Realtor Pay Exposed (Part 1 of 3): The Renter’s Agent

Posted: January 21, 2014 in Renting, Uncategorized
Tags: , , , , , , , , , , , , , ,

Rental-Property“So what will it cost us to secure your services?”  One of the top questions that I receive.  The answer may vary depending on the services you request.  For the purpose of this 3 part series, I will let you in on Renter’s Agent, Buyer’s Agent, and Seller’s Agent pay.  According to the 2013 National Association of Realtors Member Profile, “In 2012, the typical agent had 12 residential transaction sides [this does not include rentals] – up from the previous year when the typical agent had 10 transaction sides.”  Traditionally, the real estate industry is completely commission based.  Most of the time, a Realtor works under the supervision of a broker unless they are a broker themselves.  In that case the broker may have their own company or work with a large, well known company like Keller Williams for example.  There is also the option for a Realtor to work on a team within a larger company.  All of these folks require payment.  So realistically, on one real estate transaction, there is the potential for the commission to be split 6 different ways before it is all said and done.  Let’s take a look at the Renter’s Agent first…

The Renter’s Agent.  This agent is one that is often overlooked and underappreciated.  How many of you are currently renting a home or have rented in the past?  Did you enlist the help of a real estate agent while searching for a rental property?  Back in the day you could go to a property management company, sign out the key and go view the home on your own.  However, in the Clarksville area, I have heard recently of renters being told they needed to call an agent to show properties.  In my experience, it is the Renter’s Agent who is expected to work the hardest, catch the most heat, and make the least compensation.  You see, oftentimes, we get paid very little or nothing at all to show rentals.

Frequently the property management company will pay the agent 10% of the first month’s rent or $100 but only IF the agent is noted on the application as the referring agent.  I have renters who contact me months before they arrive or plan to move.  Frequent updates are expected.  What new homes are available for rent?  Can you only send pet friendly rentals?  Will you make sure to send only rentals that have a fence?  Will you go do video tours?  You can imagine how the hours of work add up.  Upon arrival, they have a list a mile long of the rental homes they would like to see.  Many times they do not want to buy because they don’t have good credit or possibly an unfavorable payment history.  Property management companies will run credit checking for financial stability too and often expect to see a reasonable score.  The application is in, the requirements are not met for whatever reason, application is denied, and the real estate agent receives no compensation resulting in a significant loss of time and energy.

There is also no representation agreement with a Renter’s Agent.  Buyer’s Agents and Seller’s Agents often have contractual obligations to their clients.  If the agent has a schedule filled with buyers and sellers, it is easy to understand how renters may get lost in the shuffle.  Have you had a hard time finding a Realtor to help you find a rental?  Under the best of circumstances, 10% of the first month’s rent or $100 is paid to the Realtor, but that amount is still split with the company or broker that an individual agent works with, then possibly split with the team too.

Scenario:  A Realtor receives $100 for referring a renter.  The Realtor has a 70/30 commission split agreement with their brokerage.  They also have to pay an additional 5% in royalties.  The Realtor walks away with $65.  Unless they are also on a team, in which case, they may be required to split the commission again by as much as half.  $32.50 take home pay on the rental BEFORE taxes.

If you find a Realtor willing to help you secure a rental, be kind to them.  Many times they are like me, and they help with rentals simply because they enjoy helping families.  It can be hard, thankless work.  We sift through hundreds and hundreds of rentals.  A lot of times, when we finally take you to see homes, they are in terrible condition.  I have heard, “I can’t believe you would rent a place like this!”  It’s not me.  I am not the property manager.  I don’t work for the property management company.  I simply have access to the Multiple Listing Service (MLS) and all the rentals listed on there from any company in town who also has access.  I have a Sentrilock card, and a desire to help ease the stress of finding a home for you in a short amount of time.  I have even heard, “I need a commitment from you to be available for me all day tomorrow.”  I can try my hardest, but sometimes I am not able to make that commitment due to my other contracts and obligations.  Again, please be kind and try to understand where your Renter’s Agent is coming from.

In closing, it is becoming increasingly common to need a Renter’s Agent in order to view rental properties.  It is demanding, and time-consuming work for a small amount of pay.  You may find many Realtors who request that you are pre-qualified before showing rentals, or choose not to show rental properties altogether.  Now you may have a better understanding of the Renter’s Agent pay.  Feel free to share any questions or comments below!

Be sure to read, Realtor Pay Exposed (Part 2 of 3):  The Buyer’s Agent and Realtor Pay Exposed (Part 3 of 3): The Seller’s Agent.

If you have questions or need real estate assistance in the Clarksville, Tennessee or Fort Campbell, Kentucky area or know anyone who does, call me today at (931) 436-6765 or submit your information below.

© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2014.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

Comments
  1. corpfire.com says:

    Hello there! I could have sworn I’ve visited this site before but after looking at many of the posts I realized it’s new to me.

    Anyhow, I’m definitely pleased I discovered it and I’ll be bookmarking it and checking back often!

  2. […] sure to read, Realtor Pay Exposed (Part 1 of 3): The Renter’s Agent and Realtor Pay Exposed (Part 2 of 3): The Buyer’s […]

  3. […] sure to read Realtor Pay Exposed (Part 1 of 3): The Renter’s Agent and Realtor Pay Exposed: The Seller’s Agent (Part 3 of […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s