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quote:
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.
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.
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
Typically Tropical Properties
"The Next Level of Service!"
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I was going to be a Realtor once because my grandpa had been one and he had been a really nice grandpa. After I took the real estate course and was ready to take the test I finally found out how un-respected most Realtors are so I never did go take the test. Coming to the selling of realty from a draftsperson's point of view I would have thought would have been a good thing, especially when selling vacant land or houses in need of permits, but if Real Estate salespersons are going to be held in such low regard, I didn't want to go there. I'm wondering how many other folks don't take up selling real estate as a profession because of how poorly they would be perceived?
One of the biggest reasons I suspect we have arrived at the mess we are in is there is no eduction in finance and mortgages for most citizens. I never had any financial education in school, there were a few math classes, but nothing even so much as how to write a check, let alone how, when or why to get a mortgage and the pros and cons of them. If you want a lesson in astonishment, take your mortgage and calculate how much you will pay in interest over the life of the mortgage. There is a REASON why the root word of "mortgage" is DEATH. It will take you until at least that long to pay that much back!
"I like yard sales," he said. "All true survivalists like yard sales."
Kurt Wilson
"I like yard sales," he said. "All true survivalists like yard sales."
Kurt Wilson
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I am astounded that realtors in this country make 6% on houses and I've been told up to 10% commission on land. With the increase in prices over the last few years their commissions have increased far beyond the normal wage increase.
We bought a house here in 2005 after meeting the seller when walking by his house and soon after agreeing a price between us. Sadly he was under contract with a realtor so of course had to pay a huge commission. We dealt with the escrow company and all other parties directly. As a first time buyer here I was shocked at the amount the realtor made for the little work they did.
I have bought and sold in the UK, which I found to be easier in some ways and certainly cheaper. I got 3 estimates from 3 realtors and went with the highest price. The basic commission was 2% but when my realtor found a buyer who offered me slightly less than asking I accepted on the basis he took a lower commission of 1.75%. He agreed. In the UK one realtor acts for both parties and each party gets a conveyance lawyer to handle escrow and anything else unusual. The lawyers' fees are about the same as one pays here for escrow.
In Canada the realtor fees are also less, as you pay a higher percentage on the first chunk of the sale, and much less on the balance. Overall it works out to be less than 6%.
With prices so high now for homes isn't it time for a shake-up in the US real estate world? I've had several discussions with realtors here who try to convince me they are worth every penny as they bring in buyers and advertise. This may have been true in the pre-internet days, but now we are all on line and we can all read the MLS website which shows property for sale via realtors and by owner.
When we bought our house in Hawaii I soon learned how little the realtor knew of the market. I simply did my homework and checked on the real tax website for all transactions carried out in my area. I learned the price of land, the price of homes, when homes were built, the permit values, how much the pools cost, how much solar cost, when the sales took place, etc. I felt informed to make the right offer by what I learned myself.
Given the information out there and the tremendous reach of the internet I just don't undertand why a greater percentage of real estate transactions are not listed as "For Sale by Owner". I do understand not everyone can be home to show all potential buyers around at all hours, but I've had realtors put me off for days when I've called to see a property because they are "busy" or realtors who just don't bother returning calls. From a buyer's persepctive, realtors make it no more easy to see a home than a motivated home owner/seller would!
If people still prefer to have a realtor guide them through the transaction, how about paying them what they are worth - on an agreed fee basis, or certainly not more than 2% of the sale price?
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Welcome to America's dilemma. I don't know of many people that aren't in that boat my friend. You just need to hang in there for the ride. We bought a property around the same time and we currently have the house rented. We are not making any profit on the rental but at least I don't have to shell out more than I have too until things turn around whenever that is. My advice is rent if you can, and wait.[ ]
Best Wishes.
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listen, all of us who bought a home in and around the Prime Lending fiasco is underwater right now! Now is not the time with giving news media sound bites for advice!
Hope, you need to understand this too. If your home is under water, you cannot get refinancing from your lender! Sure, you can get a reprieve of sorts from your mortgage company I'm sure. Most do a 90 to 120 suspension of mortgage payments if you ask them, and have never been late before. I believe even a few of these mortgage companies will even allow you to put those suspended months on the back of your mortgage!
But RadioGuy, consider your plight? Is it really that bad? If you're in HPP, you've got an acre of land you can work. I mean everything grows like weeds in HPP. You can Fish off the cliffs of HPP too. You can get yourself a few egg laying hens. I mean things could be worse,right?
Plus ole Ben's got a good idea too!!!!
http://www.youtube.com/watch?v=LusYNmp1AsI
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Let's get together and over grow the government!!!!
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Support the 'Jack Herer Initiative'NOW!!
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Youser, the problem is not the 6%. The problem is that the public is not educated enough to make comparisons and willing to pay the 6% for no service too. Most real estate agents get a listing, put it in MLS and do nothing else.
At my company we have a "Menu of Services" for the sellers, CLEARLY outlining what we will do for $500; for 2%; for 3%; for 4%; for 5% and 6%. We also offer document preparations without agency relationship for an hourly rate. Our commission rate depends on the selling price of the property too.
Of course the National Association of Realtors and the local board of realtors have no vested interest in educating the public.
Aloha,
John S. Rabi, GM,ARB,BFT,CM,CBR,FHS,PB,RB
808.989.1314
http://www.JohnRabi.com
Typically Tropical Properties
"The Next Level of Service!"
ric
quote:
I don't know what happens in a conversation between 2 other people, . . . except when they post the conversation online (even though it has now been removed from the post). I just don't see the point in the complaint when the broker's advice was exactly right in that case, and someone didn't believe him.
I got annoyed with you because you extrapolated and filled in with your imagination what you thought was the case and you were wrong, and see, are still wrong.
I met John for the first time at a social lunch with another person. The lunch was not real estated related. There was conversation. There was no professional relationship. I don't at all mind having John remind me that he had a good perspective. Did we sit at lunch a year and a half ago and discuss how the market was going to completely tank and the banks go bust, and so forth?
No we did not, and it isn't any of your business.
I'm aware of the reality of the situation. My comment about judgers is directed at people who assume they know the motivations of people they have never met. I'm just sick of the high moral tone of the people who escaped being caught up in it.
Someone said, everything happens for a reason. (Not everyone believes this. My mother who is all about faith would agree and my father who is an atheist and a mathematician could argue for days that there's no proof of that.)
If so, I think I made a decision I very nearly didn't make because I was meant to understand what it's like to stand in the shoes of this widespread misfortune. I didn't get caught in the 2004 tsunami, or Hurricane Katrina, but this one I didn't sidestep. It is certainly a profound lesson.
however, it behooves people who are not learning the lesson or going through the hard times not to stand there waving the finger and all this self-righteousness.
FWIW, I agree with anela. Very few people are compensated enough for their hard work. Ask someone who picks grapes for a living. It's not about how hard you work when it comes to wealth, although few will amass a fortune without working. But there is absolutely nothing about our society as it is structured that prevents very hard working people, who work and save their whole lives, from ending up homeless and broken. Nothing. No reward for righteousness. It's a nice morality fable for the immoral and unscrupulous to use to keep people in line.
Pit the ant personalities against the grasshoppers and let the sniping obscure the massive manipulation that is kept out of view.
I was thinking last night about what was pushing my buttons with this conversation, and I realized in part it is so familiar to me from studying Irish-Anglo relations in grad school. Very much the same arguments that I see here were used by the English to justify waging attempted genocide on the Irish. Weren't thrifty, didn't save, didn't have work ethic, expected luck to save them, the whole stereotype, well deserved that six million died in the Famine, and let's not shed a tear, it's for the best, charity is wasted on the undeserving ... very similar.
I understand and accept the realities. I also believe in compassion.
hey John, I liked your article very much. Very good points you make. I think we are more in agreement than you think we are. [  ]
My realtor for most of my time on the island is Alvin's sister-in-law, Kelly She's an awesome good and kind person who if anything is not enough of a shark for the business. We saw some real snakes in the profession in the time we worked together. Yes, she works for her commission, but she does so in a very ethical way, and is very service and communication oriented. She's a treasure, and in the minority.
I also have nothing but good to say about my current realtors. They are not pretending to be my friends, although I would be happy to have them as friends. They are extremely professional.
I interviewed three agents when I listed my house and it was a tough choice because they were each of them excellent. HOWEVER that isn't because most agents on the island are good, it's because I picked them with some knowledge of who is good because I've looked at so many properties, and sold a few, and gotten a sense of who I would want to work with, as well as who does a good job of selling property in my neighborhood.
The current report is that the phones have started ringing again, and things are starting to move. Showing requests are coming in, and offers. But some people who are looking and eager to buy and move here, still have their hands tied because of mainland properties they need to sell.
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Even though the agent had a vested interest when (s)he repeated "Real estate prices are going up!" - during that time period - (s)he was right! It seemed like everyone was trying to "invest" in real estate, and many buyers were willing to offer more than the listing price just to get THAT property! So prices went up!
Yes, I bought a house in May 2007, after it came out of escrow when someone couldn't get approved, with cash. It was more than it had been in 2000 when I started to look, but it had been offered at less than others of the same size (stripped - without water heater, kitchen sink, laundry).
Its really "auction fever" and you just have to accept that we all had it, and now we don't. How much are those Beany Babies worth today? That new car 3 years later? Or that diamond engagement ring? Its all buying in the heat of your passion. It'd be a shame if you lived your whole life without any passion, wouldn't it?
If the lava flows across 130, I hope I can have it moved to another site - I like it that much! And I now have a Hawaiian home to come back to (whilst in Michigan, shivering in single digits, temperature-wise).
Smile if you have friends, health and warmth, or any one of them! Aloha!
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Kathy,
Why do you keep telling me that I wasn't at lunch with you and John and it's none of my business, when you detailed the conversation here? You made a comment, I took the time to read it and try to offer a response. It is only an exchange of ideas.
I have no idea of your motivations except what you've said here, and really, it's irrelevant to the situation. People can't just get credit for their intentions, and if they aren't satisfied with their salary picking grapes, they can try another job. Anyone who feels that the grape-picker is underpaid could always go to the farmers market and offer double for everything.
You continue to classify people on this board, that those who can accept reality are 'judgers', or that they haven't suffered also. You talk about "high moral tone of those who didn't get caught up in it". Have I ever disclosed my losses? How can one tell if any of the other authors here haven't gotten caught up in it? What would make you think I haven't lost? If you're interested, I think I've lost more than the average home cost in, just the past 3 years. I think many people have lost that much. What good is it going to do to complain and blame everyone else? I haven't judged you or put you down. I don't know you and from what other people have written, I could only guess that you are a decent person. It's irrelevant again.
All the things that happened are blind to motivations and personality. Anybody who had anything to lose has lost. There is no point is arguing that certain people deserve sympathy and others who also lost, do not.
And to equate this to genocide? People are trying to help you understand what has happened and that's what they are labeled?
And compassion, . . . my compassion makes me wish that this would never happen again to anyone. Best wishes.
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