Hidden Costs for Agents

missmanors · #1 09-07-2008, 11:33 PM

I've heard many people say that real estate agents charge too much for listing a home for sale. Recently I spoke to a real estate agent in my area and found out how much the agent actually gets in the end......

Let's take a home that is selling for $100,000 for an example. If the agent gets 6% on this sale, that 6% is often split with the buyer's agent, meaning that the agent now gets $3,000.

Now we come to advertising.....an average agent pays up to $1,000 per month to advertise. Two advertisements in real-estate magazines cost more than $400, sellers of course always want to see their houses in print. Then there are the costs of signs, Web site fees, and mailers along with any kind of print media.

Then the commission must be split with the broker which is often 30%, and desk fees must be paid....not to mention the cost of gasoline, the agents time and expertise. This leaves probably less than $1,500 going to the agent in reality.

With the housing market what it is today, some agents are only taking home about $13,000 per year. Especially those in rural areas and small towns.

This has opened my eyes about the real estate agents in my area, and hope that you won't feel like you are being "taken to the cleaners" by your own real estate agent........more than likely that agent is getting much less of a percentage than you think.

flip_it_fast · #2 09-13-2008, 02:19 AM

This probably varies greatly from one area to the next. Small town agents likely don't profit very much from a sale. I would think that it also just depends on the agent. There are honest ones and crooked ones, just as there are in any field. I think you just need to be careful who you are dealing with and do some research on what the charges should be.

House on the Prairie · #3 09-16-2008, 03:55 AM

My husband and I attended our first batch of open houses this weekend--sans realtor--and boy did we learn our lesson about sign in sheets. Suddenly we're overwhelmed with emails and phone messages from the listing realtors who are hankering to help us find a home. Granted, we're in the market for an agent, so some of this was a welcome relief (so many people to help us find The Perfect Home, what more could we ask for?), but after 8 emails and 4 voicemails, my head was reeling (so many people to help us find The Perfect Home, dear lawd what have we done?).

I don't think I've been this popular since...well, ever.

So what should we look for in the perfect agent? I've heard that we should find someone with experience in the area you are looking to move to--but how can you figure that out? Is there a better company (ReMax, Prudential, etc) than the rest?

JaredfromIndiana · #4 09-16-2008, 01:18 PM

I know what you mean! My wife is an agent and does an open house every week. She has visitors sign in, and then asks them if they are working with an agent and if not are they looking for an agent? Then she backs off. The next day she sends then a thank you card with a quick note and her business card is also in there, that's it.

I think a great way to find an agent is word of mouth. If that doesn't work, interview a few of them and work with who you feel comfortable with. I know agents that work for Remax that are great and some that SUCK! I don't think the company makes a difference. I also know that 80% of the agents I have met I wouldn't want on my team. Hope that helped!

missmanors · #5 09-16-2008, 10:55 PM

I have to agree with Jared, the company that the agents work for doesn't matter nearly as much as the particular agent. I know some agents that I wouldn't want looking for a dog house for my dogs, let alone a home for my family.

Also, I agree with him that the most reliable thing to do is to talk with your friends, family and neighbors about their experiences. I'm sure you'll hear some great success stories and also some horror stories, but they will give you some insight on which agent to avoid and which you may want on your side.