Fred Sands to Realtors: Go back to what you were doing before

NEW -> Contingent Buyer Assistance Program
<p>My own personal example of realtard-ness:</p>

<p>I was looking for a house to buy in CT a couple of years ago. The market had been stagnant and dropping there for 8 months when I started looking. I, too, was an out of state buyer and even though I knew the general area fairly well, I needed the help of an agent (so I do agree that they are useful sometimes, but not at the prices they charge).</p>

<p>Agent and I worked for a month long distance, then I went to CT to look at some of the houses she recommended. I had searched Realtor.com and thought I knew of every listing in the towns that I was targeting. Needless to say, none of the homes I looked at were for me...so I kept looking waiting for new listings or further price drops. One day I was driving around and drove by a cute little house with a for sale sign out front of it. I wrote down the info and called the agent because I thought it was a brand new listing that <em>MUST NOT</em> have hit the MLS yet because I hadn't been shown it. (silly me)</p>

<p>My agent hemmed and hawwed and said the selling agent was hard to work with and the home had been sold twice all ready and fell out of escrow because of this particular listing agent. I told her I still wanted to see it. She stalled for 3 days saying she couldn't get ahold of the listing agent to get the code (aren't these codes available on the secret agent MLS listings) to get in. (Not to mention in the small town I bought in, her office and the listing agents were a whole 7 doors down from each other). I was frustrated because from the outside, the house looked perfect for me and the price was right...and I couldn't figure out why I couldn't get in to view it (it was vacant). </p>

<p>Long story short, at the closing table I learned that only 2% was going to my agent and 3 % going to the selling agent. I can see now why no buyers agents were showing it, because they didn't want to show any clients the house b/c they were only getting 2% and not 3 %. Not only is this the most likely reason the house didn't sell (no one was showing it)....but also the reason why my "buyers" agent....you know....the one supposed to be on MY side....didn't even tell me about the house. </p>

<p> The actual seller had to reduce the price twice before I bought it...I'm sure he would have made more money if he had offered the full 3% to the buyers agent....as it would have been shown more and not ignored by greedy agents. </p>
 
<p>More shadiness from realtors. There is that conflict of interest thing again. Why should realtor be allowed to have "in-house" mortgage companies? </p>

<p><a href="http://www.cnbc.com/id/21599754">www.cnbc.com/id/21599754</a></p>

<p>"An interesting piece in the <a href="http://www.washingtonpost.com/wp-dyn/content/article/2007/11/04/AR2007110401274.html"><strong>Washington Post today about Long and Foster,</strong></a> which is DC’s largest residential real estate brokerage. The founder, P. Wesley Foster Jr. apparently sent out a memo to employees, criticizing them for using outside mortgage lenders over the company’s own Prosperity Mortgage, a joint venture with <strong><strong>Wells Fargo."</strong></strong></p>

<p>"But Foster reportedly told employees that using Prosperity helps Long and Foster, which in these down times in housing, is suffering like everyone else. In other words, push the in-house mortgage company to save your job."</p>
 
<p>check out the story on this realtard's website "Big media's fascination with negative real estate coverage". I wrote him a nice email directing him to IHB so he can educate himself.</p>

<p> <a href="http://www.realtydirect.net/news/default.asp?PUB=14253&AID=1694904">Real Estate News Provided by Gary Rayner</a></p>
 
<p>IMVHO when you deal with a group of people who are commission only you run a huge risk of them not looking out for your best interest.</p>

<p>What is best for the buyer, lower prices, is not best for the person representing them, the realtard. The lower the price the less they make. Then you run the risk of what troop ran into. Not showing certain homes because they won't make as much.</p>

<p>So your perfect home could be out there but there isn't enough money in it for them to show it to you. Imagine that.</p>

<p>So a listing agent would show the homes they are listing to a potential buyer first. Then they get the whole comission.</p>

<p>The model is broken, there is a value to a realtard mostly because they own the MLS lisings and if you are not familiar with the area they may be of value. However the internet really has made their services less valuable. I can go online and find the demographics of a city. I can check the crime rate. I can see how good the schools are etc. All of the things that made an agent valuable.</p>

<p>If the Realtards did not have a stranglehold on the listings what value do they really bring? Looking at Redfin some of them can't even take good pictures and write a half way decent discription and yet when I find the house and want t buy it they get 3%. </p>

<p>The perfect model would be each sale is worth a set amount say 10k and whoever brings me a signed contract gets the whole 10k. Let the realtards really work to get paid.</p>

<p>Thats how most sales work anyway.</p>
 
If you pay somebody six percent, what does it really matter?



At 500K you pay 30K.

At 525K you pay 31.5K.



I can tell you any self respecting commission salesperson is not grinding it out for that last 1500 bucks if he wants to book orders in volume, which is where the money is. If they have any brains.......plus they have to worry about blowing out the buyer.
 
<p>No_Vaseline,</p>

<p>A lot is the answer because you are basing it off of 6%.</p>

<p>A listing agent makes 6% if they are they bring the buyer to the tabel as well. If another realtard brings the buyer to the table what do they each get. Some times it is 3%-3%.</p>

<p>So in your scenario it would be a difference of 15k. Now if I am the listing agent on a 525k house and not the 500k house what house do I show you first? HMMMM </p>

<p>Now lets assume for just one moment that the 500k house is a much better fit for me. So I pay 25k more for a house so the realtard walks away with 16k more comission.</p>

<p>I am not saying it happens all the time but the fact that it probably does means the system is broken.</p>

<p>And by the way what over the last few years has a realtard done to earn 30k on a transaction in So Cal? Tell their customers that they are not inventing new land. Now is a good time to buy. No really it is. </p>

<p>I think a professional should be able to sell 10 houses a year. If they make 10-15k per house they will be making a fairly good living.</p>
 
<p>The listing agent for the house I bought did exactly this. The owner was living on the other side of the country, never showed up at all to sell his house, so he had no idea what his agent was doing. The agent didn't even put a sign up in the yard to sell it (though he did this AFTER the house was in escrow, probably for advertising). He then went door to door in the neighborhood to hand out flyers. This is how I got wind of it--from a friend up the street. The house is tiny, but my buddy knew I would love the garage. It was no secret the selling agent was more than a little disappointed that I brought my own agent into the deal. My agent didn't do much to earn his 3%, but he's very likeable and was very patient and thorough throughout the process.</p>

<p>Speaking of good living, a little old gramdma-type who specializes in a nearby neighborhood handed out a year-end flyer a couple years back for all the homes she had sold. I totalled them all up and--assuming 3% on all of them--I figured she made $12M that year. </p>
 
tr:



That realtor is stumbling over dollars to pick up pennies. Truly an idiot.



The 3/3 split is a valid point. The realtor isn't arguing over 1500 bucks any more, now it's $750. What is more valuable?



$15000 in your pocket and a happy buyer OR

Gambling on making $15750 and taking a chance on losing the buyer to somebody else altogether?



In the big swing of things, the last $25K of the sale doesn't matter to the realtor. Getting a deal closed with two satisfied parties does. If your realtor doesn't grasp this concept, you need to seriously consider getting another one.



Another alternative is to get your own RE license so you can book your own sale.
 
<p>No_Vaseline</p>

<p>You are misunderstanding the difference is between 15k and 30k. A 15k difference if you can steer them into your listing.</p>

<p>It is not the last 25k of the sale. </p>

<p>Funny you mention the license that is something I am considering. </p>

<p>Either way I still don't know what a realestate agent does on a sale that makes them worth that much money.</p>

<p>You take a look at redfin and tell me how many of those listings are even remotely decent. </p>

<p>The real value is the monopoly that is the listing itself. Essentially sellers are paying 6% because if they don't agree to it they can't have their home placed on the MLS. To be honest I can't beleive that the FSBO companies have not been able to sue the Ass. or REaltards to break up this mononpoly.</p>
 
<p>Hi everyone,</p>

<p>This is NIR; who is still in the real estate business. </p>

<p>Years ago when I was thinking about becoming a realtor, I was very unhappy with all the real estate agents I worked with. I seeked advice from several sucessful agents about getting into the business. Two main advice I gathered, and I quoted from 2 agents:</p>

<p>1. "Do not get in the business. If you can do something else, then do not become a realtor".</p>

<p>2. "You will have to LOVE being a realtor".</p>

<p>So true. IMO</p>

<p>Research has shown that only less than 7% of realtors are trusted. Further analysis indicated that the general public does not understand what realtors REALLY do. </p>

<p>Seeing is believing is human nature. Therefore, some of my clients think I am worth a lot more than 6% </p>
 
<p>NIR. . . good to hear from you. Hopefully the downturn in the RE has not impacted you too greatly.</p>

<p>I do not think that having a realtor is a bad idea. It helps buffer the buyers from unwanted solicitations and saves people time from having to drive around everywhere. Actually, I think a good realtor is as invaluable as a good mechanic, good lawyer, or good doctor. </p>

<p>The problem is that there are too many bad realtors out there that are short-sighted and out to get the highest commission possible. It is similar to my profession. A lot of lawyers (esp. those on the side of the buses) are out to get the quick buck. They do not want to get their clients top dollar but rather what is most profitable to them. They do not want to do the work and are trying to settle ASAP. There are a lot of good lawyers out there but there are a lot more bad ones. It sucks to be lumped in with those guys but it is part of the gig. </p>

<p>Also, the NAR's monopolization of the MLS has turned me off. It holds down competition and equalizes the good realtors with the bad. Going back to the lawyer analogy, bad lawyers are generally cheaper than good ones. Thus, you get what you pay for. It should be the same for realtors. The good ones may deserve 6 percent but many of those out there do not.</p>

<p> </p>
 
<p><strong><em>Also, the NAR's monopolization of the MLS has turned me off. It holds down competition and equalizes the good realtors with the bad.</em></strong></p>

<p>Exactly. Without the monopoly the agents wouldn't hold as much value. The perceived value is the agents wealth of knowledge that is the MLS. </p>

<p>If a seller could be seen by everyone for less I am sure they would. Seems like price fixing to me. If I were a Lawyer I might consider a class action. Name all sellers and buyers as the class.</p>

<p> </p>
 
<p><em>"Further analysis indicated that the general public does not understand what realtors REALLY do. "</em></p>

<p>Analysis of IHB posts indicates that IHB bloggers understand very well what realtors <strong>REALLY</strong> do. </p>
 
<p>IrvineCommuter,</p>

<p>Thank you for your kind words. I do have 3 lawyers whom I love dearly - professionally, for the caring that they give me and my clients. </p>

<p><em>Also, the NAR's monopolization of the MLS has turned me off. </em>Why would you feel this way?. All the listings on the MLS go directly to all the real estate sites such as homeseekers.com and realtors.com. Only the private remarks are hidden for the safety of the sellers. The commission rates are in the ball part of 2-3%. What other pertinent information you want?</p>

<p>awgee,</p>

<p>Your point is well taken. Realtors should get an F for not showing the public what they REALLY do. Wait a minute, we are not required to 'tout our horn' because we are self-employed.</p>

<p> </p>

<p> </p>
 
<p>NIR...</p>

<p>NAR has repeatedly used the MLS to undercut discount brokers and blocked from others to use the listing on the internet. They were forced to change a little when the FTC and the Justice Dept. started an investigation. </p>

<p><a href="http://www.mortgagenewsdaily.com/5162007_Discount_Real_Estate.asp">www.mortgagenewsdaily.com/5162007_Discount_Real_Estate.asp</a></p>

<p><a href="http://www.inman.com/InmanNews.aspx?ID=59062">www.inman.com/InmanNews.aspx</a></p>

<p>My opinion is that the NAR actually does its member a disservice by trying to protect the bad realtor at the expense of the good one. I think people would be perfectly happy to pay a realtor that did a great job but are turned off by the fact that there are no choices to paying the 6 percent commission. Thus, one realtor is just as good or as bad as the other in most people's eyes. I know plenty of people who like their realtors and know that they are looking out for their clients' best interests. </p>

<p>Additionally, why is the NAR so defensive? Why not try to present the public what they do and how it benefits the clients. Instead of becoming "warm and cuddly", the NAR and realtors look "cold and greedy".</p>
 
<em>At 500K you pay 30K.


At 525K you pay 31.5K.





I can tell you any self respecting commission salesperson is not grinding it out for that last 1500 bucks if he wants to book orders in volume, which is where the money is. If they have any brains.......plus they have to worry about blowing out the buyer.</em>





if you sold your house for 500k and a few months later a neighbor sold for 525k....





and you approached your agent to ask why he didnt tell you to hold out a few months for a 5% increase...





and his response was, "hey, i'd be stupid to blow my 30k commission by holding out for what ends up amounting to only a $1500 difference for me. i needed to move on to the next deal and book sales in volume."





... how many of us would be thinking, "wow, that guy is a great salesperson. good for him!"





not me. i'd be ready to tear the guy a new @#$%&*





--





who has read freakonomics? one of the first sections of the book is devoted to real estate agents and the fundamental conflict between the seller and agent's incentives.





<em>"To test that theory, Levitt and a University of Chicago colleague, Chad Syverson, studied 100,000 home sales, and report that when agents sold their own property, they kept their houses on the market almost 10 days longer, on average, and made 3.7 percent more money."</em>
 
Hello All



I am new to the board but have been following the various discussions for the past few months. I am currently a realtor for Coldwell Banker in the Silicon Valley but will be moving down to Irvine next year to be closer to my wife's family. Thus, I have a high level interest in the Irvine Real Estate market as both a prospective home buyer and as a preson who will be making their living as a Realtor.



Like many on the board I know there are many good and bad Realtors and I am sorry anyone has had a bad experience with a Realtor. However, I do take some exception to being called a "realtard". Like I said, some of us deserve that designation but many do not. One other distiction that I think is important is that there are Realtors and there are Brokerages (ie Coldwell Banker) and quite frequently the Realtors who work for these brokerages are not in complete agreement with how the brokerages run things. As for NAR, it like any other trade group, is responsible for representing the interest of its members, the Realtors. It is not unlike the local plumbing union who will try to invoke rules that will protect the public who use their services because that is good business but ultimately they are beholden to their constituents, the plumbers. NAR is not a public advocacy group and thus I would not expect them to say things publically that would harm their members.



Also, the MLS, is not a public utility. It was designed as a way to make it easier for Realtors to communicate their listings to other Realtors. It is maintained and paid for by the Realtors, and NAR has taken stand to protect the MLS from those who wish to exploit it. I personally have no problem with companies such as Help-U-Sell, Zip-Realty or Redfin. There is a place in the marketplace for all types of limited service brokers. I am confident enough in my abilities that I can prevail on my clients that the services I provide are worth the compensation that is paid to me.



However, I do object to the "no service brokers" who simply put the properties on the MLS and then leave the rest of the details to the sellers. If you want to sell your property as a FSBO, then you should not be allowed to take advantage of system run by the Realtors. There are plenty of avenues for a FSBO seller to expose their homes to the market (local newspapers, craigslist.org, owners.com etc) and they should not get a free ride on our system. FSBO



The circumstance that we run into occasionally ( mostly in a hot market) is the listing broker who puts a nominal $500 commission to be paid to a cooperating agent for a 500k property. Again, we have a broker who is trying to get a free ride on our system without being willing to offer a normal compensation level to the buyer agent. In addition, it puts the buyer's agent in the awkward position of explaining to their client that if they want to buy the property that they can either go it alone or they will have to pay the buyer agent out of their own pocket.



I believe NAR is acting correctly to protect their members by creating rules that prevent use of the MLS in either of these situations.



As for protecting the bad Realtors, there is not much NAR can do other than to try and lobby to make it more difficult to get a Real Estate license ( which is often seen as being anti-competetive). Ultimately, the customers need to put the effort into weeding out the bad Realtors from the good. This is likely a person's most important financial transaction and thus the customer needs to put as much care into selecting a Realtor as they would a doctor, lawyer or any contractor. You need to interview several agents, talk to their references and then pick the Realtor who will best represent their interests. The one thing I always tell prospective clients, if you were selecting a doctor or lawyer would you go with the guy who is the cheapest or the one who is the best. What make one Realtor better than another is topic for another day.
 
ACPME



Actually getting or saving that last 25k in a transaction is all about what makes the difference between a good agent and a bad agent. A good listing agent will try to expose the market to 100% of all buyers who are looking for that class of home by creating websites, doing additional marketing, high quality print materials etc. A bad agent will simply put the house on the MLS and rely on other agents to do their work. This strategy will get the house sold in a hot market but even then they may miss the last 20% of buyers who might have made an offer that resulted in their client get 25k more for their house. On the buy side, it is a good agent's job to save their client as much money as they can on a house they want. Much of our value comes from our ability to negotiate our clients a better deal. Why does anyone higher an agent or negotiator? Most hire an agent becuase the believe they will do a better job negotiating than they themselves would do. If a home buyer does not place any value on an agent's ability to negotiate a transaction or evaluate a home, then they are better off working with a company like Redfin.



My clients hire me because the place a value on my experience and my ability to get them the best possible deal.
 
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