Secret thoughts of a real estate broker - part 2
In my first article of this three part series I gave you a seldom seen look into the secret thoughts of a real estate broker. We looked at the value of a loyal client, how the few unscrupulous brokers give us all a bad name and the dilemma of being “on call.”
Here are three more secrets I bet you didn't know:
Sometimes we bite our tongues
We might be thinking, “This is way out of your price range” or “This property is way too large for you,” but we keep our thoughts to ourselves.
Of course, we always disclose facts pertinent to the property, but some of those insignificant facts may go unspoken. Worse yet, if the facts are presented to the client and the client goes contrary to our professional opinion and it ends up we were right we always allow them to “save face.” There may be times when our opinion of the property kills the deal, but that is what makes us a professional.
Wow, you actually get paid every two weeks?
Commissions are the way we get paid - there is no base-plus-commission or regularly seen paychecks in this industry. We usually do not get paid until the transaction is completed - that is the sale closes escrow or the lease is executed. Most of our transactions close in about three to six months, but we could work six months to a year before getting paid. We need to be very good at planning and saving to be sure we have income regularly coming in, but sometimes it can get tight.
Everyone has their hand in our pocket
You may think we are all “rolling in the coinage,” but that is not usually the case. There are outliers who have all the right moves and the incomes to show, but according to the National Association of Realtors sixty percent of commercial agents make less than $100,000 a year. Residential agents generally less; a broker, more.
An agent splits all commissions with his broker, which could be as low as fifty percent for a new agent and up to ninety percent if more seasoned. An agent cannot transact in the selling or leasing of real estate without being under a broker’s license. Ultimately the broker is responsible for the actions of the agent and provides supervision and training.
Our expenses are high in the operation of our business. We are all independent contractors so we typically handle most of our expenses and taxes, which could be half our income. Our expenses come like clockwork each month so we need to be sure we have deals closing like clockwork as well.
Does this change your perspective on what we do? Part three will give you a couple more secrets I am sure you will find intriguing.