There was an (Associated Press) article printed a while back in our local newspaper The Grand Rapids Press. It was titled "Haggling over real-estate commission fees wont hurt.". I had pondered this article with thoughts of what the public perception of realtor's and their services might be. I decided the article deserved a response in the form of a letter to the editor, but in the end decided not to send it. I don't know whether I should have or shouldn't have submitted it but my feelings have remain the same. Although the article was written last summer I have thought about it often as to how our industry has been changing over the past few years.
I would like to share the letter with you, my peers and fellow real estate professionals, and see if you agree with my response or the article. You will want to first read the article (highlighted as a link).
In regards to the article titled "Haggling over real-estate commission fees won't hurt" (an article that minimized the professional services the real estate industry provides as something to be haggled over).
There is a misconception that realtor's make too much money for the services they provide. The facts are that the operating costs for a real estate professional are more than what most people realize.
Average Overhead Costs:
Association (Multiple Listing Service) dues
Advertising- newspaper, website, flyer's, signage
phone, fax, cell phone,
printer, scanner, computer, camera etc
Auto expenses and fuel
Annual classes and insurance
Avg annual expenses: $20,000.00 - $35,000.00
Another misconception about this business is in regards to the services that real estate professionals provide. Most people view our work in terms of the initial transaction - a sale or purchase of a home. There is far more to making a sale come together than driving around clients or putting a home on the MLS. It takes hundreds of hours to do the kind of work we do for our clients; research homes, set up showings, meet with clients, network to produce a sale or purchase, enter all data on MLS and website per each listing, stage homes, photograph, edit and down load pictures, consult with sellers for home staging and appearance, open houses, follow up feed back calls, write offers, negotiate offers, inspections, negotiate inspections, follow up with lenders, consult at closings and the list goes on. There is also a considerable amount of hours spent with clients advising them in order to help them make the best decision. This is not really a 9-5 job, at least for a majority of us. This is a lot of nights and week ends. I personally avg. 60 - 70 hrs per wk. I am not complaining. This is a wonderful profession but it does require long hours and hard work that occasionally rewards realtor's a commission and sometimes it does not. We do not have a guaranteed paycheck for the hard work we do each week for our clients. Not every listing sells that has had hours of time and marketing dollars poured into it and certainly not every buyer, that has had numerous hours spent with them in looking for the perfect home, results in a purchase. There are many unpaid hours of work in this profession.
The article "Haggling over real-estate commission fees won't hurt" is contradicting. The last line of the article ends with a quote by Alex Perriello stating "real estate commissions are determined between the sellers and their agents, but the best advice I can give home sellers is that it is far more important to focus on an agent's performance, especially in today's housing market." I couldn't agree more. Sellers should understand what they are getting in the way of services and understand those services are deserving of fair payment.
Does haggling hurt? Like most things- you get what you pay for. I know there are some sellers out there who have been disappointed with the service they got when they haggled. I know, because I eventually gained them as a client and was able to provide them with the kind of service it takes to get the job done well and efficiently.
That was my response to the editor and, as I mentioned, I did not end up submitting it.
In conclusion, I know the Realtor has the right to decline the listing if he or she does not want his commission reduced or haggled over. I also am not trying to knock fee for service real estate companies or agents. Sellers choosing these types of companies/agents typically understand upfront that they are getting al acart services and they themselves will be handling certain aspects of the transaction and marketing. So please don't misunderstand the nature of this post.
I would love it if you would share with me your experiences with "haggling" and how you handle these situations. It is not my intention that this turn into a negative post. I would just like some honest feedback and maybe some helpful ideas for listing appointments that can be shared. I know times are tough for many sellers and we have to be open minded. Times are tough for a number of realtor's as well.
Make It A GREAT DAY!
Five Star Real Estate
visit me online @ www.sueprins.com