Ever ask a Realtor this question at a party or social event?
Surprised at the generality of the answer?
We as Realtors are taught to respect the Agent/Client
relationship. If you are not formally working with an agent you are what we
refer to as a customer. In an Agent/Customer
relationship there is no general understanding about the respective roles of
each individual. A Realtor sounds
guarded because we are taught not to give advice that others may act on if they
are not clients. Seems trivial but it is rather fairly straight forward. You
might not reveal all the particulars about a property or transaction you have
in mind when you ask the question. You act on agent’s thoughts and later feel
you were misadvised about the state of the market. This has actually happened
and as a result Realtors have been faced with having to defend themselves in
law suits.
In an Agent/Client relationship there is full disclosure of
motive, fiduciary responsibility of the Realtor to protect these motives and
all personal information disclosed in the relationship. This fiduciary responsibility
survives any contractual dates and a good, professional Realtor will make
certain you are advised of these facts. Thus when advice is given it is
specific and well thought out.
There are several misconceptions a professional Realtor deal
with on a daily basis “every Realtor should be advising me on the market
conditions” and “why should I pay a commission, I know plenty of people who
want to buy my home”.
Well 1st and foremost I am a professional and I
earn a living and pay my bills by advising my clients about the sale and purchase
of real estate. If I were to come into a consumer’s work place admire a
particular item or service and say “great, I like that can I have it for free”
I don’t think I would get a very good reception. Unfortunately this happens
quite a bit in Real estate.
There is also a general misunderstanding in regards to the
costs of a Real estate professional participation in a real estate transaction.
Some consumers look at the commission as an inflated cost that no one agent can
justify. I like to educate my clients explaining that the total commission does
not reach my pocket intact. There are typically broker fees, expenses that are
paid out of pocket by the agent (in 90% of the cases there is no expectation of
reimbursement, even if a deal does not happen), Federal tax liabilities and regular
expenses associated with maintaining license/ association memberships etc.
It is just like every other business out there. You have a
gross and a net compensation. The goal of every Realtor is to increase his/her
sales to help average the costs of maintaining their license and professional
designations.
Commissions are such a touchy subject with some consumers and
Realtors that they tend not to talk about the costs associated with a
transaction. In my business plan I have a mix of business. Client referred,
repeat clients, new client associations through marketing and market exposure,
Realtor/Broker referral business and 3rd party relocation referrals.
All of these types of clients are treated equally by me even though they all
have some different fee structure associated with them. The goal at the end of
the year is to achieve an income level that allows reinvestment back into the
profession and earn a sustainable living.
There is a reason that Real estate plays such a large role
in our current economy. It is not only the Realtor commissions that generates
income, all of the inclinatory services from Property inspection, appraisal,
title or attorney fees, mortgage lending, credit reporting, moving services,
home improvement if you think about it one transaction generates a lot of
momentum into the economy and it is no wonder we were in such dire straits when
the markets ceased in 2009/2010.
So next time you are talking to a Realtor at a party or
social gathering ask “how his/her business is going” instead of “what is
happening in the market”. You might get a different response then what you are
used to. And don’t be surprised if the Realtor asks if you are in the market
and if so do you have an agent representing you interest. They are asking for a
reason.
I wish you all the best of luck in 2014.
May your dreams come
true, your goals be realized and your health well
Kind Regards,
Bob Kenney, Realtor
VP Turnquist Partners Realtors
Mobile/Text: 512-922-4922
Email: rkenney51@gmail.com
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