yep exactly. many people are stuck with the prices and mortgages rates being so high now relative to several years ago, so it all seems like it's in limbo.
throw this realtor thing into the mix and i don't think things will be at an equilibrium again until maybe 10 years from now.
instead of getting a house i want, i'll probably buy the smallest house i can stand and live with it for a decade until the market gets better.
you aren't most buyers.
I don't have a lot of experience in real estate or claim to know how it all works. My most recent experience was around 5 years ago when we bought our current home.
The only thing our realtor did was allow us to get into the homes we were interested in looking at. She never contacted us about potential listings that might suit our criteria or offered any insight into the homes we went and looked at with her.
All she did was answer the phone when we called then made an appointment to go see a home we were interested in. When we found one that we both agreed would fit our needs she collected her 6.5% commission.
We did all the leg work via
www.realtor.com and she did very little. I know this is a blanket statement but I would put my experience with real estate agents on par with car salesman.
That is not typical. At least for a hard-working full-time agent. Also I've never heard of a 6.5% commission on any home. Tops is 6%, and that is split between buyer's agent and seller's agent. So unless she got both sides she did not get near that. Then you take your commission and bring it back to your broker/team. If you are on a team, which so many are, you generally split that 50/50 - then you have to give your broker their cut, so usually 30% of what you get after your team. Then pay taxes.
If I could just be opening doors and selling homes that easy, I would kill and be first to admit I'm overpaid. So many deals fall apart. More deals are hairy than smooth. The egos and insane expectations people have is mind-boggling. Sure one side may be more on the reasonable side, but usually one is nutty to bonkers.
As far as once an offer is acce[ted, at least in this market you need to put a lot of work in to make sure it goes smooth. If you think people are dumb in general, for basic things, how do you think they are when buying a home? And even the smart ones may be great at some things in life, but their egos get in the way of a deal. Or they are just way too busy and they need someone to handhold them through the process. To me that is part of my job, so I am good at it and I do as much work as needed for any client. Last year I had at least 8 deals fall apart. Most after a ton of work was put in. That's with the buyers that made it to a deal. Others you work with for months or a year and then they never buy. Last year I worked with multiple buyers that each lost at least 10 bidding wars. Some of those people drop out of the market, all those hours, zero pay.
Now with zillow and the internet, finding the homes is easier for buyers. I measure each client individually. I always try to get them on the MLS alerts for what htey want, and have myself cc'd on every listing they get, and I look at each one. If I see one I know I don't want them to miss, I let them know. Because people either miss them, or may not consider the home, they are so honed in on certain things and would miss it. For one of the clients I worked with today. Million dollar budget. Two kids. Busy professional jobs. We are looking in like 7-8 townships. She's like we are so busy with work and the kids, I need you to hold our hands this whole process. I said of course, this is my job and I'm good at it. I said I'll send you listings, but also discussed them sending me listings as well for the first round to get some idea of their taste. So she sent me like 12. I said pick your top 6 we don't advise seeing more than 5-6 homes in a day. She said, you pick the ones we see today. So I did. I set up 6 appointments, we are putting in 2 offers and quite likely a 3rd. Rare for this to happen on day one. But we'll probably lose all of them.
The other buyer I'm putting in an offer with, I've been working with her for over a year. She has a smaller geographic location but also must have a single level ranch, as she is older. Ranches where she is looking are quite popular so there were places to see. But literally a year and over 15 showings, she put in no offer. We got close a few times, lots of talking to agents to negotiate, but nothing stuck. She is putting an offer in tomorrow on a total gut rehab. 400K. I'll bring back 2% IF we close. That's 8K. My team gets 50% (of which they pay the broker some too) so then I get 4K. But then I gotta give my broker 30% of that, so $1200 gone. I'm left with $2800, and I have to pay taxes out of that. I will get to deduct hundreds of miles in car usage for that deal, but it's still wear and tear. Still expenses.
After I sell X million of real estate and give my broker X amount of dollars from my 50% share, then I 'cap out' which means I don't have to give them 30% anymore. But you have to sell millions to get there. Also, if I have a client from my own circle of influence, my team only gets 30% not 50%. But all these clients I touched first through my team's resources. They spend a lot of money to get leads, both buyers and sellers. We also have an admin and a transaction manager, so we spend as little time doing administrative things and more time being client side because that's where our talents lie.
I also spend Mon-Thurs in the office from 9 until at least 1pm cold and warm calling, for sellers. Plus also pick an evening and a weekend hour or two to also do this to change up the cadence.
I have one listing I worked the guy for over a year now. Most of these people have a ton of people trying to get their business. You are lucky to get a listing appointment, let alone the listing. Anyway I got the listing, commission was 4% total, 2% to each side. He refused to listen to my pricing strategy so we sat on the market, got much lower offers. Took so long to list too, due to coordinating everything and massaging this guy's insane petulant ego the whole time. Anyway long story short, we accepted an offer but that fell through, home inspection. I'm showing it regularly. That's hours of my time. We also spent over 1K doing the marketing (photos, video tour, floor plans). Lowered the price to my price and got multiple offers. Then that deal fell apart due to the buyer not getting his commitment letter. So now we are out over a grand in cash, and a shit ton of time and have zero dollars for it. I mean these things happen all the time. Hopefully it sells.
I think the main brokerages get too much money from the agents. Also the vast vast majority of agents do not survive doing this full-time. Which is why some are not good at it, it takes a ton of experience to be a part of the process and see all the shit that can happen and go wrong and at least have a better shot to navigate it. Also some people are just lazy and they do absolutely suck at their job as a realtor. My friends in this business and my teammates, we hustle.
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