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High real estate commissions: because you’re worth it?

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Real Estate Professional | 30 Mar 2015, 09:10 AM Agree 0
The upcoming spring market will arrive hand-in-hand with increased scrutiny of agent paychecks.
  • David Lavalley | 30 Mar 2015, 11:37 AM Agree 2
    The article's author uses the term "take home" when referring to a professional service fee in an example given; in fact that is an amount before expenses we pay. Typical expenses are: fees board, CREA, our brokerages charge ; errors and omissions insurance; marketing; cost of continuing education courses; out of pocket expenses for investigating properties when we represent buyers and sellers; purchase and maintenance of phones, key box, office equipment and consumable supplies when many of us work from home offices, otherwise by charged to us by our brokerages some of which we pay for whether or not we use them; automobile operating expenses. Then there are income taxes and deductions of that source. As independent contractors representing our clients we are running our own businesses with all the expenses that entails rather than employees with an employer providing benefits on top of salaries and the infrastructure we pay for ourselves as self employed professionals.
  • Doug | 30 Mar 2015, 11:46 AM Agree 1
    This magazine seems to dislike realtors, all articles posted seemed to be against the industry as a whole. Despite its name REP.
  • Commission Wars | 30 Mar 2015, 11:50 AM Agree 0
    The model of efficiency at a lower cost is where it is all going. Consumers are waking up how easy the transaction really is and they want to keep their money for themselves. Nobody is worth with a 3 month course too charge 4-5% for looking up resales. Called a monopoly ...why aren't accountants being paid 20,000-30,000 for their service they provide advice,direction etc...

    What we got from agents was artificial bidding wars that were manipulated and lots of crystal ball advice,

    I am sure there is a place for agent but not at those rates. .. if you do ur homework you can find the same service,just as experienced,knowledgeable for a fraction of the cost. 1,000 -2,000 per transaction. Same results.
  • Oscar Vidal-Calvet | 30 Mar 2015, 12:04 PM Agree 2
    "Consumers often see those earnings, coupled with quick selling times and low DOMs, and assume agents are being remunerated far too generously".
    Over 20 years in the real estate business and I still hear the same thing over and over.
    Purchasers complain about the high home prices, even though in normal circumstances, they do not pay for the services a Purchasing realtor is providing.
    And sellers are totally satisfied when they sell their homes and more when this is "over asking price"
    Our clients, the sellers, in reality, pay for a service they want to have, nowadays there is a complete menu to their choice; as an example,
    if they do not want to pay commission they become "FSBO" and chances are they may succeed,
    if they want to pay just for "Mere Posting", they have this system available, and
    if it is their preference, also, there are many "Discount Brokerages" out there, almost in every neighbourhood, and
    of course a "full time realtor offering experience, liability, availability and complete professional real estate service"
    I honestly see no reason to complain.
  • Frank | 30 Mar 2015, 12:05 PM Agree 2
    You get what you pay for.... We do so much more work in the background that most people don't realize. I for one don't apologize for my fees since i work hard for what i make
  • t.o.agent | 30 Mar 2015, 12:08 PM Agree 1
    Go ahead, take a gamble my friend, hire that agent that will charge you a $1,000 per sale, and we'll see how far your profits go.
  • Your typical hard-working agent | 30 Mar 2015, 12:29 PM Agree 3
    What's most interesting is that the average Canadian real estate sales person's income is $49,699

    With only 37.6% of agents making $50,000 or more, it would seem that full time agents with no other source of income don't really make that much, especially given that 57.7% of us are in our peak earning years ( 46 - 64 years of age ).

    What people need to keep in mind is we are only paid for our successes and that 90% of the required tasks we perform have no compensation attached to them; we need to be paid well when we are successful. Yes sometimes we are successful quickly, but other times we work tirelessly for very long periods of time and carry the burden of a myriad of expenses.

    Some may argue that there are too many licensees and that if there were less agents, then the few could do what the many now do - thereby reducing the cost to the home seller. While I do think that merits some discussion, given the fact that when I got into the profession in the early 90's it was a requirement that real estate be your principal profession and we didn't have people working at other jobs and creaming off a few easy deals on the weekends that would then be shared with full time agents; I still think there is a limit to how much a single agent can do well.

    Another thing to think about is the focus on the top producers in the industry that are the ones "making too much money" these top 1% in the industry selling 100 homes a year and making gross commission incomes of $600,000 and up. These people run successful businesses with systems, staff and overhead that a single agent doing everything themselves could not possibly afford to do selling 10 - 20 homes a year. These mega agents are the ones sellers naturally gravitate to because they have proven their value in the market place. Yes they could work for less per transaction - but these top 1% types will be successful in any business, and would be very unlikely to stick around unless there are healthy profit opportunities.

    What I would say to those of you that feel real estate agents are over-paid is - come join us. Work seven days a week, be on call 24/7, get called away from important family gatherings because a new listing came on the market and your buyer needs to see it before anyone else. You too can join the 62.8% us making that whopping income of $0 -$49,999 and compete for every listing opportunity with the horde of other agents who don't know how they will feed their families next month. It's as simple as taking a quick little course - right?

  • RealRealtor | 30 Mar 2015, 01:22 PM Agree 3
    Commission Wars,
    If it's such an easy scam, why aren't you doing it?
  • Greed | 30 Mar 2015, 02:35 PM Agree 0
    These agents should be poets with their memorizing justification. Consumer are looking for value and efficiency and more and more are finding it. . I am sure all realtors when they shop for cars etc they just pay because ,it is not a monopoly they can get the info no problem to make their decisions.. so the only rocket science is having a resales access. The rest is just tour guide,taxi and whatever else is not guaranteed. If they are so special what does it make a accountant,lawyer who only charges 500-1,000 for their help!! Or for that matter a doctor or dentist ...they offer tremendous advice, direction etc they don't get paid 20,000-50,000...

    I have said it before the ego agents are ruining it for the future of agents/industry and if the other 85% agents don't stand up they won't even have crumbs left later.. like a any model when a few keep it all the rest don't even have enough to eat ...those greedy models are starting break down in the world..
  • PEEGEE | 30 Mar 2015, 04:08 PM Agree 1
    When the Sellers finally wake up and say "why should I pay more because my house is worth more when the agent(s) have done the same amount of work for the guy whose house is worth 25% less?"then we will have a rude awakening. I have been looking at this for years (many decades in the BUSINESS)-and oh yes, this is NOT a PROFESSION it is a BUSINESS -We are essentially salespeople, like car salesmen, insurance,, mutual finds etc! and I have no problem with that! But I do conduct my business very professionalLY. It is hard to call it a profession as long as we run around taking people through houses, giving them free advice, spending our Sunday afternoons at Open Houses, then have them decide not to sell or buy OR buy /sell privately from /to a friend of a friend and we end up with no remuneration ( maybe a bouquet of flowers - I've had that happen lots of times) You say get a Buyer Agency Agreement signed and the sue them? Come on now-how many of us want to take "friends" or "clients" to court?
    If we want to truly be PROFESSIONAL we will have to start being paid as professionals. Paid for our time - as true professionals are - lawyers, architects, engineers, doctors, chartered accountants. I went to a physiotherapist and right up front, she told me she charges $75.00 an hour! How many of us when we are called to do a listing interview will say we will charge for a CMA, measuring the house and calculating square footage, taking top quality films ,verifying the zoning, check if house needs major repairs, write ads, and put them in real estate publications, (if a condo - checking the Status Certificate and commenting on it.) Well you all know what I mean.
    So this will be our next real challenge
  • | 30 Mar 2015, 04:37 PM Agree 1
    Re: Commission Wars. I often work 40 to 100 hours with clients. I really don't think 1000 or 2000 dollars is a fair compensation. I also don't think many others will be willing to work up to 100 hours for that kind of pay. If I start to get paid by the hour - I will be more open to a price reduction. We don't get any gaurantees when we work 40,50 or 100 hours with clients.. we get rewarded for risk
  • Peter Barbati | 30 Mar 2015, 04:43 PM Agree 1
    Some good and not so good comments as is usually the case.
    I have listed a mobile home for $xx-xxx (less than the cost of a nice SUV essentially). My pre-fee commission will be around $600. For that, I have to carry 7 years of liability? Most of the whiners that decry what a Realtor will earn are pumped my unsubstantiated media stories from poorly advised "info-tainment" reporters that seem to believe that there are only 3 real estate markets in the entire country. Unfortunately, our "boards" are too frightened to defend us and would rather hide their heads in the sand than tell the "competition" board to stuff their attempts to regulate a free market service... although they won't push for the same for dentists ($180 an hour to clean your teeth, thousands for small dental molds) or lawyers (really, $1700 for a closing that generally requires an hour's worth of real effort?)
    Most Realtors work full time and earn less than a Government Ministers food allowance.
    And no, I do not typically charge 5% and yes, I do earn a good living.

    I am a realtor and damn proud of it.
  • windsortraveller | 30 Mar 2015, 07:23 PM Agree 1
    Just another forum for the uninformed to bash people doing jobs they know nothing about.
  • More Agents!!! | 31 Mar 2015, 10:22 AM Agree 0
    Sound like a bunch of cry babies whining about their monopoly being giving a reality check. I think Lawyers should get into the real estate world and offer a double service. Hire the realtors as their tour and taxi service.

    Commission Wars =bidding wars...line up the agents and let consumers bid their services down to the lowest offer

    More agents! More Agents!! We will see these commissions drop like a rock
  • Wake up | 07 Apr 2015, 12:13 PM Agree 1
    Ironic isn't it?

    That there is no increased public scrutiny over the government (a legal corporation) taking 50% of everyone's paycheck for doing absolutely nothing.

    None of the personal income tax goes to pay for any services (just interest on a debt that wouldn't exist if the government printed its fiat currency interest-free).

    You see, the central bank OWNS the government... because it prints everyone's money. The bank uses its government to force the people to pay interest on all the money it prints out of thin air (via income tax laws).

    Maybe we should be talking about this rather than how much agents make. Agents operate withing a free market where sellers have choice). What they earn is what they are worth and it is the result of them owning the MLS system.
  • FYI ... | 08 Apr 2015, 03:28 AM Agree 0
    "Commission Wars" and "Greed", etc... is, or are trolls!

    Don't even bother trying to explain! He or she is probably on every article trolling and time wasting with his/her non-sense! ... Frustrated with the world and what he/she has accomplished in life! ... Getting a kick out of engaging the hard working Realtors (or anyone for that matter!) in these same-ole, same-ole unproductive points!

    When you've got time on your hands, this is what happens!

    P.S Here we go! The countdown to "Commission Wars" and "Greeds" wonderful reply has begun! 1, 2, 3, 4, 5, ...
  • Ah ha! | 14 Apr 2015, 06:33 PM Agree 0
    In a 'free' market, there is competition. Why don't we just open up those MLS data feeds like the financial industry and see what happens eh? Get on board with deregulation, transparency, and competition!
  • Commission Wars | 17 Apr 2015, 11:13 AM Agree 0
    HOme prices went up not the value or service of the realtor!!!! Lawyer fees , picture takers, advertisers, stagers, print shops,car prices,...they all stayed the same or even went down..the only monopoly that went up were the taxi/tour guides of the real estate world.

    Like I said before the realtor is worth 1000-2000 per transaction and that is generous.
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