What the heck do Realtors do to sell a house? Why does it cost so much?
Attached to this post is an article from the Orlando Realtor's Association that tells you a list of 180 things that actually take place. If you are a buyer and not a seller, the list would primarily focus on carting people around to hundreds of homes and offer expertise in property resale, value, negotiation, etc..
Here is my take from the real world as to why it may cost so much.
The first reason and the main reason, real estate agents/brokers assume all the risk. In most cases, it is like hiring an attorney on "contingency". We put up all the costs to be in business (office rent, staff, communications, supplies, malpractice insurance, health insurance, gas, auto, utilities, etc.), maintain a market (MLS systems, websites, Associations of Realtors, Ethics and Arbitration controls, etc.), and only charge a small percentage when, and only when, the client achieves their results. Have you ever hired an attorney in the same arrangement? I have and it was no small percentage--I paid 35% plus costs. [:'(] Attorneys serve an essential function in our society but in my case I could not believe the guy had the nerve to charge me for copy paper, etc.. in addition to what I already paid. But, hey, I agreed to it in writing because if I would have lost, the attorney would have been out lots of time and expenses, and not even charge me one red cent. (Are they still copper?)
Second, the average consumer we deal with has never even heard of something called "self-employment tax". You may typically know the term FICA because it is taken out of your pay check. If you are an employee of a company, the company is paying about 7.5% on your behalf in addition to what you contribute. In the case of most real estate professionals, that 7.5% comes out of their pocket, not the company's.
Last, why can't real estate people be paid minimum wage, like those at fast food restaurants and big box retail stores? Well, for most Americans, their home and real estate represents a vast portion of their assets. If you owned a Ferrari do you take it to the $2 automated car wash. Well, you might. But most wouldn't knowing the car costs $200,000. The average home costs about as much as that Ferrari and most want a highly skilled, professional dealing with it. I tell my kids, "you want more dough, get in the know". For the most part, real estate agents with higher skill levels will make more income than those of lesser competency. I may a little biased; check out what I know.
Let me know what you think. Feel free to submit your comments.
Attachment(s): 180 things Realtors do.pdf