THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, December 17, 1994 TAG: 9412150307
SECTION: REAL ESTATE WEEKLY PAGE: 02 EDITION: FINAL
SOURCE: BY DARLENE M. LAMB, SPECIAL TO REAL ESTATE WEEKLY
LENGTH: Medium: 57 lines
I would like to take this opportunity to defend the real estate community against the misleading opinions that were part of Sabra Chartrand's New York Times News Service article in Real Estate Weekly on Nov. 26, ``Are realty agents paid too much?''
Perhaps the more appropriate question is: Are they paid enough? Most consumers do not realize that marketing a home is very expensive and is usually paid by the agent.
Costs of newspaper advertising, a property listing in the Multiple Listing Service and production of feature sheets and brochures all come directly out of the pockets of the agent and broker regardless of whether the home ever sells or a commission is ever paid.
According to the National Association of Realtors, the average cost of these marketing tools, including advertising, MLS, and other marketing services totals more than 10 percent of a firm's annual gross revenue.
A career in real estate can be a risky endeavor. There are many hours, often evenings and weekends, devoted to one home sale transaction.
If a contract does not result in a closing, the agent is not compensated for those hours of work - no closing, no pay.
Furthermore, entering the real estate profession is quite expensive.
Education, licensing exam, business tools, MLS fees, desk space rental, computer, association dues are all expenses that are paid before even one house is sold or one penny of salary or commission is paid.
The most appropriate question a homeowner must ask himself is, ``What is my objective?'' The obvious answer - ``To sell my home as quickly and easily as possible.''
Hiring a real estate professional with knowledge of real estate procedure and practice, real estate law, marketing practices, and the motivation to make the sale achieves that objective.
But this service isn't and shouldn't be given away.
Commission rates are not regulated or dictated by law in this country. Strict antitrust laws prohibit any rate structuring whatsoever. It's unfair to compare the United States with other countries without understanding the specifics of those markets.
For example, Australia's commission may be in the 3-to-4 percent range, but 85 percent of their sales are generated through auctions.
Once again, we are concerned about New York Times articles, which are not indicative of our market, being used in our local media.
The Tidewater Association of Realtors is an excellent source of local information and we welcome questions from the public. MEMO: Darlene M. Lamb is president of the Tidewater Association of Realtors.
She is also vice president and managing broker for the Chesapeake office
of Prudential Decker Realty.
by CNB