This week, the Wall Street Journal ran a story entitled, ‘How Should Realtors Get Paid’.
The author is a general freelance writer who describes herself as ‘a versatile writer with experience covering a wide range of topics. As a freelancer I contribute regularly to the Wall Street Journal, writing about personal finance, healthcare, aging and technological innovation’. Because she isn’t a real estate expert, she relied on three college professors for content:
They went off on some crazy tangents and no realistic conclusions were found, other than to note that there are discount brokers if you want to pay less.
Would you do your job for the same pay if these were part of your job description:
- You invest your own time and money along the way.
- You don’t know when/if you will get paid, and….
- You don’t control the final decisions – the clients do.
There should be a hefty bonus for those factors.
That being said, I would agree that the majority of realtors are grossly overpaid, relative to the services provided.
I see it every day, and if you go to open houses, you’ll see it too. The standard agent knows how to identify each room (this is the kitchen, this is the family room, etc.) and then ask you if you have any questions. Most can complete the fill-in-the-blank contracts too.
But they aren’t professional salespeople who can deliver expert advice on the fly, recognize good and bad features and assign costs/values on the fly, and put the correct price on a home based on the complete package of home’s condition and location, market conditions, and buyer pool….on the fly. Those are the realtors that deserve full compensation because the piece of mind delivered is worth extra. It is a service that is more than just taking an order.
Unfortunately, the order-takers are prevailing though, because consumers don’t know the difference and we all get paid the same. The industry isn’t motivated to disclose this to consumers because they get paid more on the lousy/inexperienced agents, so it will be up to consumers to seek out the experts in a quickie, push-button world.
Eventually, companies like Zillow will determine the values, and consumers will decide if they can live with that. Most will – it is what they are being fed by the new-age disrupters who are advertising the most. It should be just a matter of time before they prevail, and the old guard packs it up.
There will be lower costs eventually, and virtually no good help.
You pay people peanuts and you get monkeys. Get good help with JTR. He has a nut allergy and does not work for peanuts.
I do better in a tough market, when there are consequences – that’s when people think about getting good help.
It happened again yesterday. Rather than listing their home with me, people decided to take an off-market deal. They probably left a couple of hundred thousand dollars on the table, but it felt easy and the money was more than it would have been 1-2 years ago.
I like you JTR but realtors are ridiculously overpaid and it’s time this ripoff ends. It’s an old school system that leads to higher prices for everyone.
Everyone likes to pop off, but nobody wants to do it differently.
If you walked a mile in my shoes, you’d want to get paid more.
If you want to pay less, you can always take your chances with a discounter – there are plenty of them.
Your old school and you’ll be fine for the next 10 years of your job. But the next generation is going a different direction. I actually think working at In-N-Out Burger is harder than being a realtor.
Old School rules.