As a real estate professional, you know the value you bring to buyers and sellers. It’s time to share what you do with your potential clients.

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During my career I have heard many versions of these two questions: “Why should I pay a Realtor to sell my property?” and “What do I get in return for the commission I pay?”

Many sellers believe that their Realtor puts a sign on the lawn, an ad in the newspaper and then waits for the property to sell. Generally, nothing could be further from the truth.

When a seller signs a listing contract the Realtor makes a commitment to help their client obtain the highest price, in the shortest time with minimum inconvenience. A good Realtor gives valuable advice, expert guidance and great value.

The Realtor provides objective and accurate information about current market value allowing seller to select the appropriate listing price. In many cases they can offer expert advice on staging the property for maximum appeal to potential buyers.

When listing the property, a Realtor is trained to represent the seller by making sure the property information is accurately and attractively presented to the marketplace. This includes careful compliance with provincial and federal regulations like the Personal Information Protection Act, the Real Estate Services Act (in B.C.) and the FINTRAC money laundering requirements. The Realtor ensures that required disclosures are made at the appropriate times.

Once a listing is signed, the Realtor begins the obvious marketing process, which includes putting the property on the Multiple Listing System, installing a sign, writing appealing print ads, creating feature sheets to leave at the property and holding open houses. In addition many Realtors feature the property on one or more internet websites, display mall kiosks and at open houses for other agents. Giving the property maximum exposure can be expensive but it is part of the commitment of the Realtor.

Much of the work of the Realtor is done quietly behind the scenes. Realtors invest time and energy in activities like qualifying potential buyers, arranging and tracking showings by co-operating agents and obtaining and sharing feedback from other Realtors. Many sellers take comfort in knowing that their Realtor will handle all inquiries seriously and do their best to ensure that only serious qualified buyers will view the seller’s property. This provides a measure of safety and security.

Realtors are also trained to provide accurate advice and valuable assistance when dealing with the significant complexities of tenant occupied properties, estate sales and foreclosure transactions.

One of areas where the Realtor provides the greatest value is negotiation. Handling objections and tactfully representing the sellers’ best interest is an important skill that Realtors obtain through specialized training and personal experience. Writing an enforceable contract and negotiating a legally binding agreement are important services that are often taken for granted by the general public until there is a problem. Then this great Realtor value quickly becomes evident.

Another generally invisible service is managing the transaction after acceptance of the offer and during the buyer due diligence period. This consists of arranging inspections, scheduling appraisals and obtaining strata documents (if applicable). Sometimes this also involves handling real estate turbulence, which includes things like appraisals lower than the sale price, problems discovered in a property inspection and other unexpected challenges. The experience and guidance of the Realtor and their broker can usually overcome these challenges.

The final job of the Realtor is to do everything they can to ensure a smooth completion of the transaction. This includes monitoring the conveyance process, confirming payment of the sale proceeds to the seller and a timely transfer of keys to the buyer. Selling a property is a significant transaction for most people and the complexities are sometimes not well understood until problems arise. A good Realtor has the training, expertise and experience to assist their client to achieve their desired results.

Probably the most amazing aspect of the tremendous value Realtors provide is guaranteed results. The seller pays nothing unless they receive an acceptable offer. There are very few other professional service providers who are prepared to demonstrate their confidence in their ability to produce results for their client in this manner.

31 COMMENTS

  1. This is a welcome synopsis of the work that goes into doing a really good job representing your clients. Thanks for the well written article Jim. I particularly liked the word ‘turbulent’. To the public, if you hired a Realtor and the process felt seamless and low anxiety, I suspect you can thank your Realtor for that. They protected you from many a question/distraction and needless stress. A skilled and conscientious middle person with the benefit of experience and objectivity is everything when dealing with one of your biggest assets.

  2. Let’s be real!!
    Real estate agents make a ton of money for a minimum amount of education and effort.
    All the “ paperwork “ they pretend to deal with so diligently is often done by the support staff including feature sheets and open house ads.
    The offers are fill in the blanks so again oh so much time and effort……bs.
    Listings sent to clients are computer generated
    I could go on and on
    I did it for 13 years and glad to be out of the industry
    When you calculate the hours spent on a transaction with the commission received it amounts to a physician’s salary in many cases!
    It is a grossly overpaid profession and i am all for the brokerages offering flat fees as well as FSBO
    Agents need to reduce their fees and Sellers need to start demanding that.

    • You don’t know what you don’t know and can’t learn if you’re unwilling to seek to learn.

      Essentially, you were one of those do nothings, know nothings who contributed to the industry’s horrible reputation.

      Thank you for leaving it!

    • Brad, so it did not work out for you, most who get their real estate licence fail at such, for a large percentage of licensees it is just a matter of time. You obviously had alternative financial support to continue “trying” for 13 years before you accepted your personality was not one which people put trust in. It is probably best to not be angry with the small percentage of we Realtors who enjoy a great career in this wonderful business, which I have for 33 years helping many, many clients over and over adding their children and grandchildren to my ever-growing list of happy past clients. Regards, wayne

    • Perhaps a different take on your REM comment:

      Brad, I googled your name and as is typical, a viewer cannot tell what picture is you. Apparently Google decides what pictures attach to a person’s profile. But never identifies them as NOT the subject profile. There are many pictures at my own Google search profile that clearly are not me. It’s a very annoying topic to some of us.

      And I don’t know who gives Google the right to do that. But a picture of a woman by the same given name spelling as mine showed her face close-up picture in my Google profile, and she had stolen my hand-drawn corporate logo bearing my personal name as my Corp logo and changed it to colour orange, name Carolyne under her photo. My Corp logo has been in use since 1991 when I incorporated my given name as my corporate name. Apparently she started using my stolen name-logo in 2016(?). Oddly enough she represents Trip Advisor in European Cooking classes, but she is based in Montreal apparently. As many REM readers know I have been the exclusive REM columnist contributor gourmet writer for more than a decade.

      Your name search says you are a rep at both C21 and RLP. I didn’t search further. For years after I left RLP having left there to open my own company in 1991, I still appeared as being at RLP once the Internet took hold and in 1997 I was one of the first agents in Canada to have a domain. Google had me still at RLP. There was no way back then in 1997 to get rid of new world internet bots intervention.

      Google in many situations is so out of date, sometimes publishing unreliable information. You can pay Google to remove certain information according to their law firm in Ontario, otherwise the information just stays there for years, til the bots tire of it, active for viewers; misleading and maybe possibility of being considered false advertising.

      I would be available to discuss why you feel the way you do about commission and why you gave up. After 13 long years of staying power. It’s not about how little work appears to have been done by agents, relative to how much they get paid; it’s supposed to be getting paid “for their professional expertise.” And representation is not really tied to a paycheque. Neither is their worth in payment tied to how many accreditations or how much related education they have, tied to their earning power.

      It’s the old proverbial knowing where to kick the can (applied knowledge is the power driver) theory that operates. There clearly are many good, productive agents. Others, not so much. That likewise applies to those highly paid physicians you refer to. How does one judge them?

      Fifty percent of them graduated in the bottom half of their medical class, but the government chooses to pay them all equally. Do you perhaps feel real estate related consumers would be better served using that model? Having the govt in paycheque control. Agents not permitted to earn above a certain figure so remainder of office brokerage real estate commissions could be divided equally among all office reps much like some restaurant or hotel cleaner tipping?

      We are paid what we are worth; decided by no one but ourselves. We alone know what worth we bring to a transaction; to the field. Seems maybe during your 13-year tenure you might have had another source of income support to enable you to have been an agent for such a long number of years while clearly suffering profoundly, needlessly. Were you a part-time rep per chance? whose expenses overwhelmed the point of staying engaged in the industry? Economies of scale relative to the law of diminishing returns?

      Did you network extensively with other branch offices locally and across Canada, and even stateside? Bringing in and sending out client referral business? Did you leave a yellow brick road trail you went so as to easily be found? Did you practice the simple Tell-20 process? Did you read books such as: List More, Sell More? Did you make any effort to “farm?”

      Did you attend further-education classes and seminars (at your own expense? Even so many such are provided free?) Did you have a full-time “real” job, that got in your way of so doing?

      Where was your broker? 13 years in the industry and now making such a REM statement surely is their embarrassment? Was the brokerage or relative head office or owner aware of your feelings having been licensed / registered for 13 years? That’s a long time to waste. You cannot recoup that so-called wasted timeframe. It’s gone.

      We only pass this way once in life; there are no reruns. There has to be more to this story comment. What business were you in prior to, or simultaneously during 13 years you spent as an agent.

      As one of Canada’s top producers at RLP for years, I myself actually considered leaving the industry completely at the ten-year point, and when I left RLP I had no place chosen to go. Because it was not in my plan to leave.

      My exodus was unplanned; not like me to make snap decisions but a build up of branch situations erupted out of control. So with an undecided future, and no one to discuss with, I stuck my neck out big time. The office admin woman stated outright that I did too much business, making a heavy workload for her. (After I left she was without a job, as I was subsequently told I had carried the weight of the whole branch production.

      I had actually consulted with RLP regional Mgr at head office but was told branch decisions were made at a branch independently operated although corporately owned. I spontaneously left; but it wasn’t very long before actual wonderful head office control upper management invited me back as my own Corp boutique took off full steam ahead with signs popping up all over my trading area. I graciously decline. Too little too late.

      Months later I was invited back again by head office, this time to manage (I’m sure thinking I would share my success secrets with the few remaining agents; truly an honour but once again I had to decline. It had never been my intent to leave. It was a painful decision I had made, thinking I would be there for ever.

      I did the unthinkable. I opened a unique concept at the time, a boutique agency that I ran like a General Motors’ size efficiency scale, retaining my 24% market share in my trading area, but with no team. Unheard of at the time, in March 1991.

      I did not even have my husband’s support all the while being a top producer that automatically made me one of Canada’s highest earners you point reference to, constantly reminding me that I wasn’t tough enough, treating people too nicely, to succeed as an agent (mind-control), even after success decades in the making. I earned more in a week sometimes than he earned in a year. And my chances of making it on my own were slim to none he insisted. Who exactly did I think I was opening my own company. And he insisted I let my admin secretary go. Too expensive. I refused. Big step for me.

      But he “allowed” me in 1991 to give it a year on my own, trading in cashing my RLP investment fund to use to open my office, forbidding me to use “our family-money” (my earnings; he was retired for twelve years) and demanded I give up if during that first year my venture wasn’t sustainable according to his evaluation.

      I was nearly 40 when I was licensed four decades ago. I never flaunted my earning power, not ever, and ‘obediently’ brought home 20-30k paycheques. I wasn’t “allowed” to have a me-only bank account. Old European family-ways. I complied. I trusted. I could have maybe fixed the books to cut him out because unlicensed people could not own real estate companies back then. But my brain doesn’t work in that compartment. It never even entered my mind. Call me stupid. But I persevered; I just went out and sold another house so I didn’t have to go home. I was an abused wife for thirty years but there were no visible bruises.

      So, you can contact me direct (click my REM bio email address) if you care to, if you think you might re-engage in real estate at some future point. Technically I’m retired, as I elected to put my Lic on hold due to a family cancer situation, but agents thinking of leaving the industry sometimes connect with me. And they often are surprised when I reassure them how good they really are. They just need a moral boost.

      Respectfully
      Carolyne L
      From my iPhone

  3. I always get a kick out of the term used at the top of this article, namely, “the real estate professional”… I would remind you that a professional (doctor, lawyer, hockey player, etc.) gets PAID regardless of outcome… there is only one outcome for the realtor to get PAID and that is a successful sale of the property.

  4. Quoting from your REM article: “This includes monitoring the conveyance process, confirming payment of the sale proceeds to the seller and a timely transfer of keys to the buyer.” (This sounds a little American?) Are you saying conveyancing is handled by BC agents? (Just asking…)

    ===
    Maybe helpful old training material (basics in Ontario:

    http://www.carolyne.com/buyerinfo.html

    http://www.carolyne.com/sellerinfo.html

    Carolyne L

    From my iPhone

    • Leaving the keys at the property in a lockbox (code released to buyer once sale closes) seems to be the new norm with COVID. This saves everyone a trip to the lawyer’s office.

  5. Handling multiple offers in a capable, professional, transparent and fair manner! Ensuring a listed property has sufficient exposure on market by setting offer dates while managing the seller’s anxiety and expectations.
    Pricing in a hot fast market – when comps are selling thousands over asking.
    Ensuring buyers are fully qualified to make these high offers, and have back up cash in case of lower than expected appraisal. Finding an investor or buyer a house when there are ten buyers for every listing. Facilitating pre-list inspections to protect all parties. Interpreting information – clients have access to so much data on line – they need help sorting through it – I liked your article but right now, we do so much more!

  6. You have made some very good points about what a Realtor does to earn their fees. However, much of the work ( writing ads, filling out forms, installing signs, adding listing info to a website, staging etc.) a Realtor does could be handled by an unlicensed assistance. The most important duty a Realtor has is REPRESENTING their clients best interests 100% of the time. This means that DUAL AGENCY should not be allowed since it represents a reduction in the level of service to the clients which is essentially breaking a promise to your seller or buyer. Why are real estate fees based on a commission and not flat fees? Does a Realtor do less work for a seller with an $800,000 property compared to a seller with a $700,000 property? Why would two sellers listing with the same broker and agent pay a different fee, say 5% seller 1 and 4% seller 2. This 1% difference is costing seller 1 thousands more in real estate fees than seller 2 for essentially the same services with the same company. Seller 1 may be a senior citizen that hasn’t sold a house in 40 years, while seller 2 is a consumer that knows how to negotiate fees and play the real estate game. So why should one consumer pay thousands more in fees than another consumer listing with the same broker? Does a seller paying the highest fees receive a better level of service by paying a higher fee? As a Realtor what do you think? As a consumer what do you think?

    • @David – There is one kind of people looking in the 300k range and a different one at 800k and the skill set in dealing with is not the same. Each agent is free to charge what they consider they worth or what they can, based on the market and situation.
      As a consumer I don’t see exactly the problem, you have plenty of options. You can sell your home without a realtor, straight on kijiji, you can use a fixed fee brokerage like purplebricks to list your home on MLS and to assist you on the process, you can use use a discount brokerage or an agent that will give you a very low price or one that charges a lot of money.
      There is one aspect that nobody mentions when talking about the commissions – they are paid only if there is a closed transaction, which is different from the rest of the business world. What would you say as consumer if I make you an offer like : “you can pay me 2.5% when you sell your house or you can pay me upfront 1.5% today and hopefully everything will be fine and you save 1%”. Would you choose to pay upfront and get the discount?

      • Dan some interesting thoughts. As a consumer if I was to sell my property I wouldn’t pay 1.5% upfront or a flat fee upfront. However, I would be happy to pay some upfront costs – signage, advertising, photos and website costs etc. for lower fees. Dan most sellers and buyers don’t negotiate their fees with the listing agent and buyer agent simply because they don’t understand how to play the game. I do believe Realtors are worth a fair reward for their hard work. Fees based on a percentage value may not make sense anymore.
        How many Realtors when listing a $800000 property would say to a seller – “my fees to sell your home will only be $40000 + gst”. 5% sounds much better. Perhaps fees should be expressed as a percentage plus dollar value
        and consumer might start to learn how to negotiate their fees.

        • I am sorry Dave but I can’t agree with you here.
          1. You can’t tell me a home owner is looking to sell his home and he doesn’t talk with friends, go online, ask around about the fees, the process, the price of their home. It’s in the human nature to ask for a better price and all the sellers are trying to get a lower fee, the only time when they don’t is when the agent is a very good friend or a relative.
          But again, you have several options in regards of cost, let’s say similar with new cars – you can buy cars from 30k to 100k, you can’t tell me that there is somebody entering in a showroom and just buy a car of 70k and they have no clue they can get a different car for 35k.
          2. You can’t tell me that an adult can’t do the math and the connection between the percentage and the amount.

          • Dan some adults consumers are very good at negotiating while others are not. So those that are not good at negotiating end up paying the highest fees and may even get a lower price
            price for their property. Is there a direct correlation between the amount of fees paid and services provided. In reality someone that pays 5% should receive a higher level of service than one that pays 4%. I don’t think that is true in the real estate business. Don’t you agree? D

    • In BC we cannot be dual agents at all. You are working for the buyer or the seller but never both.
      It was a big adjustment at first but now its pretty routine.
      The buyers & sellers kind of like it kind of don’t especially with big teams because no one the team can sell it either.

        • Do agents understand that sellers forever were mislead thinking they were hiring an agent under the mistaken premise that the seller thought he was hiring the company / agent to “SELL” his house??? (Not for his lawn sign to be the purpose of marketing to help the lister to acquire buyers to sell some other house to?

          Carolyne
          From my iPhone

          • Carolyne:
            I would expect 99% of sellers today fully expect the listing agent to do their best to sell their property. You surely don’t pay a listing agent just to put up the sign and put the house on a website. I fully understand dual agency but I would expect my listing broker / agent to work hard to get me the best price for my property. If the seller’s didn’t think the listing agent was working for them 100% of the time to get the best price and terms they would NOT list with that agent in the first place. Quite frankly very few sellers and buyers care about agency issues because they don’t have the time to fully understand the ins and outs. Buyers just want to find a house and sellers just want to sell for the best price. D

          • I lost many a potential listing when I told the sellers the truth about the primary purpose of “FOR SALE” lawn signs. Thus, I focused on buyers. More work, but straight forward work. Some sellers still awarded their listings to me, but they were thence well aware of how the “system” worked. They hired me because I was honest with them, and they knew I would represent their best interests at the negotiating table. More than one buyer rep. walked out of an offer negotiation in a huff due to my unwillingness to cryptically (wink wink, nudge nudge) “work a deal” on our mutual behalves in pursuit of a commission. My sellers loved it. Their properties always ended up selling on their terms. More than one buyer rep. blasted me after the fact for being so “unprofessional’, and forcing them to have to explain to their buyers why they had to pay so much for their properties after initially being mislead via being told they would buy for less. That’s called being induced to write an offer on false pretense. One even asked me “How the hell did you ever get your license?”

            “Kellogs Corn Flakes…just like you.” I replied.

            Badge of honour.

            Scumbags.

          • Follow up to my post of today (May 22 at 10:20 a.m.):

            There’s an old saying: “Ya can’t fix stupid”.

            Here’s a new one: “Ya can’t uncrook a crook”, even after one has survived the licensing courses, memorizing—too often for the short-term only—canned answers to questions likely to be asked on said exams. Gotta keep those future dues, I mean, professionals, a’comin’, don’t’cha know. What a crock!

            Sometimes crooks are hatched at real estate university, even. They go there as over-fertilized-with-bullshit, unhatched eggs, ready to be schooled in the art of misrepresentation by some of their cohorts (there’s always at least one), emerging into the sunlight all dewy, ready to spread their wings and super-ready to kick ass, as they mercenarily view the “profession” of marketing ‘first’, and altruistic follow-up thereafter…’last’…if ever. Name of the game? CLOSE DEALS! GENERATE COMMISSIONS! BECOME NUMBER ONE! BE SMART! LEARN SLIPPERY!

            I took many a shower after calling it a day when working as a Realtor…even when I still smelled like an aromatic spring day in Vienna. Hand shakes with slimy Realtors were part of the punishment one endures in order to do justice for one’s clients. Of course, not all Realtors are slime balls. I’ve always said here are many good ones…just not near enough.

            Are you there CREA et all? Do you realize/accept much of your dues income is tainted? To what degree the taint is justified is open for debate.

            Even so, I enjoyed my time as a Realtor, but now I’m glad as hell I’m out of it. Many have said I should jump back in, what with all of the high selling prices and concomitant high commissions. Nope. Money’s not everything, and I don’t ‘have’ to shower every damn day. But I still do; the memories persist, even if I don’t perspire:-)

        • In BC we have Designated Agency. The brokerage designates one REALTOR (or a team) to be the agent for the seller and all of their other REALTORS are designated agents for buyers they encounter who may wish to buy the property. This system works very well although some are still unhappy with the ban on dual agency.

          • Hi Jim:

            You say, “…some are still unhappy with the ban on dual agency.” What percentage of B.C. Realtors do you think fall into that category?

            Brian

          • Brad:
            Designated agency is disguised DUAL AGENCY. So a seller lists with a large brokerage with say 50 agents. The listing agent represents the seller and the other 49 agents in the company represent the buyers. Does this make sense? As a seller paying the commission I would expect the brokers 50 agents to work in my best interests. The set up still allows the broker to double end while disadvantaging the client that is paying the fees. Doesn’t make sense. Nothing has changed – designated agency is still DUAL AGENCY.

  7. Thank you Jim for your excellent comments regarding the work and efforts of a realtor. Your article will be the lead topic for my weekly Zoom meeting this week. Your comments should be in every realtors presentation. Perfectly stated.

  8. Very well written.
    This is a true and vivid definition of what a realtor does offer his clients.
    Very convincing.
    I’m keeping this for training purposes.
    Thank you

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