I recently saw a list of 184 things that Realtors do to earn their commission. Many items on the list were items like, “Send a confirmation email for listing appointment.” Seriously! Another one was “fax copy of purchase agreement to lender.” Is that worth a five-figure commission? Or is that worth $15 an hour?
A plumber does not justify his fee by saying he had to retrieve a wrench from the truck. A lawyer does not say his job is difficult because he had to place the file folder in the appropriate spot in the file cabinet. Yet, a real estate agent says he deserves a commission because he sent a confirmation email.
Service providers – like electricians, accountants, or real estate agents – get paid well not because of what they do, but because of what they know. That is very important – we get paid well not because of what we do, but because of what we know. As long as we as real estate agents are trying to justify our commission by what we do, we will lose. A buyer or seller can do just about everything a real estate agent can do. A buyer can order a home inspection or contact the lender. A seller can put an ad on the internet or unlock the door to show the house.
Doing the tasks is not difficult, nor is it worth a large commission. However, knowing where to put the ad is valuable. Or knowing how to handle this difficult buyer, that is valuable to the seller.
As long as real estate agents present themselves to the world as worker bees who do a lot of tasks, the world will think we are overpaid and treat us that way. But if we let our clients know that we bring expertise to the table, our commissions seem warranted.
In short, whether the client believes you are worth a commission is not about the number of miniscule tasks you do, it’s about the expertise you bring to the table. It’s about whether you are offering the client something (hopefully real estate knowledge) that he doesn’t have himself.