Seller's Resources > Planning > Selecting > Myths About Realtors

Here are a few commonly-held views & misconceptions about Realtors® and the Real Estate profession as a whole:

Myth #1:	Sales commissions paid to Realtors® are too much, and bypassing them (as a FSBO) will put more money in the seller's pocket.
Fact:	Sales commissions compensate the Realtor® and the brokerage in which they work for significant expenses they incur (on the seller's behalf) in the aggressive, extensive and consistent marketing of the property. Realtors® receive no compensation if they fail in their marketing program, yet they still bear all expenses. However, when successful, the end result is typically more money in the seller's pocket, due to the Realtor's® experience and expertise in marketing, negotiation and transaction process management, at a higher selling price, closely aligned with true fair market value (rarely achieved as a FSBO). Since 2004, Realtors® consistently sold houses 15% more than FSBO, with a 6% commission, the sellers with Realtors'® services still netted 9% more than FSBO sellers (based on National Association of Realtors®)
Myth #2:	All Realtors® are greedy, overpaid, and rich.
Fact:	This perception is partly fostered by promotional advertising messages, such as “Multi-Million Dollar Producer”, intended to suggest that the Realtor® is a “hot shot” and can serve you far better than anyone else. Unfortunately, this message is frequently misinterpreted as representing something related to the Realtor's® own income level. In fact, this simply reflects the Realtor's® gross annual sales volume (total value of all properties sold in a year), and with typical industry commission structures (with a percentage of the Realtor's® commission also going to the brokerage), the individual Realtor's® actual gross income from $1 Million in sales might only be somewhere in the $25,000-$30,000 range. Not exactly “overpaid”, and this is before taxes and expenses (paid by the Realtor®). Undeniably, a few Realtors® are very successful & productive, and enjoy good incomes, but the vast majority have very modest earnings.
Myth #3:	Realtors® don't work very hard or long for their money.
Fact:	Much of what Realtors® do is “invisible”, representing many hours of work “behind the scenes”. This includes preparing listing presentations & documentation, MLS data entry & updates, preparing, submitting and monitoring (and paying for) all forms of advertising/promotion, managing access to properties (keys, keyboxes, security), coordinating all showings & appointments, working with prospective buyers (directly or through other agents/brokerages), coordinating all negotiation & documentation aspects of the offer/counter-offer/contract process, coordinating all action items associated with the escrow/title process, and assuring that their client's interests are protected. It makes little difference whether a small $25,000 property or a large multi-million dollar property is involved, since the process is essentially the same, and the same considerations apply to the transaction's documentation and management. Most people are surprised to learn that the overall listing/marketing/escrow process can represent over 60 hours of work for the responsible Realtor®, spread over a period of many weeks or months.