To realtor up or not...

[Bagor]

Originally Posted by 1stLand

Selling a home is a very Stress Inducing / Life Altering Experience for Sellers & Buyers, and Their Realtors assume some of that stress.

Such as?

Been on the selling end a few times and the worst part of the whole process for me is the decluttering and keeping it clean and presentable. You do that?

Originally Posted by 1stLand

I think part of the reason Realtors command high commission fees is having to be 'on call' at all hours of the day, every day.

You being serious? You think this is exclusive to your career?

[Travis Munroe]

Originally Posted by squiggs96

Here's an article that came out on Friday: http://business.financialpost.com/20...bubble-agents/

I saw that article.... lets put things into perspective - although many million dollar properties. There are certain agents who have been around forever, put in their time and control most of these.
The average agent does 10 (guessing and that seems high) deals a year.
The average house price is (for easy math) 500k - 10k commission

100k of potential earnings. Now lets say that agent discounted 1000-2000 on each deal

We are down to 85,000

Now that agent has to pay taxes out of that (like anyone) so lets say 20k.

We are down to 65,000

Now that agent had to market their listings, market themselves, drive around town on their own dime, pay professional/licensing dues (can easily be over 1k a month), etc. Lets be conservative and say $15,000

We are down to $50,000

They are also on call around the clock as they are not going to get to that 10 deal mark by saying no to a weekend afternoon showing a dozen houses.

As I type this I realize the taxes should have come after the expenses however it doesnt change things much. At the end of the day, the public only sees the realtors pushing 30-40-100 deals a year through and assume all realtors are making that cash. If you could only understand what it takes to get to that level. The personal financial gambles, dedication, etc.
I know I am living as a bachelor due to my career choice. I am fine with it as I love what I do but for every friend who says they want my job, I typically only need to remind them of a few things to change their mind.

[squiggs96]

Originally Posted by Realtor 1

I know I am living as a bachelor due to my career choice. I am fine with it as I love what I do but for every friend who says they want my job, I typically only need to remind them of a few things to change their mind.

You're doing it wrong. You should be finding houses to sell that are owned by recently widowed millionaires. You go there to seemingly pitch your selling skills, but are actually there to pitch your bedroom skills. The rich, old lady takes a shining to you and then makes you her boy toy. You put up with old lady sex for a year or two until she croaks and then inherit her place and money.

If people want to become realtors, bartenders, etc. and think there is so much money in it, and it's so easy, there aren't many barriers to entry. If you want to be a lawyer, accountant, engineer there is schooling and articling to go through that take a lot of time, and it's not likely a 40 year old wants to start at the bottom in these professions. These people should just become a realtor if they think it is that easy. It's like pro golfers that think the long putter is an unfair advantage. These golfers are also allowed to use it. There is literally nothing stopping them. Instead of complaining about all the money you think a realtor is making, go make it yourself. I am meaning the general "you", as clearly you are already a realtor. I think I would make a good realtor, as I am good at sales. I choose not to be because I don't want to work 7 days a week, I want to take a holiday without feeling like I am losing money, and I don't want to build a brand/client base. There are some very successful realtors out there, but there are also a lot of miserable ones.

[#-3]

Interesting article,

Highlights that many people getting into the industry do it because they share my view, that Real Estate Agents are too expensive. And they hope they can get rich quick. unfortunately there just is not enough work in Canada for 100,000 realtors.

/\
/\
Like you said, I think allot of people don't realize the costs of doing business themselves.

The one thing I would counter is that when running a home business, if you are doing it right you should pay far less tax then the rest of us. There are allot of opportunities for reasonable right-offs. It just that you have to pay the tax on your own, its not deducted for you.

If my employment agreement says I earn $65K then I get $50K. That's the way it works, we all pay tax.

[bizaro86]

Originally Posted by Bagor

Been on the selling end a few times and the worst part of the whole process for me is the decluttering and keeping it clean and presentable. You do that?

When I sold my place in Edmonton the realtor brought over a bunch of rubbermaid bins and helped de-clutter for an afternoon. I would have never thought to ask, but she said it was part of the service she provided all her clients to help the place sell quickly, along with staging tips, etc. It's a pretty competitive business, I actually thought it was a pretty good differentiator.

I definitely agree that successful realtors work very hard for their money.

[J pold]

I’ll come at it from a somewhat different perspective – a commercial real estate agent.

In some ways we are extremely similar to residential agents in terms of showings space, prospecting clients, and being a full commission profession. The nice side of things is that as commercial agents we don’t work evenings or weekends and it’s a bit more of an advisory role then a pure sales role. The downside is that our market in terms of transactions is much more limited, people are always buying and selling homes, but there are only so many companies who are planning big moves or looking for space. The result is that our market is extremely competitive, since there are only a handful of large deals done every year each brokerage fights tooth and nail in order to represent those big clients.

Not surprisingly I do believe that a good commercial agent can provide a ton of value. Generally most people have a good idea of what their real estate (home, condo, etc) is worth from a sale and rental perceptive, but how many people know what the rent is per month on their office? In terms of finding space there is no central data pool where a group could easily search listings (à la MLS for residential) so if you go to the market without an agent you are exposing yourself to a very limited market, and will almost always be paying too much for space if you negotiate direct with your landlord, which is why every major tenant in Calgary is represented by a agent. We also handle all the paper work for our clients, and when dealing with commercial lease documents there can be a ton.

Like most of have said in this thread a good agent, res or commercial, can be a huge asset to any real estate transaction.

[Bill Bumface]

When I bought my place my realtor showed me about 60 places over the course of several months and actually talked me out of making an offer on a couple.

The offer I signed off on didn't include the hot tub. An oversight on both our parts, but he called the seller and bought me the hot tub no questions asked. That probably took him down to making 8G, and call it 2 hours per showing, plus 20 hours for the house I bought, and he's sitting at just a $50 something an hour. And I could have decided to not buy any place and he would have gotten zero....

Right now I think it looks like easy money, but there are periods where those guys starve, and the good times are all part of the job, just as the bad times are.

[Winsor_Pilates]

That article is ridiculous but helps to understand why public perception of Realtor income is so skewed. 2 easy deals to make $50,000???

I've been commissioned on hundreds of sales in big expensive Vancouver, am in the top 5-10% in #of transactions, and don't have a single $25,000 commission to my name.
The thought that some receptionist could just walk into the business and start getting the type of property listings with $25K commissions is absurd.

Here's the 2013 sales per agent in Vancouver to give some perspective. It averages out to around 6 deals a year.


I actually track my average commission and it's about $7500 per deal.
At 6 deals a year, that's $45,000 a year your average agent can expect to make before paying any expenses, office fees, desk rental etc.
That's also assuming they keep/charge full commission on each transaction (highly unlikely).

Conservatively knock off $15,000 in brokerage fees/splits and you're making a whopping $30,000 a year before tax.

It's a great profession and you do have the potential to make a very large income, but the pool of agents at the top is not easy to get to, and it's their commissions, cars, lifestyles that everyone sees.

[Winsor_Pilates]

Originally Posted by fotze

Does that include the 50% or whatever the brokerage takes off the top?

Most brokerages don't take 50% (I can't think of any).

They tend to work on 1 of 2 models: heavy commission splits with very little upfront cost, or heavy upfront cost with smaller splits.

The first model is great for newer or part time agents cause they only have to pay when they make a sale. If you don't sell anything for 2 months, you're not covering large costs anyway.

The 2nd model attracts more active agents cause they know they'll be doing enough business to pay the monthly costs, and don't want to pay a lot more on every sale.
Re/Max is the most famous of the 2nd model, as they're very expensive in upfront monthly costs (at least $1000/month just to be there), but you keep most of your commission earned.

That's why a company like that tends to attract more experienced, and busier agents who can afford the monthly hit but still do enough business to justify it. Once you're doing 3-4 deals/month it makes a lot more sense to go this way.

[Sliver]

Originally Posted by hulkrogan

When I bought my place my realtor showed me about 60 places over the course of several months and actually talked me out of making an offer on a couple.

The offer I signed off on didn't include the hot tub. An oversight on both our parts, but he called the seller and bought me the hot tub no questions asked. That probably took him down to making 8G, and call it 2 hours per showing, plus 20 hours for the house I bought, and he's sitting at just a $50 something an hour. And I could have decided to not buy any place and he would have gotten zero....

Right now I think it looks like easy money, but there are periods where those guys starve, and the good times are all part of the job, just as the bad times are.

Wow, dude, that's nuts. I mean, you can vet them on the Internet before seeing them in person. I can't believe you needed to go to 60 places.

Travis - what do you figure the average number of homes one of your clients needs to see before buying?

[Bill Bumface]

Originally Posted by Sliver

Wow, dude, that's nuts. I mean, you can vet them on the Internet before seeing them in person. I can't believe you needed to go to 60 places.

Travis - what do you figure the average number of homes one of your clients needs to see before buying?

I bought in 2009.

Basically nothing was moving then. Prices were dropping, and everyone was holding on hoping they'd go up. Or leaving their place up for sale, but perpetually priced above market value, and dropping in step with the market, staying forever too high.

There was not much listed, and most of what was, was crap. Tons of stuff that looked great in photos, but was garbage in person. This was a huge pet peeve of mine. Such a waste of everyone's time. Almost everything had something wrong with it that you didn't realize until you stepped inside. It was a highly frustrating process.

There was a break in the middle there. I gave up after a couple months, took a couple months off of looking unless something really stood out, and then looked again. I'm very glad I didn't settle, the place I got is much better for me than any other I looked at.

[Travis Munroe]

Originally Posted by Sliver

Wow, dude, that's nuts. I mean, you can vet them on the Internet before seeing them in person. I can't believe you needed to go to 60 places.

Travis - what do you figure the average number of homes one of your clients needs to see before buying?

Right now I would say 5 on the high end.
Its easy to filter places out and not waste the buyers time showing them stuff I know they wont like. The best feeling is when I hand pick a property, we go see it and the client is amazed how every item on their checklist is met. Paperwork comes out and we write.
Granted, this market doesnt allow you to find a place you like and sit around hoping the price drops while looking at others to be sure.

[Calgary14]

Just curious, does anyone know how long the average person stays in their home before moving? If I had to take a guess I'd say people stay in one home less than 5 years. A realtor would probably have a better idea

[Table 5]

Originally Posted by hulkrogan

When I bought my place my realtor showed me about 60 places over the course of several months and actually talked me out of making an offer on a couple.

Damn, that 60 must've been fun.

We probably saw around 30-35 (although about 20 of those was on our own via open houses) over the course of about 5-6 months, and we were getting pretty close to taking that break. It was pretty disheartening not finding anything we remotely liked in our price range...maybe we were just being picky, but we kind of had this notion that if we're going to drop 600K+ on a place, we should probably like it. It was (probably still is) a weird time to buy though, as there wasn't much on the market at all, so sometimes you go hoping the photos were just terrible.

On a related note, there is a serious amount of homeowner/developers in this city who love brown.

[Travis Munroe]

Originally Posted by Calgary14

Just curious, does anyone know how long the average person stays in their home before moving? If I had to take a guess I'd say people stay in one home less than 5 years. A realtor would probably have a better idea

Last I heard, it was 5 years.
Makes sense... when you are younger you move every few years as you upgrade, buy with significant other, move up the work ladder.
Once you are a bit older you will settle down for 5-10 years and then once you become a senior you are looking for a home to fit the lifestyle, ie no stairs!

[cam_wmh]

Pareto principle at work here. That realtor fella on the beyond forum, seems to be one of those high performers, and Travis seems to have the same drive, to become one.

The thing is, MOST are not. The home I bought, I found the listing, pulled past sales data (from different realtor), spoke to a friend who once lived in a neighboring unit, spoke to the neighbors, a board member, and then reached out to a friends realtor pal who scheduled the walk through.

She, my realtor, was more akin to my receptionist at work, than a working professional.

What really put things in perspective, was when she suggested that I have to deliver the deposit cheque to the selling realtor, and pick up the condo docs. THEN, deliver the condo docs to the review company that SHE suggested. I also reviewed the docs, but she advised she could not be held liable if she did.

Live & learn. I too have second guessed realtors, but have concluded I will be using one of the top performers in town for my next home purchase. Not some part-timer.

[You Need a Thneed]

Having just gone through selling and buying a home (waiting for possession dates now), I'd probably have gone insane had I tried to do it without a realtor, and our house sold in 6 days.

We almost certainly sold for more than we would have without the realtor as well.

[ken0042]

Originally Posted by cam_wmh

The thing is, MOST are not. The home I bought, I found the listing, pulled past sales data (from different realtor), spoke to a friend who once lived in a neighboring unit, spoke to the neighbors, a board member, and then reached out to a friends realtor pal who scheduled the walk through.

She, my realtor, was more akin to my receptionist at work, than a working professional.

That is why it is so important to do some homework when selecting a realtor. You pay the same no matter who you go with; so why not use somebody good?

I will occasionally pop into an open house just to see what the market looks like, and in speaking to some of the realtors out there- you really have to wonder why the seller chose that person to represent them. (It also makes me question what realtor has time to do an open house every Sunday for 5 weeks in a row.)

[Winsor_Pilates]

Originally Posted by ken0042

I will occasionally pop into an open house just to see what the market looks like, and in speaking to some of the realtors out there- you really have to wonder why the seller chose that person to represent them. (It also makes me question what realtor has time to do an open house every Sunday for 5 weeks in a row.)

Often the agent at an open house is not the listing agent.
Open Houses are a great way for new agents to try and meet unrepresented buyers, so they'll host a busier agents listing to try and generate business.
That's why they have time to be there 5 weeks in a row.

A lot of busier agents won't host open houses at all; personally I probably do less than 10 a year.

[V]

Originally Posted by Bring_Back_Shantz

I really don't understand why people are so dead set against realtors being able to make a living. It think a part of it is that they don't understand what a realtor makes on a sale, and people tend to really inflate what the actual number is.

I think it has more to do with the fact that over a 10 year period house prices doubled or more, and yet the realtor's percentages never changed.

I'd be curious how many realtors worked in Calgary in 2000. I doubt it was 5000.