After watching the CBS "60 Minutes" show on real estate, I realize that there are numerous people, including CBS reporters, who have no idea what the real estate profession is all about.
First, the term Realtor® is a registered trademark of the National Association of Realtors®, not the profession of real estate. NAR® is a trade association, not a governing agency. Each State governs the real estate profession through State Law.
There's no "standard commission" in this state -- commissions are negotiable by law. I have been in this business for over 30 years and commission rates have always been negotiated between the parties. The fact is, I have worked in a range from 4.5% to 10%, depending on the circumstances pertaining to the seller, buyer, or the difficulty of selling a particular property.
In the minds of the discount brokers that the full service brokers are causing them not to gain access to listings, is an untruth. The fact is that the MLS is a private, proprietary data base that is established to offer cooperation and compensation between brokers. It is not a public utility, nor is it a public web site. In our MLS, each member has a specific pin number and an ID. Further, we supply a subset of information to all members of the Association through an Internet Data Exchange (IDX), for use on their web sites. All members including the discount brokers have access to that data.
And, finally, just like in the investment and stock business, the bigger the risk, . . . the higher the possible reward. However, there is also more possibility of losing your investment. A Realtor®, or any agent, spends money from their own pocket, in order to market a virtual stranger's home, in hopes of successfully selling it, or in the case of buyers, driving them around to find a home.
If the Realtor® successfully closes the sale, which can take anywhere from a month to years, they will be paid a portion of the commission. If the sale fails anywhere along the way, the Realtor® loses their investment of time and money. Again, high risk, . . . high reward.
The Value of a professional Realtor®'s service is NOT based on information alone, . . . the consumer can search the Internet for most information.
The TRUE VALUE of a professional Realtor®'s service is the expert interpretation of the information, the counseling of the client based on that information, and most importantly, the skill of negotiations on behalf of their client's best interests.
This explains why only 10% of the professional Realtors® are doing 90% of the business. And, contrary to popular belief, the remaining 90% are barely hanging on. Realtors® who take their job seriously, spend much longer than a few hours working on a transaction. If the agent that CBS interviewed routinely made $12,000 for only 5 hours of work, why did she leave that position!? I think that she's either inaccurate with her facts, or has terrible business sense.
My guess is that CBS would not agree to sponsor the large TV commercials, and accept one half of their fee, for the same coverage! ;-)
I have never done a real estate transaction in 4 hours. It's impossible to think that anyone could find a home, get financing, get all the inspections and reports completed, get insurance, a closing attorney, a title search, and get all closing documents together in four hours.
I know that there are people who think that Realtors are overpaid, -- and the truth is that many of them ARE overpaid. However, if those same people were to experience true value and services of a professional Realtor, they may change their minds.
