Real Estate Commissions: You Get What You Pay For

As a Realtor, I know that the general public thinks we make a vast fortune for a small amount of work — and I’m sure some people even think “the company” gives us a luxury car to ride around in while talking on the cell phone!  Let me assure you that nothing could be further from the truth!  I am “the company.”  I’m not an employee.  I don’t collect a paycheck. Every dollar I receive is earned through commissions.  I am an independent contractor affiliated with the premiere real estate brokerage in south Alabama, and they provide me with excellent infrastructure on which to build my business….. but at the end of the day, I am Chairman, CEO, CFO, Vice-President of Sales & Marketing and bookkeeper for “Donald K. Mayes, LLC.”  The satisfaction of my clients and customers depends on my getting up every day thinking about how to help them accomplish their goals, and being readily available to respond calls, texts or emails from interested parties, or from the clients themselves.

Realtors are prohibited by anti-trust legislation from talking between companies about commission rates, and by law all commissions are negotiable — so there can no standard rates for a region.  Each company sets its own commission structure and the parameters within which their affiliated agents can “negotiate.” One of the reasons I am affiliated with my current broker is that we do not “put ourselves on sale.”  To receive the benefit of my experience and extensive training — well above and beyond the minimum required to obtain a real estate salesperson’s license — my customers pay a reasonable commission, and they don’t complain.  They know they get what they pay for!

The Code of Ethics of the National Association of Realtors prevents its members from speaking in a derogatory manner about any other members — and besides, it’s just the right way to behave.  But, as in any field of service, there are those who are true professionals, and there are those who are an embarrassment to the profession. There are companies that are transparent about their fees, and there are those that engage in misleading — maybe not false — but certainly not painting a true and complete picture, such as “Sell your house for 1%” or “Sell your house for $870.”   Possible?  Sure, if you already have a buyer lined up for your home. Probable?  Not likely.  Most sellers today don’t know how to compete in this difficult market, and therefore need the service of a professional. Many sellers “shoot themselves in the foot” by trying to save commission dollars, while their house sits on the market declining in perceived value month after month…. after month.   I couldn’t have expressed it better than the folks at KCM did in a recent post:

Real Estate Commissions: You Get What You Pay For.