Real Estate Agents Underpaid?

Perhaps time to quit your IT job and get in on the easy door opener game?

There will be a huge variance in required time that a buyers agent spends to call other agents, verify stuff, call you, drive around to open up houses, prepares offers, picks up paperwork, makes sure all the t's are crossed and so on.

I bought an investment property last year, and the buyers agent was also the sellers agent. She showed me one house, it was nice, put in offer, got it. Was she grossly overpaid? In that instance, yes.

This year I am looking into buying a house as a primary residence. My buying agent has been working with me for probably, well, 3 months. Contacting selling agents, showing houses, preparing offers, etc etc. All without a single cent compensation, and perhaps, it will stay like that if nothing suitable pops up. Grossly underpaid? Sure.

I do have a real problem with realtors because so much money is spent on them and they add no real value to the transaction. It just infuriates me when I consider how much more affordable housing prices could be without these leeches who basically have a monopoly on the industry. What's amazing to me is there are still people out there that don't mind having an extra 6% built into the cost of selling/buying a home just so someone can schedule appointments, drive them around, and unlock doors for them.

Quote from Stubbs4Prez : Seriously, you seem to have a real problem with Realtors from the way you talk.. In our case, our Realtor got 1.5% of the selling price (Less than 200k). His company got 1.5% and the sellers agent got 3% (not sure how that broke down between what his company took). As for how much work he put into our purchase, we gave him a list of 5 houses we wanted to see and he provided us a list of 25 more he thought we might like and were in our price range. He then spent 8 hours a day with us for 3 days straight looking at houses. He ended up writing the purchase agreement and then we had about 12 revisions to it over the next month (due to the sellers agent). He spent time getting our home inspection taken care of, and was here with the inspector. He got the exterminator taken care of, worked with our mortgage broker getting financing taken care of, and even stopped by on our move in day to lend a hand. But what makes me think he was underpaid was that in the end he took care of everything, we got the house we dreamed about, and he still calls me checking in to see if we need anything. But like I mentioned before... the agent we used to sell our house... way over paid for what he had to do.

Quote from zzyzzx : Real estate agents are grossly overpaid. A McDonalds employee works much harder.

that's lots of lettuce they make you guys wash everyday

If they bring no value to the transaction, why would you hire one? You can write up the offer yourself. Can you go through the whole transaction without help?

The buyer is not paying the agent anything at all. The seller is. You say that extra 3% going to the buyer's agent can reduce the purchase price. Not all seller will agree to that since they care about maximizing their net.

Funny you should mention that. I said the same thing to my wife after we sold our home on our own through a flat fee listing service. However, it probably wouldn't be worth it for me because their average annual salary is quite low. Yes, I know that sounds counterintuitive to what I've been saying this whole thread, but it really isn't when you think about it. I think the reason their median salaries are so low is because there is such a low barrier of entry into the profession which results in a whole lot of realtors for a limited number of homes. I still stand by my original statement though that they are overpaid. When you look at the actual work involved and the actual hours worked to buy/sell a home, then I just can't see how anyone would think they're underpaid. Just because there aren't enough homes and buyers to go around for every realtor to make over $100k/yr doesn't mean they are underpaid.

Quote from Wasser : Perhaps time to quit your IT job and get in on the easy door opener game? There will be a huge variance in required time that a buyers agent spends to call other agents, verify stuff, call you, drive around to open up houses, prepares offers, picks up paperwork, makes sure all the t's are crossed and so on. I bought an investment property last year, and the buyers agent was also the sellers agent. She showed me one house, it was nice, put in offer, got it. Was she grossly overpaid? In that instance, yes. This year I am looking into buying a house as a primary residence. My buying agent has been working with me for probably, well, 3 months. Contacting selling agents, showing houses, preparing offers, etc etc. All without a single cent compensation, and perhaps, it will stay like that if nothing suitable pops up. Grossly underpaid? Sure.

Good question. We decided to use a buyer's agent that provided a buyer's rebate because what we found was that you couldn't negotiate with seller's agent on their commission. When we first started out looking at homes on our own without an agent, we found a home we liked and wanted to put an offer in. I could almost see the $$$ signs in the seller's agent's eyes when he found out we had no buyer's agent. We were hoping that because the seller's agent didn't have to split the commission with a buyer's agent he would be open to giving us some sort of buyer's rebate. WRONG! The greedy SOB refused to even rebate us back 1% of the commission even if it meant he got to pocket 5% instead of 3%. He gave me some crock about buyer's rebates being illegal until I pointed out the law in our state stating they were perfectly legal. In the end, we still went forward with putting in an offer through the seller's agent, but got into a bidding war with another buyer and backed out. The next home we wanted to put an offer in was same situation. The seller's agent would not back down from their 6% commission so this time we went out and found a buyer's agent that offered a rebate. We figured a little something was better than nothing. I would have loved to have bought a home that was for sale by owner, but sadly most people think they need realtors to sell their home.

And yes I can certainly do the whole transaction on my own. I'm perfectly capable of filling out a form. It's not like realtors write up the contracts from scratch. They use templates published by the local BAR association.

Quote from samurai03 : If they bring no value to the transaction, why would you hire one? You can write up the offer yourself. Can you go through the whole transaction without help?

This is the kind of mindset that I would love to help change. Just because you don't pay the agent doesn't mean you don't pay. So what if one day car manufacturers decided to start paying Company X to put in a useless feature into all their cars and increased costs by 3% to offset their cost. Would be ok with that because you didn't send your check directly to Company X?

Quote from samurai03 : The buyer is not paying the agent anything at all. The seller is.

When you are buying houses in towns and off beat paths, sure agents are underpaid for the work they do..

But for agents to be in the city, where they deal with apts and condos... those are the biggest scum and leeches if there ever was one. Those are just over glorified doorman/women

Quote from dealgate : Some agents are overpaid, some may be underpaid. I was very happy with my agent. Did he get a shitload of money from my sell and buy? You betcha! Did he earn $38k (his 3%)? Almost certainly not! But it is what it is. The MLS is a criminal organization. It has a lot of influence. The MLS isn't going anywhere so nothing will change.

yes of course, its a criminal organization that you can join if you want to.

Quote from laier19usa : The average home price is not $40k - $50k. The vast majority of the homes sold in the US are well above $100k. http://www.trulia.com/home_prices/ But let's use your example anyways. We recently sold our home on our own using a flat fee listing service and put in roughly 30 hours worth of work acting as our own seller's agent. More than half of that was spent hosting 4 open houses. We obviously went way above and beyond and spent more time on selling our home than a normal seller's agent would have. So in my extreme example, let's pretend we had a super ambitious agent that spent a total of 30 hours selling a $40k home. If he were a broker/agent, he would have made $40/hr and half that if he was just an agent. Since when is $20/hr or $40/hr at the LOW end of a pay scale for a profession considered underpaid?

3% of 40k is $1200. Of that 3% he gets what, 1-1.5% tops. The rest goes to his broker fees. So lets say he gets on the high side 1.5% of it. Thats only $600. $600 for 30 hours of work is $20/hour...................i see your point.

But lets be fair for most homes they are selling you, they spend much more time + gas than that driving around showing you the 20-40 houses you looked at.

I don't think I agree with that. Based on my own experience and my buyer's agents comments, we really made him work and that still only came out to about 40 hours worth of work which mostly involved driving around and unlocking doors. At 40 hours, that's still $15/hr for pretty easy work. When I first started out in IT, I was doing equipment installations which was real tiring and sometimes dangerous for less than $15/hr.

Quote from nizzy1115 : But lets be fair for most homes they are selling you, they spend much more time + gas than that driving around showing you the 20-40 houses you looked at.

Quote from laier19usa : I don't think I agree with that. Based on my own experience and my buyer's agents comments, we really made him work and that still only came out to about 40 hours worth of work which mostly involved driving around and unlocking doors. At 40 hours, that's still $15/hr for pretty easy work. When I first started out in IT, I was doing equipment installations which was real tiring and sometimes dangerous for less than $15/hr.

I think the big question is, If it's that easy why didn't you do it?

tiring & sometimes dangerous for < reward VS easy work > reward.
If agents have connection, it would be sick. 3% out of million dollars listings. Just need to sell 1 house/quarter lol

I already covered that in a few posts above.

http://slickdeals.net/forums/show...stcount=20

Quote from kyotuosa : I think the big question is, If it's that easy why didn't you do it?

Tiring and dangerous was when I first started out. I've moved into an engineering role now that is intrinsically and financially more rewarding but with different challenges. Besides I don't think I would find much satisfaction from taking thousands of dollars from hard working people for just driving them around and opening doors.

Quote from kyotuosa : tiring & sometimes dangerous for < reward VS easy work > reward.

Quote from laier19usa : I already covered that in a few posts above. http://slickdeals.net/forums/show...stcount=20 Tiring and dangerous was when I first started out. I've moved into an engineering role now that is intrinsically and financially more rewarding but with different challenges. Besides I don't think I would find much satisfaction from taking thousands of dollars from hard working people for just driving them around and opening doors.

Well, then that's not much of a comparison. At least shouldn't be written as the way you made it sound to be.

My point was not made to make you look dumb to choose IT as profession, rather to point out that there's limited advancement, uncertain salary, risk of meeting weird people, etc in real estate business.

Same goes to Insurance sales agent (wtf do they do to deserve 6-7 figure?), car sales, basically any types of sales really....
If you made it, the reward is great. If not, then not so much.

Quote from laier19usa : Interesting perspective as I haven't thought of it like that. What are your thoughts on the Kardashians making millions for being trashy in front of TV camera? As long as someone is willing to pay them the millions then by your logic they are not overpaid?

Great question. Let's take the example you gave of the Kardashians making money on being trashy. Here's my take on it: I am a big believer in, since I am not the one paying nor the one getting paid (in other words, I don't have a financial dog in the hunt), then it's none of my business whatsoever what someone else does with their money and it's none of my business whatsoever what someone else requires or will accept for payment for their product or service. That's between the two willing parties involved.

The Kardashians provide a service. Someone wanted their service. The two parties sat down and willingly agreed that if the Kardashians trade Service X, then the payer/employer will trade Payment X. The trade only involved the two parties: the Kardashians and the employer. Both parties entered into an agreement willingly and without force or fraud. I, therefore, don't have a problem with it.

Now, can someone please tell me who the Kardashians are?