But What About All The Brokers?
Guess how many real estate agents there are in this country? More than 1.2 million. During the boomtimes of 2002 to 2004, there was a 26 percent increase. Now, with the number of real estate transaction forecast to fall 7.6 percent this year, the question is how are all these folks going to continue to…
Guess how many real estate agents there are in this country? More than 1.2 million. During the boomtimes of 2002 to 2004, there was a 26 percent increase. Now, with the number of real estate transaction forecast to fall 7.6 percent this year, the question is how are all these folks going to continue to put bread on the table. The National Association of Realtors is predicting that those who came last to the party will be the first to leave: With less low-hanging fruit to pick, those without established networks will find it toughest to generate commissions. We’re curious whether anyone’s noticed a thinning of the ranks among brokers in our corner of the universe. How ’bout it?
Real Estate Downturn Hits Agents [CNN/Money]
Graphic from Lisa Saltman Real Estate
how do you know if the 4% even got you near your best price? your discount broker most definitely didn’t co-broke so you probably got less than you could have.
Paying less than 6% appears to be fairly common outside of NY, and even in NY you can easily negotiate if you avoid the major firms (Corcoran, Halstead, etc.) I paid 4% when I sold my 1-BR condo through an experienced independent agent last fall; the arrangement was 5% if the buyer had an agent, or 4% if not.
With more expensive properties most buyers will presumably want to use agents and the marketing expenses will likely be higher, so paying the full 6% may very well be justified. However, I found that several comparable apartments to mine repped by those larger firms were priced very high – in some instances over $150K more than my apartment despite having an identical floorplan (but on a higher floor).
Those properties also sat on the market months after mine sold. Of course, the seller may not have been willing to compromise; I had to sell quickly in order to close on my new place and settled for less than I had expected, but still a great profit over what I originally paid.
The guy that sells those shlocky $200 real estate classes drives a big Hummer….I bet it’s leased.
“i guess i would be curious as what a 6% commission would get v. a 3%?”
Mainly advertising. Less money at closing means less money into advertising the property. And with a stabilising market, advertising counts a lot more than during the go-go days of past years. There is a huge difference in profit between 3% and 6% and, believe what you will, the bottom line is this IS a business.
i guess i would be curious as what a 6% commission would get v. a 3%? that sorta goes against any logic since you only make money if you sell. wouldn’t you do the same work to get the deal done regardless of percentage?
i think the internet is harming the profession because of the transparency that a buyer or seller can get via real estate related website. hopefully this increase pressure will weed out the bad brokers from the good.
“I worked almost 2500 hours last year for two-thirds that much.”
So maybe you are in the wrong profession? Not to disparage what you do cause maybe you love it. I love what I do too and work hard at it to serve my sellers and buyers. I put up with a lot of crap from buyers and seller and shield my clients from a lot of wackos and unqualified/unserious buyers who just “want to look.” So, yes I want to get paid for it and there is a big difference in service between getting a 3% commission and a 5 or 6% one. I will possibly take 3% but I will tell the seller straight up what amount of service that 3% gets.
There are a lot of crappy RE agents out there but those of us who are serious about this work. Who are in it becasue we love the business more than say our next audition. We earn and deserve what we make.
Who else thinks that this seller’s 4% deal is going to end now that he’s blabbing about it and now that the market is slowing and listings will stay around longer??
In California, real estate agents don’t have lawyers to do the paperwork. They have to do all the contracts and disclosures themselves. Not to mention the time spent driving around between far-flung appointments (tho I guess that would apply to just about anywhere outside of New York)
To the individual that has only had to pay 4%, that is because you had 12 properties and I am sure you tell all the agents that you give the listing to that “there is more listing to come.”