“Million Dollar Listing”
One of the more popular television shows right now is Bravo’s Million Dollar Listing. MDL follows the lives of three real estate agents through the affluent real estate market of Beverly Hills, Malibu and Hollywood. As you would expect, everything from their lifestyles, personalities, clients and commissions are completely over the top. However, as with most reality television shows, there are very few aspects of this show that mirror similar situations in real life. While entertaining, the show does not exactly do much to improve public opinion on realtors. The three realtors involved fit the stereotypes of being self-absorbed, arrogant and earning far more than their value added proposition to any given transaction. I have am asked about this show on a fairly frequent basis, given the average home price in San Carlos is over a million dollars. So for those of you who may be wondering how shows like this translate to the actual real estate world in San Carlos, here are my thoughts:
Perception vs. Reality
I am a realist with what I do for a living. I am not curing some type of awful disease and I am not going to invent anything that starts a revolution. That being said, I work very hard to disprove the notion that all realtors fall under well known stereotypes. I am well aware of the reputation of my industry. My prior years as an attorney in a big-firm atmosphere has given me a fairly lucid perspective on where different professions fit on the spectrum of public opinion. While I do greatly enjoy and am proud of what I do, I have always been more proud of my work and contributions in the community and would far prefer those to be what I am known for by my friends and family and not a 3/2 listing in White Oaks. There are other realtors in San Carlos working hard, as well, to dispel the stereotypes that run rampant in shows such as MDL.
Perception: Real estate is a relatively easy industry to break into.
Reality: In San Mateo County, a little more than 50% of all realtors did not complete a single transaction in 2011. Of the next 25% (up through 75%) completed 0-3 transactions. It is the top 10% that are doing 90% of the business.
Perception: Realtors are paid commissions that are too high.
Reality: This could very well be true. It depends on the value your realtor brought to the transaction. In addition, the public perception is that the commission goes right into the pocket of the agent. This could not be further from the truth. Each agent works for a brokerage which takes a portion of the commission. The agent will also have to pay office fees, MLS fees, marketing fees, insurance premiums and association fees. Finally, all agents are independent contractors, so there are no benefits of any kind. The cost of doing business for a realtor is much higher than one would expect. Additionally, all of the attention is focused on the deals that close, not the deals that agents may work on for many months at a time at their own expense and never come to fruition.
Perception: For San Carlos, just stick a sign in the ground and the house will sell.
Reality: You can always sell a house instantly by slapping a low price on it and putting a sign in the ground. Getting absolute top dollar for the property is something different entirely. I did not have this opinion before I got into real estate, but since seeing it up close, there is significant value in strategy, experience and expertise.
Most people understand that shows such as MDL are primarily focused on entertainment value, rather than showcasing the reality of the real estate industry. The truth of the matter is that for most people, the buying and selling of their primary residence in areas such as San Carlos is the most significant financial transaction of their lives. Understand that many of us work very hard to take the entertainment value out of the actual process and replace it with hard work and sound advice.