- Aug 19, 2011
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Those are my thoughts as well. I'm sure there are great real estate people and they deserve fair pay. But in my opinion they don't deserve what they're making.
A person spends years/decades paying, repairing, updating their home gaining value and a real estat person comes in and spends typically 5-20 hours on a sale and makes $10k-$25k on average houses?
In 40-50 years houses have went up 100-300% yet they are asking even higher percentage for commission.
So a agent 30-40 years ago would make $3k at 3% on an average $100k house now makes more like $18k on the same house now worth $300k at 6%.
Those are accurate numbers for an agent that just puts a home on the MLS and prays that it sells. In a large team where there are professionals of each aspect of the transaction and the home is actually marketed through all avenues possible, the return is far less to the end agent.
Average agent spends $500 on marketing a home...if that! We do things different because our company actually has a marketing department and spends money on marketing the home. On average I receive .5% from the sale of a home. I’m not getting rich, but I can attest that my clients are getting top dollar for their homes.
I just opened escrow on a home this week where the two agents that live in the neighborhood and were supposed to be experts said the home was worth $550k, the seller had offered it to a few people for $575k as a FSBO and luckily those buyers didn’t take them up on it. I spent 3 weeks marketing the home prior, generated offers before going active. In the end, we generated 15 offers and opened escrow this week at $675k, no loan contingency with an extremely short due diligence period. Negotiations did get the final number up quite a bit.