Gee, thanks. Having executed over $3B in real estate transactions, I appreciate you letting me know about the negotiating process. What are you going to throw my way, how to split up closing costs? When to take possession? A contingency purchase? DaRizzle, you're out of your depth here. This is what I love about Realtors; they have to pump themselves up as an integral part of the process, when most people just look to minimize their impact. It would be tough to prove. And I say that as an MAI. A realtor can pick and choose, or not make upward or downward adjustments, as a way to include/not include or properly value a comp. And Realtors do it all the time. If you're really in the business, you know it happens.
Interesting. I didn't realize open houses were so futile. I guess it makes sense though. If I'm interested in a house, I'll contact the agent. I won't say to myself, "I wonder if there's an open house?" If the realtor is getting a potential double commission, it'd be pretty easy to cherry pick the comparables to only show houses that sold below market value (perhaps for structural or other reasons not shown in the listing). My real point, though, is that the seller often thinks he's paying for a "seller's realtor to represent him," when in fact the truth is that the only one representing the seller is the seller. The realtor represents the realtor. I'd no sooner rely on a realtor to advise me on a real estate contract or on structural issues than I would allow them to advise me on a how to invest my 401k. Realtors are not real estate lawyers (I do use one of those--my dad. He works cheap!) Realtors are not home inspectors (I do use one of those--an uncle of mine.) Realtors are in the business of selling real estate. They make money when property is sold. Period. Therefore, every financial incentive they have is to expedite the sale of real estate. The most convincing study I've read about realtors was in Freakonomics. The essence of the study concluded that a realtor selling his own property typicallly made 5% more than he did selling his client's property. Why? Because it's in a realtor's self-interest to churn through as many sales as possible. He doesn't care if the seller makes 5% more on the sale, because 3% commission on that additional 5% sale pales in comparison to the commission he could make selling two properties because he convinced the seller of each to take the first offer that came along. Don't have a link to that study--it was in the book Freakonomics. While trying to find a link, though, I came across this story: http://www.nytimes.com/2007/06/08/business/08home.html?hp=&pagewanted=all
No, because I know you just like to argue against me no matter what the issue so id rather not waste my time. Thats why they arent lawyers, appraisers, mortgage officer, or title officer...they are a realtor... what you wrote could be said about any occupation so....whats your point? Damn the restaurant for not making the pasta noodles from scratch Real Estate agents are like a contractor. They set you up/recommend the other professions you mentioned to help aid in the process. Whenever I give references for say a mortgage broker I ALWAYS give out at least 3 choices. They are free to choose who they want.
Okay...notice the dates of that study...1998-2004, when home prices were going through the roof and homes were on the market for days if not hours (in CA at least). The "Help-u-Sell" companies were a GOOD option in that time. Homes were being bought for OVER asking price. Your right, you dont need an agent for that part and "Help U Sell" and the likes did at least make sure the paperwork was kosher. Do that survey now or early 90's and you will get a VERY different result
I don't like to argue with you. It's just that you're pro-terrorist, pro-Realtor and--the worst offense of all--pro-L*ker. Then what's the role of the Realtor? If they don't add any value, then why do they take 6%-7%? At any point in the process, you can hire someone cheaper and more capable to do the same job. I wouldn't go to anything but a fast food joint for a place that didn't at least cook a few of the ingredients, and then I order off the $0.99 menu. Also, a restaurant offers ambience. Again, what is the value proposition that Realtors provide? And that's worth 6%-7% of the price of the house? And let us not forget that you're not necessarily recommending the least expensive or best alternative, just the ones that throw you business or that are your buddies. Let me ask a question: When one of your clients use one of your recommended people, do they get their mortgage done for 25 basis points instead of 100-150 bps? Do you send them to an inspector you know will tear the house in two and find every single problem, which may kill the deal? What is your criteria for making a recommendation?
I don't know. Maybe, but I doubt it. I would think salesmanship matters less in our current climate. People are out of work, nobody has any money--all that really matters in this climate seems to be price. If I can sell my house for 6% less than my neighbor because I don't have to worry about paying commissions, I like my chances of selling my place before my neighbor does. As a buyer, I like my odds of negotiating a lower price for the same reason.
Its not just salesmanship, its also networking. Bringing compatible buyers and sellers is harder now than almost ever in recent history. A competent Realtor knows everything the surrounding area has to offer which is valuable no matter which side he is representing.
Come on darizzle, I gave you something to hang your hat on . . . most people are uncomfortable with confrontations, including negotiations. Real estate agents do the dirty work of fighting for their clients who really aren't comfortable negotiating for what is likely their biggest purchase. Real estate agents give their clients peace of mind that someone who knows the industry is on their side . . . that is a valuable service to provide. Sounds like mook, maxiep and myself are not afraid of and even invite that kind of negotiations . . . but for many people you provide convenience and peace of mind. Sellers who use agents should not complain about their commision, they wouldn't get the agent in the first place if they thought they could do it on their own. I know very little about the mortgage industry . . . so I don't mind paying a good mortagage brooker commision for convenience and peace of mind. I don't have time to stain my deck, so I don't mind paying someone to do that . . . without real estate agents, less houses would be sold and bought. IMO.
It's actually financing that seems to be the real stopper. People simply can't qualify for financing in this climate. For all intents and purposes in CO you need to bring 20% in equity. And if you have more than 70% LTV on your previous property, forget it. Lenders aren't making assumptions that your previous house will sell for a price high enough to cover the previous mortage and it's being factored into your debt coverage ratio.
I havent mentioned that yet but it is very true. Without RE agents things could get personal. People would not take offers just in spite of the prospective buyer. People like it or not have prejudices too. If you can distance the buyer and seller from each other it is more easier to focus on the terms rather than the who. You might be level headed but maybe not the buyer/seller.
Good post. It's the reason why most NBA players have agents, even though the salaries are pretty obvious to negotiate in most situations. (Brandon Roy knows about how much he's going to make in his next deal, and so does Steve Blake.) Confrontation isn't fun. The price you pay to avoid it (at least in real estate) is 3-6%. To me, that's way too much, but I can see how it's worth it to many.
Spoken like the #1 owner of swampland in America! A man who acts as his own Realtor has a fool for a client.
You must not live in Oregon or you are severely misleading yourself. Oregon was the first state in the union to enact Real Estate laws, way back in 1929, and have the most stringent laws, and an additional binding Code of Ethics. The seller's Realtor must represent the seller's interest faithfully and has a fiduciary duty to act in his client's best interest. The scenario you describe if in Oregon would result in revocation of the Realtor's license, monetary fines, criminal penalties and possible jail time. Also, in the current market, some Realtors have an agreement to return part or all of that half to the seller if no other Realtor is involved. Either way the commission is always paid by the seller so a buyer who uses a dedicated Realtor gets FREE advice and major assistance not only in finding the perfect property (only about 60% of the properties for sale in Beautiful Central Oregon are on MLS), but in every step of the transaction which usually includes negotiation for the best price, quite a few forms which must be filled out correctly to protect the buyer, research into the property's history, permits, code violations, leins, past repairs, possible tax situations both positive and negative, red flags which may suggest a bad investment, construction or demolition plans in the neighborhood's future, HOA fees, utility hook-up fees, septic feasibility, water quality and average well depth in the area, well report, and can usually offer extensive details of any neighborhood's pros and cons which may not be common knowledge. Clearly worth your investment to the Realtor ($0) as a buyer to protect your investment (price you pay for property) as a buyer.
You mis-interpret the findings. What it means is the Realtors who sell their own homes, a minority as most Realtors are much smarter than that, price their homes too high so it takes years to sell them. Mostly these are investments and not primary residences and they are willing to wait years for the market conditions to be right. Meanwhile they pay on interest-only loans and hope to beat the balloon pmt deadline. Currently something like 10% of all foreclosures in Beautiful Central Oregon are owned by local Realtors. I know several personally who have lost 5 or more homes each in the past year. They represented themselves and because of that they could not make rational decisions on their home's value due to emotional connection. Very few sellers have the luxury of taking years to move their home, and as the study points out, Realtors will get their home to sell faster, and for about 20% more than if they do an Assist-to-Sell, o FSBO. They will also greatly decrease the likelyhood of any future legal problems surfacing after the sale. Rule of thumb, in Oregon (as many state are pretty much unregulated) if you don't represent yourself in criminal trials, don't perform medical operations on yourself, you probably shouldn't represent yourself in Real Estate transactions.
Marine Accident Investigator? Yes, a criminally-minded Realtor could cheat his client, just as you seem quite proud to conduct your own business in that manner, but it's an extreme rarity in Oregon, and almost always results in prosecution. Don't confuse a Realtor(trademarked) with a "Real Estate Agent". Nationally, it's the difference of being strictly regulated and highly educated in the field, or just a guy who tries to sell houses with no particular training or guidelines. In Oregon you are either a Realtor, or you're illegally representing in the field. In addition to learning the entire library of Oregon and Federal Residential Real Estate Laws, FBI background check, credit report, paying a couple grand in fees to start and re-licensing every 2 years, most Realtors have a genuine love of the business and thoroughly enjoy the thanks and admiration they receive each time they put someone into that dream home they never thought they could have, or succeed in selling their client's house in a reasonable time frame so the client can get on with their life. All Realtors are required to meet 30 hrs a year of specific continual education in order to stay licensed. I would guess that even you who are involved in the field careerwise would seek the assistance of a Realtor, even if it's a friend, for a little assistance were you considering home-shopping or had some property to move or exchange.
Exactly, you can spend 8 hours a day every day for a year looking at homes, and not come close to the personal knowledge the AVERAGE Realtor has of the area. You could look at the same house 5 times and not notice the defects the average Realtor has already committed to memory. If you represented yourself in buying a home you had no prior knowledge of, go ahead and feel proud of your accomplishment and be happy, but just know you probably would have come out even better with some professional assistance.
