My sister is an agent in a small city. Housing prices in that city are considerably lower then here. She makes about 35K in a good year, and she works a lot. She closes on about 20 houses per year, but they are usually about $100K.

Agents selling a $5M home aren't necessarily working more than an agent selling a $500,000 home.

That is a terrible example. It takes a lot of marketing and connections to list and find a buyer for a $5M home. There are a LOT more of them for sale than there are buyers for them, in any market.

I think the commission is hard to swallow around here. Agents selling a $5M home aren't necessarily working more than an agent selling a $500,000 home. The money just doesn't make sense. (And I don't want to hear that bigger houses are more complicated. A $2M home here would be about $650,000 in Atlanta and the negotiation/inspection process is exactly the same)

Doctors who are highly educated and skilled aren't always making $900,000 per year. Agents may not even have a high school degree in order to do their jobs. (I admit most are educated BUT they aren't using this education. It's not a specific skill.)

The issue is how much work did the agent do for the money. Agents deserve to make a good living but the commission is just ridiculous. I have worked with two female agents who were at the top of their game (one made way over $1M a year). We liked them but they didn't really add a heck of a lot of value.

We found the listings we wanted to see. They had the codes for the lock box. We made the decisions, hired the inspectors and never got as much as a thank you note (despite sending referrals). I still love these women but if I'm not in a rush, I might just try to sell my home by myself. Resources today make this possible.

I don't know why agents don't just bid for the jobs? I know they'd hate that but it seems like the fair way to do it. They take into account the condition of the house, the neighborhood, any potential things that might take longer or require more work. They give the seller their estimate like a contractor would and then the seller selects the agent they want to work with.

Business gift deduction limited to $25 per gift.

Anonymous wrote:

Anonymous wrote:Just checked this morning for accountant. Made $923,000 in commissions in 2013. Expenses including business tax but not FICA or income taxes generally reduce to about $875,000

I don't work for Washington Fine Properties or TTR, bot a well regarded firm. My average sale in a close in area is $750,000.

I hate to be a stickler but what is your adjusted gross income on your tax return. I am betting nowhere near $875k. I'm not saying you don't do well but real estate is a career where people exaggerate. Some by a lot.

I won't know what my adjusted gross income for 2013 is for a month. Accountant has to get my 1099 ( not yet issued) and all of my expenses. The $923,000 was total commissions paid in 2013 The $875,00 was my guess of what it would be after business expenses. I have other income from rental properties and expenses, I hold several mortgages for people which also generate income and my husband and I file jointly, so his income is taken into account. I have many deductions for business expenses, charity and car. The fact that I am a real estate broker gives me further deductions related to my rental properties. This is a long way of saying I don't know at the moment but I will do fine.

As I always tell clients -- particularly lawyers -- who apologize to me for problematic transactions that take huge amounts of time, I always make money at the end of the year. If I billed each transaction as a lawyer might, I would still be fine. Not to be too annoying, but I often pay costs for minor house fixes, home inspection, radon retesting, etc. I also give generous housewarming gifts. All of these are deductible. Of course, they also ensure I receive many referrals from past clients

As an example, yesterday a person who wants to buy and sell a house was referred to me by his friend. The friend was not my former client but sold her house to my buyers. A very complicated problem was found during the home inspection. The listing agent had no advice for the seller. I met with multiple contractors at the house and the seller saw what I did on behalf of buyers. An old time plumber I use solved the problem for about $200. I do something like this every day but not everyone sees my skills or effort but those who do keep me in a business where I do well.

Hope this helps you

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I earn between 1.4 and 1.75 (my high) each year, depending on the economy and whether it's a year I've given birth or not.

How often do you give birth

Lol, each time I'm pregnant. Four times to date. Ready to be finished, as my vagina is not a clown car.

To the pp with 4 kids - do you have to put in a lot of weekend hours or do you have a team that does the weekend grunt work for you? I can't imagine having little kids with weekend work commitments.

Anonymous wrote:One of the best discussions I ever had was with Steven Levitt and Stephen Dubner when they were riding the high of "Freakonomics." They make your same argument by likening real estate agents to the Klu Klux Klan. Levitt is a good economist but Dubner was too clever by half using that argument.

Ha, this describes most of their joint interactions. I was disappointed the podcast was mostly Levitt making an offhanded comment and Dubner "exploring" it for 20 minutes.

Anonymous wrote:Just checked this morning for accountant. Made $923,000 in commissions in 2013. Expenses including business tax but not FICA or income taxes generally reduce to about $875,000

I don't work for Washington Fine Properties or TTR, bot a well regarded firm. My average sale in a close in area is $750,000.

I hate to be a stickler but what is your adjusted gross income on your tax return. I am betting nowhere near $875k. I'm not saying you don't do well but real estate is a career where people exaggerate. Some by a lot.

We sold and moved up this summer. The buyers agent worked her ass off for us. I feel like she earned her keep. The sellers agent OTOH got a decent check for very little work. I think the whole system sucks. This topic really fires me up. As a PP mentioned, the price of property in this area makes the commissions sickening to swallow. In reality you can try to negotiate any terms you want. The good ones won't bite though.

One of the best discussions I ever had was with Steven Levitt and Stephen Dubner when they were riding the high of "Freakonomics." They make your same argument by likening real estate agents to the Klu Klux Klan. Levitt is a good economist but Dubner was too clever by half using that argument.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not enough for the incredible work they do: printing out leaflets, putting up a sign, entering the data in MLS... - if anything, 6 percent is too little.

not an agent but I can tell you that you're thinking about this the wrong way. You are only focusing on what they sell - I bet any agent on here can tell you countless stories of the thousands upon thousands of dollars spent on marketing a home only to end up not selling it.

agents only eat what they kill. You on the other hand can count on a paycheck every two weeks. I bet you'd change your tune if you knew that your kids eating or not eating was totally based on your ability to sell or not sell a house.

Not the PP, but the issue is that I don't think realtors provide a valuable service. (Or, to be more precise, they provide a service that exists only because other realtors force it to exist; its essentially a guild system and it creates a huge amount of economic waste). Obviously I think realtors should be able to feed their families, I just think the world would be better if they all fed their families by doing something other than being realtors.

PP Please feel free to do away with the system.

I find it strange that on a board dominated by women, that other women are so contemptuous of an industry that has allowed women to succeed and make good incomes.

Alas, I have only the power to complain about it.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not enough for the incredible work they do: printing out leaflets, putting up a sign, entering the data in MLS... - if anything, 6 percent is too little.

not an agent but I can tell you that you're thinking about this the wrong way. You are only focusing on what they sell - I bet any agent on here can tell you countless stories of the thousands upon thousands of dollars spent on marketing a home only to end up not selling it.

agents only eat what they kill. You on the other hand can count on a paycheck every two weeks. I bet you'd change your tune if you knew that your kids eating or not eating was totally based on your ability to sell or not sell a house.

Not the PP, but the issue is that I don't think realtors provide a valuable service. (Or, to be more precise, they provide a service that exists only because other realtors force it to exist; its essentially a guild system and it creates a huge amount of economic waste). Obviously I think realtors should be able to feed their families, I just think the world would be better if they all fed their families by doing something other than being realtors.

PP Please feel free to do away with the system.

I find it strange that on a board dominated by women, that other women are so contemptuous of an industry that has allowed women to succeed and make good incomes.