Home Buying in San Francisco>Question Details

Peter Century…, Real Estate Pro in San Francisco, CA

If there were one thing that we as realtors could improve on or do better for home sellers or buyers, what would that be?

Asked by Peter Century 21, San Francisco, CA Thu Jan 31, 2013

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18
Mack McCoy’s answer
- I never had any reason to believe my agent was self-serving, but I also never had any reason to believe she wasn't.

Well, how could that have changed, Zannie?

- but how does a client who does not have deep real estate experience have any way of evaluating whether the advice given is good advice or bad advice?

I know, I have this problem every day of my life - how do I know that my CPA, my doctor, my mechanic, my carpenter, my dietitian, my hair stylist, web designer, et cetera - are giving me good advice?

Many people "validate" their physician's advice by going to WebMD or asking their friends; given your line of work, Zannie, do you think we can verify how well you know your job by asking our friends?

So I think the answer is: we don't know how to evaluate whether the advice is good or bad, but we do have ways to evaluate the person giving the advice - by evaluating their integrity, honesty, knowledge; you can verify some of the things they tell you, at least. If you meet for coffee and they joke about skipping out on the check, that tells you something, doesn't it?
0 votes Thank Flag Link Fri Feb 1, 2013
It could have changed in exactly the way I've said over and over--by the agent acknowledging the conflict and explaining why it's not a problem.

Most professionals are financially incentivized to do a good job, and it's reasonable to get a second opinion from another doctor or mechanic, but by the time I'm entrenched in a real estate transaction, it's not really reasonable to get an opinion from another real estate agent. Unless you'd like all of your clients to work with two or three agents at a time, and cheat you out of your commission.
Flag Mon Feb 4, 2013
Great question Peter!


I think we Realtors need to improve on our personal relations skills. We need to remember how scary it is for a first time buyer to buy a home. We need to have a bit more compassion for them.

For sellers, we need to look beyond the commission check, and see them as people trusting us to sale one of the most valuable things they will ever own.

Last, we need to be more kind hearted to eachother!!!

Kawain Payne, Realtor
1 vote Thank Flag Link Tue Feb 26, 2013
I often find myself in the position of defending other agents from those that have had a bad experience and are questioning an agents level of professionalism. This is also a very common theme in the trulia forum and one that truly impacts the reputation of realtors in general.

Being considered a true professional goes far beyond being granted the status and is something that is earned(not entitled to) every single day that we interact with people. My wish is that we could all be better at what we do and minimize those bad feeling about agents that are floating around out there.

Respectfully,

Bill
1 vote Thank Flag Link Tue Feb 26, 2013
I'm a bit late to the party here but I understand where Zannie is coming from. I want a happy client who trusts me and will come back to me years down the road, and will tell all their friends about me. I don't care if my paycheck is $500 thinner on a specific transaction. I don't care if they don't end buying that house we'd worked hard to get in contract to. I want happy clients or I don't have a future in this business.

That being said, I'm paid on commission and I know its really hard for most buyers to separate those two concepts. It does seem like a broken system but its the one that has proven to actually work.

The only way that trust would be innate would be if a buyer was directly paying me. Zannie, would you have felt more comfortable about your agent if you were paying them a flat fee, upfront, or at least partially upfront? I think a lot of buyers might like the idea for a while. But totaling up purchase price and closing costs, most would probably go the more traditional route as it doesn't add on to their out of pocket expenses.

Maybe I'm wrong. Maybe buyers would gladly pay upfront flat fees in exchange for knowing that the agent was fully working for them.
1 vote Thank Flag Link Mon Feb 25, 2013
Honestly though, just having this apparent conflict of interest acknowledged would go a long way toward making me feel comfortable. I'm not quite sure how to explain why... I guess it would make me feel like everything's out in the open. An agent who brings it up and addresses it head on comes across as honest and forthright.

Not that an agent who doesn't bring it up seems dishonest, as some people seem to think I'm saying. But bringing it up and explaining just exactly how the system "actually works" would be really nice. And when you're putting your life savings on the line... it's nice to have every bit of assurance that you're working with the right people and they are going to do right by you.
Flag Tue Feb 26, 2013
Yes, I would have been more comfortable with a flat fee. Perhaps a fee schedule; something small very early in the process, another portion upon entering contract, and the final fee upon closing.

But I don't know how an individual agent can do that, since the current way of paying commissions is so ingrained. It's the Way It Works.
Flag Tue Feb 26, 2013
I uunderstand Zannie's point and from this discussion the answer to Peter's question seems to be that agents could improve their presentation of their duties as a fiduciary better. By their license they are never to be self-serving. If they are Realotrs they have sworn to work according the the Code of Ethics which takes that admonition to a higher level.
If we stress that our responsibility is first and foremost to the client. If we are clear that we advise while the client decides and that we will carry out their instructions to the best of our ability right away then we would be doing better for the buyers and sellers.
As the process moves along we can listen better and show that we are listening by pointing out that this propery has that or the other thing that the client has said they wanted, or conversely we can ask "what about this or that?" when they say they like someting that shouldn't fit. (This brings up another early process statement "Buying real estate is all about trade-offs)
1 vote Thank Flag Link Mon Feb 4, 2013
Jed Lane, Real Estate Pro in San Francisco, CA
MVP'08
Contact
I am a recent buyer. I worked with several agents before I found the right one. I can definitely identify with the trust issue -- I felt exactly the same way and never knew if my agent had my interests at heart. I think it's very important for agents to be transparent with their clients and to communicate. Trust can only be built overtime. I found that many agents choose to be evasive when it comes to giving feedback on properties and either waited for me to tell them what I thought or said "I thought that house/condo was really nice!" The better ones will tell you first "I didn't like that property because of X" or "It may be a good option because of Y but may not meet your requirement Z". After a while you can tell if they really mean when they say "I think it's a good option for you." If you can't build that trust with your agent, you definitely need to go find another one. I found out the hard way -- spent too long working with someone, wasting their time and mine. And looking for places is one thing, but once you start going through the purchase process, making offers, doing inspections, etc. you need to be able to trust your agent at least to some extent, else you will end up doing all the work and research yourself because you don't trust them.
1 vote Thank Flag Link Fri Feb 1, 2013
Zannie should have asked about that concern. I've been asked that question by a number of my buyer clients over the years. I've never shied away from it and can honestly say that I am my clients agent. It is my job to place their interests before my own and that includes the negotiated sale price.

An agent is a fiducairy to the principal. The client is the principal. They make the decisions. The agent can, and should advise, but the client decides.

I hope that makes perfect sense to everyone. If you ever feel that the agent is self-serving, or looking out for their interests above the clients, fire them and repoert them to their manageing broker and the state's departemnt of real estate (DRE).

Also do not fail to ask about your concerns. You are the principal - the most important person - in this transaction.
1 vote Thank Flag Link Fri Feb 1, 2013
Yes, the client decides, but how does a client who does not have deep real estate experience have any way of evaluating whether the advice given is good advice or bad advice? I never had any reason to believe my agent was self-serving, but I also never had any reason to believe she wasn't. Unless a problem is extremely obvious, I have absolutely no way of evaluating the quality of the advice provided to me.
Flag Fri Feb 1, 2013
Jed Lane, Real Estate Pro in San Francisco, CA
MVP'08
Contact
I think the one thing we can do is realize that when people come to us, it's usually a new experience for them, even though it's beyond routine for us.

Maintaining some of that enthusiasm is good for everyone. And perhaps sharing a little bit of the anxiety, too. Residential real estate is an emotional field; if we're all that jaded, maybe we better switch to the investment side.
0 votes Thank Flag Link Mon Feb 25, 2013
- It could have changed in exactly the way I've said over and over--by the agent acknowledging the conflict and explaining why it's not a problem.

It is a problem, and it's a problem for which we cannot control the outcome - only you can.

You do know what it means to be "trustworthy," right? You may be 100% trustworthy. But you have no control over whether other people trust you. All you can do is be the best You you can be.

That is our problem. Telling you to trust us is likely to have no effect. Only You can make you trust one of us.

- Most professionals are financially incentivized to do a good job, and it's reasonable to get a second opinion from another doctor or mechanic, but by the time I'm entrenched in a real estate transaction, it's not really reasonable to get an opinion from another real estate agent. Unless you'd like all of your clients to work with two or three agents at a time, and cheat you out of your commission.

Reasonable? I don't know; everybody can't be served by a system, no matter what it is. BART doesn't serve everybody well, some people don't want fluoride in their water - there is no perfect system.

I don't know what your complaint is, other than that You Can Never Be Sure. Well, that's true. So where do we go from there?
0 votes Thank Flag Link Mon Feb 25, 2013
See Simone's reply, she understands what I'm saying. Perhaps I will use her next time I make a transaction.
Flag Tue Feb 26, 2013
I believe that we as Realtors could all do better to address the trust issue and keep a better rapport with our clients.

I am glad that I got some answers from this question and I hope that everyone, including myself, is listening.

There have been a lot of great answers and I still want to hear more....
0 votes Thank Flag Link Mon Feb 4, 2013
The whole point here is that buyers agents are financially incentivized to be self-serving, more so than those other professions.

Ultimately I think the whole system of compensation for agents needs to be changed so that they get paid for their work regardless of the outcome of the transaction, and preferably so that for both buyers and sellers, they get an extra financial incentive for a completed transaction that is in the financial interests of their clients. But short of that possibly impossible task, the trust issue could have been resolved for me had my agent brought it up. That's all I'm saying.

The question asked was what could have been an improvement, and I gave my answer. It was not a personal attack on anyone. I am not incorrect in stating that bringing up the incentive issue myself felt confrontational to me; I know what my own feelings are. If you think I shouldn't have felt that way, that's fine, but I still felt that way and I guarantee you I am not the only buyer who does. I believe buyers agents will benefit from being proactive in addressing it.
0 votes Thank Flag Link Mon Feb 4, 2013
I had a client who did not trust anyone, including me...I had to constantly keep her informed of what was happening all the time...it's okay because, in the end, my client thanked me so much for the work I did for her.

Even after the deal closed,I still did work for her and met with her HOA'S at the condo meeting to help her address some issues and I spoke to the association on her behalf.

It's very important for clients to write down as many questions as possible and to ask as many questions as possible.

I think this will help in building trust and rapport.
0 votes Thank Flag Link Fri Feb 1, 2013
I do not perceive trust building questions as being confrontational or showing mistrust. I see it as a good person asking probing questions. I want my clients to ask me anything that they want. Too often they are embarrassed that they don't know something they think they should and don't ask. Some ask me questions that they should have asked the lender, title officer, inspector whatever, because I work to build that trust from the start. I tell everyone that there are no stupid or inappropriate questions.
What I hear Zannie saying is that trust isn't there and no matter what the agent says trust can’t be built because of “circular reasoning”. If you think that whatever we say might not be true then you really need to check why you are working with that agent.
Since we are looking at the issue of lowering the purchase price benefiting the buyer but hurting the agent, let’s use that as an example. Forget about the market the way it is now and let’s assume it is a “normal” market where there are enough houses to satisfy the number of buyers and there can be downward negotiation. Start a discussion of a lower price point and then you have to judge what you hear. Of course you might hear advice that lowering the offer price isn’t going to get it and that could be true but remember that you make the decision. If you are willing to take that risk tell the agent to do it. If they balk fire them! Yes, fire them. The reality of the dollars is $25.00 for each $1,000 if the brokerage fee is 2.5%. That $25 is then split with the firm and taxes are paid on the remainder. Our business is built on referrals of past clients so few professional agents will do what is being supposed.
In all business it is best to trust but verify. If Zannie or any buyer and seller approach their agents with that attitude it should be recognized as just good business. I would rather work with a client that isn’t afraid to ask questions, take bold steps, make decisions, verify terms and conditions and watch out for their own best interests. Then my job is so very clear; explore, advise, strategize, let the client decide and then carry out the instructions given to me by the principal to the best of my ability.
Frankly I think it’s fun to negotiate savings for my clients. That winning in negotiation is worth far more to me when I save my client tens of thousands of dollars than to take home a few hundred.
0 votes Thank Flag Link Fri Feb 1, 2013
Jed Lane, Real Estate Pro in San Francisco, CA
MVP'08
Contact
Yes, I suppose I could have asked directly, but there are two problems with that:

1) It's a rather confrontational type of question. It's not always easy to have a good rapport with someone when you start off the relationship by saying "Hey, I don't trust you." However, an agent can more easily say, "I know a lot of buyers have a concern about how buyers agents are incentivized, so let me explain right up front that I my personal motivations for doing the best job I can for you are X, Y and Z."

2) No matter what the agent tells me, how do I know it's true? "You can trust me because I say so" is circular reasoning.
0 votes Thank Flag Link Fri Feb 1, 2013
I should be clear about the fact that I am not trying that buyers agents are NOT doing a good job. I'm sure most are. The problem is that at least superficially, their incentive is to encourage me to spend more, and it is not at all transparent to me what other incentives there may be to ensure that they are really trying to help me accomplish my personal goals. Greater transparency is what I am suggesting.
Flag Fri Feb 1, 2013
Zannie makes a very interesting and valid observation regarding Peter's question and reveals the problem as well.
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Zannie asks, "How do I know?"
Zannie"s expectation is cloudy with the expression, "Somehow?"
Peter asks, "How can we do better?"
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Better than adhering to a set of rules of which the consumer has no knowledge, it would be better to ask the intelligent and probing questions needed to determine the 5, 6 and 7 that are the real motives of the buyer or seller needing your help. Elevating a buyer or seller to this higher version of themselves, where the best decision are made, reveals the real skill of a consultant as opposed to a sales person.
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If operating at the highest level is not possible, simply establish a clear understanding of each ones expectation coupled with the promise to verify. In Zannie case, the most probable scenario was Zannie had no expectation therefore did not recognize if or when the expectation was meet and most likely exceeded. By accepting the responsibility of defining the performance level and providing the means to verify, we as professionals also create the environment that will assuage Zannie's concerns and create a raging advocate. A RAGING ADVOCATE!
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As real estate consultants, we must accept the responsibly to enlighten our buyers and sellers even if they are drifting in a sea of foggie perception of what real estate professionals actually do..
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I want to challenge my buyers and sellers to verify that what I said I would do is being done.
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I want them to be astounded at what THEY see I am doing on their behalf....but of which I will never speak. I want them to catch me creating the situation that will assure their success. I want them to discover and embrace the assurance that if I can not do it, it can not be done.
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They will come to realize that the axis of my business will shift to capture what is most important for them. But, none of this is possible if they will not accept the challenge to verify. Verification is not an embryo of fear. It is the opportunity to be caught doing something good when we think no one is looking. That is the private portal revealing one's character.

It is summed up in the cliche`
The smallest of deeds outweigh the greatest of intentions.

That's all I have to say about that,,
Annette Lawrence, Broker/Associate
Remax Realec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEz.us
0 votes Thank Flag Link Fri Feb 1, 2013
These are all very interesting answers...

By the way, there is no such thing as a wrong answer for this.
0 votes Thank Flag Link Fri Feb 1, 2013
As a buyer, I never really knew how to tell if my agent was really working in my interest, since her commission is better if her clients pay more. I would have been more comfortable with the relationship if I had been assured somehow that I could trust my agent to advise me with *my* best interests in mind.
0 votes Thank Flag Link Fri Feb 1, 2013
That's an easy one. Live by NAR's code of ethics.
0 votes Thank Flag Link Fri Feb 1, 2013
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