Do you want to be a Real Estate Agent ???

[Carmel]

The two best RE agents I know both do it because they love it.

Yup, they work a lot & the hours are long & they live on the phone at times. But they're both really good at what they do, love selling, love the variety, love property, love the lifestyle (which includes taking time to do stuff when they want) love driving around, love talking to people, love the wheeling & dealing...

 

[Glenn]

My wife and I bought our last house from an ex real estate agent with the deal semi-organised by 2 ex real estate agents. The 2 that helped us organise the sale have since become good friends, with one of them becoming a mentor as well...it has been a fantastic transaction for us in more ways than one.

The previous owner made some money from selling real estate but made more from being able to identify the good stuff and buy it.

The guy that has become the friend/mentor retired from selling @ 47 and now drives around screwing things back together in his properties and drinking moccachinos....fantastic!!

 

[brains]

Originally posted by geoffw
I now understand that some agents are prepared to sell burnt out properties without charging any fees.

My friend is not at all happy with the present agent. He's had other agents approach him- but he's found out that the agreement with the listing agent exclusive for four months, so can't do anything.

Dont ya just love real estate agents

 

[Ross Sneddon]

Hi

It seems that there is now another thread which is only a thinly veiled attack on the amount that a Real Estate Agent earns, with the implication that $4,000 is more than enough, perhaps too much for the work of selling their property.

Commission structures vary in each state but Queensland has a simple structure. It is 5% for the first $18,000 and 2.5% thereafter. If you do the work and don’t make a sale the commission is zero. For your calculations, allow a little more than 2.5% and you won’t be far wrong.

Now that is Gross to the agency. The sales person gets between 25% and 35%, which is offset as an advance paid against commission. I’ll go along with Kevin’s $2,200 per sale. An advance may be about $35,000 per annum. The sales person must provide an adequate car, mobile phone and home phone and all operating costs.

Industrial Courts over the years have allowed that about 40% of the advance may be claimed as expenses for taxation. Therefore this leaves a net of around $20,000 before tax is earned by the salesperson, or $17,000 net after tax. To breakeven, the salesperson must sell around 20 per year. An agency would expect about double or 40 sales per year as a minimum. Same mathematics. Gross of say $88,000 less expenses for a net of $52,000 less tax to earn about $39,000 per year. Now that isn’t a fortune.

A successful sales person would be aiming for $100,000 a year as gross income before expenses.

And yes, the agency gets the balance of the commission, less advertising costs, office rent, support staff salaries, phones, light, power and the million other expenses that go towards running a successful agency. As agents, we can make money and like to but clearly we have to enjoy what we are doing just as anyone in any occupation must like and want to work where they do. Asy summed it up well.

I also find the constant raising of this topic a little boring. May I join Asy and Kevin on the couch, but then again I don’t have much time between running around to look for the next potential.

Regards

Ross

 

[brains]

With all due respect, should this forum not include threads about real esate industry/agents/comisson..etc..because members of the forum that are involved in the industry find the thread boring?

No way.........just dont read/reply/comment on those particualr threads and let other forumites increase their knowledge of the real estate industry themselves.

Seems fair......yes?

 

[Ross Sneddon]

Hi

Brains raises the matter of a friend who cannot discharge his agent for four months and is stuck with the situation.

Did he read the sales agreement before signing. The agreement (contract) includes a blank section which is completed and states the period of time the vendor is giving to the agency as an exclusive period. It can be 30 days, 60, 90 or any amount of time to which the vendor agrees.

Sixty days is perhaps typical. I would not agree as a vendor to longer and would consider 30 days as not unreasonable. Don't let the Agency buffalo you into something to which you really don't want to agree.

Properties which require more time than this must be special or the agent isn't putting in the full effort.

Regards

Ross

 

[Aceyducey]

Originally posted by geoffw

Sorry, my question was more on the nature of the flat fee ($5000), which will not vary according to the price. It would seem to perhaps cut down the motivation of the agent to sell it for a good price.

Geoffw,

On your point, the client can choose not to accept a not good enough price, so your friend does have the ultimate veto ability to say no if they feel the agent hasn't done a good enough job.

On the other side, while many Real Estate Agents are diligent & try to do the best for their clients, one who is solely motivated by money might well find it easier to convince clients to take a lower than best price offer just so they can move on to locating and selling the next place. The incremental commission on a $15K higher price is not really much compared to making a new sale. After all, under ANY commission structure an agent makes more money by selling 3 properties at $200K than 2 properties at $215K in the same period of time...

Ultimately it's more about making sure you have an agent that you trust and a realistic timeframe and outcome in mind...after all you can get $300K for a property valued at $200K - if you are prepared to wait some years.

Cheers,

Aceyducey

 

[brains]

Originally posted by Aceyducey
Geoffw,

On your point, the client can choose not to accept a not good enough price, so your friend does have the ultimate veto ability to say no if they feel the agent hasn't done a good enough job.

On the other side, while many Real Estate Agents are diligent & try to do the best for their clients, one who is solely motivated by money might well find it easier to convince clients to take a lower than best price offer just so they can move on to locating and selling the next place. The incremental commission on a $15K higher price is not really much compared to making a new sale. After all, under ANY commission structure an agent makes more money by selling 3 properties at $200K than 2 properties at $215K in the same period of time...

Ultimately it's more about making sure you have an agent that you trust and a realistic timeframe and outcome in mind...after all you can get $300K for a property valued at $200K - if you are prepared to wait some years.

Cheers,

Aceyducey

Acey,

The problem is he can sell the property to his mum if he likes for any price he likes but the real estate agent still gets their commision if the property is sold in the contract period.

I know of no other industry that works like this and its patently unfair due to the fact that if you sign with a dud/liar/cheat of an agent you are locked in for the contract period and cant sell your property without giving them the commsion.
They love to sign you up for as long as possible for this reason (and to allow for conditioning after buying the listing)

I almost went to court years ago over this with an agent in Sydney's inner west, he settled out of court just before the hearing cause he knew he was going to lose and he tried bluffing me.......

 

[Aceyducey]

Originally posted by brains
Acey,

The problem is he can sell the property to his mum if he likes for any price he likes but the real estate agent still gets their commision if the property is sold in the contract period.

I know of no other industry that works like this and its patently unfair due to the fact that if you sign with a dud/liar/cheat of an agent you are locked in for the contract period and cant sell your property without giving them the commsion.
They love to sign you up for as long as possible for this reason (and to allow for conditioning after buying the listing)

Brains,

The solution is simple. Don't agree to a contract period you aren't comfortable with, veto any offer you aren't confortable with, secure legal advice if you feel your interests aren't being looked after.

There is plenty of advice out there to help people ensure this doesn't happen and plenty of other real estate agents who would like your business.

Having the government wipe our bums with legislation so we don't need to do it ourselves isn't the best way to encourage people to be responsible and mature adults. You can't legislate intelligence.

So you got caught once, now you know better - learn & move on I can't count the number of times I've made mistakes & had to do the same (two companies, several properties, etc) and I've learnt that the best way is not to get bitter but to get successful.

BTW Real Estate this isn't the only industry with this type of contract. if you are selling a company through an agent they have every right to request their % if you go and do a deal behind their back when they've been putting all the work in - and rightly so I feel. This also holds for sales of IP rights and other things.

And remember, it's not always the real estate agent who is dodgy, clients can also be liars/cheats as well & real estate agents need to protect their own interests.

Cheers,

Aceyducey

 

[Carmel]

My friend is not at all happy with the present agent. He's had other agents approach him- but he's found out that the agreement with the listing agent exclusive for four months, so can't do anything.

"He's found out...' implies this was not something he was told or knew until recently. I find this difficult, or impossible, to believe. The period would have been spelled out on the contract - it has to be! If not, he'd definitely have a case for complaint. But surely it would be more accurate to say 'he's only just paid attention to the period specified in the contract he signed, and discovered that he agreed to a period of 4 months and therefore he must abide by the terms of the contract...' Different issue - comes back to who's accepting responsibility.

I think blaming the agent at this point is unfair, & refusing to accept his own responsibility.

Motto: always, always read paperwork super carefully. When you sign something, know what you're signing.

It's unfair not to do so... and then to complain later & blame the other party. The agent has every right to rely on the fact that your friend signed a clearly written agreement, IMO.

 

[brains]

Originally posted by Aceyducey
Brains,

The solution is simple. Don't agree to a contract period you aren't comfortable with, veto any offer you aren't confortable with, secure legal advice if you feel your interests aren't being looked after.

There is plenty of advice out there to help people ensure this doesn't happen and plenty of other real estate agents who would like your business.

Having the government wipe our bums with legislation so we don't need to do it ourselves isn't the best way to encourage people to be responsible and mature adults. You can't legislate intelligence.

So you got caught once, now you know better - learn & move on I can't count the number of times I've made mistakes & had to do the same (two companies, several properties, etc) and I've learnt that the best way is not to get bitter but to get successful.

BTW Real Estate this isn't the only industry with this type of contract. if you are selling a company through an agent they have every right to request their % if you go and do a deal behind their back when they've been putting all the work in - and rightly so I feel. This also holds for sales of IP rights and other things.

And remember, it's not always the real estate agent who is dodgy, clients can also be liars/cheats as well & real estate agents need to protect their own interests.

Cheers,

Aceyducey

Acey,

I agree , but business brokers are similar to real estate agents and some RE agents do both.

I agree that the governmnet cant legislate for dumbness, but society shouldnt have to live in a perpetual state of fear of being ripped off at every transaction they do either.

I was pretty young at the time and out of my depth, but i only ever make the same mistake once and have built a successful company and IP portfolio over the years.

btw..i dont get bitter, i get even.......haha


ps: how did you make mistakes with 2 companies and several properties...etc?

 

[Aceyducey]

In brief, in the first company I didn't do my legals & written contracts - relied on partners with handshake agreements too much.

In the second I did not follow my instincts when I should have.

In both cases a legal route is an option, but there has to be sufficient value for it to be worthwhile.

With property it's the usual, choosing the wrong mortgage broker, not picking the best property available on the market at the time.

So far all my mistakes have been survivable, though I've certainly become less risk tolerant

Cheers,

Aceyducey

 

[h8dk97]

Originally posted by Marten
Greetings,

would anyone like to be a RE Agent if you had the means to be one???

i'm wondering if RE Agents enjoy their job or they're just in it for the money???

any RE Agents on this forum???

Curious,

Marten

As for me I don't think I could be a real estate agent - too lazy, I get the computer to do all the repetitive work for me

 

[geoffw]

Originally posted by Carmel
"He's found out...' implies this was not something he was told or knew until recently. I find this difficult, or impossible, to believe. The period would have been spelled out on the contract - it has to be!

Carmel,

My friend spoke to the real estate agent. He did ask specifically about what would happen if he did not sell. He did not ask what happens if he sold the property by other means.

He HAS had his house burnt down, including all possessions (phottos and one vehicle were saved), and he has a newborn child as well as a toddler. He has been under the stress of finding a new property to live in, and then buying everything you need for a house. Perhaps he was naive in signing without reading, but when people are stressed, they sometimes do not make the best decisions.

When he first talked about selling, I suggested that he talk to at least three agents. His response was, "all agents are pretty much the same". Now he's found out differently.

He understands that it's fair for an agency to have exclusivity to a property- after all, the agent has to be protected against the owner getting a contact through his advertising and bypassing him. He did think that 120 days was excessive though. There was no option for him to fill in a period in the contract.

He's not jumping up and down, threatening legal action or anything. He's just disappointed that the agent appears not to be doing the best job, and he does not have the choice to do anything about it.

I actually believe he's got a remarkably positive attitude to his situation, and admire him for it.

 

[geoffw]

Originally posted by Kevin Hockey
Hi Geoff,

As far as I'm aware commission (fee) is only ever charged when the property is sold. Sorry to hear your mate lost his home. How is everything going in ACT now? I imagine there is a big clean up happening.

Kev

www.nundahrealestate.com.au [/B]

I guess I was surprised that extras, like advertising fees, were not charged if he decided not to sell.

Are advertising fees commonly charged as extras?

I know that Jenman comes down hard on overuse of advertising, charged as an extra- but I don't know whether he's shooting at an empty target or not..

 

[Carmel]

GeoffW,

He HAS had his house burnt down, including all possessions (phottos and one vehicle were saved), and he has a newborn child as well as a toddler. He has been under the stress of finding a new property to live in, and then buying everything you need for a house. Perhaps he was naive in signing without reading, but when people are stressed, they sometimes do not make the best decisions.

Yes, you're right - sorry if I sounded too harsh on him and it's a horrible situation for him to be in, and you're quite right that it's hard to make wise decisions when under a lot of stress. I'm also really sorry that some advantage appears to have been taken by a rather opportunistic person (though I believe the latter 'will get his' in the scheme of things').

As you say, all agents aren't the same... but it's definitely an unpleasant lesson for your friend to learn this way. There are, alas, somewhat opportunistic and shonky people in all walks of life, and RE agents are no exception (wonder if the agents could/do swap ghastly war stories about buyers/investors/etc?). But I feel strongly (I know you're not holding this point of view) that we cannot & shouldn't judge the whole group by the shonky few. It's hard to be in property without dealing with agents! I know the good ones I know would be ashamed about behaviour like this, as would any reasonable person.

Depending on how he feels about this course of action, one possible course to try would be to prepare some sob story press releases for the Canberra press, along the lines of 'Agent takes advantage' or 'Hard lesson learned' etc. (I can feel the headlines coming on) and show to him.... I wonder if that might induce said agent to release him from the contract in exchange for no press release and avoid negative publicity???

 

[geoffw]

Originally posted by Carmel

Depending on how he feels about this course of action, one possible course to try would be to prepare some sob story press releases for the Canberra press, along the lines of 'Agent takes advantage' or 'Hard lesson learned' etc. (I can feel the headlines coming on) and show to him.... I wonder if that might induce said agent to release him from the contract in exchange for no press release and avoid negative publicity???

Carmel,

Thanks for the idea.

I don't think he's upset enough about it to worry. It's more just that he's quite annoyed- and probably more at himself than anything. He obviously was (and is) under pressure all around- and he did approach the agent, rather than the other way around.

He went to that agent because they had given hime good treatment when he was getting an appraisal, before the fires.

It may also be that his own expectations are too high- I really don't know that either. But if he doesn't get a good price, he will rebuild, that's all.

I appreciate your post. I gave out limited information- my apologies for that. Your initial response was on that information- and on that basis, you were not beingt too hard.

 

[Carmel]

Thanks GeoffW. Holding out positive vibes for a speedy & good resolution to your friend's problem.

 

[karsal]

Hi everyone.

I was at a management training course today and got myself into hot water.
When it came to the subject of money, everyone seemed to avoid the topic as if it wasn't inportant. So, being the stirrer that I am, I asked the question: Why is everyone in denial about money?

Personally, I wouldn't work all the long hours and put up with all the abuse (settle down Brains!) if I wasn't rewarded for my time.

I love the money!

However, if you approach from a money making perspective, then you will crash. Take care of the client, and do all of the basics such as follow up and prospecting, and the money takes care of itself. I think this rule applies to all types of business'.

Why do I do it? I love sales and I love Real Estate. I also like to be in the loop to further advance my investing.

I am still to find a vocation that allows you to set up a business with virtually zero cost and generate a $60k plus annual income.

Another pleasing aspect is that the hours are flexible, and I can look after my reno's etc whilst working. As long as the figures are met, my boss doesn't care what I do. Find me a salary based job that let's you do that.

As for commissions, the amount a vendor pays goes to the office. Of this the agent may get 20% for the listing and 20% for the sale, or a 40% max if it is thier own listing and sell. Do the numbers and you will see that it isn't that great. Even if I did sell only one property a week for $4000, it would roughly work out to an hourly rate of approx $60.
On average, an agent who makes about $60,000 pa averages about $20 per hour. If you don't make at least $80k pa then you shouldn't be in the caper.

A final note on sales authorities:As always mentioned, read the small print. Sign up for 30 days with the option to extend if you are satisfied with the agent. If they don't like this, then walk away. Alternatively, get a written commitment that will release you from the authority if you're not happy. Great way to keep us honest. Any agent with self belief in their integrity will have no hesitation doing this.
I might also add that I think that tese authorities are fair. Yes they are different to any other industry, but I would be interested to know if anyone would agree to be employed without some form of agreement that guarantees that you will be paid. Let's not forget that if we don't sell, we don't get paid.

Have a great weekend, and don't believe anything they tell you.

Sam De Monet Louver.

 

[Kevin Hockey]

Originally posted by geoffw
I guess I was surprised that extras, like advertising fees, were not charged if he decided not to sell.

Are advertising fees commonly charged as extras?

I know that Jenman comes down hard on overuse of advertising, charged as an extra- but I don't know whether he's shooting at an empty target or not..

Hi Geoff,

I assume you were asking my opinion. My view on advertising is simple. I want to get the best price I can for my owner, the person paying me. When I went to the seminar by the person you mention he regularly spoke about getting the best price a buyer will pay. That is very different from getting the best price the MARKET will pay. The only way you can reach the market is if they know it is for sale. No agency can stay in business, pay its expenses and afford to also pay for a proper and complete marketing campaign.

In Brisbane, so I assume everywhere, all those agents are no longer even exposing your property to the public via there window display. We have a lot of enquiry off our window and as a FREE option to our vendor, I have no reason to rob them of that opportunity to find a purchaser for them.

Not every owner wants to pay for advertising, and that's fine by me, as long as I have given them the information and allowed them to decide.

If you are interested I have expressed my opinions on my website. Look under Property 4 sale and then thinking of selling.

As for careers in real estate, there's nothing like it. I meet wonderful people everyday. I work with the most exceptional people everyday. I am in contact with positive, modern and progressive people every day. And at the end of every day I know that depending on the effort I put in I will be rewarded equivalently.

No-one makes the big money in real estate without extreme sacrifice. It's a shame when others who wouldn't be prepared to make the same sacrifices then begrudge them of their earnings. Those that make good money do so by referals and repeat business and you can't do that if you are not leaving your clients truly happy with your efforts.

I'll say it again, I have some great mates who are very honest real estate agents, some are jenman and some aren't. In my experience it comes back to the Principal every time and how they train the staff. If you want to change the industry thats where you start. All the legislation and self motivated gurus in the world will not stop unethical and untrained real estate salespeople.

My God, I've done it again. Please Brains, be gentle with me!!

Kev

www.nundahrealestate.com.au