Realtors Are… (fill in the blank)

Favorite game?  Typing incomplete thoughts into a Google search.  We all notice it when you start typing letters into a Google search bar you begin to see what other people have googled before you using the same letters.  For example, when I type the word “where” into a Google search bar, the first thing I see that has been googled before me is “where is Chuck Norris”.  This morning I was scrolling through my Facebook news feed and saw something that I just had to write about.  Someone began their Google search with: “Realtors are”, and what pops up on Google after those two words is absolutely priceless.  I decided to research this issue since I am not the guy who sees something on Facebook and immediately takes it for truth.  So I typed it into my phone and came up with this:

COME ON! This is what I got when I started my Google search with "realtors are"
COME ON! This is what I got when I started my Google search with “realtors are”

Realtors are… Idiots, Overpaid, and A Joke!  Awesome!  When I did this same search on my laptop there were a few extras on there:  Worthless, Useless, and my favorite… Ninjas.  But why would someone google “realtors are worthless”?  I’m not really sure.  Once I hit the search button I encountered about 4 different blogs that talk about being financially smart by never using a Realtor.  All this did was reassure me that there are a lot of under-educated people out there saying and believing simple, yet completely broad and untrue generalizations like this, and passing themselves off as experts.  But let’s focus on why someone who claims to be a financial wizard would give you advice like this.

First, the facts:

++ Sellers who use a real estate professional make 16% more on the sale of their home compared to those who sell without an agent.  This is a published statistic by the National Association of Realtors.  What would the National Association of Realtors know about homes that are NOT sold by a Realtor?  Everything.  All sales get recorded.  So whether you use a real estate agent or not, there is a public record of your home sale.  The National Association of Realtors takes inventory of ALL the home sales in the entire United States and compiles the data for statistical analysis.  So if a Realtor can make you 16% more on the sale of your home, would you really complain about a 6% or even an 8% commission?

…Because you’re not as smart as you think

In this particular “financial blog” I speak of, the author uses his own home as the example.  He sold it in 2 weeks for $330,000.  He wants his readers to know that it saved him $18,000 by doing it on his own.  I don’t see it this way.  First off, commission would have been $18,150 if the agent was charging 5.5%.  I would have charged him 6% which is actually $19,800.  As he says in his article, the point he wants to make is this: “what does a real estate agent do that I can’t”.  He says essentially that the agent gets paid a lot of money and actually does nothing.  He goes on to say that he also found his new house online very easily, and needed no assistance there either.  As if the only things Realtors do are a) “put pictures on a website” and b) “find you a new home”.  Well, Mr financial blogger, if you think that we Realtors receive $19,800 for simply putting pictures on a website or finding a home for sale via an internet search, why haven’t you become a Realtor yet?  Sounds like a pretty effortless job to be making so much money.  It’s because this idiot has spoken out of turn and actually has no knowledge of what he is talking about.  He even tells you at the beginning of the post when he says, “i have sold 2 houses myself”.  Really?  You’ve sold two whole houses?  You must be an expert!  I can’t imagine that someone who was involved in selling more than 50 homes in the last 11 months alone would have anything of value to offer on this subject above and beyond your vast expertise.

DunphySo where does that 6% go?

Out of the 6% I charge, half of it goes to the agent representing the buyer.  Why?  They are bringing someone to us who is qualified to purchase your home, and ready to move so that delays and problems in the process are kept to a minimum.  So $19,800 becomes $9,900.  Out of that, I pay my broker about $2,000 so now we are at $7,900.  I also have to spend money to market your home.  The marketing money that I spend goes toward website development, capturing leads from qualified buyers that could potentially buy your home, professional photography of your home, professional video tour for your home, the tools to position your home at the top of internet searches, and other tools that allow me to compare your home to everything else in the current market.  You have to know the current market in order to price your home effectively, otherwise you may as well just throw a dart at a board and price it that way.  I’m not talking about what Zillow says your neighbor’s house sold for.  I’m talking about true-to-life market knowledge that has been gained by analyzing the housing trends weekly over the past 5 years.  So our $7,900 turns into $6,500 very quickly.  What are my income taxes on a $6,500 gross commission?  About $1,500 would come out of that for Federal, State, and Social Security.  So all of a sudden $19,800 turned into $5,000.  Each sale takes about 45 days to close.  PLEASE don’t get me wrong.  I feel that I am compensated well for my time, knowledge, effort, and creativity.  I don’t want anyone to think that I’m complaining about my income or my job because I’m not.  I truly love what I do!  But when someone makes outrageous claims about the money that I am “taking from people” as if I’m “only looking out for a pay day” and not looking out for my clients, I have to speak up.  I care about the needs of my clients, which is why they send their friends and family to me.  So I charge 6% because I’m worth it.

Not all agents are worth it

Has this financial blogger guy had a bad experience with a bad real estate agent?  Yes.  So he chose to label all agents incompetent instead of accepting the responsibility of not doing his own due diligence.  Would you simply give up on going to the doctor when you’re sick just because you had a bad experience with one bad doctor?  Nope, you would find a new doctor.  Similarly, when you are choosing a family physician, do you go in blindly?  Absolutely not!  You’re on Facebook and Twitter asking for recommendations.  You’re searching the web for patient reviews.  You’re asking everyone you know about their relationship with their doctor.  Why, then, would you blindly choose someone to represent your interest in what is most likely the largest single purchase you will make in your life?  Why would you choose to represent yourself when you lack the knowledge and experience of how to do so?  It’s ok that you don’t know everything.  You’re allowed to not be an expert in buying and selling real estate.  Just like I’m allowed to not be an expert in auto repair.  I take my car to a mechanic.  Are there licensed agents that are bad at their job?  Absolutely.  There are bad apples in every field of expertise, including the field of “financial blogger”.  That is why you ask questions when choosing a Realtor.  You don’t just close your eyes and point at a line in the phone book.

So if this super savvy home seller had used me to sell his house, he would have spent $19,800 (only if it actually closed, though), but he could have made $52,800 additionally, increasing his bottom line by around $33,000.  You don’t have to be a financial expert to see the benefits here.

If you’re thinking about selling your Louisville home this year, let’s talk about your goals – 502.509.9278

Don’t have anything to sell, but interested in buying?  View Louisville Homes for Sale  

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