No one works for free unless they volunteer to local not for profits or other similar organizations. People have bills to be paid, necessities to purchase such as rent, mortgage, utilities, groceries and hopefully enough money left over for a lunch, dinner or some new outfit.
As real estate agents are licensed by the state just like doctors, dentists, financial advisors, however there is a one REALLY BIG difference.
Real estate agents are not paid until a successful real estate transaction has been completed.
Yes, there are some agents who have a retainer fee that may or may not be subtracted from their overall agreed to compensation.
The majority of real estate agents are independent contractors. As such, these agent are small business owners who have up front expenditures including: marketing from business cards to signage, organizational memberships, networking events, brokerage fees, E&O insurance premiums, fee driven education requirements by the state department of real estate and office expenses including computers, printers, paper, etc.
Money is often a much smaller outlay than the investment of time by real estate agents. Unfortunately as noted previously, real estate agents do not get paid for their time as well above expenditures until a successful transaction has been recorded.
To better illustrate for sellers and buyers how real estate agents earn their fees, I am sharing some of the usual times that I invest for my potential clients (no signed listing agreement or purchase contract) and without any compensation unless there is a successful close of escrow. My sense is many seller and buyers are not aware of all the time and efforts agents put forth. NOTE: Just like other licensed professionals not all real estate agents are the same.
- Research each property by locating all pertinent information including permits, then downloading it to the computer for future reference – 30 minutes on average. NOTE: Local real estate agents know the "lay of the land" and often know much about the area without a deep dive into the particular property." Non-local agents usually from other counties do not usually have this knowledge.
- Calling outside vendors to clarify any information located such as well information when that information is not available – 15 minutes for each clarification – NOTE: In sales, the goal is to remove any potential sales obstacles that will prevent a successful transaction.
- Constructing Competitive Market Analysis (Seller) or Comparative Market Analysis (Buyer) 1.5 hours. NOTE: My CMAs for either seller or buyer are not just the often 3 properties overview, but extend to sales 180 days in the past. This extensive CMA provides some insight into an overview of days on market, pricing and payment of similar properties. I believe in comparing apples to apples from square footage to improvements such as fencing, pool, etc.
- Communications (include phone, text and email) with sellers and/or buyers prior to making an offer hours range from 1 to 5 plus hours as each transaction is unique. Average from my tracked statistics these past eight years is 3.5 hours. For example, I had two distressed listings with a court approval from another AZ county that had over 40 hours and was then expired by the seller. No dollars received for all that time. The expiration was due to the property being distressed and the acting fiduciary agent for the seller needed the funds for the seller’s everyday maintenance. Another listing, also court approved, that was successfully sold had over 30 hours. As a listing agent I drive by most of my listed properties at least every other week if not every week.
- Negotiation Communications with other agents, my sellers and/or buyers regarding a submitted offer – 30 minutes to 2 hours depending upon any counter offers. Average from my tracked statistics is 2 hours. A recent successfully closed transaction had nearly 3 hours.
- Communications (include phone, text and email) with sellers and/or buyers, title and other vendors after offer is accepted – 1.5 hours to 5+ hours again as each transaction is unique. The average for me has been 5 hours with several transactions exceeding 10 hours.
- Touring of Seller’s Property (Vacant Land) – Before I list vacant land, I physically travel to the property, take photos, determine best road access. Then I communicate with the seller about my findings and if I believe I can sell the property. My goal is to sell the property not just list it. Time for this activity ranges from 1 to 5 hours. My average has been 2.5 hours. This does not include the time to load all information into the MLS for the seller. That investment of time is another 3+ hours.
- Touring of Properties for Buyers (Vacant Land) – Often buyers cannot find vacant land due to road access along with no sign on the property. I will meet them at a designated location and we each drive our vehicles to the property. Mohave County is the fifth largest land county in the country. Golden Valley is well over 300 square miles where most of the roads are dirt and many can be described as cow trails. – 2 hours for Golden Valley; Bullhead City and Fort Mohave 3 hours; Yucca, White Hills, Dolan Springs, Meadview, Chloride, North and East of Kingman 4+ hours.
- Close of Escrow (COE) – Often if schedules permit, I will attend the closing of the property for my buyers. – 2-4 hours (includes drive time) with average of 2 hours
When the hours are added for a seller listing one property or a buyer touring one vacant land property , the bare minimum average time that I have invested is 20 hours. NOTE: I have not included the time invested with buyers who wish to purchase a home as that time investment is often even more.
To cover my fixed expenses and the hours I invest with potential clients, I believe my time has value. Yes, I don’t work for free. However even with that stipulation I believe my real estate practice delivers value for my clients as evidence by over a 90% referral practice.
P.S. Please consider checking out my Facebook business page, The Grit and Gratitude Realtor, that will focus on the Dirt Roads in Mohave County as well local real estate, lots of dirt or vacant land parcels as some of the local attractions.
#LetsGetBackToRealConversations #WeDoThingsDifferently # ArizonaAcreage #GoldenValleyAZHomesAndLand #KingmanHomesandLand #RealEstateSellers #RealEstateBuyers
Leanne M Smith, The Grit and Gratitude Agent Who Goes the Extra Mile Because Life Begins Where the Pavement Ends.
Feature Photo Courtesy of Leanne M Smith
Any reproduction of Leanne M Smith’s blog for use by any AI or GAI, distribution or reproduction including but not limited to electronic newsletters e.g. PDF’s Internet sites or physical products e.g. newspapers, CDs without prior written permission and consent by me, Leanne M. Smith (Leanne Hoagland-Smith) is strictly prohibited.
Comments(13)