Real Estate Commissions – You Charge HOW MUCH?
I often hear from consumers that they feel real estate commission are too high. I often hear from real estate agents that real estate commissions are too low. I guess it depends on what side you’re on! I also train a lot of agents. In doing so, I am always struck by the same sentiment from all of them. “Wow, there is a lot more to this than I thought.” Yep, there sure is.
I once had a client get his real estate license in hopes to save money since he bought multiple properties each year. He very quickly realized that not only was the time invested not worth the money saved, but that he really wasn’t saving anything after all the fees and taxes were paid. As Realtors, we own our own business which comes with several perks. It also comes with a lot of liability and a lot of expenses. There are tools we need to do a great job for our clients. We need equipment, so we can keep up with technology to service our clients. We are required to take continuing education that is a benefit to clients. We pay self-employment taxes. If we have any help with paperwork, such as an office assistant or a contract to close professional, we pay for that. Most hire professionals to do things like take photographs, videos and measure houses. That all comes out of our pocket. We have errors and omissions insurance and license fees. Marketing and advertising and gas to and from properties. We also pay our companies for the benefit of the experience and advice the Brokers give us and those are just hard costs.
We’ve all heard the expression, “time is money.” Why are so many people so opposed to paying others for their time? Just like those new agents discover, there is a lot of time spent during the buying and selling process that most clients never see. Phone conversations with clients and agents, emails, text messages, drive time to appointments, scheduling and rescheduling showing appointments, inspections, appraisals, reviewing offers, drafting offers, negotiating, late nights and early mornings, coordinating closings with title companies to make sure that all the client needs to do is show up! Those are just a sample of things that Realtors spend their time doing behind the scenes, so their client doesn’t have to worry about anything but the move. Yes, time is money.
Most of us think nothing of spending hundreds of dollars to go see our favorite entertainer or sports team but we balk at paying a professional Realtor handle the details of, quite possibly, the biggest investment we will make in our life. Before I get backlash, let me acknowledge that not ALL agents are created equal and not ALL prove their value. The first step is making sure you hire the right one. If you’ve hired a great Realtor, chances are, you won’t even know what they do. You won’t realize how many hours they are working to make the process virtually stress-free for you. If that’s the case, they are worth their weight in gold. The good ones make it look easy, so remember that when you get to the closing table and see that “huge” amount their company will be paid – and be thankful that they were on your side!
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. Wife to Robert, “Mom” to Tyler and Livvie, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.