So I often come across articles and or overhear conversations regarding real estate commissions and the general idea that real estate agents are paid too much. Are they overpaid or underpaid or is their compensation accurate for their work? Of course, depending upon your agent and your experience you might have a completely different opinion, but let me elaborate.

Here is what my life as an agent looks like while working with a relocation client


Here I am at 9PM at night and I’ve been “working” for the past 3 hours on a deal that I have been negotiating now for over a week. Before arriving at the pivotal point of writing an offer I have spent a few weekends every 6 months or so working with these particular clients when they come into town looking for the right property for them. On average we spend about 3-5 hours together looking at properties, discussing the market and going over options on each trip. I pick them up from their hotel and drop them off, offering a “round-trip” tour. I prepare for about 2 hours before each tour to go over properties, call agents, call sellers and research the sales price, history of the unit and building for each listing we are looking at. During the time that they are not here I have spent time every day searching for properties (about 30 minutes a day) to see if any new properties have come on the market that they might be interested in. Any property that they might be interested in I email or call them with the details after researching the properties to see if they do fit their needs.

After looking at properties for over a year, we have finally found something that they are interested in. I have spent additional time researching the zoning, the height restrictions, the history of the building, the market, the prior sales history in the building, the comparable units in the market that have previously sold as well as the comparables in the market currently. I have provided council on pricing, pros and cons of the building and the unit and have spent hours discussing the unit with my clients. We finally decided to write up an offer on the unit but felt the price was above market value since this unit has been on the market for over 2 months with no previous offer. Since writing up the offer, we have been negotiating back and forth for a week. The listing agent on the other side failed to provide documentation that he said that he and the seller had and so additional research was needed on my part. It’s day 7 of negotiations of which has taken up at least 5 hours on this week because the communication from the seller and listing agent is very slow and has been difficult.

At this point my income is negative as I have already paid for gas, parking and my time with no guarantee that I will ever get paid for this work. What many people don’t realize is all of the unpaid work that real estate agents put in since they are not “billing” clients for their time and don’t get paid for usually at least half of their actual work. If I was to bill my clients for my time, you would be surprised to see that actually on a per hour my compensation is moderate with other professionals and that is if I don’t include all of the expenses and “perks” that I often take care of for my clients such as a Home Warranty, house cleaning, staging, handyman work etc. which is an out of pocket expense for me as well.

I think that most people would be interested and surprised to see actually how many hours many many successful agents put in for their clients. There have often been weeks with no days off because my clients need me which means that an 80 hour work week is often the norm during the busy season or hot market times.

Since we have had a very strong real estate market for the past few years I also agree that there are a lot of agents in the business making money for not doing much of anything and certainly not representing their clients to the best of their ability. I have had numerous deals where the agent on the other side of the transaction was incompetent, didn’t return phone calls, didn’t know the contracts or the market or understand what an agent really does. In many cases these agents should not have been in the business representing clients as their clients were really getting the short end of the stick. This ends up being double work for the competent agent and the incompetent agent still gets paid the same amount.

In this case, I don’t think that the compensation is unjust, I think that the real estate license laws are too loose. I think that everyone both agents and consumers would benefit from tightening up the license laws and requirements for being an agent. If everyone who had a real estate license was required to actually do a minimum amount of business per year and take a minimum amount of classes every year there would be a lot of “part-time” or lousy agents who would not be able to stay in the business and the both the consumers and other agents how do work hard would benefit.

Good agents do earn their income and they provide a very valuable service just ask anyone who has had a good agent on their side in negotiations or when the other party failed to disclose something. However agents who don’t do a minimum amount of business a year and keep up on current contract and state laws shouldn’t be allowed to stay in the business, it would save everyone money.