Sellers Beware

Sellers Beware

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Working as a Realtor is hard enough when you are having to build your business and on top of everything share the cheese per say!

While working as a realtor we are encouraged to think when the seller asks, "Why don't you offer a lower commission like agent so and so?"

Well for one a realtor works hard to get that small percentage he/she makes on the sale of a home plus they have all the costs involved in marketing that home.  

Can we then say time is money as well as paying for professional photos, advertising through open houses, printing off flyers, going door to door, marketing online and the lists goes on and on. 

How much is a realtor's time and marketing expenses worth?  I can say on the average home of 200,000 and above a realtor on the conservative side probably has 400 or more dollars in advertising (photos, gas to open houses, flyers printed, and signage). 

Not to speak many hours of time depending on length of sale.  Say a realtor spent an hour a day online marketing and reaching out and the average home sales in 40 to 60 days that ends up being 40 to 60 hours. 

What should she/he be paid hourly to do so?  What is his/her time worth?  Well let's see, accountants on the avg get paid about 40 to 60 an hour on the most part and some higher than that.  So say on the low end $40 an hour.

Now we are at $1600 to $2400 dollars.  Commissions on the avg are 6% to 7% and then that is split in between two agents the buyer's and the seller's agent.  Then it is split again between each of those agents with their brokerage.

 So say a realtor has a 200,000 dollar home to sell and the buyer will pay the 6% at closing and it sells for the listing price of 200,000. Now the commission is 12,000 to be split into percentages of 1/4ths. So both brokers get $6,000 and then

that is split again with the agents at a 60% or in some cases more.  However at 60% that is only $3600 for that agent then she/he has her office fees, photographer fees, advertising fees, time in hours spent, gas and goodies for the 

showings and open houses.  When I take out about $400 as mentioned above for photos and advertisement not counting the open houses (gas and goodies) as well as $1600 for the time of 40 hours now that is $2000 taken from 

that $3600 people think a realtor has profited and like I said open house goodies and other things haven't accounted for as of yet. This is now $1600 dollars the realtor will hopefully succeed in making to make it worth his/her time. 

Now the seller chimes in well the broker is cheating his/her agents.  Well, no the broker has many fees upfront that are being paid out when you consider there are upfront advertisement online that the agents use that cost the brokers $500 to $750 dollars per 

listing, then they have a load of other costs that are involved.  Let's not forget that both the realtor and the broker has to pay insurance along with many other costs that are percentages to help them get leads.  There are so many costs tied into this equation.

To cut your commission hurts each and every one of us.  How can we survive if just one agent does this?  

I brought this up to point out that I have a seller I am meeting tomorrow. He explained that another agent is going to list for 1%.  I asked him what is that agent going to do for you?  How can he advertise, take professional photos, market correctly or even help 

you when that won't even cover the basic expenses?  I explained my strategy and my expenses up front and what I would do for him.  I was able to schedule him in for an appointment.  Agents let's support each other and not lower ourselves to do this.  I did this

one time for a client and let me tell you, it didn't help either as other agents will not show the home if it that low of percentage as it is not worth their time when you consider the costs. However, I didn't go that low.  I would suggest it is best not to.  Let's support 

each other.  If an agent is doing it for one percent what is he offering the other agent?  The house is not that much value either.  

I hope this blog enlightens you and that it will help you to better yourself as an agent and not lower your abilities.  

Tamela Pittman Headshot
Phone: 806-319-2500
Dated: September 28th 2017
Views: 121
About Tamela: Hello my name is Tamela Pittman current resident and realtor in Lubbock. I was a teacher in Vernon,...

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