Ken Jacobs

Yes, the listing agent's website shows the price as $179,000. - Mon Nov 3 2008, 09:43

For all the agents that continually feel the need to defend 3% fees by demonizing Redfin, you're doing nothing but justifying them in the eyes of the public. To date this year, in King County, Washington, where Redfin started, they have represented buyers in only 248 transactions out of 14,522 total sales in the area.. That's about 1.7%. Just like there are some people that do their own home repairs instead of hiring a contractor, there are some people that will continue to focus only on commission, especially those that have not had the experience of working with a top quality agent, and those people will think they are getting a great deal.

If you have faith in your abilities as an agent, you should feel no threat from Redfin, as their business model lacks all the personal attention, benefit of experience, negotiation skills and service that top agents give to clients. You don't see contractors out in front of Home Depot telling consumers how badly their going to mess up their home improvement project if they try to do it themselves. The overwhelming majority of consumers recognize the value that a top agent provides, and those are the consumers top agents should continue to focus on.

Despite all the attention they've received, and the amount of angst and discussion of their business model, they continue to produce a low volume of sales compared to the industry, and continue to lose money. For those of us in business a long time, we know the overhead costs, and the overwhelming amount of time and energy that have gone into lisings that fail to sell, transactions that fail due to inspections, financing, appraisal or buyer remorse in which we get paid nothing. In my opinion, unless something changes, they will either fizzle out when their venture capital runs out, or be forced to change their business model, much as happened with Zip Realty. If they are able to sustain, and their customers are happy, more power to them. Nordstrom still has plenty of shoppers though despite Marshall's opening up down the street, so I have faith that my business will continue.

Our industry needs to accept a lot of blame for some of the public perception out there that real estate agents do nothing to earn their commission. For many years, obtaining a real estate license has been almost as easy as getting a driver's license, training by the major companies has been severely lacking or non-existent, and brand new agents make the same commission % as agents that have been at it for 20 years. What other industry can brand new people staring out make the same as people with genuine experience and longevity? - Thu Oct 2 2008, 21:05

Harry,
I just wanted to add something I think is important. I'm glad for you that your friend has agred to help you. You didn't mention his experience level or affiliation, but hopefully you'll get more personalized representation. All of the analogies I've read, whether it's cars or stereos are not valid. What you're paying for is a service, not a product, much more closely along the lines of an accountant or lawyer.

Now, you can choose to go to a great tax accountant who has a great knowledge of the tax code and great references, or you can choose to go to a company like H&R Block. Obviously, H&R Block is much cheaper. Now, if your taxes are simple, that might be fine, but if it ends up getting complicated or a mistake is made, it can be much more expensive down the line for you. That doesn't mean that H&R Block is incompetent or that all accountants do a great job, but the likelyhood of you getting better, more personalized and professional service is with the highly regarded and referred professional.

Real estate sales is easy to get into, much too easy in my opinion, which means there are a lot of "traditional" agents out there that are not qualified or professional. This leads to a perception among the general public, and obviously yourself included, that there's not much to buying or selling a house. The reality is that when you do your homework on agents, and find one that really stands out, you'll get the outstanding support and representation that you'll understand what the difference is, and why the fees are generally what they are.

With all the information out there, many people can become "highly educated" on any number of different subjects. I have reviewed many legal cases online, and consider myself extremely knowledgeable on real estate law, but I wouldn't consider representing myself in a lawsuit. If you were accused of assault and arrested today, would you prefer one of the top attorneys in the area respresent you, or a young person just out of law school?

I appreciate your desire to save money, and for that Redfin is attractive. The key is that, regardless of how educated you are, you are not going to get the same service, knowledge or help from an agent sitting behind a computer as you would one that has been in the houses, the neighborhoods and has tremendous, long term experience knowing what issues can arrise and how to handle them. Houses are so unique, that there's no guidebook on all the things that can happen or go wrong during your purchase. Your transaction may go wonderfully, and you may be happy, but that doesn't mean that you didn't miss out on some negotiation tactic, market knowledge, advice on inspections, schools districts or neighborhood, or some other help that a top agent could have given you that could have saved you even more money down the road. You'll simply never know.

I can tell you this in all honesty. If I moved to a new state tomorrow, and had to buy a house, I would search for the top agents in the area, interview two or three and hire one to help me, even though I've had 10 years of experience in real estate sales, bought and sold 5 houses for myself in that period of time, and am quite intelligent (at least I like to think so) and internet savvy. I believe that strongly that a top quality agent is worth more in a major purchase than the prospect of saving a few $$. But I respect your opinion to the contrary, and I wish you the best of luck. - Tue Sep 30 2008, 11:33

Hi Harry,
How do you know what kind of negotiation or closing it's going to be until you actually do it? The purpose of having an experienced agent working for you is to help guard against things you might not know to look for, or how to navigate issues that may come up in the sale negotiations, title report, home inspection, etc. That knowledge is invaluable, and with Redfin, you'll get only the bare bone basics of transaction management. What if things get complicated? What if there are issues that it takes a true professional to work through on your behalf? What if your friend ends up being able to save you a substantial amount of either headache or money by seeing something that you don't? Would that be worth more than 1%? Who would give you advice to walk away if they thought it was a bad deal for you, even if they would lose out on a commission? I've represented buyers and sellers in over 200 transactions and I still learn new things with almost each negotiation and each house. You're taking an awful chance with a large investment by not having a true professional in your corner representing you with all their experience.

Also, many listing agents stipulate that to pay a buyer's agent the full commission, they must initially show the property, so you'll need to check if that's the case with whatever house you're interested in. - Mon Sep 29 2008, 10:52

Most of the school districts in the area have a boundary map, or address lookup on their websites. For example, see the link in the web reference below for a boundary map for Issaquah elementary schools. If you're looking in other areas, or have more specific questions, please feel free to contact me directly and I'll be glad to point you in the right direction. - Sat Aug 30 2008, 13:55

The idea that the Seattle market was not as bad off as some of the rest of the nation was correct, but a little misleading. The downturn has been late arriving here, but with rising interest rates, more difficult lending standards, and a faltering economy, we are now seeing what much of the country saw last year. It appears we've just been a bit behind. When you dig deeper into the market analysis, and look at properties that are selling in the area, almost all of them either have come on the market within the last 60 days, or had a substantial price reduction in that time period. There are currently 105 properties on the market in Woodinville between $500K-$750K, and only 10 have sold in that price range in the last 30 days. That equates to a 10 month supply of homes on the market, a definite buyer's advantage. The showing agents that are telling you you're priced right may believe that, but the reality is that to attract buyers with that much time on the market, it's likely you're going to need to consider a reasonable reduction to get someone motivated to purchase in today's environment. Good luck! - Mon Aug 4 2008, 15:57

Hi Mark,
I think you'll find that Craig's List has become the most comprehensive listing of rentals avaiable in most areas. Good Luck!

Ken Jacobs
Associate Broker
John L. Scott Real Estate
(425)605-5250
ken@jacobsrealtygroup.com http://www.jacobsrealtygroup.com - Mon Jul 14 2008, 10:52