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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: MJ who wrote (14516)	10/25/2003 12:50:42 PM
From: Tradelite	Respond to of 306849

Reality check definitely needed here. .....4 homes sold per month at $800K each probably means the agent also is working with many other seller and buyer clients at the same time and pays a staff of one or more assistants to handle much of the day-to-day stuff, because that agent certainly won't have time to handle it all himself/herself. Consider payroll costs, and then move on to the other expense categories... All those big-time agents you see advertising in the newspaper also have big-time advertising and marketing expenses. It costs hundreds-to-thousands out of the agent's own pocket just to place one professionally photographed high-priced home in a slick magazine--somebody has to pay the photographer and the publisher. Many agents also pay out of pocket for the routine ads seen in the newspaper classifieds. Then there are the big-time expenses for office equipment/phone & internet services/personal website/gas/auto insurance (extra auto insurance coverage needed when carting around other people in one's own car in the course of business), errors & omissions insurance, MLS fees, national/state/local association dues, lease fees or monthly payments on a non-Hyundai-type vehicle big enough to hold 4 or more people at one time, car wash tickets to keep the vehicle presentable on a regular basis, new tires every now and then, and so on.... The biggest hit, of course, comes from the IRS and Social Security Administration and Medicare, which deals about a 30 percent or bigger blow to the paycheck in self-employment taxes. Has anyone ever wondered why so many people enter real estate and exit just as fast? Somebody mentioned earlier that taxi drivers are becoming real estate agents. These folks will soon find out that taxi driving is a big part of their new job, too, and then they have to figure out how to afford to carry out of the rest of the job description. It's a lot easier and cheaper to drive a car owned by somebody else. <<GG>>

To: MJ who wrote (14516)	10/25/2003 1:14:29 PM
From: Tradelite	Read Replies (2) \| Respond to of 306849

<<3% to the buyers agent and 3% to the sellers agent. Translated to a year-------that is $2.400,000.00.>> Reality check time again. Not all of that goes to the "buyer and seller agents" involved. You do know that don't you? The brokerage firms involved have to pay the office rent/agent training expenses/etc. to stay in business and be successful enough so that people like you will have a reason to seek out their help when it's time to buy or sell your home. And do you also know that it can take just as much time and even more paperwork to sell a $200K condo as it does an 800K house?