This week, the Wall Street Journal ran a story entitled, ‘How Should Realtors Get Paid’.
The author is a general freelance writer who describes herself as ‘a versatile writer with experience covering a wide range of topics. As a freelancer I contribute regularly to the Wall Street Journal, writing about personal finance, healthcare, aging and technological innovation’. Because she isn’t a real estate expert, she relied on three college professors for content:
They went off on some crazy tangents and no realistic conclusions were found, other than to note that there are discount brokers if you want to pay less.
Would you do your job for the same pay if these were part of your job description:
- You invest your own time and money along the way.
- You don’t know when/if you will get paid, and….
- You don’t control the final decisions – the clients do.
There should be a hefty bonus for those factors.
I would agree that the majority of realtors are grossly overpaid, relative to the services provided. I must confess, I’ve many times shown an apartment only once and rented the Boston Beacon Hill apartment within an hour of obtaining the listing and made $3,000.00 or more.
Now I see this it every Sunday, a Boston condo buyers goes to open house, you’ll see it too. The standard agent knows how to identify each room (this is the kitchen, this is the family room, etc.) and then ask you if you have any questions. Most can complete the fill-in-the-blank contracts too.
But they aren’t professional Boston condo sales agent who can deliver expert advice on the fly, recognize good and bad features and assign costs/values on the fly, and put the correct price on a Boston condo based on the complete package of home’s condition and location, market conditions on the fly. Those are the realtors that deserve full compensation because the piece of mind delivered is worth extra. It is a service that is more than just taking an order.
Unfortunately, the order-takers are prevailing though, because consumers don’t know the difference and we all get paid the same. The industry isn’t motivated to disclose this to consumers because they get paid more on the lousy/inexperienced agents, so it will be up to consumers to seek out the experts in a quickie, push-button world.
Eventually, companies like Zillow will determine the values, and consumers will decide if they can live with that. Most will – it is what they are being fed by the new-age disrupters who are advertising the most. It should be just a matter of time before they prevail, and the old guard packs it up.
There will be lower costs eventually, and virtually no good help may follow.
Source Wall Street Journal