Ilyce Glink

Summary: A real estate agent writes that real estate commissions are reduced by real estate advertising costs. The real estate agent describes other costs that lower real estate commissions more. In addition to real estate advertising costs, real estate agents may have to split commissions with other agents and pay for gas and extra help.

Q: I just finished reading your answer to the question about 90-day listing agreements and I couldn't help but to write to you. I don't agree or disagree on writing a 90 day listing agreement. I have written them many times for 90 days and most people relist anyways.

It's not always the most convenient thing to do, but if my customers don't want to relist with me then I probably don't want to relist with them.

I do agree with the person who wrote this question, that homes are on the market well over 150 days. In fact in many of our neighborhoods here the number is actually 190+.

What gets to me is that people seem to think we shouldn't make a living. That 5 or 6 percent or whatever the agent is charging is very often split with a buyer's agent. So on a $100,000 home at 6 percent, the listing agent is making $3,000.

Advertising for an average agent costs almost up to $1,000/ month and can be much more. Just two real estate magazines' page ads run over $400, and sellers always want their houses in print. And then there are the costs of signs, lockboxes, Web site fees, any kind of print media and mailers, etc. In our area, we are rural, and many of our homes here sell under $150,000, so these numbers are not a far stretch.

Let's not forget we then split the commission with the broker, let's say 30 percent, and then pay desk fees. And gas, and time. And let's not leave out our knowledge, our expertise. Preparing contracts, keeping our customers organized and within the time limits in their contracts. So that leaves us probably with less than $1,500 on a $100,000 sale.

Now if we're selling several homes every month then we would be making an average living – and I stress average – but right now even some of our top agents have a month where the sales are falling apart.

Short sales take months to close, buyer's financing falls through and such. So selling one house a month would earn me a little over $13,000 per year? Boy I guess I'm greedy. And what about agents who list at 4 percent, or those whose office fees or splits are greater?

I bet it would be difficult to find someone willing to be on call seven days a week who actually works a good eight hour day for at least five of those days and only makes that much per year. Fortunately many people recognize the amount of work we do for them. Unfortunately the ones who don't see it this way are always the ones who make it to print.

And for those that think we are useless, well just look at what the housing crisis is proving. Without us selling homes, many other trades and businesses are collapsing. Without a real estate transaction, there are no closings for title agents, no new mortgages, no home inspections, septic inspections…well you get the idea.

A: Your letter provides an interesting look inside the real estate profession, and I can tell you're frustrated. I appreciate your comments about the length of listing agreements and think that it's wise of you to work with your clients to accommodate the length of time that they want for a listing.

Many agents worry that if they don't sign their clients up for the long haul, they won't renew their listing agreements. So, they push for a long listing agreement that just pens everyone in.

Thanks for also providing an inside look at how the finances of being a real estate agent often differ from what many home buyers and sellers would have expected – especially in a slow market.

It's true that very few agents are paid on an hourly basis for their work. Most, like you, rely on flat-rate commissions for their income. Your letter provides a glimpse at some of the out-of-pocket expenses agents often bear, like advertising, the entertaining of clients, gas, car maintenance, technology expenses (like computers, cell phone and Blackberry services), and other expenses that keep your business humming.

If you lived in a high-cost area, like New York City, where the average home sells for nearly $1 million instead of $150,000, the economies would work better, even if you just sold one house per month.

But in areas where the average sale is $150,000 or less, it's tough to make ends meet when your fixed costs don't fall but your commissions do.

There are good agents and bad agents, good clients and bad clients. I think the hallmark of a great agent is that he or she makes it all look easy and seamless. You sound like a hard-working agent who is trying to make a living in a very tough real estate market. I wish you continued success.

Apparently first time home buyers want more than they used to. They're less willing buy fixer uppers, per a new Coldwell Banker survey.

"In the past, first-time home buyers were willing to purchase older, more basic houses in an effort to save money and break into homeownership," said Jim Gillespie, president and chief executive officer, Coldwell Banker Real Estate, LLC. "Today, this group has greater home expectations because they have grown up more accustomed to their parents' lifestyles. It is important for first-time homebuyers to remember that by considering a 'fixer-upper' for their first home purchase, they can build equity over time and move up and into their second-stage home that better reflects their expectations."

In the survey of Coldwell Banker real estate agents, 81 percent of agents said first time buyers are very concerned with move-in condition and only 7 percent of agents report clients are considering fixer uppers.

Agents say that clients worry more about credit scores than down payments, perhaps because they've saved money or their families help them with down payments.

Other survey findings include:

• 71 percent of brokers noted that first-time home buyers are looking for larger homes than they were 10 years ago.

• According to 41 percent of the respondents, proximity to job is the No. 1 attribute first-time home buyers are looking for in a home.

• 35 percent of the survey respondents said "investment" is the No. 1 reason first-time home buyers are making their purchase.

• 46 percent of the survey respondents reported that first-time home buyers look at five to 10 homes, on average, before making a purchase.

The survey yielded responses from 150 Coldwell Banker brokers throughout the U.S.

If you're a renter and unsure whether to make the jump to buying a home, check out this video:

Home buyers prefer one-story homes of 2000 to 3500 square feet this year, according to a recent survey. Buyers prefer ranch styling, a change from 10 years ago when they preferred country style home.

• 70 percent want a utility room next to a kitchen



• 77 percent want the owners suite on the main floor



• 71 percent want a deck or patio while 67 want a front porch



• 54 percent plan to build a home within the next four years

This was one of my columns for this week. I thought it was perfect for AR.

Summary: What qualities do the best real estate agents have when working with home buyers? While home buyers often perceive the real estate purchase process as unpleasant, a great real estate agent can change that. The best real estate agents work with home buyers to help them figure out what they want and where to find the home that will meet their criteria. Top real estate agents also know the neighborhoods and resources intimately and share them with home buyers.

There are great real estate agents and terrible real estate agents. Within each category are agents whose behavior puts them at the top and bottom of the spectrum.

In other words, the best real estate agents are truly stellar. The worst agents? Well, let's just say that if you wind up with a terrible real estate agent you'll probably have war stories to share about your home purchase or sale at the next cocktail party you attend. (Unfortunately, stories about terrible real estate agents are shared more often than stories about great real estate agents.)

When hiring a real estate agent to help you buy your next home, the trick is to find a one who really listens to what you have to say; who will go the extra mile to help make your purchase a little less stressful; who will help you be objective when you become emotional about plunking down the single biggest chunk of cash ever; and who can help you understand and work with local market conditions.

I suspect that most buyers spend more time thinking about the curtains they'll hang, the granite countertops they'll install, or the boxes they'll need for their move than the agent they'll hire to help with the purchase of the property itself.

Why is that? Why isn't creating a home buying selling team the top priority when beginning the process of buying a home?

Perhaps it is because going through the process isn't perceived as being that much fun.

But that's where hiring a great real estate agent can make all the difference. What qualities should you look for?

The real estate agent you hire should have an intimate knowledge of your neighborhood of choice. The agent should have worked in a neighborhood for awhile, seen a lot of the housing stock, and know the history of the neighborhood, trends associated with it, and where the locals hang out. The agent should know about home values and should have the ability to come to you and tell you what other homes have sold for in the neighborhood and what other homes are listed for in the same neighborhood. The agent should also have information to back up why some homes are listed for more than others and be able to represent you when you are ready to make an offer for a home. The agent should know about the school district, shopping, commuting and recreational options. He or she should basically be a wealth of information, and be able to point out the flaws as well as the outstanding features of the community.

The real estate agent you hire should be able to really listen to your wants, needs, dreams and desires, and ask questions that help you delve beneath the surface to figure out what's really driving those wants and needs. Real estate agents sometimes say that "buyers are liars," because buyers tend to change their mind about what they really want to buy during the home buying process. But if an agent is able to draw out the buyer ahead of time, and help him or her focus on the important issues of the purchase, it will save everyone a lot of time.

It's also important to hire an agent who is willing to tell you what you may not want to hear--but should. If you're a buyer who is unrealistic about a local neighborhood, you'll want an agent to tell you that what you want to buy can't be found for the price and unworkable in the current marketplace. No one wants to have their dreams dashed, but you'll come to see that your real estate agent is doing you a favor by not allowing you to run away from reality.

A great real estate agent comes with laden with resources, similar to a hotel concierge. (Some real estate companies talk about the "concierge" services they provide.) The agent you hire should be able to provide you with a handful of great home inspectors, mortgage lenders, and real estate attorneys for you to interview. (Be wary of the agent who steers you to one specific inspector, mortgage lender or real estate attorney. What you want is a choice of great partners.) If you need help locating service people, a handyman, or even a new pediatrician, a great real estate agent should have those names and numbers at his or her fingertips. Being a walking neighborhood directory for many longtime top agents is part of the service they provide.

A great real estate agent stays in touch. Top real estate agents use technology to help them communicate frequently with their buyers. Email, Blackberrys, iPhones, cell phones, electronic newsletters, websites, digital photography and video help agents share properties that they've previewed, provide feedback, and keep buyers updated on the progress that is being made.

Finally, when you hire an agent, it's like a short-term marriage. When the transaction is completed, when you've bought your new home, the intense relationship you've created comes to an end. With a great real estate agent, you'll find you don't want your time together to end. While these are just some of the qualities you should look for in determining whether the agent is a good match for you, you still need to make sure to get referrals and recommendations for the agent from other buyers he or she has represented recently.

What happens next? Dinner--ostensibly to discuss past and future deals, but really to move your relationship into the long-term friendship stage.

The Mortgage Bankers Association announced yesterday that more than 29 percent of July 2008 mortgage loans were for government-insured loans (mostly from the Federal Housing Administration). That's up from the 8.4 percent during July of last year. MBA announced that the July numbers show a steady increase since January of this year, when the percentage of government-issued loans was 9.4 percent.

MBA's data comes from information provided by mortgage lenders and the survey covers approximately 50 percent of U.S. retail residential mortgages.