No, I'm not referring to putting strangers in a car and driving them around. I'm talking about the big risks we take when we don't get paid for work performed. Because every time we work with a buyer or a seller, there is no guarantee we'll be paid.
I love this business and have been practicing in the North Shore suburbs (Winnetka, Wilmette, Kenilworth, Glencoe, Evanston, Glenview, and Northfield) since 1998. I have met many interesting and diverse people - several who have become lifelong friends. But RISK is a downside that we agents must all learn to deal with.
Why do Realtors take a risk each time they work with a client?
The truth is that real estate agents do not get paid until they reach the closing table with you. We do not get paid for showing homes, previewing homes, giving tours, making appointments, attending inspections, negotiating, and advising. Our gas is not reimbursed and our brokerages do not foot our lunch bills with clients.
Many buyers wrongly assume that agents are in some way compensated when when they show a house. We're not and that's one reason we keep asking you if you are working with another agent. I've had buyers call and ask to see my listing because they "don't want to bother their agent." As a representative of the seller, I want to make sure you see the house, but I'll certainly tell you to call your agent (they want you to!)
Relocations, downsizing, upsizing, moving in general can go awry. I recently spent two days with a relocating family from out-of-state. We viewed around 20 homes in six communities and they found the perfect house! Unfortunately for me, two days later they decided not to move here. This is the risk of doing business as a real estate agent - we take on this risk because we work very hard to get to that closing table - but things go wrong. We can't control those things.
However, a home stager will bill the client after the staging is complete. The house inspector will get a check before he leaves the house. An attorney bills the client for legal advice. If the deal fails to close, all those professionals will have been compensated.
But not the real estate agent who works commission-only based on the house selling and on the price of the house. Many in the industry have advocated for different compensation models, but commissions have been used decades and aren't likely to change.
Even though we take on this risk and know about it, we wouldn't want to change our careers. We just ask that you consider and understand how it is that we get paid.
Filed under: Real Estate