Consumers Have No Love for Agents
So many agents are “part timers” that it’s really alarming. True, this job isn’t splitting atoms or disarming an IED but what happens when the part timer screws something up? We wind up rated as above. Being both a broker and active appraiser I see contracts daily and speak with agents continuously….and more often than not I end the day shaking my head in disbelief. Much of what I see and hear is downright frightening.
I’ve been an Army officer and owned and operated large appraisal firms, I understand managing people in fluid situations. Managing brokers have their hands full, you can only mandate so much for agents. Personal responsibility has to kick in; I submit that if you are in ANY business then be in it all of the way. Real estate is not selling a commodity; you earn your fee by selling your experience and ability, not widgets. You develop that by working every day, by shadowing more experienced agents, by immersing yourself in the data, mastering the appropriate tools, understanding contracts and amendments, keeping abreast of trends and current regulations….how is that a part time job?
Consumers bear significant responsibility as well. As long as one of the first questions is “how much will you cut your fee or rebate me” you will have problems. Again, you are not hiring someone to sell or buy a widget! The unique thing about real estate is that there are no two parcels exactly alike. Toss in the billion other influencing factors and then the million things that can go wrong with negotiations, contracts, inspections…..And yet and still, consumers love to lead with the “how much” question. Let me know how that question works out while you’re losing buyers with an overpriced undermarketed home, leaving money on the table during negotiations, overpaying for a home and or mortgage, missing inspection items, spending money on lawyers with contract issues….have a look at questions on Trulia! Can some of these people asking these questions really be represented??
Hey Mr. & Mrs. Consumer, try this. When you need the services of a real estate agent find your top 5 and contact them, set appointments to speak with each one. Ahead of that, write out at least 15 pointed questions, random in nature but pertaining to your situation. Something like “How will my house being stucco impact things” or “What’s the sale to list price ratio in this neighborhood” or “How will that HVCC appraisal regulation impact me” or “What’s the difference between a short sale, foreclosure, distressed sale and a corporate owned home”. Invite them over if it’s a listing presentation and let them get comfortable. Give them five minutes to babble then ask them to close the presentation book – start asking pointed marketing questions and then your pointed questions, see what happens. You’ll know pretty quick who knows the biz and who spits back realtor-speak. This is great for sellers but also works well for buyers. Oh yeah – real estate is a world where everyone is “Number 1” at something; call them out. Make certain that any agent brings you a printout of their year to date performance – NOT THE COMPANY. Professional agents are earning, they will have the data you need.
While I’m ranting…can agents please give the ridiculous “personal marketing” nonsense a break? Does the consumer really care if you like reading mystery novels, your favorite music is disco or if you enjoy going out to dinner with friends? Do they really want you to be a realtor for life? Do they want to be badgered with recipe post cards every month? Maybe I missed the boat, but my clients want me to do my job for them; they refer me to others when I do that. I don’t see dentists walking around in tooth costumes holding toothbrushes, lawyers dressed as Lady Liberty holding the scales of justice or doctors holding giant syringes chasing a flu bug. Read their qualifications, nowhere in there do I see “I want to be your lawyer for life”.
The real estate industry is a mess right now and right or wrong we're being blamed for it. The direct blame starts and stops with the consumers; you can't regulate stupidity and so many were. Our challenge in this field is to change with the times, we have to be more demanding of our peers, we have set much higher standards and we have to win the confidence of the public. This isn't a part time job and unless every agent treats it as a profession, the public will continue to treat us as they do.
Hank Miller, SRA, ABR
Associate Broker & Certified Appraiser
Prudential GA Realty
678-428-8276
www.hankmillerteam.com
Fair Housing and Equal Opportunity
Comments
They often seem to be very loud when they share.
Hopefully those like you and there are many IMO will decide to become loud! Thanks for sharing an excellent & relevant Blog
You know as we all do that perception is reality; the average "Joe" has about a 30 second attention span and often hears only what they want. Agents are going to be blamed for the real estate problems, plain and simple. These days, when you mess up you look to place blame, not accept it.
The perception that anyone can sell a home comes about in large part because of the number of unqualified agents that are allowed to be in this industry. I know for a fact (because I see it daily) that as buyer or seller I'd rather take my chances alone as opposed to working with many agents I cross paths with. Don't you find it alarming that you say "This industry does not require a lot of formal education so we will always be an occupation "anyone" can get into when they can't find anything else to do. Anyone can sell a home, at least that's the perception." How about changing that perception? That's the exact reason we have these PR problems, we let ANYONE into this business and the real pros take the hit.
Company owners are in business to make money. The revenue comes from monthly agent fees, closings are important but how many brokers will push out an agent that does a deal or two a year if they are steady in meeting their set office fees? The model is simple; fill out a hundred paying agents, let them work at home reducing hard costs, hope 10%-15% are productive and it's a decent income stream. At the end of the day, the best brokers can only encourage agents so much - as long as they stay current they can be considered an asset to the company bottom line.
The problem with that is simple, unless the agents stay current and engaged they simply cannot be as professional as a full time agent. Most will drop the ball in one way or another (or several ways) and what should be a smooth process for the public turns into a mess....and another black eye for the company and industry. The "idea" of part time agents on paper is plausible; you expect them to hit the classes and stay current. My experience in the real world is quite different; they beat up every breathing soul they know (the famous "sphere of influence") and often guilt them into business knowing that they may not be up to the task.
As far as the time and effort you mention, how many full time pros even have the time to consider what you say about spending hours and dollars with "maybe" clients? I sure don't! No one gets near my truck without a thorough pre buyer brief and loan APPROVAL from a lender I know. I ensure they are reasonable in their expectations and ready to buy. After that, I maximize the internet and do a ton of work off the desk top. We only visit homes that have been thoroughly scrubbed - neither my clients nor I have time to drive around aimlessly. I do the same with sellers; it starts with a phone brief and a desk pull of comps. I don't do a thing until I know they are serious sellers and that they understand and will respect the data. I work up a thorough "reasonable expectations" package that walks them through the first 90 days. If we don't see eye to eye then why would I waste my time? If I'm not productive every day then I'm in trouble.
Hopefully as the industry moves ahead agents will too and we can begin to raise the performance expectations and public perception.
Great post! I totally agree. Fortunately, my clients appreciate hard work, knowledge, relevant information, respect, honesty, etc. and that has always the basis for my business. As an industry, we all need to work to raise the bar and hopefully these kinds of forums help do that. Mariyn
Though much of your post I would generally agree with. As for our ranking among other professionals, during our training Realtors ranked right down there with Attorneys. Ok there are a lot of reasons, too much competition form those thinking that this is easy, part timers, non Realtor®'s. Lets be honest, there is a lot of activity that goes on unseen. I recently had a Seller client who after going under contract decided not once but twice not to sell. The buyer had expended close to $1,700... and once again the seller decided they were not ready to close the deal. I personally attended 20 showings, spent $ for marketing and hours on the phone and writing emails. And for what? The Mass. listing agreement that he signed clearly states that if we secure a ready, willing & able buyer that the seller is liable for our fee even if the transaction does not close. Do I feel I earned my fee or at best a portion of it.....? You bet. His offer, was barely minimum wage.
So I agree with Ed Mcnamara above: What other profession is willing to go to work for nothing up front? I have actually had this conversation with neighbors and came up with one solution. Agents could consider reducing their fees by adopting a business model that begins with a binder that would credited to the client when the transaction closes. This puts some of the responsibility back into the hands of the client. Sellers who just want to give it a try would drop our, and buyers who are perpetually just looking would go back to dreaming about home ownership.
My pet peeve are discounters who offer little or nothing in value other than a discount. I often tell a prospective seller that if another agent is so quick to give away their money before they have your business, how quick do you think they will be to give away YOUR money to close a deal?
There are always going to be the unforeseen and unexpected client issues. I've had my share of buyers over the last yeat that froze when the realization of finding what they didn't expect hit them....I blogged about it and titled it "When the Dog Finally Catches the Bus http://www.trulia.com/blog/hank_miller_-_associate_broker/2009/05/when_the_dog_finally_cat I closed all but one of those buyers as sitting down and running trends, numbers and intelligently answering their concerns gets them refocused. Each has since invited us out for dinner and told me that they are delighted with their new home. The last one is tee'd up as well, we just need to find the deal.
Professional agents do everything we can to limit the potential hit from things we can't control. Georgia just instituted a "retainer" fee option for listings - designed specifically for us to cover out of pocket expenses if the home fails to sell; great idea. It also shifts a financial burden to sellers, has them put skin in the game. The best thing though, is don't deal with clients that you can't close - and that's the hardest thing for an agent to do. But, if we waste time with tire kickers we will lose in the end and they will blame us for their issues.
As far as discounters, I agree that they are horribly misleading the public into making it all about the "crazy fees for buying and selling". But - I give them an A for effort, we pro agents allow them to do it to us because we fail to police the part time problem agents. If the public perceives a problem, there is a problem and it's easy for discount agents to harp on the "what do they do for ALL that money?" argument. All nonsense of course, but it strikes a nerve with the public because we pros let it.
I agree that the industry is broken. This is my 25th year working as a full time RE professional. For the past 10 yrs I've been an owner/broker.
What's frustrating is this:
1) Consumers complain over the quality, but everyone thinks we're overpaid but no one really understands how we're compensated.So they hire the least expensive broker and complain and complain.
2) I've earned my CRS designation, offer extensive marketing, I'm a RE instructor/coach, and have a strong selling track record. Yet, once a listing term is up, sometimes (although not often) the seller lists with another Real Estate professional, simply because they "need a change" It is quite disheartening-especially when the new marketing is inferior.
3) I don't think we do a good job at explaining what the real differences are, what's important when choosing and agent, and how to tell us apart.
4) Many of us choose services that no longer garner us business, but are afraid that consumers won't choose us if we don't have what others have, so we continue to spend $$ in wrong places....
5) What other industry gets paid only if they get to closing? Too many variables..including client's agenda, that sometimes get in the way. If the seller disagrees with your price and it remains that way, the agent may never get paid and yet has worked for several months.
6) This is an industry that is getting more costly to stay in day after day
7) Few agents start with a business plan- Actually this should be item #1!!
I agree that most agents operate from a weak position - call it fear of losing a client - and that has much to do with how this industry has become a "YES" business; tell the client what they want to hear and hope for the best. Actually doing your job and walking away from trouble is liberating; have those clients come back after they've been beat up by the market and say "you were right" is it's own reward.
It amazes my wife and i how difficult it is to get other agents to return calls even during a transaction. We have a settlement next week we don't even know where because the agent has not informed anyone and doesn't answer his phone.
I come from China. Although I do not understand your theory, but I just want to give you a support article. Also, I want to say hello to all people here. I will return.
3Q!
"3Q" means thank you in China, because "3" in Chinese pronunciation is [θæŋ]~~~~
I noticed that you said you were an Army ofiicer? I too serve and although I am on active duty, I work primarily with Air Force Reserve pilots. AKA ....PART TIME!!! Now I know that flying around in 150 million dollar aircraft at twice the speed of sound doesn't require the same expertise as being a real estate agent (notice the sarcasm) I could line up my "part time" pilots to any active duty and promise you, that when it comes to professionalism and competency in the aircraft, you can't tell them apart. The issue isn't between part time or full time agents.
I just recently bought a home. After careful selection I chose a a broker/agent referred to me by a family member. When we made the initial offer on thehouse we bought we asked for closing to be as late as possible, 1) because we were still under lease and 2) it was obvious to us that the little old lady selling it was not in any position to move out quickly. We finally settled for the end of August to offer as settlement date. Our agent said the counter-offer came back with the seller wanting the settlement the BEGINNING of July. We figured "Ok" we misread the lady.
One weekend, while our agent was on vacation, we stopped by to ask some questions to the seller. She was running around, stressed and freaked out, and as sweet as can be said "while I appreciate you guys buying my house and wish you well, I just wish you could have given me more time to move and given me more time on the settlement date."
I was LIVID!!! What happened was our agents decided that THEY would decide when our settlement would be and lied to both of us to get it done ASAP even though both me, the buyer, and the seller wanted a later date.
That my friend, was a dishonest move by two agents who has been in the business for 20 years a piece. My agent also decided that my family member didn't deserve the referral fee and I had to spend my own time, faxing HUD 1's and talking with the referral company to get her her referral check.
In closing, my point is that while I totally agree on your assessment that agents rank right up there with lawyers and blood sucking ticks when it comes to public perception, it's a desticntion well earned. It's a based on the lacking of one simple characteristic: HONESTY!!!!!!
As for your experience, being in business a while doesn't make you honest. I'd submit that this type of behavior warrants a note to the state real estate commission; it's flagrant misconduct. I hang skins when I can in both the appraisal and real estate sides - but it's up to the public to speak up too.
Abraham - I'm not certain if you're kidding or not, but if this chart was chopped please send me what you think is the original. This one was forwarded to me from a friend so if I'm wrong please square me away!
To the point!
Until agents and the old school mentality, the unethical behavior and low barrier to entry improves, there will still be a perception of an agent as being part of a low-end profession.
Make it much harder, have the state agencies and NAR police better, attract better quality people, then the standards will go up.
Fred Glick
The poll on occupations to a random group who may or may not have any idea what a doctor does, a lawyer does, a real estate agent does, has little meaning. If after studying the differences, the requirements, and the reality, the ranking of occupations based on concrete criteria such as "requires a license, must be ethical, involves negotiating skills, requires timely diligence to facts and a time table," the table might look different. Fire fighter being on top, makes me wonder if the responders were are group of 8-year old boys. How many adults would be expected to select fire fighter over teacher? Good stuff though and a thoughful exercise.
I think what is wrong with RE is there are too many part timers taking away opportunity from professional full timers. But the business model is more like AMWAY or CutCo knives where it is, Get as many as possible to sell their families and friends and take 50% or thereabouts of the commission. It is a brilliant model and serves the industry well.
I don't know that commissions are the main heartburn - I think sellers feeling that they're not getting "value service" for their expense is. A good agent is measured by the intangibles as much as by the tangibles. Any jug head can put a sign out - a good agent knows how to price and minimize marketing time, attract the best qualified buyers, how to effectively negotiate and present arguments, how to work through inspection issues and how to ensure few issues to closing. That's where the good agents make their money and how they justify that expense to clients. I've not had a client ever complain about my fees as I either save them as much or more or keep they heartburn to a minimum.
If clients hook up with agents that say one thing and do another, then the idea of "after all this I STILL have to pay them how much!" will cause issues....and rightfully so. This is a service profession and like others, clients recognize true pros are worth the fees.
http://www.harrisinteractive.com/harris_poll/index.asp?PID=939
Thanks Pax -
Bring up the subject of commissions and every real estate agent will have something to say. I am a real estate broker and owner of my real estate office and I have witnessed various attempts at renegotiating commissions over the years. I believe this market actually makes that effort more difficult for the client. I am personally hustling more hours with more clients than I have ever worked before. For years, I woke up and made money in spite of myself. Now I have 15 agents waving the white flag and I am working my tail off every day, seven days a week. I am tired, bitter and discouraged every day but I proceed to tackle the day Harder and Smarter. I utilize systems I did not utilize before. I discover internet uses I never took the time to investigate before. I am now getting calls from prospects who tell me they found me online... wow! I am practicing patience, endurance, humility and service beyond my wildest expectations. There is nothing glamorous about my real estate practice right now... but I'm making sales. My clients, by the way... they love me. They love me or they just don't get it. I will always have a client now and then that just doesn't get it. The key to my sanity is to recognize that I choose to allow my time to be misspent working with them sometimes. Other times, I've won clients over as they stray from the belief that my service has real value. Those moments have sometimes rekindled valuable relationships and they are the same clients that often become my greatest fans in this business. So, I believe that the agent is the key to negotiating that commission. If the agent is truly working tirelessly and vigorously with passion and real effort then it will show. Some of my clients wouldn't even dare to bring it up, really. No, I'm not being sarcastic. I mean, the public knows we are a dime a dozen but a true loyal, committed professional is a gem to be appreciated. If I lose a client to a dispute over a commission then they are not prepared to do business seriously and the loss is not mine. If they are willing to quickly make me money then shame on me if I do not appear flexible with my commission- if the subject even comes up. That's the last lesson for some agents- don't act as if your commission is too much. If you're good in this market, YOU'RE EARNING IT! Remember the old adage 'You get what you pay for".
Education is obviously important but how many agents do you see that are professional students? I've seen signature blocks with every letter of the alphabet and then some, the Natl Assoc of Realtors must dream up "designations" just to raise money and keep agents busy. A few based on education and production are warranted but come on! What exactly does a "senior" specialist do? Look for small hills and one level homes? What's a "green" agent, ones that don't shower but on Sat night? I love the "short sale specialist"; if they have that figured out then teach that one to the lenders because no two deals are the same. Give me an agent completing 10-15 deals a year over one with ten nonsensical “designations”.
I see managing brokers trying to get inactive and unproductive agents into classes and coaching sessions, few takers and fewer steady attendees. I too often scratch my head when I see contracts with grammatical errors, misspellings and broken sentences. I routinely speak with other agents when completing appraisals or in the course of brokering a deal; the inability of some to concisely form and support positions is pathetic. These agents work hand in hand with the public…..and we see the results.
I think we have settled into a lax routine with low standards and until we police ourselves and start raising the bar, we’ll be wearing the reputation we have for a while.
I enjoyed reading!! I totally agree with you on many levels. ANYONE it seems can enter the real estate industry by passing a state exam and claim that they are an expert in the field with "0" experience.
Nearly every contract that has come my way is misinterpreted and incomplete. While working with REO properties, the addendums were not read, misinterpreted and incomplete as well. I have a lengthy background in contracts so I can spot the inconsistancies rather quickly. The sad thing is when I offer to assist agents with the complexities of the contracts and addendums the agents reject the help and do as they wish. When I return an incomplete contract and request it be properly filled in to move a deal forward faster they become disgruntled. At times, my biggest challenge is trying to work cohesively with the other agent.
There is a lot of self-pride and vanity in the industry as well. Often I read agent's defending their commission in the same manner, "Well, you pay your doctor or attorney a certain fee...etc, and so on". It's used up and a rediculous statement. We are real estate agents/brokers with various levels of experience but yet EVERYONE feels they deserve the same commission if you are a newbie or seasoned professional of twenty plus years. If my doctor or attorney performed like a few bad agents that we all know, I would not want to pay them either.
At times, I may get a little offended by the typical comment, "You get what you pay for," and feel this is misleading to the general public. There are many agents in the field who are giving far more than what is expected and are more than willing to give more, and do whatever it takes to successfully help their clients. They are not complaining about commissions but channeling that energy into opportunity and flowing with the current market.
The usual real estate models are not working and are considered "dated". The all-inclusive, cookie-cutter training offered to agents have become stale as well. The industry is seeing change that it has never encountered before and more changes are on the way. For all those hard working agents out there, positioning yourself to meet the next wave of change will not only promote a steady income but ensure survival. Consider taking a road less traveled and focus on what is important and what will sustain your business.
The standards are so low that you don't need much of a brain to pass the tests, heck, if I can do it, anybody can, and money-hungry brokers will hire any warm-blooded hound off the street. Forget ethics! The 'experienced' realtor to whom I so graciously gave my business actually raised her voice to me when I told her I was using a lender that was not the 'lender/friend' she recommended. She couldn't answer any of my questions, and neither could the listing broker, and neither one could talk to the seller, who conveniently had no phone. She then left town during the closing. I really wish I had turned her in to the NAR, but I didn't have the energy, after crossing states and dealing with the same or worse in moving companies.
The MLS has forced people to use these so-called "professionals," and having been there, done that, I fully understand how that works. It's just another scam if you ask me, very much like loan sharking.
And Oh Yes! The internet is likely to put an quick end to the business - if we're lucky.
http://forums.redfin.com/rf/board/message?board.id=Boston&thread.id=1127
I mean come on! This got me really furious. Why would the agent do this! Its just down right dumb!
An update on my last post: My agent still has not given my aunt her referral fee. My aunt called my wife just the other night wanting another copy of the HUD-1 faxed to her and another phone call to the referral agency. I finally just decided to wash my hands of it. Apparently, all my aunt did anyways was "google" the lady's name and sent it to me, although she made it sound like she knew her (isn't that the point of a referral anyway). If the lady was worth the referral then I've decided my aunt can deal with it. I've put more time in trying to get these agents pay squared away than my agent spent on finding me the dang house!!!
What other respectful"profession" do you know that has to deal with this kind of clowning around?!!! Especially with so much money at stake!!!
I still think that the MLS should be free and/or fee based for EVERYONE and that real estate "agency" should be banned. I would much prefer to pay an authentically educated attorney than some dimwit with a GED and a real estate license.
You know I'm not far off agreeing with everything said - right down to the "dimwit with a GED" and stupid agent policies but let me clear up something regarding the use of an attorney and transactions.
Here in GA and I suspect in most states, the attorney reps the lender and his closing of the deal is simply him acting in the LENDER'S interest; he represents neither buyer nor seller. Most states use standard contracts drawn up and regularly updated by real estate attorneys; these are designed to be filled out by the nitwit GED agents - and they are also designed to expedite transactions by use of consistent language (imagine agents writing their own offers!).
No real estate attorney can do what an agent does, that is not what they do. A good agent knows the data, how to apply it, where to find it, how to read the situation, etc etc. A lawyer can certainly negotiate but unless they know the market cold, the data cold, the motivations of the parties.....what good are they? Toss in that they have "real jobs" so how many are actually going to care enough or make enough to justify not doing their real work in favor of essentially being a realtor?
The idea that lawyers are the answer is misguided - when have lawyers been the answer to anything? How's the cost of health care looking? RE lawyers are essentially transaction managers - they prep and close deals and btw get a handsome paycheck for doing so - look into that! They charge modest closing fees (300-600) but they do quite well with add ons and title insurance fees....I know as I have many friends doing it. No lawyer I've ever met wants to deal with the nonsense agents do - they prefer getting the package as they do now - after the commotions have died down.
As far as the internet eliminating agents, don't hold your breath. Web MD hasn't eliminated doctors and law.com hasn't eliminated lawyers. Just go to a site for an automated valuation on a home, see what you get back. Get on any "foreclosure" site and see the garbage data. Nothing replaces the need for walking a property and doing field research. With so much information available I have clients literally tossing their hands in the air and getting overwhelmed, they are not interested in doing the grunt work.
Transactions mandate consistency to be smooth and effective, the issue remains not the system as much as the individuals within it. The RE industry is still behind the curve and the public is calling BS right now. More agents need to go, the standards need to be raised and as far as fees go - pay what the market will bear. There are good, productive and ethical agents out here, we're just in the minority!
Bill Roach,
Century21, Pacesetters
Lexington, Ky
I agree with your comment; I came into this industry five years ago from the corporate world w/a background in high tech sales and management(10 yrs); the first thing I learned when stepping into Real Estate industry was the lack of information shared between agents and networking; if part timers want to survive in this industry they need to reach out to new methods of networking such as applications like this and season agents that can help them gain knowledge and help them improve the skills.
You telling me that some people on this thread are upset because some think of them 3 points lower than Brad Pitt?? And your problem with this is what???
The public has and will call on agents when they need agents. After all the self marketing, internet, fsbo, flat fee etc etc ....The public continues to pick up the phone and call on agents.
As for agents leaving the business, that is fine. Real estate is like any garden; it needs weeded out. After 19 years (yes I am pretty old) I am still in the business and enjoying the internet part a whole bunch!! We are doing our sellers a disservice by not using photo enhancing programs and actually learning how to take a good photo and creating virtual tours for every listing and videos too. It is simple and a no brainer. - Enough, I'll get off my soapbox for now.