How long until realtors work by the hour/fixed price?

[FP]

With the up and coming sites like redfin.com how long do you think it will be before realtors aren't paid their 3-6% commission on home sales?

I always wondered why they were paid so much especially after buying our first house. My sister-in-law recently got her realtor's license and after taking to her it is obvious the market is really better served by a fixed price or hourly type of payment system.

She spent a grand total of 14 hours working on her last close and made almost $40k. I am happy for her but that is just insane.

Has anyone here received their realtor's license simply to save on commission?

 

[Mojoed]

My best friend is a realtor.

You would not believe how many times he shows a house and gets nothing in return for it. In this economy, it can be months between sales, depending on the area. He spends thousands on gas just showing houses and $1200++ per year just to keep his realtor license.

Your example of a realtor making $40k for 14 hours work is not typical. At 5% commission, that's an $800,000 house. In most areas of the country homes are selling for many times less. (Where I live, you can get a decent home with 1+ acre for ~100k).

I believe due to the nature of real estate sales, realtors earn what they make and they deserve it.

Edit:

Just checked out redfin for the first time, pretty cool although it has some big holes as far as searchable regions goes.

 

[badkarma1399]

Being an agent really isn't a lucrative field. Remember that a commission is split between a buying and selling agent, and then split again between the agent and their broker. Mojoed is right, with their expenses and the time it can take to move a home, they don't really make a lot of money. Too many expenses, and a lot of wasted efforts.

Now I hear being a broker is a different story...

 

[Chaotic42]

Originally posted by: Mojoed
My best friend is a realtor.

You would not believe how many times he shows a house and gets nothing in return for it. In this economy, it can be months between sales, depending on the area. He spends thousands on gas just showing houses and $1200++ per year just to keep his realtor license.

Your example of a realtor making $40k for 14 hours work is not typical. At 5% commission, that's an $800,000 house. In most areas of the country homes are selling for many times less. (Where I live, you can get a decent home with 1+ acre for ~100k).

I believe due to the nature of real estate sales, realtors earn what they make and they deserve it.

Edit:

Just checked out redfin for the first time, pretty cool although it has some big holes as far as searchable regions goes.

Yeah, my realtor had a lot of horror stories. She drove 40 miles per day for like two weeks for a house that the people just walked away from. Fortunately I bought a house near hers and really close to where she worked. I'm easy.

 

[waggy]

there were tons of people getting into it 10 years ago. easy money.

now? seems to much work to make it.

 

[vi edit]

Just like any other service, it'll get cheaper when people stop paying for it. (or as much) for it.

The hard part is that it's a two customer business. One on the selling side, one on the buying side. It's easy to buy something. But selling something is a completely different beast.

Until people start dumping realtors for FSBO's or flat fee listings/buying agent en masse realtors will keep charging what they do.

 

[newnameman]

I don't see it happening any time soon.

 

[seemingly random]

I have zero sympathy for realtors. They made so much money the last five years that if they didn't hold some back, they deserve to sink.

I wonder when walmart will start selling houses.

 

[wiredspider]

$40k isn't typical, I'm looking at houses for like 20k, I'm sure my agent wouldn't get much on that kind of sale. Almost feel bad for the guy, lol.

 

[shortylickens]

Originally posted by: waggy
there were tons of people getting into it 10 years ago. easy money.

now? seems to much work to make it.

We have a Texan friend who got into it in 1979. Throughout the 80's and 90's she made ridiculous money.
Now she's begging my paralegal mom for handouts once a month.
Kinda sad actually. Her kids were all spoiled and two of them ended up on drugs and eventually in jail.

 

[alkemyst]

Originally posted by: Mojoed
You would not believe how many times he shows a house and gets nothing in return for it.

wow so just like most businesses work? Many can only hope all are going to be paying at the end of the day.

 

[alkemyst]

Realtors are sales people...many just jumped on the bandwagon during the boom...I know of NO realtors pulling in less than well into the 6 figure range here that were doing it before the boom.

Many should go back to working at starbucks.

 

[hanoverphist]

Originally posted by: alkemyst

Originally posted by: Mojoed
You would not believe how many times he shows a house and gets nothing in return for it.

wow so just like most businesses work? Many can only hope all are going to be paying at the end of the day.

we spend time quoting jobs we never get as well, its called overhead. you just hope your quotes are better than your competitors and get more than you dont is all. cost of doing business. i have a friend that has made tons o cash in the last 10 years as a realtor, and is still making cash now. shes in commercial tho, i think that has different market slumps/ rises than residential. i know the commissions are a lot bigger usually. i know next to nothing about realty market, so its all interesting to me.

 

[LegendKiller]

Originally posted by: hanoverphist

Originally posted by: alkemyst

Originally posted by: Mojoed
You would not believe how many times he shows a house and gets nothing in return for it.

wow so just like most businesses work? Many can only hope all are going to be paying at the end of the day.

we spend time quoting jobs we never get as well, its called overhead. you just hope your quotes are better than your competitors and get more than you dont is all. cost of doing business. i have a friend that has made tons o cash in the last 10 years as a realtor, and is still making cash now. shes in commercial tho, i think that has different market slumps/ rises than residential. i know the commissions are a lot bigger usually. i know next to nothing about realty market, so its all interesting to me.

I love when RE brokers bitch about not getting business and wasting time on dry holes. SFW?

I've spent 6 months on a single deal, working 12 hour days 6 days a week, and didn't close it. It's happened many times. Then, when we close a deal, the closing fee isn't 3-6%, it is .5% with maybe 1% run-rate (2-3% in this market isn't uncommon for some deals).

But so what? Just because I had one dry hole doesn't mean I take its cost and charge it to somebody else. The price somebody will pay me to do my next deal is the price the market bears.

The problem is that RE agents think they actually provide anything more than a finders fee and a service any automated computer system could do. If they put MLS completely public, modernized the system, and cut back on the bullshit, they'd be nothing more than glorified chauffers, which is what they really are and should be paid accordingly.

There is no innate brain power required for their job, just sales technique. They're a car salesman.

WHat's sad is that if you don't pay them their self-entitlement rate, they fuck you by giving you a lesser listing or not showing other moron clients who don't do more of their own research, thus they have a captive audience.

 

[Slew Foot]

Originally posted by: LegendKiller

Originally posted by: hanoverphist

Originally posted by: alkemyst

Originally posted by: Mojoed
You would not believe how many times he shows a house and gets nothing in return for it.

wow so just like most businesses work? Many can only hope all are going to be paying at the end of the day.

we spend time quoting jobs we never get as well, its called overhead. you just hope your quotes are better than your competitors and get more than you dont is all. cost of doing business. i have a friend that has made tons o cash in the last 10 years as a realtor, and is still making cash now. shes in commercial tho, i think that has different market slumps/ rises than residential. i know the commissions are a lot bigger usually. i know next to nothing about realty market, so its all interesting to me.

I love when RE brokers bitch about not getting business and wasting time on dry holes. SFW?

I've spent 6 months on a single deal, working 12 hour days 6 days a week, and didn't close it. It's happened many times. Then, when we close a deal, the closing fee isn't 3-6%, it is .5% with maybe 1% run-rate (2-3% in this market isn't uncommon for some deals).

But so what? Just because I had one dry hole doesn't mean I take its cost and charge it to somebody else. The price somebody will pay me to do my next deal is the price the market bears.

The problem is that RE agents think they actually provide anything more than a finders fee and a service any automated computer system could do. If they put MLS completely public, modernized the system, and cut back on the bullshit, they'd be nothing more than glorified chauffers, which is what they really are and should be paid accordingly.

There is no innate brain power required for their job, just sales technique. They're a car salesman.

WHat's sad is that if you don't pay them their self-entitlement rate, they fuck you by giving you a lesser listing or not showing other moron clients who don't do more of their own research, thus they have a captive audience.

:thumbsup:

 

[Fritzo]

Originally posted by: badkarma1399
Being an agent really isn't a lucrative field. Remember that a commission is split between a buying and selling agent, and then split again between the agent and their broker. Mojoed is right, with their expenses and the time it can take to move a home, they don't really make a lot of money. Too many expenses, and a lot of wasted efforts.

Now I hear being a broker is a different story...

My realitor drove us to our house in her Cadillac STS. She must be doing something right.

 

[waggy]

Originally posted by: LegendKiller

Originally posted by: hanoverphist

Originally posted by: alkemyst

Originally posted by: Mojoed
You would not believe how many times he shows a house and gets nothing in return for it.

wow so just like most businesses work? Many can only hope all are going to be paying at the end of the day.

we spend time quoting jobs we never get as well, its called overhead. you just hope your quotes are better than your competitors and get more than you dont is all. cost of doing business. i have a friend that has made tons o cash in the last 10 years as a realtor, and is still making cash now. shes in commercial tho, i think that has different market slumps/ rises than residential. i know the commissions are a lot bigger usually. i know next to nothing about realty market, so its all interesting to me.

I love when RE brokers bitch about not getting business and wasting time on dry holes. SFW?

I've spent 6 months on a single deal, working 12 hour days 6 days a week, and didn't close it. It's happened many times. Then, when we close a deal, the closing fee isn't 3-6%, it is .5% with maybe 1% run-rate (2-3% in this market isn't uncommon for some deals).

But so what? Just because I had one dry hole doesn't mean I take its cost and charge it to somebody else. The price somebody will pay me to do my next deal is the price the market bears.

The problem is that RE agents think they actually provide anything more than a finders fee and a service any automated computer system could do. If they put MLS completely public, modernized the system, and cut back on the bullshit, they'd be nothing more than glorified chauffers, which is what they really are and should be paid accordingly.

There is no innate brain power required for their job, just sales technique. They're a car salesman.

WHat's sad is that if you don't pay them their self-entitlement rate, they fuck you by giving you a lesser listing or not showing other moron clients who don't do more of their own research, thus they have a captive audience.

and that is pretty much that.

 

[olds]

We sold a house four years ago and in the contract, set a fixed price.
No problems.