T. J. Richards tells us that if the $300,000 home in the neighborhood were reduced to $150,000, then they, the Richardses, still could not qualify.
Perhaps the Richardses are overextended with their credit or have other problems that place them at risk to lenders. With the family's income they should qualify for a $150,000 home. I will be the first to admit to the Richardses that real estate agents must share in the blame for inflated prices of homes but I also see a reversal of that trend. We're trying.
When Richards says real estate agents are reaping tens of thousands of dollars on each home sale, then I must set the record straight. Let's take that $150,000 list price and put the normal 6% commission with it. If it sells at full price (they rarely do these days) then the commission would be $9,000--not $9,000 in one agent's pocket but a total of $9,000, usually with half going to the listing broker and half to the broker that actually sells the home.
Now we have $4,500 to each side. A major company like Century 21 takes 8% off the top. Now we have $4,140, from which they take $80 for E&O (errors and omission) insurance. Now we have $4,060. This money is still the broker's. If the broker is generous and gives more than a 50/50 split, let's say 60/40 with 60% going to the agent, that leaves the agent with $2,436.
Now let's divide into that the number of hours spent driving potential buyers around showing houses, the hours spent negotiating a sale, the hours spent opening escrow and during the term of escrow, running documents back and forth in order to hold it all together for our clients. Should I also mention the hours spent holding open house?
All of this is without compensation to the agent unless he/she "closes" the escrow. Real estate agents do not receive benefits such as retirement, health care, sick leave. All we have is commission, no salary. Let me just say to T.J. Richards I earn my commission.If your agent doesn't, then you are with the wrong one.
GARY N. SHALANDER SR., Ramona