01-19-2009, 05:43 AM
quote:OK, here it is! This article appeared in my newsletter Volume 16, Issue 2. I am in disagreement with Kathy, I think most real estate agents are scumbags and only a small percentage of them are real professionals.
Originally posted by KathyH
Some real estate agents ARE a big part of the bubble, but as part of showing what's on the market.
YOUR FRIEND?!
Nobody trusts every professional completely – that’s the good news. But unfortunately while 50% of people in a Harris Poll completely trusted their doctor, only 7% completely trusted their real estate agent. At the other end of the spectrum only 4% didn’t trust their doctor “at all” but 20% didn’t trust their real estate agent “at all.”
Buying and even shopping for real estate takes nerve. The rules of engagement are completely different than you would think. To be successful, you’ve got to arm yourself well in advance with an understanding of how this game is played.
The first thing to know is that the real estate agent is not your friend. I’ve worked with real estate agents for 25 years and in dozens of countries. They are all friendly guys, and most are good company. I even keep in regular contact with some and value that relationship. But none of those things change the fundamental truth about real estate agents: they’re wolves.
Stepping into a real estate agent’s office, you’re stepping into the wolf’s den. Believe me when I tell you that, when it comes to business (that is, the purchase of real estate), the agent you’re working with is not working for you. Buyer’s agents don’t exist. It’s the brokerage company that represents you and if they have just one listing they are not Buyer’s Brokerage regardless of what they are telling you. In many of the markets (if not all!) a large percentage of the agents are new, aren’t supervised or maybe not even licensed. The guy showing you around could have been selling shoes two months ago. (By the way, have you checked how many of the real estate agents have been foreclosed on?! Would you trust the advice of such an agent?)
Furthermore, not only are these guys not working for you…but they’re not working for the seller either. They are working for themselves, and their goal is to extract as much commission out of you as they can. Understand that going into the conversation, and you stand a much better chance of coming out of it uncheated. Here are some other tips to help your search go smoothly:
Don’t reveal your budget: Until you have a good idea of current market pricing and of differing values neighborhood to neighborhood, don’t quote a dollar amount when the agent asks about your budget. Tell him as specifically as possible what you are looking for--if you’re in the market for a house or an apartment, indicate the number of bedrooms, the total size you want in square feet, the area of land, and any special features that are important to you, - for example mother-in-law quarters - but be vague regarding how much you want to spend. The minute you quote a budget, the agent works from that number to figure his potential commission. If he decides there’s not enough in it for him, you’ll get even less service than you might enjoy otherwise. Quote a bigger budget, and you risk the guy selling you something for that amount of money…even if he’s got something just as nice (or even nicer) on his books for less.
Keep to your original specs: Stick with your parameters and don’t be confused or distracted by agents showing you houses that don’t seem to fit the specs you quoted at all. When I was shopping for a home in Texas a few years ago, I told the agents I wanted a large older house with at least five bedrooms on some land. They took me to see one 5- to 10-year-old, 1,800-square-foot house after another. I still don’t know how you fit five bedrooms into 1,800 square feet. I didn’t go inside any of these houses to find out. I simply reminded the agents, again and again, that I wasn’t interested in a small, recently built house on a little plot of land.
It wasn’t that they didn’t understand. It was that they didn’t have any listings that fit our specs on their books…but they had these houses…so why not show the silly buyers? Maybe they won’t notice the difference… It’s even worst in most markets around the world; agents don’t work with each other. They don’t share listings, and they don’t have access to other agents’ listings. They only have what’s on their books...so that is what they are going to try to sell you. Talk about trying to put a square peg into a round hole. They’ll try to chip away at the edges to make a fit, because, remember, all they care about is making the sale. Buyer satisfaction doesn’t figure into the equation. Do your diligence to make sure you know who you are working with. As I said it at the beginning, I even keep in regular contact with some real estate agents and value that relationship, but that’s a small minority. Those very few true real estate professionals are the ones that have made a concentrated effort to take their career seriously. They have continued their education beyond just licensing and the bare minimum continuing education standards set by the state. Enhancing their career didn’t just involve taking more specialized courses to gain additional skill sets. It involved making a mental shift from being a commission oriented, independent agent to a customer-centric consultant; often in a specialized market niche.
Don’t be blinded by fancy names like REALTOR or REALTOR-ASSOCIATE, they don’t guarantee more knowledge, more credibility, and more ethics. As reported by all major news media organizations, between March 1, 2008 and June 16, 2008, 406 people have been arrested in the sting dubbed "Operation Malicious Mortgage" resulting from 144 cases across the country, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI. Those named in the cases included, many brokers and real estate agents, most members of the National Association of REALTORS. (So much for their so-called “Strict Professional Code of Ethics.”) After all, this is the organization that said “Buy now, or be priced out…FOREVER!” (Check out this hilarious parody and pay attention to the National Association of REALTORS part!)
http://themessthatgreenspanmade.blogspot...osure.html
Aloha,
John S. Rabi, GM,ARB,BFT,CM,CBR,FHS,PB,RB
808.989.1314
http://www.JohnRabi.com
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