Reputation Key – The Lindsay Post – Ontario, CA

Reputation Key

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Posted 1 day ago

There has been a lot of media coverage regarding the competitiveness or a perceived lack thereof within our real estate industry.

A real estate sales representative generally is on call 16 hours a day, seven days a week. We have no security and no employer-provided retirement plan. We are often stopped and asked our advice on real estate matters, which we happily provide, with no expectation of ever being paid for it. As realtors, we are only as successful as our last transaction. In addition, we live by the rule that if you do something nice for someone, chances are they will tell no one, however, should you do something they consider less than good, they will tell everyone. Reputation is everything.

All realtors are mandated to have continuing education courses and cannot be re-licensed without 24 credits every two year period. Six of those credits must deal with updates from our provincial regulator.

The Canadian Real Estate Association, at a general meeting, recently agreed that a realtor can place a listing on a board/association’s MLS system with no or only a limited amount of realtor involvement after the listing agreement is signed. This will allow realtors to offer flat fee services, in addition to their full menu of service options. The flat fee option may have some merit if you are prepared to undertake all the steps that full service brokerages offer, including negotiating your own sale. Sellers will pay the fee at the time the listing agreement is signed and offer the co-operating brokerage (the brokerage bringing the offer to you) a commission, at a previously agree percentage or fee. Obviously, if you do not sell your house during the listing period, you have lost the flat fee already paid and will have to take other steps to try and sell your house.

There are 136 typical actions, research steps, procedures, processes and review stages in a successful residential real estate transaction that are normally provided by full service real estate brokerages in return for their sales commission.

There is a real misconception surrounding our real estate commissions. To better explain the reality, let’s assume you sell your house for $250,000 and the commission due on closing is $12,500. This amount is split equally between the two brokerages involved in the transaction. The $6,250 received by each brokerage is then split between the brokerage and the sales representative. Let’s assume that the sales representative receives $4,400 out of the $6,250 and the brokerage retains the balance. The sales representative must pay his/her business costs out of this amount. If we assume that these costs will approximate 45% of the $4,400, the net income, before income taxes, earned by the sales representative will approximate $2,400 from this transaction. Assuming that a sales representative handles one successful $250,000 real estate transaction a month, he/she will net, before income taxes, approximately $28,800 annually.

It is essential to always keep in mind that a sales representative’s expenses continue with or without successful real estate transactions. Full service brokerages only get paid when the sale of your house closes. If we do not sell your house, there are no real estate commissions due and payable.

The views and assumptions included herein are purely my own and do not necessarily reflect the views of anyone else.

BILL THOMPSON Real estate sales

representativ

Posted via web from Toronto Real Estate News | Blog

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About Tariq Sultan
Dear Readers, I am a dedicated Toronto, Ontario based real estate professional who has been successfully meeting and exceeding the needs of his clients for past several years. I am actively involved in the insurance, financing, and mortgage industry. Real estate is not only my career – it is my passion. I strive to continuously provide my clients with exceptional service to ensure they are fully satisfied when it comes to their real estate needs. For any real estate related inquires contact me today, I will be happy to assist you. Best wishes, Tariq Sultan

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