I’m not going to disagree with the fact that a lot of real estate agents work hard for their money, and they’re not all just salespeople, etc. It’s easy to generalize.

HOWEVER, I do want to ask why you think that your compensation be linked to a % of the sale price? Given that prices are about double what they were back in 2000(ish), do you deserve double the pay? Were you being underpaid back in 2000? Are you overpaid now? OK, not “now”, but how about in 2006 when things were still red hot? You have to admit that while prices (and transaction levels) were going through the roof, your salary rate increased dramatically at a time when most people in this country experienced an inflation-adjusted decline.

If you justify your higher rate of pay due to working hard, then I can only assume that previous lower levels of pay were because you were lazy and didn’t work hard. Surely, this must be the case because hard work = good pay, right?

Or maybe you were in an industry that experienced a long and profitable (for you) peak, and now things are changing. Given your experience and education, I imagine you’ll be fine, but a lot of others won’t. Personally, I won’t feel sorry for them.

I respectfully disagree with you. If you are just having your first kid and you have owned 3 homes and have not lost on any (one being in San Diego and 2 more in Seattle) I would have to assume you are in your early 30’s. If that is the case, of course you haven’t lost any money on a home yet because you’ve only owned in an up market. If you were to have owned a home in California between the 80’s – the late 90’s you would have had much different experiences. My Dad always reminds me that he is just happy if he can get out of a home for what he paid for it plus inflation. You should hope for the same as well. Prices are coming down and it’s not going to get better anytime soon. I’m not one to time any market, but when you see the crap about to hit the fan, you run into a different room until someone cleans it all up.

Consider alternate compensation models or prepare for disintermediation. Seriously.

My job is to act as the buyers liason. I make recommendations, research and present the data and let the buyer make the decision with maybe a touch of reality thrown in if needed:-)

I work on the Eastside, most of my customers are well educated in high income jobs….quite afew are in the high tech industry and prefer to do their own research. Bottom line is I represent my client only.

Buyers are alot more educated over the past several years than when I first started in the industry. I recognize this.

I have no idea what the future portends and when I am asked (almost daily) about future price appreciation in the area all I can offer is a history of the past and should it continue or not I am not in the business of predicitons.

Using conventional terms, people can afford roughly 3 times their household income… Yet I’ve had RE agents encouraging me to buy a house that’s close to 7 times my income with a 0% down loan – as recently as 2 months ago. Does this sound like something someone with my best interests would do?

Seems that Ira may be the real deal. Kudos and best of luck beating the liars and scumbags in your industry, Ira.

I have both an undergrad and a masters degree in Business Adminsitration from UCLA.

I have had a few behind the desk or 9 to 5 jobs where I had basically no opportunity for growth.

I got my RE license over 15 years ago and have put much education, sweat, time and persistance into my career and am very proud of my accomplishments in the RE business. I have a long list of personal references which is up to date to support this and the majority of my business is through referrals and past customers.

The point being….I have earned my way into this profession and have succeeded with hard work. If there is a 9 to 5 worker out there that wants to improve their life whether it be as a RE agent or whatever profession that pays more ans is more rewarding then this country allows that person to do so.

Thank You for your reply…I am appalled at the number of RE “experts” out there who think we all sit by the phone chewing gum waiting for the buyer to call us first.

:-)

Do you read the news at all? Are you aware that housing prices are declining all around the rest of the country? All evidence indicates that Seattle area real estate prices are at or near a peak and it is just a matter of time before prices start falling. You’re not going to be climbing the equity ladder by owning depreciating assets!

Have you ever held a 7-to-6(+) job where you were chained to your desk all day? Ever worked 20-30 hours extra per week (sometimes for several months in a row) and not get paid a dime for it, since it is expected of you?

Many people here put in a lot more hours, and have a lot more invested in their education, and get paid a lot less than many RE agents. You can make on ONE SALE what it would take others several months of 9-to-5 to make, so give us a break, please.

And guess what? Uncle Sam takes a big chunk of everybody’s income, not just yours.

Someone called agents lazy here?

I must have missed it.

Martin – Just about any time in our history what you say is absolutely true.

Just not now.

I bought 4 years ago, and am happy I did.

I would never buy now, nor would I recommend buying now.

Generally I agree with you on timing the market, but anyone with eyes can see this is the most horrendously overpriced market poised on the brink for a fall.

This isn’t charting the S&P. This is looking at fundamentals, business conditions and bang you on your head-obvious trends and realizing only the someone with willful distaste for facts and money who would prefer to buy a falling down rambler in the Central District now instead of a decent in a decent neighborhood a few years from now would buy a house now.

Anyone who recommends otherwise is either blind or a moron. Pardon my insult.

Oh, and dont forget the driving around of potential buyers to see homes. Sometimes I feel like a tour guide and dont get paid for that! It is not nice to have someones child throw up in your car and all you get is a “sorry” where I have to take it in to have it detailed again! Once a potential buyer does identify a house, I sit down with them and council them, write the offer, present the offer, negotiate the offer, am there for inspections, title and appraisal contingencies and other good stuff that takes my time and energy all the way through closing.

Yup, us agents are all glorified and over payed sales people selling folks the most important and expensive item they will probably purchase in their lives.

My time is nothing according to many of you here!!

Oh! Forgot to mention that Uncle Sam takes a large chunk from me each quarter and Ihave to feed my hubby, children, dog, goldfish, and the various billsand charities I donate to!

What a simple life….just kicking back and watching the easy dollars rolling in according to alot of folks here!!!

LMAO….if only you knew.

I’ve owned 3 homes (as my primary residences, on in San Diego, and 2 in Seattle) so far, on some I’ve made more money on some less- but I’ve never lost. The longer I stayed in those homes, the more affordable the monthly payments became (since neither me nor my wife have any extravagant appetites for anything, we are able to afford 2 homes, right now at this moment) and the deductions I enjoy from those are a blessing… With a kid on the way, I can not be happier and more thankful for being able to own 2 homes, building equity, investing in our future and living in a city as nice as Seattle…

If I could, I’d hold on to as much real estate as I possibly could. Unfortunately, between an accountant’s and an software engineer’s salary, this is all I can afford…

Timing the market? Good luck. Let me know how it works out for you.

I think you would be surprised at how many agents who’ve been in the biz through the mania (say 10 years) are now objectively wealthy.

Sell a house a month in the high-end market, and rake in six figures annually. leverage that money, as a lot of them did, in RE in the late ’90s, and you pretty easily have assets worth millions.

It’s a lot easier to take the long-term view, when you own half a dozen rental properties on QA hill.

I’m not saying all are rolling in dough, but a number of them are – particularly those who have time and experience to blog.

For instance, I would bet Marlow and Reba are not hurtin’ for jack.

If you are real, you are very rare. I wish you the best of luck with your business strategy.

I will agree that money isn’t the only incentive, but I maintain it remains an important incentive. A salesperson (just like the rest of us) cannot defer paying their bills indefinitely. They either sell something, irregardless of their standards, or they get out of the sales biz.

Maybe I’m jaded, but I’ve dealt with my share of salespeople over the years and I cannot recall any of them being even a tiny bit concerned about the wisdom of my purchase with respect to my overall personal welfare. Most pushed for the best deal that I would let them get away with. I don’t fault the salesperson, it’s just the nature of that type of business transaction IMHO and I expect it. Caveat emptor and that sort of thing.

Integrity and long-term reputation can easily overcome the short-term incentive that is the commission.

We are not all simply cogs in the capitalist gearing. If you try to derive people’s actions based purely on monetary incentive, you will almost always miss the mark.

My point is a simple one. A sales person has a large incentive to sell things if his income is based on commissioned sales, especially so if commissioned sales are his only income. How can that not be true?

I appreciate your take and your honesty. You should really consider linking your account to a website if you have one (underneath your name and email, is a website field). I imagine a number of people reading your comments will be interested in talking to you about purchasing a home when they decide it is time.

I also agree with the sentiment that not all salespeople are dishonest scumbags. There are some who have decided that their own worth as a person derives more from their character than their paycheck. We can only hope that these people eventually are repaid for their character as well.

That said, I would give the people on this board a little slack when they generalize. Most don’t deal with real estate agents on a daily basis. Their primary exposure is from press releases and blogs like RCG that are run by agents. They witness all the double-speak that come from such sources, and generalize that all agents are either liars or incompetent.

Again, as one of the few honest agents in Seattle, you should really get the word out about how you feel. A year from now, it might mean a lot to people.

Zoinks!! I used to walk past that building all the time in 2001 and I always thought “man what a s—hole”. Now it’s been converted to condos and they’re selling for $350K each? Man, that just really goes to show you how easy it is to sell people snake-oil. It’s like they assume that since you’re over-charging it MUST be worth it.

Where did he get those numbers? New York Times has a different picture:

http://www.nytimes.com/2007/08/01/business/01leonhardt.html?partner=rssnyt&emc=rss

That chart says we are at the peak now and it goes down from here (the caption is a few months old).

Answer – None. Self interest being part of human nature will ensure that sales people paid on commission will always push sales, irregardless of circumstances.

*mind blows up at the thought that people used to use travel agents*

Same with FSBO. Basically the RE agents are trying to cling to their last bit of power, which homes to show buyers.

http://www.usatoday.com/money/economy/housing/closetohome/2007-10-08-tacoma-close-to-home_N.htm

New worry – where to save your money in the meantime? A lot of reputable people are predicting a severe devaluing of the dollar.

I am shocked, absolutely shocked, that anyone would say such a thing. I absolutely need my three wireless telephones, two cell phones, four television sets, home theater system, PC, laptop, two micro-wave ovens, three portable stereo systems, two lawn mowers, four weed-eaters, one pick-up, two SUV’s, and a garage full of extra furniture.

http://www.tradingmarkets.com/.site/stocks/commentary/gkitermi/-68323.cfm

2007 mortgage resets, Jan – Dec: $515 billion.
2008 mortgage resets, Jan – Jun: $521 BILLION.

After that it tapers off seriously for the rest of 2008, but we all know that it takes three to six months for the reset to hit the fan. So yeah, end of 2008 is the absolute earliest bottom for the national market.

The right time to buy as home is when you are ready both financially and in your personal life. Having said that, I would not buy a house now unless I was able to negotiate an extremely healthy reduction against asking price and comparables. At minimum I would wait for winter to find a seller absolutely needing to sell or late summer 09 before doing some low balling.

I negotiated a 7% reduction off the price of the home which I purchased 6 months ago. At the time my realtor was surprised given where the market was. I felt good then but am not so sure now. Even so, I am extremely happy I own even given the uncertainty in the market., This is coming from someone that rented for close to 18 years.

Anyone who buys things knows inflation has been way over what the government says it is. The interest rates are lower than inflation, in my opinion. This is why the savings rate is negative.

Princes have started dropping here, although it doesn’t show up in the median prices. Think of the 7% cash back. My husband is in construction and he says that builders are having a hard time moving their homes and the electrical supply houses are saying business is dropping. We have friends who tried to sell a home and couldn’t, at the price they were asking. If home prices were really still rising I believe it would have sold.

But this is just the beginning. It takes years for real estate markets to bottom. 4 years for the last one in California. There is no way we will see a bottom next year. I estimate the true top of our market was last summer or fall. If you think of your home as a financial investment you should wait until at least July, 2009 before buying, but if you wait until next summer I believe you will be able to see that the markets that started the decline before us, such as San Diego, are still declining and that will make it clear that we will still have a ways to go.

We bought our home this year in March at a price that I believe will turn out to be thought of a crazy in a couple of years. We do not think of it in any way as a financial investment, we expect the value to go down maybe as much as 50%, but we paid cash and plan to live here for the rest of our lives. We want the values to go down because then maybe the taxes will go down somewhat eventually, and it will encourage people to stop living on borrowed money and stop, at least for a while, the inflating of the money supply.

“You have to be realistic about your limitations. We can’t all be Bill Gates. What we can do is live to the best of our ability and make smart financial decisions.”

“for the most stubborn of buyers it will take about 3 months of steady increases for them to realize that the bottom of the market has passed. …After a few months of this, buyers will get the hint and return.”

Do you see the contradiction? I’m not stubborn, I know my limitations. I get the hint, I’m not Bill Gates.

If being a homeowner who had a life change (kids) and is waiting ’til I can afford (by my own definition, not yours or lenders’) to ‘move up’ makes me a bubble head then so be it. If people like me make you angry (using words like ’stubborn’ and ‘get the hint’) then so be it.

One thing is for sure, you will not be my agent.