Real estate agents have different commissions. No two are alike. Even if two commissions are both the same percentage, there are many, many variables. What are you paying for, anyway?
You're paying for your agent's expertise as a professional, much like that of other professionals, like lawyers, doctors, interior designers, and other business people. It's not a minimum wage job, in other words. But if your agent is working as hard as the agents in our office, once their expenses are paid to sell your property, some of our agents' incomes has been as low as 38 cents an hour after paying all expenses. Can you imagine having an agent put that much time into selling your property? They do! So, what are some of the things we do for the commission we earn?
I haven't learned it all yet, but here are just a few things, and maybe you agents reading this will add to the list with your comments and feedback...
~ Advertising expenses, how many times an ad goes into the paper, and how much each ad costs. (Our local newspaper ain't cheap.)
~How much time your agent spends talking to other agents and potential buyers about your property.
~How many open houses your agent has for you.
~The ad costs for the open house newspaper advertisements.
~The costs and time involved in researching to give you an accurate market value (the Current Market Analysis or CMA) of your home.
~Research often involves contacting the experts at City Hall to figure out sewer, water, and easement questions.
~Putting a "for sale" sign together to put on your property. Yes, it actually takes some time to do that, and then go and place it at the right spot for buyers and agents to see it.
~Phone calls to you to discuss the property and expectations of pricing and commissions with you.
~Emails back and forth with sellers to answer questions that come up throughout the days and weeks of marketing your home.
~Time helping you to know how to best prepare your home for each home showing.
~Time and money in preparation of documents to list your home.
~The knowledge a real estate agent knows about the documents you need, by law, to sell your home, is invaluable. This includes the purchase and sale agreement, and there is one other that is mandatory. What are all these documents? If you don't know, you need to make sure you can count on an agent who does know.
We, at Gary Mann Real Estate, do know. Even the rookie knows. :)
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3 comments:
Hi Connie, I am a real estate agent with Top Properties in Wenatchee. Glad to see you blogging about your local real estate market. This is an interesting subject, much misunderstood by the general public. Here's a list of expenses I saw recently on another network:
* Income taxes
* Medical Insurance
* Life Insurance
* Dental Insurance
* MLS fees
* E&O Insurance
* Dues for NAR
* NCAR
* Office Rent
* Advertising
* Marketing Expenses
* Continuing Education courses
* Signs
* Lockboxes
* Office Equipment
* Cell phone
* Cell phone bill
* Vehicle
* Gas
* Maintenence on vehicle
* Insurance on vehicle
* Meals & gifts for clients (they aren't fully deductible)
* Specialty training and seminars
* License renewal fees
* Any assistants or staff
The above list doesn't even address the issue of time and expertise... which is HUGE, of course.
Good luck,
Carol Williams
www.CarolsWenatchee.com
That's a good list, Carol! All of those expenses are typical for real estate agents. It's good for our clients to know that 100% of our commissions don't go into our pocket as profit. When an employed individual goes to work, many of these expenses are taken right out of their check so that they don't even see what they really make. I noticed when I have looked at my husband's paycheck as an experienced teacher, in which all are considered a professionals, he brings home only 2/3 of what he earns. The rest is used for paying bills, the mortgage, groceries, clothing, and other essentials. Would you say that real estate professionals are similar but we bring home a portion of the commission after business taxes are taken out, then pay our own income tax, medical insurance, and I could go through your list....
Thank you for your comment! (And your list!) I wish you well in real estate in Wenatchee. Maybe we'll have the opportunity to work together some day...
Hi Connie,
Well as you know we do only bring home 30%-50% of what we earn (depending on the arrangement with our brokers for their portion). Then we get to pay OUR expenses with what's left. When you actually sit down at the end of the tax year you can see how much is really left, and it's not always that pretty is it??? So, in spite of what people think, we do it for the love of the business... not the money.
Perhaps we will have a transaction together someday. That would be fun.
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