What Do Real Estate Agents Do to Make Their Money?

My opinion is that there are two types of real estate agents – those that are at the top of their profession and those that are looking for easy money, more time spent sipping coffee at coffee shops than working through real estate fires and marketing homes to the best of their ability. You will find a lot more of the latter when the market is strong and deals are abundant. When the market shifts, often those second-type of agents go back to working an hourly or salary position. Approximately, every 10 years or so, the market is “flushed” of the sub par agents.  The agents left standing have weathered many storms and have a book of clients who are loyal and who value them. They say that 20% of the agents do 80% of the volume, and I believe it to be true.

You will find plenty of home buyers and sellers who have had poor experiences with real estate agents.  This is partly due to the fact that they worked with a “lower quality agent”, and the clients were not aware of what their expectations should be when looking for a top agent. Even the “smoothest” transactions can have fires and burst into flames at least once before closing. Often a client will not even know about these “fires” because their agent handles the situation before communicating with the client.

When an executive hires an employee, they hire a “problem solver”, someone who can analyze a situation and respond within reason before alerting the higher up’s of any problems. No one wants to micro-manage who they hire; they want results, good communication, and as smooth a transaction as possible.

A top real estate agent, a true professional, does these things at an executive level:

  • They market your home and market it well. They invest in your home with up front marketing dollars, and they present it to the market, the public, and other agents to the best of their ability. I personally provide professional photography, even for my mobile home sellers, and it is because I cannot do anything on a sub par level.  Just because my commission would be less does not mean that the client will get a lower level of service, and this is KEY. The BEST agents are the ones who do not provide a “mediocre” service in anything they do, and these are the ones who will sell your home for the most amount of money, and/or help you purchase in the most strategic manner.
  • They have systems in place, and they have the support staff, so as not to leave the ball in the air for their clients. One of the hardest things for real estate agents is knowing what they excel in and what they need to “leverage”. When I created my firm I decided to find an “A” Team, and through trial and error, meticulous and efficient systems are now in place. We will get a buyer to see a home without saying we are “too busy” because we have several agents available, if necessary.  We use Transaction Coordinators who are trained by us and only work for our firm, and their level of service is first class. Gone are the days that a seller has to ask how their buyer’s underwriting is going because we check on this for the buyer or seller on a regular basis. We have a support staff that is at our buyer’s and seller’s fingertips, and that allows the lead agent to do his/her job more efficiently “behind the scenes”, working harder and better for you.
  • They put out small fires without you even knowing about them. So many times I have had staff or agents ask if we should alert the client about a potential issue, and I often say to wait for a certain period of time, because 99% of the time, the “problem” is resolved “behind the scenes” so the client will not have to endure undue stress. They are paying US to handle the transaction and give them the lowest stress possible. Agents on “high alert” are often creating more fires than actually exist. The best agents are calm, cool, and collected, looking to solve the issue before communicating the situation.
  • Negotiating is key, but often it is more than just negotiating the sales or purchase price. Negotiations include repairs that can cost thousands of dollars. We have had buyers often tell us that they will only use our firm because they fear another agent would “give away” things like repairs; they know we will fight for them. Often repairs are negotiated when you get the correct people to evaluate and estimate repairs, instead of relying on the other party’s “estimates”. This often saves a buyer or seller thousands of dollars, sometimes in the tens of thousands.
  • The best agents communicate well and communicate the way that the client prefers. This could be phone calls, text or email. A lot of agents have “hours”, but I am strongly against this. Instead I put my phone on silent, and if I am able to respond, I do, no matter what day or time. Often clients will be surprised to see an e-mail come in at 3 AM, but in this business, and if you do any type of volume, you have to stay on top of what is going on, and I prefer not to have a long list of items in my “to do” pile. We are paid to be flexible and available, and that is why this profession is not for the faint of heart.
  • They will keep the client protected from the other party and agent, often acting as a buffer to stressful situations and outbursts. The home buying and selling process can be stressful, and everyone has a different personality type; not everyone gets along with every personality type. There have been many times that I have dealt with an irrational agent or an irrational client of another agent, and although my client might know bits and pieces, I do not add fuel to the fire. At the end of the day, we all are working to close the deal.  Getting our client to the closing table, with the least amount of stress, is key.
  • They are hands on with their listings and do not just hand them off to co-brokers and buyers’ agents. Many of the large teams spend more money marketing themselves and their business, to generate more business.  They do not invest in their listings, and they leverage their clients through other agents who may not be at the level as that of the managing broker. As the firm owner, I am on top of all of my clients and take pride in the fact that the face on the sign, the one who has her BSBA degree in Marketing, is the one managing and marketing your home, or at least monitoring your file. Quality is important to me, and I will not increase my volume if the level of service were to suffer.

There is so much more that I have not touched on, but know this – Realtors and agents who seem to make a big “paycheck”, the ones who do more volume, often have unseen overhead and expenses, and after taxes, the paycheck is far less than it appears. You often get what you pay for and experience and quality will often net a client more at the end of the day.

 

About the Author:

Erica Anderson is the Broker-Owner of Team Anderson Realty, and she prides herself on extraordinary service and assistance with smart investments, for both home buyers and home sellers. This is purely her opinion of the current and future market potential, but she is rarely wrong, merely passionate about what she believes in, and she believes that the Raleigh/Durham and surrounding areas are an incredible place to work, live, invest and “play”.

 

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