A 2007 study by Harris Interactive asked participants for their opinions on various professions. Real estate agents fared very poorly in the study:

Of all occupational titles surveyed, that of real estate broker had the infamous honor of having the lowest score for “very high prestige.” Only 5% of respondents thought agents/brokers held very high prestige.

For comparison, it is interesting to note that five times as many respondents (26%) thought being a member of congress had “very high prestige.”
 

Pretty much every profession ranks above real estate agents – lawyers, members of congress, even journalists.

Perhaps the low ranking of real estate professionals is due to the notion that people are paying more for real estate brokerage services but getting less in return. For example, fewer and fewer “full service” real estate brokerages in my town accept earnest money like they used to…it is held by the title company or attorney. Listing agents are very rarely present at showings; something I’m told was common years ago.

Or maybe it’s because information is power, and most agents are very reluctant to give up their information. Almost no MLS systems provide past sales data because that would decrease the agents’ information advantage.

Perhaps it has something to do with the fact that agent pay increases as home values increase (ie, doubled in 10-15 years). Being on this end of the business, I know that the commission can be split up to four different ways and that there are so many agents that very few make good money. But this should not be the consumer’s concern or problem. The consumer sees 6% going out the door at closing and thinks they have just been robbed.

In my opinion, this commission structure is the main reason real estate agents rank so poorly year after year in the Harris poll. What other industry has this sort of pay system? Certainly we don’t pay plumbers or attorneys or teachers in this way. If you ask me, the real estate agent commission system is broken. It is out of touch with the way most Americans earn a living. Real estate commissions in their current form aren’t working for most agents and certainly aren’t working for most Americans, who hold real estate brokers in lower regard than any other profession.
 

I run real estate websites that are consumer-friendly. I keep my costs low and pass along savings to my clients. My seller clients can list on the MLS for a flat fee. They can choose to have me involved in the transaction or not. My buyer clients can browse the Eau Claire MLS and earn a rebate of 1% of the purchase price of their home if they know exactly what they are looking for before we get to the point of setting up showings.

Sure, running my business this way is no way to get rich quick. I have a long way to go, but I am creating a niche. And hopefully I'm helping to regain some of the trust real estate brokers have lost in the recent past.

 

 

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