Realtor Value, Commissions and Discounts

Realtor Value in a Nut Shell

One of the oldest debates in Realtor history is over commission rates, and how Realtors justify their fee.

One side says, "When you add everything up, including an agent's time, it never costs anything close to what they charging"

The other side, "The free market is willing to pay it. If people didn't see the value, they wouldn't pay the price."

Could it be that both are a little right, and a little wrong? (Isn't life always that way?)

First off a couple disclaimers...No.1 - I am a Realtor, ok, I'm admitting my bias. No.2 - Commissions are always negotiable. Always!

Here is my take on the whole issue. Realtors do one thing, they represent and advise their clients. That is the essential service that they are paid for. Not for hosting open houses, not for dollars spent marketing, not for finding a buyer, or for finding "the perfect home".

Good advice can save a buyer/seller far, far, more than what it costs. What's more good advice will make the whole process far more painless than it could otherwise be.

Not every deal is complicated, but many are, and the financial and emotional costs of complications can be very steep. People want the full time assistance and advice of a competent professional, and are willing to pay for that service, because the cost of a mistake could easily be far more than the cost of hiring a Realtor.

But, not everybody needs that full time assistance and advice. Some people know a lot about the real estate market, maybe they buy and sell homes regularly, and they simply want a Realtor to send them leads when they find a good deal. In many cases people work out special deals with Realtors to only provide certain services. A Google search on "discount real estate brokers" yields 4,180,000 results. Want a cheep Realtor, or a fee for services rendered deal? Just ask, they are easy to find.

I'm tired of the age one debate over Realtor value. It's true that Realtors charge a lot of money, and it's worth it, in the majority of cases. But one size certainly doesn't fit all buyers and sellers. There are many options available to choose from when hiring a Realtor.

Buyer & Sellers : Do your homework, hire a Realtor who you trust (they are representing you after all) and who's willing to provide all the service you want for a price you feel is fair.

Realtors : Remember you are not buying or selling anything, your clients are. Realtors are in the representation business. Justify your fees, explain your fees, and understand what your true value is. If you can't people will think you are lazy & stupid, and I know that's not true!