MrSquished
Lifer
- Jan 14, 2013
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You're confusing the intent of the word rip-off. Painters, plumbers, etc. provide a service and subsequently expect to be paid. That's not unreasonable nor is it really unreasonable for a real estate agent to expect the same in theory. The word rip-off comes into play when you take a deeper dive and consider the effort put in versus the value that was received by the client. I agree that some clients are probably very obnoxious, but that isn't what we're discussing here. The main point is the $/hr, which is the first order indication of low value for a client, at least for this.
No, I don't know where the line is in terms of $/hr being worthwhile or a rip-off. It's a moving target, but I think we could all agree on certain ranges being egregious. For example, a plumber may charge $75 or $100 per hour and most people would find that range to be reasonable depending on the type of work, but people would find another plumber if the charge was $300 or more.
i am not confusing that at all. i know it's part of the equation. however with a realtor you have to take into consideration all the hours we put in that result in ZERO dollars. that is an inherent part of the profession therefore the commission structure is built to account for that. and honestly these days the 5% commission is becoming the most popular (around here)
No, I don't know where the line is in terms of $/hr being worthwhile or a rip-off. It's a moving target, but I think we could all agree on certain ranges being egregious. For example, a plumber may charge $75 or $100 per hour and most people would find that range to be reasonable depending on the type of work, but people would find another plumber if the charge was $300 or more.
we got quotes from 3 plumbers. 2 were referrals. they were all in that range i spoke of. if i did it in 1.5 hours my first time. i suspect it would have taken an experienced plumber 30 minutes.
I also know an agent most likely has to put in more time than I would to sell my house, but that's because of the fragmentation of their time investment due to driving and having other clients. That doesn't really change the underlying issue, though. I sold my house with approximately 30 hours of effort and I sold my last house in probably 45 or 50. I purchased my last three houses in less time than it would have taken with a realtor, so that's a win regardless of how it's sliced. No waiting on telephone relays for negotiating or the dozens of other things that need to be discussed AND I had a significant bargaining position: "ok, now that we've negotiated down to 96.5% of asking, take another 3% off because I don't have a realtor."
your first statement says it all. we have investment in time working for a lot of other clients of which many will result in zero financial gain. that's not your fault but it's partly the reasons commissions are that high.
let me ask you this, do you think people would get into a profession that wouldn't take into account the shitload of time commitment you have to make to not get paid for? basically - let me ask you - if i offered you a job that would have hundreds of hours where you'd make nothing, but you would get paid for the hours that ended up in a successful transaction only. would you do it?
funny enough today i stopped at the office in between two photo shoots. one of my good friends there and top 5 agent was there doing the paperwork for an offer that she knew would be outbid. she had to do it ethically but knew it was a total waste of her time. she knows the market very well. therefore the time she spent showing the place with that buyer, doing paperwork, responding and inquiring or what not, was going to be totally all a waste of time.
You have a few valid points, but, overall, the main issue is the outrageous cost for a low amount of work and arguably the same result. I say that because there have been valid points made with respect to the outcome, but percentage based income is extremely hard to justify especially for unskilled trades and this isn't an exception. Some might argue that a house worth $10 million would be harder to sell (for the most part, I disagree, but I'm merely painting a picture here) than a house worth $100k. Okay, we can debate that, but two houses worth $200k and $230k are going to be exactly the same amount of effort for anyone to sell and that's the real issue with the current fee model. The extra $1,800 in realtor fees are a complete waste of money for the clients on both end of that deal and there's no way to defend that.
i wouldn't call RE labor unskilled. anybody can become a realtor, but to be a good one takes skills. i could agree that a shitty agent that puts in little effort and gets lucky to close some deals being at the right place at the right time hasn't earned that commission.
but for good realtors - it takes a serious amount of organizational skill and time management. it takes a lot of social skills. it takes a lot of analytic and research skill to learn markets at any given time for a variety of types of property (1 family, 2 family, 3 family, 4 family, commercial buildings, condos, co-ops, vacant lots, rentals) and truly know the correct pricing for each to help your buyers and sellers. it takes great networking skills. it takes a lot of self-drive skills - because you aren't told what to do with every hour of your day like most jobs, you gotta figure that out yourselves. most people need the constant pressure of a boss, timeline and schedule made out for them. i consider independent management skills of yourself to be management skills in general. cause you got to manage, a lot. there is also a kind of 6th sense skill - being able to read people and know what they really want, and being able to find it in a sea of variety.
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