What is your point Phil...?

**..You can take a client around for months and they never buy something, you can advertise a property that never sells ..you make absolutely nothing - but you still pay out-of-pocket and you still pay all your fees..**



If you're a basic plumber, electrician or even a registered carpenter you have the cost of doing business ... you have dues, cost of tools, in some cases they run well over $2,000 a year .. people in the Post Office pay for their own uniforms, UPS drivers pay for theirs -- you have to spend money to make money, it's the flea's that come with the dog.

If you're spending lots of money and time and your clients aren't buying, then you need to be in another line of work ... let's face it, there is a bunch of agents out there that shouldn't be in the business ..

The only thing that kept most agents buoyant in the last 5 years was an exploding market and lenders that were buying dead people with a pulse ...

So it was pretty much "order taking" on a vast scale, no skill needed there ... much like selling green beer and St Patty's day ..

Stop and think about .. what do you think is going to happen in the next 12 months without a counterfeit real estate market in place.? .. your NAR thinks you'll lose 20% of your realtors, I think it will be much more than that..l.o.l..


;^)

Just to set the record straight, the costs of being an agent are a little more substantial than you have stated. Yes you take a 63 hour class. This is NOT available on-line in Florida - you sit in a classroom for 8 days, 8 -5. Before you take the test, pay $61 for fingerprints. Once you pass the course, you take the state exam, a $25 test. Now you join MLS @ $950 per year, Buy a lockbox key, @ $250 per year. Now you find a broker. If you have no experience, you probably go to a traditional broker and pay a monthly fee plus do a commission split - the broker gets a percent of your 3% and you get the rest - there are many programs. Next you have advertising fees, promotion fees, etc.. You can take a client around for months and they never buy something, you can advertise a property that never sells - you make absolutely nothing - but you still pay out-of-pocket and you still pay all your fees. Being an agent is not a cushy job - its hard work if you are doing a good job - it is a rewarding job when you can actually make a living and have satisfied clients.

Buyers believe that if they do not work with a realtor they can get a better price and using the MLS themselves they can more effectively search and screen properties.

The realty is that it is difficult to get a better price without using an agent because the standard listing agents have a 6% commission built-in. As a buyer, you can write an offer that rebates 3% back to you if you do not use an agent. Or more practically, as a buyer you use a realtor that will upfront agree to rebate a portion of their commission to you (ziprealty realty 20%, others up to 80%) in advance.

I am seriously thinking about getting a realtor license myself after reading the requirements. This is not like getting a college degree. In fact in FL all you need is:
a) a high school degree
b) a set of classes--can be completed online. total time investment 63 hrs ($245.00)
c) pass a state exam ($35.00) then pay $145.00 to get a license

This exam isn't rocket science; a sample question with a common sense answer:
A person want to act as his own general contractor to build a home
would consult which document to determine the amount of
insulation required by law?
A. zoning ordinance
B. home warranty
C. plans & specs
D. building code

Buyers believe that if they do not work with a realtor they can get a better price and using the MLS themselves they can more effectively search and screen properties.

The realty is that it is difficult to get a better price without using an agent because the standard listing agents have a 6% commission built-in. As a buyer, you can write an offer that rebates 3% back to you if you do not use an agent. Or more practically, as a buyer you use a realtor that will upfront agree to rebate a portion of their commission to you (ziprealty realty 20%, others up to 80%) in advance.

I am seriously thinking about getting a realtor license myself after reading the requirements. This is not like getting a college degree. In fact in FL all you need is:
a) a high school degree
b) a set of classes--can be completed online. total time investment 63 hrs ($245.00)
c) pass a state exam ($35.00) then pay $145.00 to get a license

This exam isn't rocket science; a sample question with a common sense answer:
A person want to act as his own general contractor to build a home
would consult which document to determine the amount of
insulation required by law?
A. zoning ordinance
B. home warranty
C. plans & specs
D. building code

So it takes around $500.00 and a bit of self study!!! In fact, if you are a lawyer, you don't even need to take the class. You can just sit for the test. There are even Cliff Notes to help you pass the test. It actually is a fantastic investment, even if you just buy once depending on home price. If you purchase a $1M home, for $500.00, you get $29,500 back.

Some Uneducated people think RE are ripping off, and think we get paid too much. They just don't understand that the RE agents will look upon their client and try to get the best price for the purchase, not a win/lose situation, but a win/win. Sorry I don't rip off the buyers or sellers of any sides, but I do promise to give my best to represent my side and make sure he/she will get the best price honestly for their money. And for some people thinking, we get paid too much for our service because they don't see this as a business, and job. WE ARE A BUSINESS and we pay taxes and help the economy too. But most of us do work with commission based, and yes this is ok, and yes some of us make over a million per year, yes over, so what? Some make 0 and work for minimum. We work hard, did help the rich and the no so rich to buy a home or an investment and the party most likely will make money or loose money on that. It’s all business, its ok, its how it works, and numbers are big so the % is too or not. So if you look outside the box, travel agents get commission, and also yacht sellers, and stock brokers, and all this doesn’t need to have a professional neither, but the number for the commission is so small, to compare, for the loss you could get or the gain, trying to go in your own, to save a buck. The most successful people do use the services of agents for everything, they do understand theirs business and trust ours. I think they are wise, they don’t want to waist their time, their time is more valuable then any %%%%. Think of that.
So I'm happy, been a PROFESSIONAL REAL AGENT and love this business and treat it like, business, with respect to me and to others. I did grow up inside a business world with my family, so I'm proud of this and think we do deserve to get paid 3%, 6%, 7%, 12%, whatever you think your work is worth.
Good luck to all the agents and people who are involved in real estate.
It’s all beautiful!
PS: I do respect that people for their reasons like to do RE transactions in their own too, just think you are doing a business for yourself, so get educated and try not to loose your hard worked money.

I would love a realtor who did that found our perfect house put in offer... one week later nothing no rejection/acception, or counter. Now I do not know what to do but look at other houses. :(

Hi Melanie, I am sorry to hear about your experience with a pushy realtor and admit that there are many inept agents out there. The client I am working with right now told me a horror story of a local (Sarasota, FL) agent who actually charged her $2500.00 for showing her 5 properties that did not even meet her criteria. She eventually got all the money back but was deathly afraid to deal with a realtor. I cannot emphasize enough the first step after pre-qualifying for a mortgage is building a relationship with your agent (if you choose to use one). As a realtor, there are agents that I won't deal with because of their manners and ethics. I apologize for your experience but do hope you find someone trustworthy during your search. Good Luck. Judy

As a new potential first time home buyer there are many reasons listed below that I agree with. I do not want to find a home in a week and be done with it all. I want to see the various places and price points I can afford. I want to look at a HUGE backyard and a small condo complex with little to no maintence. Buying a home is a BIG deal. I don't want a realtor/agent who is going to push me into something right away just so they can get the commission off the sale. I also do not want them to push me into something I can't afford!

I went to look at a property this weekend, and the listing agent was innitially rude when I made the appointment by telling me that she wanted to talk with my buyers agent to see what I can afford. The day before the viewing she called to change the time she could show me HER listed property because she over-booked herself that weekend. When I showed up to the property the next day she gave me her card, and shuffled me around the place...then she told me that I should look at properties that were $50K MORE than the property I was viewing. She didn't understand my need to set my own budget and tried to turn herself into my buyers agent while I was viewing the property she was listing.

As for right now I don't trust realtors or agents, and with use of the web I can look at properties and make arrangements to view them on my own. Once I have choosen a property that works for me, that I can afford, then I can get an agent who will help me write my offer, and one who will have contacts with an inspector to view the home.

I will not be pushed into something that I can't afford, and I won't be bullied into a property that I don't want. If I can't see the potential in a property on my own, than it isn't the place for me!

I think they think they have to pay us if we help them. They are not educated in this area so it is our job to show them the value in having representation. Giving them information and time is a great value they just may not know it.

Jozie, I agree with a lot of what you were saying. To finish off your point that not all real estate agents are as good as others, also not all people who are good at market research and negotiations are real estate agents. You may have a lot of the same skills as some of the great real estate agents, but decided to pursue a different career.

My cousin is a police officer. But, he is also excellent carpenter, plans and measurements come natural to him and he has an eye for design. Contractors are often asking him if he wants to pick up side work. He has no training as a carpenter, is not licensed, it just comes natural to him. So, other carpenters may tell him that he is crazy to frame a wall in his basement by himself, but there is no way that he is going to spend money to have someone else do what he knows he can do just as well. When it comes to electrical work, he understands it but would not risk doing it on his own. He hires an electrician. I liken this to hiring an atty when buying a home on your own. You may understand the market very well, and be a great negotiator, but if you don't feel comfortable with the legal documents you can hires someone for that part of the process.

That being said, I do not think that just anyone can successfully buy a house on their own. It is a complicated process. I am just saying that for some people it can be done if they are willing to do their homework.

I like to do my own thing in my own way. I have found that this saves thousands of dollars. I, too can search the market and don't need the 'help'. I also manage my own portfolio. I guarantee you I can deal with a seller as well as anyone, cars, real estate, or whatever. Let's face it, not all real estate agents are as good as others. And you never know reading their 'press releases'.

Real Estate Pro wrote: When making one of the largest financial decisions of your life consulting an expert just makes good sense..

It is true to the point when buyer is educated enough about the area he/she is looking into (see answers below) and in that case the buyer can make a good decision and save a lot of money.
There were, are, and will be bad and good examples of buying FSBO.
The question was 'why some buyers shy away ...' and it is not a discussion whether they should or should not. It is just answers to the question.
Those are:
1. Some people have fun researching the market
2. Some people want to save money
3. For some peole it is business
4. For some people it is all of the above.
5. For some people it is 'other'

This discussion seems to be getting heated and I will add my two cents. I have a few questions for buyers- Do you have dogs you walk regularly? I know of nearby parks that are very dog friendly. I walk my dogs in these parks. Are you athletic or a member of a gym? I belong to a swim team and the facility we meet at has a full gym. I pay 3 bucks to use the gym and do not have to be a member. There are two others within ten miles you may want to check out. Are you highly allergic to mold? There is a home in my neighborhood that had water problems. The seller didn’t use a realtor nor did the buyer. In my state you do not have to use a seller’s disclosure if the home is not listed by an agent. If the buyer had consulted me prior to the purchase I would have suggested tests be performed to insure the problem had been remedied. There was no insurance claim but I had a conversation with the seller before the house went on the market. Do you want a pool? I will give you names of the home owner’s warranty companies that have good coverage for the equipment and a reputation for customer service. Concerned about appreciation? The neighbors of the house someone was buying was about to go into foreclosure. It hadn’t hit a list or shown up on a website yet. My children go to school with the owner’s children and the mother confided in me. How many times have you negotiated with an agent that has someone else’s best interest in mind? Fortunately I have many times and now I could be working for you.

Before I was a realtor I was a loan officer. I will help make an educated decision when obtaining a mortgage loan. I was an appraiser’s apprentice. I will show how an appraiser is likely to value the home being purchased. I am now a real estate broker. I continue to take classes and stay on top of local developments to grow my knowledge of the market. My integrity is top priority. I wouldn’t sell a house to someone that I wouldn’t sell to my own mother.

I agree that some people get into the business and never take the time to become an expert. They do not last long and could potentially leave a wake of unsatisfied buyers and sellers. Most of my business is by referral. So if Aunt Betty tells you she had a good experience you may want to take that into consideration. Furthermore, if your aunt, mother, son or daughter is relocating to my area I think they should consult me or a local realtor. The good news is there are other knowledgeable agents in my area. I know because I have either worked with them or trained them.

My point is clear- Local agents are privy to local information. When making one of the largest financial decisions of your life consulting an expert just makes good sense..

Phil,

***.. "Buying and selling a house is no different than buying and selling your car yourself. Some people can do it and some people can't. Some people want to do it and try and fail and others do it with great success .. ***

You're absolutely correct ..

Some people shouldn't try to buy or sell cars, or boats or that grand piano in the living room - or properties - ..and then you have others, like myself, that shouldn't be around paint brushes or sharp tools .. So, I totally agree.


*** .. "I have a neighbor who has been selling his home himself because he is a "retired realtor" . He was over priced 2 years ago and he is still overpriced... ***

That door swings both ways .. your neighbor is a realtor, he's retired .. but years in the business - yes.?

He's been in contact with how many consumers .. 350.? .. 150.? .. 15...??

No matter, he's been in contact with enough people in his life - to "change their life" .. and he's been obviously wrong on his own home for the last 2 years ...

So, now the question arises - how many times has he been wrong with his own clients..?

..70% of the time..? ..

.. 50% of the time..?

... is it safe to say, a mere 25% of the time ..?

...... and how much money did he cost those consumers.??

Do you see where I'm going with this...? .. there's a huge difference between being in the business - and "knowing" the business ..

The point is, there is a lot of agents like your retired neighbor out there that are "in" the business - but they know very little about their business and that's scary ...

Getting NAR updates every week is a far cry from any reality of what goes on in the market ... especially since they are getting pummeled by lawsuits, their own agents and the FTC follows them around like a bad habit ... think about it, who's worse.? .. the NAR or the NRA - it's hard to tell the difference..l.o.l...

I played golf with one of the largest brokers in the south last week ... now, he's had an agent working for him for 9 years and he's "never' sold a home ... but he does get his 25 or 30 listings every fall when his friends come down from the North, and then expire around Easter .l.o.l..

I doubt you'll ask for that listing agents opinion ..and if you really think about it, what experience does that agent possess -- besides zero.



: ^)

Much of it has to do with the perception that buying a house is something that you can do on your own just like buying a car or a lawnmower. It is true that people have access to tons of information that was not available before but customers who do it alone have no clue about what they miss by not using a Realtor who knows what he/she is doing. You can always buy a house but did you buy the one that best fits your needs or did you buy at the best price possible. "Buy-It-Yourselvers" or "FSBOs" think that they save money but there is plenty of evidence that (1) people who buy on their own tend to overpay because they were not aware of the other competitive offerings and (2) that people who sell on their own get less and take longer to sell their property than if they had used a Realtor.

I have had the experience of having had a parent in real estate (Century 21), buying a home before I had my license, and buying and selling to myself and others as a licensed agent (KW). When there was no computer, people had to rely on the agent's knowledge and expertise. Some lower income and minority buyers don't understand the process of a real estate transaction. They are afraid they will be judged, or fear wasting an agents time. These are the people I am hoping to reach.
On the other hand, with the many internet websites on every subject, some people want to be an "home office" expert on everything including real estate, the stock market, travel, and medicine... They use the time at work, not doing their actual job, but trying to do my job.Yes, they can even look for a home by driving away precious gas everyday after work and every weekend. When I hear people complaining about how much Realtors cost or get paid, I wonder, did you really use an agent? did you even let the agent do the job? Or are you mad because you rode around, on your own, for six months and finally found the home yourself? Did the listing agent even let you in the house when you were unrepresented stranger? Did you submit your own offer? was your phone offer taken seriously? Did you buy a contract on the internet or the office supply store? These are all scenarios experienced when dealing with the unrepresented or renegade buyer.

That kind of business to me is crazy. I readily have access to so much information about homes, neighborhoods, actual comps, pending development, financing programs, real estate contracts and law, and the access key to every listed home in a 17 county metro area. How can you NOT afford to use me. I have experience working with clients that are highly repected professionals in medicine, law, entertainment, business, and sports. Their time is money. They want a professional, to get the job done, so they can go back to making money and enjoying life. My lower incomes and first timers, need me to explain the basics and get them the best possible deal for the money they have. I am the one that makes sure we hire inpectors, appraisers, surveys, in a timely manner. I am the one who contacts the listing agent, lender, and closing attorney. I make peoples lives easier. For most people, buying or selling a home is the biggest deal of a lifetime. Why wouldn't you want your own expert representing your needs? I recently had a client, who is an attorney, and not a first time buyer, draft a contract that was completely useless. The forms I use work every time.

I think my dentist overcharges every time he says, you have no cavities. He didn't even clean my teeth or take the X-Ray. I know how to clean my own teeth, I do it every day. But he is an expert and I pay him twice a year. I think the city charges too much for sanitation collection. I have a car and know the location of the landfill. But I am paying for them, because there's no money for me at the landfill every week. I chose the field I'm in not just for the money. I wanted to help people with their biggest transaction. I also wanted to get first look at all the good houses coming onto the market. I left a cushy job with 4 weeks vacation pay and full medical and dental benefits. I left behind my covered parking spot. I only had 1 boss, but now sometimes I have 20 at time. I am not overpaid. Sometimes I'm underpaid. I work when you get off, including evenings and weekends. All day I am previewing homes, making calls, studying neighborhoods and numbers, just so I can do my job whenever you decide to let me.

I'm so glad to hear a realtor care enough to ask this question. I've been on both sides, a realtor in SRQ and a buyer in PA. I can honestly say it's follow through. I've yet to find a realtor that gives good advice and customer service (other than when I was a realtor). If there isn't a big enough commission, the effort is matched to that. I think a realtor should be persistent, have really good listening skills, and great perseverence. I've yet to work with a realtor of that caliber.

Judy,

I love this question.

For everybody who calls our comissions "excessive", I would like to go to their place of employment and tell them how much they are overpaid. This is basically what they are saying to REALTORS. It also means that our expertise is not valued, or worse, they don't believe we have expertise.

People make a lot of assumptions about what we do or don't do, and their point of reference is skewed.

Raj gave the example of 6% comission on $400,00. First, Raj, I only see half of that......before I start getting whacked for fees, marketing expenses, insurance, gas money, self employment tax etc. A full 30% of my 1/2 of the comission is money I never see.

I challenge Raj and Tman (for the cause of good natured competition), to go get their real estate licences and try doing this for a while. It would not take long before you realized why hard working realtors charge what they do to sell a home. In return, I promise that I would go to your employers and ask you to take a 30% cut in pay. :)

I think the 6% is excessive. You should get paid about the same as the appraiser and the inspector. Its not like you're a lawyer, you are a realtor.

I would turn the perception-reality theory on its head and say that there is a perception that realtors add "value" to the transactions. A very small percentage of realtors do; most don't. Most realtors just perform the routine tasks. And no, they don't do twice as much work for a $800,000 house than for a $400,000 house.

You may not be a pro re agent, but it does not mean you have no skills or brains and desire to find needed information to make an intellegent conclusion about price for a house. As other buyers explained below.
Then (here is a jet pilot needed) hire re lawyer to do paperwork. 6% of the commision could be fairly divided between seller and buyer. No 3rd pipe needed.
From the other point of view. I do recognise that re agent put time upfront without guarantee for the reward.
I am kind of buyer that you can call looker. I will look not at 5 and not at 20, I will look at as many houses as I want untill I am sure I found the one. It may take years (I am in no hurry). I do not want to feel bad about agent who will go with me to 20 houses to open a door. I also may not want to go there at all, but want to know if the house on sale and what the sale parameters. So I use a lot of info sources and get pretty good picture of what is going on. When I am that educated, why do I need an agent at this point?
Again, just to open a door, but I can find other way to get there, save on comission and as I said above use re lawyer for the paperwork.

In addition to the good answers below (bad experiences with some agents, etc.), there's another reason that hasn't really been addressed.

Few people would get into the cockpit of a jet fighter and try to fly the plane. Few would walk into a hospital and try to perform brain surgery. Why not? Because most people recognize that there's a level of skill and knowledge required for those occupations. They don't recognize that there's a level of skill and knowledge required for Realtors.

Now, I'm not comparing Realtors to brain surgeons or jet pilots. But when you take a skill that anyone thinks they can do--maybe because they've seen someone else do it, or maybe because it "doesn't look like brain surgery--you end up with a lot of people convinced they're as good as, or better than, the pros.

In fact, let's do some comparisons with Realtors. I have a background in writing and journalism. I have a degree in journalism and several decades of experience. I've taken classes. I'm an accredited member of the Public Relations Society of America. I'm pretty good at writing. But all anyone "needs" to write is a computer or typewriter. And so many people think they can write. But what they turn out is jumbled, grammatically incorrect, and unclear. There's no way I can convince someone who is "sure" that they can write well that there's a qualitative difference. And, frankly, I don't try.

Or take waiters and waitresses. The good ones are marvelous. They get the orders right. They're helpful without being intrusive. They know the food and can make appropriate recommendations. They're even clever salespeople (and I say that with all due respect), all the while making your experience thoroughly enjoyable. And yet too many people seem to think that "anyone can be a waiter or waitress." The good ones make it look simple and, technically, any person off the street could take orders.

So, with Realtors: You take a profession that, superficially (the part that's visible to the public) most people can do. You add some tools, such as the Internet, that take some of the "mystery" out of the buying process. (Even if a buyer puts his/her full faith in a "comp" from Zillow.) You do in fact have agents with a wide range of skills. You have a commission structure that some feel doesn't always reflect the amount of work an agent puts into a sale (specifically, does an agent do twice as much work to sell an $800,000 home as a $400,000 home--the perception sometimes is no). You have the perception--often reflected in comments on Trulia and elsewhere--that agents will sell you anything at any price just for the commission. (And, ahem, if you look at the increase in foreclosures and short sales, it might just possibly appear that some agents may have put commissions ahead of buyers' interests.)

So the perception, among some buyers and sellers, is that they already possess the skills needed to do the transaction...and that they don't want to pay a bundle of money to others for what they can do better. Perception, not necessarily reality.

6% is the answer to your question Judy. Really!

When you talk about $400,000+ homes, I think 6% commission is excessive. Most of the services that an agent offers are "commodity" services. They should be made available for a flat or hourly fee. Now, when it comes to negotiations, yes, there could be a good value prop but how much does an agent save you on an average across the board? If that 6% commission is lowered, both parties get a great negotiation leverage right there!!

Now, I do recommend 6% represenation in the following scenarios - (1) Buyer/Seller absolutely has no time to spend (2) They are from a different state and do not know local areas (3) It's their first time or they hate doing any research (4) Price is not a big deal for them

Cameron - is the site you found regional or national? Do you mind sharing it? Thanks.

Buying and selling a house is no different than buying and selling your car yourself. Some people can do it and some people can't. Some people want to do it and try and fail and others do it with great success.
The current real estate market has many interesting factors as a result of th high number of foreclosures and short sales. sorting thru the garbage is time consuming and there are long delays in dealing with banks and REO companies. Comps of similar houses are confusing based on the needs of the seller, rather than the perceived value of the home. With the vast amount of inventory on the market in most areas, buyers have a tremendous amount of choices. A good realtor bases their opinion of value based on the information available. Appraisers are supposed to get to the details of transactions by talking to listing agents to determine the mechanics of sales. Many people make comments about true prices are based on knowing that a seller kicked back money to a buyer. I have never seen that done. It is not only unethical but illegal. I have heard stories but they never seem to make sense. To do it in todays market
means you have to have 2 or more people involved in perpetuating the fraud. Yes, I am sure it happens but neighborhoods are not valued on this type of activity.

In closing, there are people who need assistance in buying and selling and those that don't. I have no motivation to try and convince someone to use a realtor. I have a neighbor who has been selling his home himself because he is a retired realtor. He was over priced 2 years ago and he is still overpriced. The houses in the neighborhood have dropped over $100K since he started. It he would have listed with an good realtor 2 years ago at a price that was supported by comps he would be living in the new house he bought 2 years ago. He is still trying to sell and is still over priced. Thank god he can afford two house payments. He could have gotten $50K more 2 years ago.

Phil

I'm going to say that being a Realtor is just like any other profession, there are good ones and bad ones. If your "negotiation" is a 92 second transaction, I would say you should find another job - a job because that is what you are doing, not conducting a profession.
Although the internet is a great source of information, there is misleading information, ie. websites slow to update (Realtor.com), Photoshopped pictures, inaccurate community information (school system, condo fees, restrictions) etc.
Using a site that shows percentage of sold / ask price is fairly inaccurate. I used my neighborhood of 284 homes - 19 sold in the last 2 years. Of the 19 sold, 10 had a significantly higher ask price than was listed on sale records and 7 had credits ranging from 4k to 10k - this distorts any percentages used to establish the real numbers used to determine the actual values.
Getting the best possible price - to me this means my client got the perfect house and paid an amount that they are completely comfortable with.

Judy

>>> "What proof do these buyers have they they got the best possible price? The same proof Realtors have when they make the presumption. None, just their opinion." >>>

That is a brave statement .. but an absolute true one.!

How does the consumer ever know..?

They hook-up with an agent that's usually referred by Uncle Bob or Aunt Betty or their picture looked good in the paper ... they hear and see a barrage of information, most of it unimportant, while being consumed by emotional numbness ..

Then they're told this is a great offer, which gets transmitted to another stranger (the listing agent) which in turn gets transmitted to the seller, usually by fax -- and neither one knows each other .. and all this information is 3rd party - at best.

Aaah, I'm confused ... "where's the negotiation part..?"

92 seconds on the cell phone and a fax is a far cry from negotiating anything.

Would you send your 2nd cousin or your neighbor to interview for your high paying career move at Google or Amgen..?

..... then why would you let someone else make the largest purchasing decision of Your life..??


Interesting article from the NAR:

>>> "NAR membership grew 83 percent in seven years to 1.37 million Realtors, and is now turning sharply lower, according to Yun.

Most everyone agrees that too many Realtors in the market isn't a great thing for Realtors. It creates so much competition that many agents still struggle for commissions during booming markets. And many complain of lax standards, which contribute to an overall bad image for Realtors.

However, many brokerage models rely on high numbers of agents for profits. And NAR definitely benefits from having more agents. More agents = more members = more dues = more powerful trade group. NAR's swelling membership of recent years certainly has helped the group maintain one of the largest political contributions in the country and the political clout that goes along with that.

NAR's declining membership doesn't come as a surprise, but Yun's statements sound odd coming from a guy who works for NAR.

"Given that about ½ million Realtors have less than 5 years of experience, sloppiness in some transactions no doubt exists. A complaint I hear quite frequently from Realtors is about the second-rate conduct of some of their fellow new members." >>>


: ^)

The problem that I've found is that there are far too many realtors around. Only a small percentage of realtors are actually good at what they do. Many barely know or understand what they passed on their test to get their license. So many don't understand the contracts they are processing. Everyone I know have had bad realtor experiences. Very few have good experiences. Until realtors find a way to actually provide better customer service and to get those bad realtors kicked out of the industry, homebuyers will continue to be wary of them.

Cameron,

Your experience is similar to mine. One thing I found you need to look at is sale price vs. original list, as opposed to sale price vs. list at time of sale. In my area, it seems that most homes sell for about 97% of final list price, though many sell for close to 80% of original list. It is always fun to find sites out there that offer the information that helps you make an informed decision.

Also, by going to open houses and talking to other interested buyers, I got a lot of the gossip on homes that had sold (e.g, "that one over there sold for $x, but sellers returned $y at closing", or "the one on Z street had inspection related deductions of $a.) That type of information is great to factor into your calculations.

I think the Internet is making the tools of a professional realtor available to a lay person. Today I found a website that lists closed transactions with picture of the front of the house, closed price, % off list price, bedrooms, bathrooms, sq. footage. Since I am interested in townhomes mainly, I was able to look at a picture, decide it was a townhome or not (easy to tell once you have gone to enough open houses), narrow it down to # of bedrooms, etc. to do an 80-20 version of the much touted comp analysis. I now have a good idea what townhomes in the zipcode I'm interested in with the right # of beds/baths/sq. footage tend to go for. This gets me 80% of the way there.

The remaining 20% is more of a gut call. I've been to enough open houses now to have a good idea what kind of upgrades are more or less expected at a certain price level. I've a good idea of what assessments would be, what taxes would be, etc. I'm basically matching a realtor's knowledge of pricing for a very specific, narrow niche of the market, which is *my* niche. In the process of doing so, I also tend to immediately shave 2.5 - 3% off the list price with zero negotiation.

Sure it takes time and perserverence to get a handle on the market but, hey, it's fun. Checking out homes and learning about the market is part of the fun. Now that I can also see closed transactions, its better b/c now I can calculate price per foot, avg. discount off list, what upgrades are non-standard at a specific price point, how location may add or subtract a few points.

Given all the above, I humbly beg to differ that a buyer's agent can negotiate the best possible price for me. Of course, others mileage may vary.

What "most" home buyers don't realize is that when they go to a real estate agent, they have a choice to be a customer or a client. Most buyers think "their" agent is working for them however, most of the time the agent is acting as a "subagent" for the seller! Home buyers should be explained the difference before the agent shows the houses. I would definitely recommend being represented by a buyers agent as a client. As a buyers agent, I would negotiate the best deal for "my client". As a listing agent or "subagent", they are obligated to get the most money for their homeowner/seller.

Sometimes there are a few numbers that apply to discussions w/ buyers. I can document w/ comps what a property is worth. Sometimes that is easier than others. It depends upon how much recent data exists for very similar properties. I also account for trends.... If values have been going down and a comp was sold 3 months ago, or 5 months ago, the price suppression of the market will be a factor.

Buyers sometimes believe that a property was worth much less than data supports. Still, a good buyer agent will present and make the best presentation possbile for the buyer. The other factors that determine the selling price are the motivation of both the buyer and the seller. A motivated seller may be willing to go to contract at a price less than the market data suggests. A seller might also hold firm to a price that is on the very high end of the range of the market data.

A Realtor may advise a buyer that if they want the property, they will need to meet the seller's price...with a provision that allows them to cancel if the proeprty fails to appraise. A buyer agent can hold firm and tell their buyer client that the seller should sell for less, but the buyer agent cannot force the seller to do so. A buyer agent can present the offer in person to the seller, provide comps, provide market trends, and still come upon a seller who simply is not motivated to sell at any price other than the one they predetermined they want. A buyer can walk away and a seller may come back at a later point in time.

I have done that with buyers several times. We simply walked away and left the door open, inviting the seller agent to contact me if and when the seller would like to reconsider. My buyers and I looked at comps and those comps simply did not support the seller's ask price. More than once, the seller came back to my buyers through me with an interest in going to contract. Each time, there was always a risk that might not happen and the buyer had to make their decisions based upon their willingness to forfeit the property.

I have to agree with Judy. While I was looking for a house (Boston area), several friends were also looking. Some had agents, others did not. But, all shared same grievance - Realtors are not as good at determining value as they believe they are. Several got sick of their brokers because they were tired of being told to "offer as much as you can afford if you really want the house", only to pass on the house and see it go for tens of thousands less.

Not all Realtors are bad at valuing houses, but as this site will show - most are willing to tell that they are good at it.

The market is changing, and buyers can do a lot of research, talk to a lot of people, make an offer and get the house at the best possible price. They can then hire a lawyer for about $1k to work the transaction.

What proof do these buyers have they they got the best possible price? The same proof Realtors have when they make the presumption. None, just their opinion.

Judy, Judy, Judy (I always wanted to do that)

I don't know the exact answer to your question but what I have done, since I am always scouting for buyers is I have a professionally prepared handout that explains the benefits of using an agent when the buyers are serious. It's amzazing how many had no idea of the work it takes between "Finding" the house and actually getting the keys.

JD "Dan" Weisenburger, GRI
Broker-Associate
Vanguard Realty, Inc. GMAC Real Estate

Judy,


You can't push a Moose through a keyhole ....

Other buyers might need to look at 20 homes by themselves after they spent their 20 hours on the computer ...

Remember, things are changing fast in your industry and most things can be done by the buyers of today .... plus, there has to be a chemistry between agents and consumers ..

As far as "best possible price", that's strictly an opinion .. maybe that's why more and more consumers are looking on their own...

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A few possible answers: They don't want to go faster than they are emotionaly able to--they may feel an agent will speed up the process, they may feel like they are losing control of the situation if an agent is involved. Also, their ego is on the line--if they go slow they may not want to appear indecisive to their agent. Maybe they don't really understand buyer agency. Just a few ideas: the main theme is how best to gain their trust. Good luck.