Bottom Line: Do Real Estate Agents Deserve 6-7% of a person's net worth?

Question

In short, for working 12-40 hours, do they deserve the equivalent take-home pay of almost a year of labor??? (assuming most people have a 30 year mortgage and pay about half to it each month...)

The labor is so overpriced, that no buyer in his right mind would pay 3% extra for a property for said "service", that's why it's mixed into the seller's price, so they get to lose.


C'mon, we all know this is a protected mafia racket that discriminates against and boycots FSBOs...don't you think people are going to wise up to this rip-off?

almost 100% of a person's net worth is their home, unless they're in the minority

Brokers should be OUTLAWED
WRITE CONGRESS

Answer 1

My experience with most real estate agents, real estate brokers and REALTORS is that they are very poorly trained and do not offer any real value.

I have been investing in real estate for 40 years and I have never used a real estate agent or REALTOR.

When I bought my first house I was an 18 year old kid in college. None of the agents would help me because they did not think that they could make any money off me.

While I was in college I bought several more houses and rented out rooms to my fellow college students. I found that I could get enough money doing that to pay the mortgage on the house, if I was very careful about buying the house and not paying too much money for it.

By the time the real estate agents figured out that they could make some money off me, I discovered that I knew more about the process and the business than they did.

Real estate agents are trained as salespeople. They are trained primarily to sell their overpriced services to you.

The only real estate agents that I have found that I thought provided anything of value is those who have been active in regular business for 20 to 30 years or more. Not those that have merely had a license that they haven't used for 20 years.

At least if they have been active and around that long they have some experience with different markets. That can be of some value.

Otherwise they do not provide enough value to justify their fees. I find this to be particularly true of new inexperienced agents.

Answer 2

As you can see from the other replies, the actual comission to your agent may vary. Whatever comission the seller contracted with the listing agent normally gets split between the seller's firm and the buyer's firm. Most likely your agent got around 1 1/2% of the purchase price. The loan originator's firm mostly likely got around 1-2% with your loan originator getting a portion of that. The fees should all be listed on the HUD-1 as items paid - the realtor's fees will show up under the sellers' expenses. Were they worth that amount? Only you can answer that based on the type of customer service they gave you. If they stated in touch with you on a regular basis; informed you of what documents you needed to qualify for the loan, etc - then most likely yes they were worth it. No I'm not a realtor but I have have purchased and sold several properties over the years. If the service was friendly, honest, timely and without surprises at the closing time then to me it was well worth the fees. Enjoy your new home.

Answer 3

Most of the agents that I know of are nothing but lazy no goods that cannot get or hold a real job thus they take the simple test and become a bonafide Realtor. They can afford to be lazy and not get a sale for long lengths of time because when a sale hits they cash in. Another fact not to be ignored is the broker they have to work under is the real criminal that rakes in over half of the total percentage that is charged the seller passed on to the buyer. All they do is artificially escalate home prices to line their pockets... IMO..

Answer 4

wow. you are missing some components of business.

earning 3% of a sale can take some agents 5 yrs, depending on the
type of clients they seek, the services
they perform and more.

IF we assume the average agent
earns 3% GROSS and
helps buyers or sellers with 25 houses a year that average $200,000,
that is $6,000 x 25 = $150,000.

and then, the agent must pay expenses [unless they are a split
agent and then, they gross about
$50,000.]

That is not a huge paycheck.

And an agent helps a buyer find the
best property at the best price and
if representing a seller, finds
buyers.

There is no salary for this category
of employment- so this type person
[RE agent] sometimes works for
2-3 mo with no pay whatever!

Statistically, fewer than 3% of all
real estate agents nationwide earn
more than $100,000 GROSS per year.

[some RE agents who help buyers buy commercial RE can earn 15x
that!]

btws-the 6% or 7% has nothing whatever to do with a person's net worth!

NOTHING.

96% of buyers put up less than .5
or 1/2 of 1 percent of their net worth.

Answer 5

You only know people whose entire net worth is tied up in their single personal residence ? That doesn't describe most folks I know. That being aside, are you simply naive enough to think that there are no expenses involved in procuring a buyer for a real estate property ? Do you want to pay for the costly newspaper advertising ? For realtor.com exposure? For the operation and maintenance of the MLS, including electronic lockboxes ? For E&O insurance? For automobile expenses ? For licensing fees ? For the legal forms required ?

Get a grip man. And WHERE do you get the asinine notion that a real estate agent works 12-40 hours per week ? I think you need a serious reality check.

Answer 6

No! They don't deserve it. However, on the flip side...They can work for 6 months and get nothing if your house doesn't sell.

Most sellers refuse to sell their homes at market rates. They think their home is the best one on the block. So the house sits and you end up lowering the price when you get desperate. Your home probably is NOT worth what you want it to be.

Maybe they should offer a flat fee and tell you too bad, so sad if the house doesn't sell. And they will walk away with your money anyway.

The real question here is....Which end do you want it in?

Answer 7

Until you sell property yourself you have no idea what's involved or the liability you open your self up to. It's very expensive to be a REALTOR and very expensive to sell a piece of property. It gets really expensive when you have to go to court over something you knew nothing about. The general public is unaware of all the laws involved. There's a lot more to it than meets the eye.

Answer 8

Hey moron I have a news flash for you. You don't know zip about what's involved when being an agent for a buyer or seller. You think it a quick and easy money maker don't you.
I''ll bet your a teacher or government employee who cry's all
the time while you get all those paid holidays and don't do anything anyway. Get educated if you still can.

Answer 9

It isn't a percentage of "net worth." Its a percentage of the sale price.

Answer 10

So how soon can we expect you to open up your Real Estate Brokerage? Seems it would be foolish to turn your back on something so obviously easy and lucrative......