no gte of compensation.  How to explain that diplomatically?  Hopefully the limited  time I do spend with them will pay off.

 

Apr 18, 2016 12:28 PM #37
Rainmaker
503,517
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Well I'll be!  Sounds like Realtors -- as giving as we are -- actually don't make any money unless we make it to a closing table, and a sale is transferred.  Wow!  What a concept!  And I thought all agents just got up in the morning, worked a few hours a day driving around in their expensive car, and had an easy peasy job.  What was I thinking?    Thanks for this excellent post ... every prospective buyer and seller needs to have a little educating prior to us giving them our services ... so we are all on the same page.  I try to explain this to all my clients and it is an eye-opener once explained.

Apr 18, 2016 12:34 PM #38
Rainmaker
1,556,723
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

It's all good. Learning how to say NO is important.

Apr 18, 2016 02:18 PM #39
Rainmaker
1,539,902
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Fifteen Years Experience in Brevard County

I have a couple of those $16K investors in the wings now. Not sure why I am investing time when the ROI will be minimal, at best!

Apr 18, 2016 10:57 PM #40
Rainer
78,965
Carol Lynn Johnson
Re/Max Elite Realty - Franklin, NC
Residential Specialist

I am having a Mike week!  I so relate to what you said.  One of the first things I say (at least in the first meeting) I tell the perspective client that this is how I pay my bills.  Apparently this week it is falling on deaf ears.

Apr 18, 2016 11:11 PM #41
Rainmaker
359,222
Debra B Albert, PA - Keyes Realty
Keyes Realty Treasure Coast, 34986 - Port St Lucie, FL
Ron and Debbie 772.708.3292

Both the Buyer and Seller consultation appointments are important!  That is the time to find out who is serious about their real estate goals and who is really in the "planning" stage.  We do not sign everyone we talk to.

Apr 18, 2016 11:20 PM #42
Rainmaker
206,168
Margaret Mitchell
Coldwell Banker Yorke Realty - York, ME
Seacoast Maine & NH Real Estate

You are so right.  I try to walk a fine line between the buyers and sellers who need to be incubated until they are ready to transact and the time wasters who never will be.  Sometimes you just need to fire the customer or client.

Apr 18, 2016 11:32 PM #43
Rainer
183,388
Anne Corbin
Long and Foster - Lake Anna - Spotsylvania, VA
Serving Lake Anna & Central Virginia

It is all about building relationships and that is why we take time with the "no or little $" people. Hopefully, they will come back when they can buy up or just give our name to somebody else that is in a profitable market. Love the post, Mike. If I have any Winchester referrals I will keep you in mind. I'm in Orange, Culpeper, Spotsylvania, Louisa, and Madison area. Keep me in mind.

Apr 19, 2016 01:10 AM #44
Rainer
149,198
Theresa Akin
CORPUS CHRISTI REALTY GROUP - Corpus Christi, TX

I wasted a lot of time in the beginning of my career. If a renter or buyer is not qualified to move in now. We wait until they are.

Apr 19, 2016 02:05 AM #45
Rainmaker
1,431,667
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I will often show homes one time without a BBA or a Pre Qual in place.  That is my chance to meet the prospects and assess them.  But I learned the hard way; that if they are not willing to listen they are not worth my time.

Apr 19, 2016 04:44 AM #46
Rainmaker
279,436
Annette Thor
Connecticut Homes and Commercial Fairfield Cty,CT reinct.com - Westport, CT
Residential & Commercial Real Estate Broker in CT

Oh those tough tough lessons we learned in the early years...it takes such a long time to be able to accurately assess people's ability to make a big decision.

Apr 19, 2016 09:17 PM #47
Rainer
497,765
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Buyers don't care what you need, they only care about what they need. Many of your issues could have been easily prevented by your actions.

Needless to say, it's your time you're using and once spent, you'll never get it back, so ask tough questions and get the commitment and timeline written down and if it's a lot later than sooner, learn to politely inform them that you won't be able to accommodate them. Invest your time with prospects that are ready to buy immediately. 

Apr 24, 2016 04:54 AM #48
Rainer
53,778
Terry Kraemer
Exceed Realty - Houston, TX
Houston Realtor

When I first started I had three buyers I worked with for over a year.  The first one ended up buying a home that I had showed her twice.  I had showed her at least 50 to 60 homes that year.  She waited until the buyers rep expired then purchased the home through another realtor.  The second one was probably the most indecisive person on the planet.  I finally cut her off after finally deciding on a place then wanted to back out at the very last minute.  I don't think she ever purchased a home.  The last one I showed them homes for over a year, and they purchased a home through a for sale by owner.  I had a buyers rep, but my broker refused to back me in court.  I had to go it alone and lost.  The judge thoght it was riduculous that I had listed the entire metro Houston and thoght we made too much money.  The buyers rep ran from something like November 10, 2010 to February 10, 2010 which should have stated 2011, and because of that, the judge ruled in the buyers favor.  Even though my lawyer defended the date with a past ruling, the judge sided with the buyer.  My broker refused to stand behind me because they didn't want to sue a member of the community.  Had it been another agent involved they would have done something but since it was for sale by owner, they said sorry you are on your own.   Talk about frustrated.  I learned the very hard way about this. 

Apr 24, 2016 09:27 PM #49
Rainmaker
3,251,232
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Michael

Real estate professionals are only compensated on successful closed transaction. There are no weekly pay checks.

Good luck and success.

Lou Ludwig

Sep 21, 2016 11:32 AM #50
Rainmaker
3,251,232
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Michael

Congratulations on a well earned feature for your post.

Good luck and success.

Lou Ludwig

Sep 21, 2016 11:33 AM #51
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Mike Cooper, GRI

Your Neighborhood Real Estate Sales Pro
Winchester has a place for you! Call me.
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