Why would anyone want to get into this ‘profession’?
The National Association of Realtors’ (NAR) membership profile states that the typical Realtor makes just $41,800 in commission income on 11 transactions. There are 1.3 million Realtors, in case you didn’t know.
For illustration, take the median income of $41,800 and deduct 30% from it for business expenses and taxes. You are left with $29,260 to live on and pay out of pocket for your health insurance, 401K (SEP), paid vacation, maternity leave, sick days, etc.
Works out to just $14.63 per hour based on a 2,000 hour work year.
Pity the poor real estate consumers, entrusting their sale or purchase of a $300,000 asset to a minimum wage earner. Then worse, the seller asks the listing agent to reduce the listing fee commission, and the buyer expects his agent to give a cash rebate.
We have discussed supply and demand before: too many Realtors allows the consumer to force price compression. I’m about to throw up.
In my Prelude post I mentioned how much consumers enjoyed searching for homes online, but once they enter the actual transaction process, all transparency and sense of order goes out the window.
Just trying to locate the best services and products, with the best solutions, and the best prices can be a thankless task.
One of the reasons might be the sheer fragmentation of products and services, each operating within their individual supply chain process and not collaborating fully with each other.
So I have this view that a marketplace platform could bring about a new paradigm of the real estate transaction experience for consumers as well as the providers of products and services required for those transactions.
Spent the morning with my Realtor-Wife, Kayelin, at the Heritage Texas Properties office in The Woodlands, TX.
Nice presentation by Nick Van Valkenberg showing off a truly excellent product that has been created by the Moxiworks team.
Wildlife, especially waterfowl, are observed on a daily basis.
This post speaks mostly to the so-called iBuyer companies, but what intrigues me more is the notion that these ‘platforms’ are actually creating ecosystems whereby services necessary to the transaction can be accessed on their platforms.