Are realtors and brokers just useless middlemen?

Question

What exactly is their profession that allows them to take 3-6% out of a sale? Did they go to college? Did they build the house? And what exactly do they do? Open doors? Shake hands? Be somewhere 9-5? Print fliers? Why can't people just sell the house on their own and keep every penny? A house is a house, hardly any bad house in a bad neighborhood can be sold otherwise than it is. Can it?

What justifies somebody who does less work than a hamburger flipper to make more per hour overall?

I certainly don't have time or access to all laws regarding selling, but what's there to it than "I want this much, like it? Pay me"

Safety and inspections are certainly things to worry about in a house, but that's for a construction person who knows building, did the realtor study that?

"results oriented" is no excuse. Obviously EVENTUALLY they'll sell it. And at 3-6%, selling off a house for a bad offer is less loss on their part but good loss on your part.

Why should somebody be hired to negotiate for you? You know what you want!

I guess I can take back the education part. They certainly do get more training than other salesmen.

And of course I asked this question because I DO think people are getting into real estate thinking it's easy money.

I can see clearer now that I know the numbers, and a lot of you are answering in the manner of IF the house sells. If you can sell a house and walk away, why not do that and cut 10-50 hours off the work when its only going to lose you at most 10% of that 2,000 a house?

As for Sarah, I think your time and expenses is a reversed calculation. Every job involves driving and time. Yes I know you drive more. And what job doesn't involve time? Time in the kitchen next to the stove and time in an office is quite different.

I still don't get one thing, what's the cost of advertising a house? Houses are either for selling or for buying, isn't Craiglist, yard signs making these things a lot easier now? If you're looking for a house, wouldn't you just drive in the neighborhood looking for a sign? If you're selling, wouldn't you just tell friends and family and eventually find a buyer that drove around and saw your sign?

Answer 1

Our Eductation?

Some of us did go to college, some went to Real Estate School, all of us had to take a state exam to become a Real Estate Agent, some of us went further and joined the National Asssociation of Realtors to become a Realtor. We have to take continuing education every 1 to 2 years.

Working Hours?

it is way more than just showing houses, that is actually the easiest part of our "job". Most of us are working 7 days a week and it is definetly not a 9 - 5 Job. Not very many Realtors know "free weekends" or vacation time without being reachable by phone or at least by internet.

What we do?

If you have ever tried to sell your home on your own, you will know how much work it is and how many thing need to be thought of. But we do more than that. We match homes to buyers and buyers to homes, We develop marketing strategies, advertise in print media and online, put a transaction together and keep it together, we are there for our clients whenever they need us or have any questions or concerns. We pay all upfront costs out of our own pocket and we get paid only if we successfully closed a transaction.

I don't think that a lot of us are really making more money than somebody who flips hamburgers, if you want to put a dollar amount to the hour.

If Real Estate would be so easy, i think a ot of more people would do it. A lot of people starting a carreer as a Real Estate Agent quit again after a very short while because they never expected it being so much work.

If you try to sell your home on you own, i wish you the best of luck - if you ever have a question and don't know what to do, find a local Realtor, he or she will be able to help.

Answer 2

I am a Realtor. And I do not think it is fair to take 6% out of the sell. I do think it is fair to give 3% to the agent who brings the buyer though. The listing agent I agree doesn't do much more then you could except dress up and look profesional. Some things they do that can be important though is put your home on your local mls. This allows all other agents, and public, to see that your property is for sell. You can only do this if you belong to your local asociation. If you put your house in the newspaper everyday for the duration it is on the market it will cost you, well a lot of money. Oh they also make sure you are protected from legal actions. Over look contracts and what not. They also evaluate the value of your home so you can get the most money from the sell. To high no one buys, to low you lose money. You can't walk down your street and look how much someone else is selling their home for and price yours the same. Well unless everything is exactly the same.... Year built, condition, paint, landscaping, appliances, and a lot more. So with that 2% for the listing agent is fair to me. Or a set price no matter how much you sell your home for. It is all nogotible between you and your agent.
But you can always do a "for sell by owner", making sure that it is an as is sell so you are not responsible later. This means the buyer is responsible for doing all the inspections before signing anything.
Remember you get what you pay for. So if you sell your house by yourself. Very good luck to you. Just remember you will not have the help of agents bringing people to show your home. In todays market it helps a lot.
If you can find agents willing to take less then 3% that is good. It all depends on what you want them to do for you. Caution: paying 3% doesn't mean you get 3% of work from your agent. If you use an agent do your homework. Maybe ask for some of there past clients and talk with them.
And the comment about the hamburger flipper....are you kidding me. If it seems so easy go and get a real estate license and tell me whats easier, your job or mine.

Answer 3

I am in agreement with Monika, she explained the truth about being a Realtor. I would just like to add that the problem is that you are looking at the full 6% commision as being paid to the Listing Realtor and that is just simply not the case.

Truth is at least half of that so 3% usually is paid to the Selling Broker for bringing the buyer and that of course pays for the effort of the Realtor in finding the property, driving their customer around, showing the property, making the offer, helping the buyer get pre-approved, helping to keep the transaction together by overseeing inspections et.. so they earn the 3%

The remainig 3% is paid to the Listing Broker and then split with the Listing Agent who actually performed all the work. Then taxes have to paid, dectuct any personal expenses and an average transaction in my area looks like this....

$250,000 purchase price
x 6% commision
$15,000

$7500 paid to Selling Broker
$7500 paid to Listing Broker

Split usually 50% With Broker
$3750 to Agent
- $1100 in Taxes
=$2650
- $500 (Personal expeses on gas, signage, time etc..)
=$2150 TOTAL

In my market it takes an average of 8 months to sell a home and I personally service my listings at least 5 hours a week.. at LEAST! So that is an average of 160 hours for a total of $2150 that is about $13 an hour and that is IF the house SELLS! If it doesn't that means I made $0.00 an hour.

The other remaining portion of the commision is applied to the Brokers expenses to market and advertise the property an amount the seller would have to pay even if they were to sell by owner except the Broker pays all the fees up front and ONLY recovers the money if it SELLS!

So to answer your question No I don't think they are just useless middlemen.. we EARN our money just like everyone else. We provide a vaulable service and if you don't agree then please don't hire a Realtor. Best of luck!

Answer 4

You can sell your own house and it not a big deal. I have sold 13 homes without a realtor with no problems. Realtors do like to make like its a big deal and if you don't do it right if will come back at you, not true. Thats what tile companies are for, they do 98% of the paper work and guarantee clear title with title insurance. Setting up an escrow account is no big deal, you just call the title company and tell them you have sold your house and you are bringing in the earnest money check and purchase and sales agreement and they will set up an account for you. The title company will give you all the paper work you and the buyer need to fill out if you have any question they will help you with it. What the agents do it find you buyers, I never had a propbem with that part. So I never use them to sell my prop, just to buy them and sometimes not even then.

Answer 5

A person CAN sell a house by themself, but because most people don't know the laws, or the many things that can happen about the title, or other things that go wrong with the property, or the way the other person buys, I suggest you get a real estate attorney, they won't take your guff. A realtor or real estate agent or broker do 50-75 things for every seller and buyer, and these things take time to accomplish, plus advertising is costly. And, since you were so abusive and rude in your question and words to real estate realtors and brokers you don't deserve good service from this industry. ...Sure, do it yourself. haha Good luck, you'll surely need it.

Answer 6

Most of my peers have nailed it.

Let's say that a big, snotty Black woman comes to visit your home, smelling and being wise ***.

She asks the price and you say "It's not for sale."
[Cause you don't like her attitude.] She can
sue you for Fair Housing Discrimination and easily win more than the value of the home in court.

That knowledge is something a licensed
real estate agent/broker knows.

Or, let's say the house has hints of mold
and you do not find it. And you
write up a simple 1 page real estate contract
and put down your cash and you clear
escrow and 1 mo later, you find the mold
climbing throughout the house and you sue the seller. The contract did not state there would be a walk-through inspection.

Let's say the contract does not stipulate that
the house is not connected to the city water
system and you run out of water in 2 mo.

OR a bar opens up next door and you find
out belatedly that the house is actually zoned
C2.

These and a myriad others are things
sellers do not have to disclose voluntarily.

[ONE man loved the home he bought and
did not ask for proof of building permits
and the house had to be leveled.]

Answer 7

If you can answer a few of our questions - then maybe you don't need a realtor- here goes:

1. What happens when there is a cloud on title?
2. Do you know how to order a TDS (do you know what it is?)
3. Do you know when you are supposed to remove all continginencies?
4. What are your options if you receieve a notice to perform?
5. Do you know how to open escrow?
6. Do you have access to the forms neccesary to complete the transaction and know how to fill them out?
7. Do you know the difference between a fee simple estate and life estate?
8.Is there an appurtanence to your land?
9.Do you know the difference between an easement in gross and easement by neccesity?

Last Question:
10. Are you prepared to answer these questions and the thousands of potential questions that can and do arise in transactions?

Your knowledge, or lack of, can be not only detrimental to yourself- but to the other party in the transaction.

Good Luck!

Maresa & T

Answer 8

Well first of all they're results oriented professionals. This means that they do not get paid unless the deal closes. Before that happens the realtor has to market the property for sale 6 to 9 mos (nowadays) by doing open houses, listing the property on MLS, offer a portion of their commission to the buyers agent and in this market it has to be substantial to get other agents to bring their buyers. The realtor has to negotiate on your behalf and deal with your concerns, buyer and buyers agents concerns and demands. The realtor must coordinate the closing with you, buyer, appraiser, inspectors, title, escrow and lender.
The job is stressful and in some cases if you don't close the deal you don't get paid. Could you say you'd be willing to do that? Your burger's burning, buddy!

Answer 9

ok firstof all they have to take a test and kkep up on continuing education believe me the test isnt fun and most flunk it the first time.

now IM not busting on realtors here although it may seem like it. if you want to seel your home forsalebyowner is a decent choice. i found my home online and im sure in todays world its not hard finding a house without a agent!

i didnt have trouble finding mine and the money the seller saved she cave is 6% seller consessions to cover our closing costs. so its not always needed. the buyers agreement can be found online and fill out easily

look most realtors and real estate agents are very hard workign people and spend many hours driving people to see homes. not a job i will ever do

i agree with you if i soold my home i would sell it myself and avoid the costs. most buyerscome to you and although im not pushing forsalebyowner the fee is minimal and you home can be found online by anyone looking and not hidden in a book (mls) only the chosen few can see

Answer 10

There are legal documents that much be filed and deeds researched and insured before you close with the mortgage company. I wouldn't try to buy a home myself.

But my next door neighbor went to one of those "For Sale By Owner" places that charged him like $1,000 up front and put his property in the MLS listings, advised him on what paperwork he needed to get and complete to sell his home. In other words, they were advisers who walked him through the process and he didn't have to pay a real estate agent the $9,000 commission that he would have paid to sell the house.

He actually listed it on Craig's List and sold it from that ad!