Demonizing Real Estate Commissions
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I just read an article by Al Lewis entitled: "Cut foreclosures by slicing real estate fees." (You can read the entire article by clicking HERE.) And if you'd be so kind as to allow me to blow off some steam at the get-go (I'd appreciate it): What is it about folks that have a problem with Real Estate brokers and agents receiving remuneration for their services? It's the underlying theme/point/agenda of Lewis' article quite frankly. As he sees it 6 percent commissions are responsible for the foreclosure mess (not government intervention~no) and by doing away with these "hidden" charges the market will see a turnaround and the consumer will be better served. I have a few questions for Mr. Lewis. First of all, I would like him to enlighten me as to how a foreclosure is tied to a real estate commission? That's like saying the Titanic sank because of the ticket price to come aboard. Secondly, Mr. Lewis, how is a real estate commission "hidden"? Under the bed? The law requires that it be communicated upfront along with a signature on a contract by a buyer or seller acknowledging they understand the cost and will pay for it. Thirdly, Mr. Lewis, how can the market see a turnaround apart from the involvement of real estate professionals who are a benefit to the consumer offering services and deserving payment for those services like any other business person in America? One final question/thought. Did Mr. Lewis get paid for writing his article? I want my money back.
Labels: calaveras county, commissions, lake tulloch real estate, mother lode, real estate, real estate twain harte, sonora, tuolumne county
8 Comments:
I can see how someone can erroneously think a seller cannot sell the home they purchased at 105% of the purchase price because the fees to sell are so high, therefore causing them to walk away from the home.
But...hello....the seller is the one who made the poor choices, not the Realtor chunking down a lot of money to advertise a house that is priced too high.
And I don't have to tell you how much stress is involved during the transaction for a Realtor. I've had friends who used to think Realtors were paid too much, spend a little time with me during the transactions and conclude by saying, "You don't get paid enough for all that you do to get these houses from on the market to the closing table."
The writer of the article needs to spend a little more time with some Realtors to see the real world a bit more clearly.
Thanks for the "vent" post!
Never mind the money... what about the time we spend between advertising, posting, managing, showing.....
Maybe the best way to cut fees is have sellers pay us on an hourly basis whether the home sells or not!!
I love it. Hmmmm, as far as I can recall, most of these sub-prime loans had huge fees that the borrowers had to pay. And in almost every case they financed these fees into their new junior loans on the house. So it wasn't a broker's commission that "sank the ship".
Oh yeah, I also don't think it was a 6% broker commission that eventually forced foreclosure on these folks. Rather the equivalent of a 6% commission or more on their over-leveraged Escalades, boats, ski doos, and fake boobs for the wife...
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Wow. How frustrating it is to hear this again. People honestly do not understand the volume of work we Realtors do. I am a licensed attorney and gave up my career years ago to become a Realtor/Broker. I can tell you that as an attorney I made more money for less work in many cases than I do as a Realtor.
As an agent my service is valuable, not only for the reasons others pointed out but also for the fact that it protects these clients legally, in the majority of situations, from potential future litigation. If a seller or buyer wants to be naive enough to try and get through a real estate transaction on their own without the assistance of a real estate professional, than all I can say is good luck. When down the road s/he is sued for failure to disclose or some other nuance that was overlooked during the transaction maybe they will then understand the value of our services.
I wouldn't sweat it too much - there are plenty of folks out there willing to blame Realtors for every possible woe in the market, and plenty of buyers and sellers who don't see the value in our services. They are free to FSBO and take on the work/risk themselves.
I'm with Merrimack Valley Real Estate! And I'll tell you why: this is just one instance of MANY just like it or WORSE!
I've had a rural lot of land listed for over 3 years. In that time I've spent over 400 hours communicating with the sellers, writing offers, advertising the property in print ads as well as dozens of websites (BY HAND because in our office the agent is a FULL SERVICE agent, not just a list-it-and-forget-it-agent) and driving to the property to check on it, take pictures, put up or change the sign, etc. Not counting the actual dollars spent on MLS and association dues each month or other costs of doing business, my time on this one property at minimum wage has already racked up a bill of over $3,200.
I FINALLY got a good buyer who is determined to buy this property. 10 day escrow, all cash, no inspections, he's ready to go. Oh, except the seller was sure the property would not have to go through probate and was WRONG! So now I'll spend the next 3-6 months waiting on a lawyer and judge to approve the sale of the property even though all the heirs to the deceased owner are in agreement on the sale and the sales price. Know how much I'll make on this deal when all is said and done? $1,200. I WANT TO BE PAID ON AN HOURLY BASIS!
Wow, that's quite the article. Kinda like blaming the doctor for death because he gave a diagnosis of terminal cancer.
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