Personal Finance

I'm a Real Estate Agent - - Ask Me Anything

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Deal Addict
Dec 18, 2007
1258 posts
26 upvotes
I don't think it's that lucrative a career as many here are making it out to be. Most, if not all, agents are running their own business, so it's eat what you kill. Some will close a lot of deals and do very well while others will struggle to make ends meet. Agents also need to be prepared for market crashes when even the most successful agents could have trouble making money.

Even subject to the above, I don't disagree that MLS should be more open and sellers shouldn't be forced to use the services of an agent. I also think that in certain circumstances a non-commission based option should be available, although I imagine many sellers like the commission structure because they don't have to pay for anything if the agent is unsuccessful.

The industry as a whole seems like it could get very shady. I'm lucky, through reccommendations, to have found an agent I trust, but there are lots that don't look overly trustworthy. An agent has extra motivation to make a sale, and at times they could unnecessarily push a client. There's also the issue of an agent representing both the buyer and the seller.
Jr. Member
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May 18, 2008
185 posts
68 upvotes
Victoria
Hi guys,

My name is Marko, I am 24 years old and I live in Victoria, B.C. At age 20 I received a Diploma in Respiratory Therapy, at 22 I had my Bachelor of Health Science, and currently I am work on my Masters of Health Administration (MHA) at UBC. I have been employed at the Vancouver Island Authority for four years. Three years ago I convinced my father (a stonemason) to start a residential construction business. In three years we have built 7 homes, and I have sold 3 privately, and 4 we have had to list via MLS. You can visit my website at www.jurasconstruction.com on why it makes sense to buy directly from builder without agents involved.

I have completed my real estate course and I am shortly writing my exam on April 15th. Why you ask? With an MHA I can expect to make around $90,000/year. Last year we built a home, between me and my dad we invested 2000 hours of physical work and made a profit of $56,800 - the real estate commission was $22,000 and the house sold in 6 days, the agents did a total of less than 10 hours of work.

If you can sell 10 houses a year you can make more than someone with a Masters Degree? Does this make sense? $10,000 x 12 = $120,000.

This is what my business plan will be once I obtain my license later this month:

For Buyers

- 70% cash back of my commission minimum.

Example (Ontario commission structure):
$600,000 x 2.5% to buyer's agent = $12,500 x 0.70 = $8750 back to buyer. (you can use this to buy new furniture for your place, go on vacation, or increase the offer on the home you really want by $8750.)

For Sellers

- $2000 flat fee for my services, we keep the buyer's agent commission at 2.5%, this way real estate agents will not avoid brining their clients to your home.

I did the real estate course in 2 weeks, yes 2 weeks, I can't believe these people call themselves professionals.

Take home message...

- IF YOU ARE BUYING ASK FOR CASH BACK FROM YOUR AGENT, 50% MINIMUM!

- IF YOU ARE SELLING NEGOTITATE THE COMISSION!

Thanks,
Marko
Deal Addict
Dec 13, 2004
3488 posts
175 upvotes
Toronto
Captain_Ron5 wrote:
Apr 4th, 2010 8:20 pm

This is what my business plan will be once I obtain my license later this month:

For Buyers

- 70% cash back of my commission minimum.

Example (Ontario commission structure):
$600,000 x 2.5% to buyer's agent = $12,500 x 0.70 = $8750 back to buyer. (you can use this to buy new furniture for your place, go on vacation, or increase the offer on the home you really want by $8750.)

For Sellers

- $2000 flat fee for my services, we keep the buyer's agent commission at 2.5%, this way real estate agents will not avoid brining their clients to your home.

I did the real estate course in 2 weeks, yes 2 weeks, I can't believe these people call themselves professionals.

Take home message...

- IF YOU ARE BUYING ASK FOR CASH BACK FROM YOUR AGENT, 50% MINIMUM!

- IF YOU ARE SELLING NEGOTITATE THE COMISSION!

Thanks,
Marko
Marko your math is a little off
$600,000 x 2.5% to buyer's agent = $15,000 x 0.70 = $10,500 back to buyer.

Don't forget that of that 2.5% a certain amount of that goes to your brokerage.
Jr. Member
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May 18, 2008
185 posts
68 upvotes
Victoria
GemInite wrote:
Apr 4th, 2010 9:40 pm
Marko your math is a little off
$600,000 x 2.5% to buyer's agent = $15,000 x 0.70 = $10,500 back to buyer.

Don't forget that of that 2.5% a certain amount of that goes to your brokerage.
Yea, you are right, I calculated it for $500,000 accidently.

Yea, I have found a brokerage with low desk dees, meaning I pay a fixed monthly fee, not % of my commission.
Deal Addict
Dec 15, 2009
1265 posts
439 upvotes
Ontario
Captain_Ron5 wrote:
Apr 4th, 2010 8:20 pm

I have completed my real estate course and I am shortly writing my exam on April 15th. Why you ask? With an MHA I can expect to make around $90,000/year. Last year we built a home, between me and my dad we invested 2000 hours of physical work and made a profit of $56,800
Marko,

This turns out to be about $28/hr for both you and your dad. In your education field, you'll make more. Your dad as a stonemason would make WAY more.
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Jan 5, 2009
168 posts
17 upvotes
Ottawa
Donnie740 wrote:
Apr 4th, 2010 1:51 am
Ha ha, good question. Let me give you an example of what you'd hear from me in a listing presentation.

I do my homework on the property & neighbourhood beforehand, so I've got a general range of what the market value of your home would be. After I take a walk through tour of your home, I can measure the features & characteristics against previous solds & current listings in the neighbourhood. Now I've got a pretty good idea of the market value of your home.

We'll go through the comparables together and I'll do my best to help you understand what I'm basing my evaluation on. Then I'll give you three prices:

Price #1 - if you really need the house gone ASAP

Price #2 - my estimation of the market value, and what you can reasonablly expect to get +/- a percent or two

Price #3 - if you're looking to be agressive and test the market. And you're either prepared to lower the price to something closer to market value in a couple of weeks or you're fine with staying put if/when it doesn't get any offers.

I work for you, so the final decision on price is yours and you name the price - - hopefully being mindfull of what we've just discussed.

One thing I'll never do is inflate the price to get the listing. That's a disservice to both you and me. You end up disappointed/frustrated/angry when the house doesn't get any interest because it's over priced and I have to start asking for a price reduction. I end up wasting my time and money marketing a property that I know is listed too high and has little chance at moving.

I'd consider myself a professional, but there's obviously salesmanship involved. How else other than salesmanship do you figure I'm going to be able to squeeze an extra percent or two off the price of the home you want to buy? How else other than salesmanship do you figure I'm going to convince the buyers that your property is worth more than what they're offering on it?
Thanks for replying. Very humble answer to a trick question.
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May 18, 2008
185 posts
68 upvotes
Victoria
riffr aff wrote:
Apr 4th, 2010 11:22 pm
Marko,

This turns out to be about $28/hr for both you and your dad. In your education field, you'll make more. Your dad as a stonemason would make WAY more.
I already make more than $28/hr at my current job. My point is why would I work for lets say $45/hour with an MHA, when a highschool grad can make more than that working as a realtor? Does that make any sense? This past year I've met a lawyer, and a women who has a masters of education who recently became real estate agents, both claiming they make more than they previously did.
Jr. Member
Aug 10, 2006
111 posts
Markham
Hi Donnie, great getting the inside scoop on being a real estate agent and the workings. I have a question for you regarding some agents/brokers offering to buy your home if you move up to one of their listings. I figure the incentive for them to do this is to have control over the selling and buying of two homes but are there any other scams or drawbacks to this? I figure if I can get my price for both the house I currently live in and the house they are offering then it's a good one-stop-shop situation. I guess I have to be very aware of the commission they are charging and try and negotiate that properly. Any comments would be appreciated. TIA.
Rob
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Oct 26, 2008
2474 posts
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Captain_Ron5 wrote:
Apr 5th, 2010 10:42 am
I already make more than $28/hr at my current job. My point is why would I work for lets say $45/hour with an MHA, when a highschool grad can make more than that working as a realtor? Does that make any sense? This past year I've met a lawyer, and a women who has a masters of education who recently became real estate agents, both claiming they make more than they previously did.
Maybe these lawyers, teachers, engineers or whatnot didn't have what it takes to compete with the real talent in their respected fields. So they go into realestate. Isn't that how it usually goes?
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May 18, 2008
185 posts
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Victoria
Si98 wrote:
Apr 5th, 2010 12:32 pm
Maybe these lawyers, teachers, engineers or whatnot didn't have what it takes to compete with the real talent in their respected fields. So they go into realestate. Isn't that how it usually goes?
The way I view it is why would I take on the responsibility of running a department at a hospital 5 days a week with my Masters of Health Admin for $90,000/year when I can sell one home per month and make $120,000?

My girlfriend is an accountant, and the amount of money some agents in Victoria make is mind boggling. One guy in particular had 20 real estate transactions last year and made over $225,000 NET!!!!

We are talking less than 2 transactions per month here!
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May 18, 2008
185 posts
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Victoria
stevelam wrote:
Apr 5th, 2010 12:56 pm
for what its worth:

http://www.century21.ca/paul.indrigo/Bl ... _privately

of course its written by a real estate agent so take it with a grain of salt.
This is the biggest pile of sh1t I have ever read......

"50000 reasons you should never buy/sell privately
Chances are that you have heard about some proposed amendments being made to how real estate is handled in Canada.

If you've read about it in the paper next to the most recent Tiger Woods or Jesse James updates...consider the source.

The reality is that if you wanted someone to sell your most prized possession at a discount rate...the option has always been there. Perhaps now 4 extra people know about it.

FACT: Buyers have no reason to buy privately. There are no savings for the buyers and, in some cases, you may NOT be reading the signals as well I do and may even be buying the home from a tenant vs the owner of a house.

Visit my website, www.jurasconstruction.com and click on the link that says "Why Buy Direct," then tell me there are no savings for buyers...

As for property sellers wanting more options to sell their properties...discount brokers have been around since the earliest days.

Thankfully none of my sellers have bought into the idea of selling their property as a "discount" property (similar to power of sales etc).

The most qualified buyers will always choose to work with a professional like myself and, as a result, will want access to my ViP properties whenever possible.

This is a bunch of crap as well, the most "qualified buyers" are usually well of business professionals who know a thing or two, I've actually found it easier to sell the 5000 sq/ft luxury homes privately than the 1800 sq/ft low end homes we build. The person paying $1 million+ for a home knows how real estate works, the young couple looking at 1800 sq/ft can easily be manipulated by friends and real estate agents into avoiding buying privately.

Lastly, both my buyers & sellers have access to the 50,000 Air Miles Challenge that is both a bonus to them and also helps me help the "Easter Seals Send a kid to camp" program.

THESE ARE STRICTLY THE OPINIONS OF THE WRITER AND DO NOT REFLECT THOSE OF CENTURY 21 CANADA"
Deal Addict
Aug 21, 2009
1330 posts
72 upvotes
Transient
I totally agree with the Capt Ron

Paying RE agents 5% for the amount of work is the biggest scam of the century

I worked with a RE agent for 1 day, bought a house privately listed, and negotiated the commission down big time

MLS needs to change. People will move to a free website soon I hope.


As soon as any salesperson puts on the their "act" it's pretty obvious to me. I look for honest people to work with myself
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Oct 26, 2008
2474 posts
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Captain_Ron5 wrote:
Apr 5th, 2010 12:53 pm
The way I view it is why would I take on the responsibility of running a department at a hospital 5 days a week with my Masters of Health Admin for $90,000/year when I can sell one home per month and make $120,000?

My girlfriend is an accountant, and the amount of money some agents in Victoria make is mind boggling. One guy in particular had 20 real estate transactions last year and made over $225,000 NET!!!!

We are talking less than 2 transactions per month here!
Potentially more money and less responsibilities. Ok, I can understand why some people go into RE now. You seem like a fairly motivated guy. All the best to you and let us know how you're doing.
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Jul 4, 2005
1730 posts
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Captain_Ron5 wrote:
Apr 5th, 2010 12:53 pm
The way I view it is why would I take on the responsibility of running a department at a hospital 5 days a week with my Masters of Health Admin for $90,000/year when I can sell one home per month and make $120,000?

My girlfriend is an accountant, and the amount of money some agents in Victoria make is mind boggling. One guy in particular had 20 real estate transactions last year and made over $225,000 NET!!!!

We are talking less than 2 transactions per month here!
"One guy" in a very hot market. You can find that "one guy" in almost any commissioned industry. There are many REA that make just enough to live on, but of course there are a few the make six figures.

In regards to your 5 day per week question compared to 120k selling real estate ... I'll take yours! Guaranteed income / weekends and evenings off / benefits / pension / paid vacations / mat. leaves / medical / paid company insurances ...

Disclaimer: I am not a REA and the benifits are assumed (since I don't know your employer)

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