I know why real estate agents have such a bad reputation and it has nothing to do with reality and everything to do with perception.
Many years ago when I was a salesman, I called on a small technology company. Over the years I developed a good relationship with the business owners there and apparently I must have impressed them because one day they said they wanted to hire me. At that time I was making a solid six-figure income and had been for some years. I did not think the small company could afford to hire me and my feeling was confirmed when they offered me $70,000 to join their firm.
I explained to them my compensation history and told them I could not work for them for less than $100,000. It was more than they were comfortable spending, but they must have wanted me bad because they offered to meet my salary demand.
To make a long story short, I was gone in less than a year. Why? It turns out the answer to that question is the same answer as to why real estate agents have such a bad reputation.
What I did not know then, but I do now, is that my $100,000 salary established a perception of me that set me up for failure. Since I was making more, much more, than the owners were comfortable paying, every time I walked in the door all they saw was someone making too much money. It did not matter what I did or how I performed. I was just an expense that had to be reduced (or eliminated). And I was.
When you charge more than what someone is comfortable paying, all they see is someone who costs too much. Their perception of you is that no matter how your perform, you can not possibly be worth what you charge. Everything you do is a letdown. Your expense has set the bar unreachably high.
The opposite is also true. Had I accepted that position with only a $60,000 salary they surely would not have let me go. At that salary, every time I walked in the door I am sure the owners would have thought to themselves, “wow, that guy is a steal.” There is almost no way I could have let them down. I would have been a bargain at that price, which would have dramatically impacted their perception of me.
It is the same thing with real estate agents. When a real estate agent confidently tells a home seller there is no way they can possible sell their $500,000 home for anything less than a $30,000 (6%) fee, all the home seller sees is someone who is making too much money. Their perception is the agent is overpaid, and everything they do is bound to disappoint.
Of course the path to improving agent perception is something no agent would ever consider: charging a fair price to sell a home. But that is okay. The day is quickly arriving when they will no longer have a choice: they can charge a fair price to sell a home or find another profession. But just think how it will improve their reputation.