What Do Real Estate Agents Actually Do to Justify Such High Salaries?

alex123711 on 04/09/2021 - 20:32

I haven't really ever heard of anyone having a good experience with a real estate agent even pre pandemic, and I have noticed they don't seem to do anything to try to sell a property, usually just turn up for inspections, sometimes answer basic questions, real estate generally sells itself.

However they get large commissions which can make their earning potential huge, which is mostly dependent on where they live/ work e.g Most of Sydney being $1 million+ homes = lots of commission to sell one house.

Why is this?

Education & Work

Comments

  • Bafranz on 04/09/2021 - 20:33

    It’s boom time.. up and up we go

  • mskeggs on 04/09/2021 - 20:36
    +2

    Historically, when houses sold for 4 times income, estate agents were moderately paid members of the community, like a suburban accountant.
    They were lucky their pay was linked to sales prices, so they got the benefit of the huge property price run up.

    So far, selling costs have stayed fairly stable, and competition has mainly been in the number of agents, with new entrants spreading the income over more people. Over time, there will be price competition too. It is already happening a bit.

    I wouldn't be joining the industry at this stage as a career.

  • Jimothy Wongingtons on 04/09/2021 - 20:37
    +6

    Well the lease on the brand new AMG don’t pay itself

    • MrThing on 04/09/2021 - 22:26

      high yield investment AMG A 45?

    • lgacb08 on 04/09/2021 - 22:27

      and I don't think you can claim tax deduction from it much.

    • [Deactivated] on 05/09/2021 - 09:54

      Or if youre better known, a Lambo

  • infinity03 on 04/09/2021 - 20:37

    At face value, I tend to agree with your sentiment. However, I think there is probably more to it with the amount of competition within the market for each listing. Purple bricks tried and failed so probably not easy as it looks.

  • brendanm on 04/09/2021 - 20:39
    +1

    At the moment you could probably have a "learning challenged" llama sell a house. Half the time they aren't even getting advertised.

    • MrThing on 04/09/2021 - 22:26

      I think a soggy pancake could sell a house these days

  • bobbified on 04/09/2021 - 20:44
    +1

    If they don't sell, they get sacked. The income is unstable and risky so there's got to be a benefit to outweigh those risks.

  • Hugh G Rection on 04/09/2021 - 20:52
    +4

    its feast or famine. you just hear about the successful ones, the many that fail doesn't make for great news to spread.

    • MrThing on 04/09/2021 - 22:33

      just like instagram influencers. you just hear the successful ones.

      i bet thats more like 99 - 1. 1 making money the other 99 selling their bodies for a quick like

  • Peter Enis on 04/09/2021 - 20:54
    +2

    How much do they really take home though, and is it consistent year on year?

    • MrThing on 04/09/2021 - 22:32
      +1

      +1, would like to know all the basic statistics101 on this.

      not anecdotal, but ATO style data

  • lubos on 04/09/2021 - 20:59
    +1

    Well, a lot more work goes into beating other real-estate agents so they will be the one actually selling the house. It's hard to get listings and usually it involves a lot of cold calling, marketing and networking.

  • zombrex on 04/09/2021 - 21:07
    +1

    Artificial scarcity by purposefully making it a difficult profession to enter despite the relatively low skill set needed.
    For example you need one year working as an agents representative.
    Real estate is very much a family business. Hard to get in if you are not mates or family.

  • Dlw on 04/09/2021 - 21:07

    I had the same belief when selling my unit several years ago. Went with an unknown local as the market was quite hot. It sat on the market for months and went stale. Ended up changing to a more well known group which cost more. It sold in weeks.

  • spackbace on 04/09/2021 - 21:30
    -1

    Working through the day, sometimes 7 days a week, or having to open houses on the weekend, after business hours etc… I'd say if you worked out their hourly wage it wouldn't seem so bad.

    Plus it's all a % of the house price, at least for new builds, meaning that for every $1mil+ house sale, how many cheapo houses are sold…?

    • Geekless Belle on 13/09/2021 - 17:09

      how many cheapo houses are sold…?

      Define "cheapo"? Where can I get one of those?

      (Didn't neg you.)

  • pharkurnell on 04/09/2021 - 21:34

    Try it yourself, see how you go

  • ihbh on 04/09/2021 - 21:37

    1. 80/20 (more likely 95/5) principle - the few earn a lot, the many earn not much more than AWE, if that and get carried by the agency.

    2. Their earnings have to spread (average out) over a long cycle - luckily for them interest rates have been falling for decades. When it rises, prices will be fall and it might be harder to sell.

  • p1 ama on 04/09/2021 - 22:24
    -3

    This is a dumb question, nobody is forcing you to hire a real estate agent. If you think you can do a better job for cheaper then list your own house, conduct all the inspections and save yourself the $$$.

  • WreckTangle on 04/09/2021 - 22:38
    +2

    They do stuff all. And what about the ones selling bare land…they do even less

    • Jimothy Wongingtons on 05/09/2021 - 10:43
      +2

      Hey hey hey , old mate had to pick up a phone to arrange a for sale sign and a web listing. It’s hard work putting up your feet on the desk and sipping Mai tai’s all day.

  • freefall101 on 05/09/2021 - 21:32

    They’re middlemen, they also have a list of people looking for a house. More interest means more competition means more money. Hopefully the increase is more than the cost of them, probably not at the moment.

  • GourmetFoodie on 05/09/2021 - 22:35

    Like any profession…80% are crap.
    Personally I found ours was worth every penny for a myriad of reasons. We interviewed a number though and made them do a formal pitch to us before choosing. We really challenged them hard on strategy, network, pricing etc.

    You want an agent who will go above and beyond to get the best price, even in a hot market there is a good price and a best price. Average agents will only ever get you the good price.

  • Cheapskate Paul on 05/09/2021 - 22:57
    +1

    In 2018 the average salary for real estate agents was $82,045 and the median was $54,539 according to this article https://www.smh.com.au/business/workplace/basically-the-mini….

    This is pretty close to the all occupation figures, so nothing special.

  • streetsmart on 06/09/2021 - 02:13
    +6

    My partner used to be an agent. No base pay except for free mobile phone and petrol allowances($225 a month). It is a commission-based job, if I remember it right 2% of the sale price then, no sale no income, 6 days a week. What agents do may look easy but they do not have peace after 5pm, forget about weekends, if the fone rings they need to answer, there is just no quiet time. So many times, he needed to entertain private inspections at weird hours, I remember countless instances when we ate outside, we ended up packing our food and finished up at home coz we needed to open house for someone interested. Just to spend time with him, we woke up early on Saturdays around 7am to put boards on the side of the road and roundabouts, and collected those by 3pm. In between he was in house opens or auctions and the worst would be when someone made an offer, he needed to do paperwork till 5pm or beyond and in the cooling off period, the buyer cancels wasting his effort and time. Partner decided to leave after a year, the industry was not for him ultimately, he did not enjoy having to lie and make up stories to get better offers, the show off culture and the zero work life balance. I know he could have done better coz the game is you stay in the industry then the business grows via word of mouth. He quitted when he started getting more listings to his name coz it was already at the expense of our happy married life. I hated it. It was just not worth it for us. I have so much respect for the families of real estate agents. Maybe if he started when he was single it would have been okay coz he would have built his name and contacts and could have afforded the crazy hours.

  • Icecold5000 on 13/09/2021 - 17:50

    Agents don’t get a salary, they are compensated in fees. A salary is a fixed amount where you simply turn up to work and do the minimum not to get fired while a fee based commission is based on performance. It does not sound like you know the difference

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