3 Things Everyone Knows About Realtors That You Don't
There are many misconceptions about real estate agents. Many people assume that agents are just glorified salespeople who are paid too much, but that is far from the truth. In fact, you may be surprised to learn how inaccurate that statement really is.
Realtors are licensed professionals
Real estate agents are not simply sales people. While selling is part of their job description, anyone can sell. A real estate agent, on the other hand, is a professional. Much like a doctor or a lawyer, a real estate agent completes rigorous training, specialization, and ongoing education in order to be able to perform their fiduciary duties to the clients they represent. In fact, the proper, legal term for their position is Realtor, with a capital R.
Realtors sell houses for faster and for more money than you can alone
There are many things that you can 'hack' in life to save time or money. Real estate is not one of them. Trying to sell a home yourself may seem like a sure cost saver, but it will only end up costing you more in the long run. The lure of 'saving' on the cost of an agent's commission is not worth the low selling price that homeowners experience when they try to sell FSBO (for sale by owner). The National Association of Realtors reports that homes sold FSBO sell for an average of $190,000 while homes sold with a licensed agent sold for an average of $250,000.
Realtors do not make as much as you think
Commission costs vary from state to state, ranging from five to eight percent of the cost of the home. Vacant land is often sold at a rate of ten percent or more. For a home valued at the national average of $248,000, that means that a seven percent commission is $17,360. While 17K may seem like a nice paycheck at first glance, it does not all go to the agent. The commission is split between both the buyer's and seller's agent. It is typically split 50/50, but that varies regionally. The realtor then has to split their portion of the commission again with the franchise agency or independent broker that they work with. Next, there is the cost of marketing and selling the house, the day-to-day office expenses of the agent, the expense of continuing education, and, of course, the IRS. All causing that $17,000 commission to dwindle rapidly.
Understanding why it is important to work with a qualified, professional realtor is important when you are buying or selling a home.
