Real Estate Agent Car Use and Cost - Posted by Ben

Posted by Jim Kennedy - Houston, TX on March 19, 2003 at 09:02:34:

Just curious. Why do you think that listing 59 tract houses doesn’t count?
I’m sure that Zack didn’t have any trouble cashing the commission checks.

The broker that I use has over twenty years of experience. His first few years in the real estate brokerage business were a definite struggle. He was barely able to eke out a living until he got his first investor client. Their first deal together started out as thirty-two condos in one complex. My broker friend represented the investor who bought all thirty-two units as a package deal. They then sold them individually to owner occupants. The investor was committed to purchase all thirty-two units but the deal was structured so that he could close on the units one at a time. Therefore, the investor didn’t close on a unit until he had an owner occupant buyer in place. They did simultaneous closings on each of the thirty-two units. It went so well that they ultimately picked up another forty units in the same complex. That was the first time that my friend made over $100K in a year.

When my broker friend realized how much money the investor made without having to come out of pocket with any cash (except earnest money), my friend decided he was missing the boat. He continued his brokerage business but started investing as well. For his first deal for his own account, he duplicated what he had seen the investor do but on a slightly smaller scale. He did eleven condo units in a different complex. From that point, he was hooked. He became a very active investor. He still maintains his brokerage business, but now he only works with investor clients. The bulk of his income comes from his own investment deals. And he routinely negotiates his commission based on volume.

BTW, my friend still has the above mentioned investor as a client.

Best of Success!!

Jim Kennedy,
Houston, TX

“Only eyes washed by tears can see clearly.”
– Louis L. Mann

Real Estate Agent Car Use and Cost - Posted by Ben

Posted by Ben on March 16, 2003 at 05:12:59:

My Real Estate agent says that she cannot lower her 6% commission fee because of the commission split, overhead office expenses and especially car expenses. I can understand office costs but just how much do most real estate agents use their car in showing properties. Are they out there every day driving clients around or is it just once or twice per week. And does an agent drive a client around to like 20 or more houses in a day or just to a few. I’m just kind of curious about the car use of a real estate agent.

Re: Real Estate Agent Car Use and Cost - Posted by Zack

Posted by Zack on March 16, 2003 at 21:28:59:

I put 11,500 miles on my car in the last 2.5 months.

Re: Real Estate Agent - Shop around? - Posted by Wade

Posted by Wade on March 16, 2003 at 18:16:19:

Try asking a agent driving a chevy instead of a BMW?
It’s a cost , why not shop the best deal ; my wife would give you a break for multiple deals. Just a thought.

Not sure if its any of your business - Posted by Frank Chin

Posted by Frank Chin on March 16, 2003 at 07:40:11:

Hi Ben:

If you think 6% is too high, shop around for someone who can do it for less.

I own several businesses, and there’s always some customers who thinks they’re being ripped off. The truth of the matter is, there’s costs to cover in every business, and its none of my customer’s business how much I pay for gas, how many miles I drive, the cost of fuel etc.

Usually, when a customer is insistent like you, I’ll try to give a short answer, like car expenses are high, rather than to print a P&L out of Quickbooks, and go thru the expense items line by line. Then why should I??

Let me say a few words about car use if you must know.

My wife was a RE sales agent for a while, and not a very good one. She drove many many many (too many) tire kickers around JUST CURIOUS about houses in the area. Are they real buyers?? Who knows. She sold exactly one house in six months and quit soon after.

Remember, sales agents only collect a commission if the sales closes. And that is split 4 ways, buyer broker, buyer agent, seller broker, seller agent.

My friend became a RE sales agent after retirement, and sold a house a month after the second year, and thought he was doing OK. As houses was averaging $100,000 in his area, he makes $1,500 commission selling each house, or $1,500/month gross.

From this $1,500 - he pays a desk fee, plus gas for driving dozens of potential clients around every week. SO how much do you think he clears at the end of the month?? He said less than $1,000.00. He even had to pay to print his own business cards.

Now do you think it pays for him to cut the commission to 4%, grossing $1,000/month - and net $500/month working almost full time?

Would you work for $500/month ??

Frank Chin

Re: Real Estate Agent - Shop around? - Posted by Zack

Posted by Zack on March 16, 2003 at 21:35:01:

I would not want an agent who is willing to cut their commission unless they got a large number of listings in exchange for it. What does that say about their negotiating ability? I believe it’s also a reflection of the money they expect to spend advertising your property. We cut our commission once in the past year and that was for approximately 60 listings from one seller.

Re:Really 60 listings,1 seller,1yr-Right! (nt) - Posted by Wade

Posted by Wade on March 18, 2003 at 24:38:52:


Re:Really 60 listings,1 seller,1yr-Right! (nt) - Posted by Zack

Posted by Zack on March 18, 2003 at 07:23:14:

Actually it is 59, but that’s a rather small development compared to most of the new subdivisions they are building here.

Re;60 listing tract home doesn’t really count! - Posted by wade

Posted by wade on March 19, 2003 at 01:07:48:

I thought it sounded odd. But good for you.