Are Realtors Charging Too Much?

November 16, 2017
November 16, 2017 Irene Voronel

In the early days of my real estate career, I was fortunate enough to have a mentor who had been in the industry for over 35 years. His name was Rick. This guy was the real deal. He’s seen it all and there wasn’t a business question he didn’t have an answer for. My favorite part of being coached by him were all of his hard-to-believe stories from the trenches, of course now that I have 15 years under my belt, I have my own crazy industry tales as well, but that’s a topic for a different post.

The story that has lingered in my mind all these years was one where Rick sold a house for a Seiko watch as his compensation.

Life Happens!

It was back in the early 1990’s and this seller, Steve, was dealing with a series of difficult circumstances. First there was the sudden death of his spouse, then a tree fell onto the home during a windstorm causing major damage, and then there was the life-altering car accident confining Steve to a wheelchair. Steve was quickly depleting his savings since he was unable to return to his previous job in construction. Steve felt that his only viable option was to sell the home and move-in with his parents.

He called a few real estate companies in the area and explained his misfortune. After paying to have the damage repaired on the home from the fallen tree, Steve had $2000 in his savings account and if he sold the home for what he felt was the market price, it would be barely enough to pay off the loan.

All of the agents with whom he met were sympathetic to his predicament but weren’t able to help him with the sale of his home because there wasn’t money in the transaction to compensate the agents. Thinking he was going to lose his home to foreclosure, Steve decided to visit a small new real estate company that just opened up across town. Rick was just finishing up with a client, when Steve came in. As the two started to talk, Rick could see that Steve was struggling to get his words out and that it was incredibly tough for this former high school jock turned construction guy, to ask for help. Steve explained that all he could pay to sell his home was $2000.

Helping People Realize Their Real Estate Dreams

Rick, who started in the business because he wanted to help people realize their real estate dreams, saw Steve living a nightmare. Rick agreed to take the listing for free and said he may have a buyer who would be interested in seeing it. A few days later, Rick showed the home to a few buyers who had been looking in the area. One of the families loved the home and bought it!

Steve was elated and Rick was proud to have helped take this enormous burden off Steve’s shoulders. Several months after escrow closed, Rick received a small package in the mail. It was an older model Seiko watch with a note from Steve. According to the note, the watch belonged to his brother who died in the line of duty. Steve wanted Rick to have it because he felt that much like his brother, Rick was a hero. Of course, Rick tried to give the watch back to Steve as he never thought of himself as anyone special, just a guy doing the right thing, but Steve wouldn’t hear of it.

Over the years, as Rick grew his agency and expanded to bigger office space, the watch moved with him. It always had a designated place on his busy desk to remind him of his purpose of getting into the business in the first place.

Taking a Page from the Past and A Step into the Future

This story has in many ways influenced my own real estate career and the way I believe real estate agents should work with clients. While I am not a proponent of cutting anyone’s wages, I am a staunch believer that compensation should be commensurate with the work performed.

Thirty years ago, before Realtor.com, Zillow, Trulia, and plethora of other real estate sites empowered the consumer to start their search on their own, the job of an agent was quite laborious and required many more steps. When representing a buyer, the agent would have to manually go over MLS printouts that were faxed (high tech back then) to brokerages, write contracts by hand on carbon copy forms, obtain signatures from the client in person and oftentimes drive the documents to the escrow office, and this doesn’t even begin to address the need to use land lines and pay phones to communicate with clients and other agents. Cell phones, scanners, and email was just in their infancy and the idea that documents would one day be signed and sent without having to touch a piece of paper sounded like sci-fi.

The reality is that agents today can do more of their work remotely, and work with more clients at one time, earning more money as a result.

Why then, if technology has liberated the agent from much of the mundane tasks and allowed us to help more clients at any given time, are we still working under the old compensation structure? If the way we work has, in many ways, becomes simplified, shouldn’t we be reassessing what we charge the client?

In taking a page from Rick’s book, Home NV was founded with the idea that we always do the right thing. With this in mind, our team has developed internal systems that allow us to save our clients thousands of dollars by identifying efficiencies and streamlining the process. We believe that by harnessing the power of technology we can stay competitive and transparent while providing unbeatable customer service.

So here’s to you Rick, little did you know all those years ago, that your Seiko watch story would be the inspiration to a whole new way of selling real estate!

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