Clients Challenging Our Wages

Unfortunate.

After working for 7.5 months with a family, submitting 11 offers for them on Short Sales and Bank Owned (REO) property (we have verbal acceptance on one), doing more pre-negotiation work with new construction...

We receive an email demanding we pay them roughly 33% of our wages!

These are Buyer clinets as well. We already work for free for Buyers!

So? Free + Agents or Brokers paying client to use us? That would be a wonderful "program" to offer, but it isn't a realistic expectation.


Of course all real estate commissions are negotiable. Some real estate firms offer "incentives" back to a Buyer client if they use them. But that is not the norm. In fact, it's a very small percentage of companies. Usually it is a bulk service provider more interested in high client turnover than service. They make their revenues through volume. They don't encourage referrals, so they don't often do the very best for their clients.

In our business everyone comes after our wages. On a Short Sale home, the lender almost always cuts commissions. On a bank owned home (REO), the banks frequently cut commissions. Those two classes alone count for a little over 60% of the homes on the market today.

Now the client wants a chunk of our reduced wages too? I do enjoy charity work, but I can't buy food with only my good looks.


There is a view that Realtors make piles of money. I believe this could be true for some (I haven't met them personally). But again, it's not the norm. Of the 1.4 million members in the National Association of Realtors - over 400,000 had zero or one transaction in the last 12 months. Try surviving on that.

This is an expensive business to run.

Earlier in the year I spent nearly $2,000 listing and advertising a home for sale - that we eventually removed from the market.

We are all independent contractors or business people. In addition to high fuel prices, we have to provide our own:

* If you are an Agent, you pay your Broker a percentage of all your earnings
* Errors & Ommissions insurance policies (MANY thousands of dollars)
* Workers Compensation insurance policies (also very expensive)
* Enhanced vehicle insurance policies
* Office space leases (over a thousand dollars a month)
* Rental insurance policies for leased space
* Telecom & IT support expenses, and new equipment purchases
* Websites and email engine expenses
* MLS dues (some of us pay over a thousand dollars a year)
* Local Association Membership (several hundred)
* State Association Membership (several hundred)
* National Association Membership (several hundred)
* Medical, Dental, Vision insurance ($1300+ month for a 4 person family)
* Fees for Formal Education requirements
* Fees for Licensing and renewal
* Fees for Additional checking / savings account so as not to co-mingle funds
* Fees for contracts software
* Tax rates that are unbelievable for the self-employed
* Expenses for our street signs and open house signs
* Additional clothing expenses
* Expenses for all of our own office supplies, fax machines, printers, toner, business cards, periodicals to stay up to date, etc.
* We may even have to buy a new chair to sit in, to type up your contracts (and the coffee to keep us running)!

...and we haven't even started counting the expenses associated with marketing your home or the business.

Personally, my wages were higher with my corporate job, and I only worked 50 or 60 hours a week.

Now? Those of us who are surviving and doing well are working 7 days a week, and nearly constantly. Yep. You don’t measure the work day in hours. If you are awake? You are working.


Of course, none of the items listed above are really the consumer’s (or client’s) concern. They shouldn’t be. It’s our job to run as efficient of a shop as we can. That’s part of the risk / reward of working for yourself.

But – when we are working for you for free, and you are asking for our wages as well? Please give a thought or two to that request.

Perhaps you will understand when we say “No thank you, but I can refer you to someone who might…..”

I encourage our agents to fire clients. That's right. In this market of insanity and challenge, if a client isn't performing or is unethical? Our folks can end that relationship immediately. I'm told that's rare for a broker, but that's the way any professional organization should operate. We aren't in it for the dollars. We're in it to do the right thing. Our clients should be too.

Buying a home in this market requires a very close partnership between family (Buyer) and service provider (agent). When getting into this professional relationshp, make sure you've got the right partner by your side.

- Jim