Over the last couple of months we have spoken to hundreds of agents who when asked, most can not easily articulate what they do in a transaction. Yet worse, justifying why they receive 6% commission on the transaction is even harder to define.
More often than not their answers have been based upon mantra-like rhetoric that centers around the ignorance of the consumer. One of my favorites, “I don’t get paid for what I do, I get paid for what I know” is representative of the kind of inanity surrounding an industry whose players for the most part are reluctant to provide great detail into what they do.
In this Web 2.0 world, many who are resistant to a culture of transparency and fear disintermediation believe they are beyond reproach and that the technologically savvy consumer could never do without a Realtor’s involvement in a transaction. The misguided belief that “there will always be a need” for a Realtor is ignorant at best.
While true, there may be quite a great number of consumers who DESIRE to have an agent involved in a transaction, much more for convenience sake then anything else, it is big mistake to think that they are NEEDED in a transaction.
The former implies that an agent’s services are thought of by some to be much like that of a “real estate concierge”,while the latter implies some form of prerequisite dependence. This article is written to dispel the rumor that an agent is needed in a transaction.
So from start to finish I will outline a recently closed transaction.
1. Property Selection: A property was found online through tax records as being owned by a bank. The bank had not as of the time of contact contacted or retained an agent. The bank was contacted and the decision maker at the bank communicated their willingness to receive an offer.
2. Due Diligence: Data was reviewed and it was concluded that this would be a great buy. All of the vital signs were reviewed online and required about 2 hours of time. It only took this long because it was located in another state that we were unfamiliar with.
3. Contract Offer: Offer was submitted via email and the bank received it, struck a few paragraphs, required an addendum and sent back to our office for review.
4. Contract Accepted: After one revision and a counter offer in price, the deal was accepted and it was time to prepare for closing
5. Contract Delivery: Contract and all associated paperwork was scanned, and emailed to attorney / Title Company to prepare for closing. Electronic signatures were accepted on the contract and originals were obtained via Fed Ex directly to closing rep
6. Transaction Tracking: Within 2 hours of submitting contract we were given a password to track file activity online…password sent via email to REO department as well.
7. Inspection: A local inspector was obtained online who went to the property, met the bank representative, took pictures, video and presented a full report online in under 24 hours.
8. Municipal Background: A lien was found on the property and there was a cloud on title. We forwarded this information to our attorney who had it resolved in 24 hours. Clear title was available and we were given an abstract for review.
9. Survey: The Hard money lender wanted a survey and an engineer’s report which were ordered and completed within 48 hours.
10. General Contractor Report: A general contractor was given the assignment to prepare a report showing a detailed review as to what repairs, if any, would be needed on the subject property. Took some time on this one as the GC was backed up. Report received within 5 days and nothing major beyond cosmetics found.
11. Greenlight: based upon all of the data, the closing was green-lighted.
12. Clear to Close: Transaction agent sent out email notifications that the deal was ready to be closed and that funds were on hand.
13. Mobile Closers:Mobile Closer sent to our office to execute all closing documents and loan papers from the Hard Money lender as well as an original HUD. Another mobile closer in Maryland was contacted forwarded the necessary documents and met with the designated bank official in Maryland and signed the previously executed docs from here. Closer Fed Ex’d closing docs back to the title company and the transaction was concluded.
14. Time Frame: From the time the property was located through to the time that the deal closed was 9 calendar days.
15. Commission Savings: REO Bank saved $18,000.00 in commissions and liquidated a property they wanted off of their books.
We never even visited the property!
While this type of transaction may be, at this point in time, beyond the scope or understanding and ability of most end users, to think that an end user can’t learn to do this or won’t want to do this, is unrealistic.
Many FSBO’s may not be able to coordinate this type of transaction…yet. However for a Realtor to say that they will never be able to is quite foolish.
It’s not an if, it’s a when. Very soon various companies will begin marketing their services to the consumer that will enable the consumer to buy and sell real estate without the NEED for a real estate agent. This is irrefutable and not even remotely debatable.
What can be concluded is that there will most likely be an ongoing desire for a Realtor to be involved in a transaction. Yet, this desire is borne of convenience, not need.
As such, the seemingly sacrosanct commission will even be more scrutinized. Although it makes for good discussion and debate, I would not worry all that much about disintermediation.
If I was a real estate agent I would instead wonder if I was prepared for what lies beyond disintermediation.
We talked about this post today on Real Estate Radio USA
Jeff Duffey says:
You state, “What can be concluded is that there will most likely be an ongoing desire for a Realtor to be involved in a transaction. Yet, this desire is borne of convenience, not need.”
I think most Realtors would freely admit people are very capable of handling their own real estate transactions. The general public is also capable of laundering their own clothes and cleaning up their own home. Yet people pay for maids and dry cleaning. These are SERVICES.
Real estate is a service industry which means agents handle transactions that the average Joe could most likely do themselves. The truth is that most people don’t have the time to learn about the industry. You didn’t get to where you are by reading one book at the library yet you make it sound as though real estate is just that simple. I could learn all about plumbing and fix my own leaks, or learn about roofing and install my own roof, or learn about installing brakes on my car – you get the idea. But I don’t have the time, nor do I want to know about these things, which is why I’d rather pay a professional plumber, roofer or mechanic to do these things for me.
Realtors understand this and are reminded daily that they are not “needed” as we drive by FSBO’s or when our friends sell their home to a co-worker and cut agents out of the deal. But we’re also well aware that there are people out there that don’t have the knowledge you have about real estate transactions and those are the people that can get themselves into serious legal trouble if they’re not careful. You know how to CYA in your contracts but most people don’t. And guess who the buyer ends up calling when the sellers of the home they’re trying to buy is threatening to keep their $10,000 in earnest money? That is when our clients realize they do “need” a good agent’s help.
Refusing to ask for help when you need it is a sign of pride and ignorance corrupting your better judgement.
April 10, 2008 — 11:30 am
Allen Butler says:
Hello Barry,
I understand clearly what you are saying. And in the current market climate, lender owned property is a no-brainer. However, many lenders won’t deal with buyers directly. Their asset managers “play by the book” and use agents and systems (notably REOTrans) to facilitate transactions. The example you site will be the exception, not the rule.
In a more normalized market, where we are dealing with actual homeowners, and actual buyers dealing with homeowners, the process you outline becomes more onerous.
Many homeowners will not know where to begin. However, I will grant that a certain savvy homeowner wants to “go it alone.” So, what does savvy homeowner do? First, he needs to know what price to place his home on the market at. Is he going to order an appraisal? Get a Zestimate? Log in to a “web-site as yet to be launched,” wherein he is given accurate, up-to-the-minute market valuation data and market trends reports? Possibly.
So, our hearty homeowner sticks a sign in his yard, posts his home on the web in a few places, and waits for the buyer to arrive.
So far so good. Now, a buyer (also a go-it-alone[r]), decides, after seeing the home on the web & such, that he’d like to see the home. He visits, and likes, and makes an offer. They haggle a little. Settle on a price.
Now, we need contracts drawn up. Little problem here, as neither of them have the requisite experience with contracts. Do they contact an attorney? Okay, they could do that. In my state, we don’t have “real estate attorneys” as such, but granted, they could probably find someone to do it.
They might also, for a nominal fee, contact an “on-line realtor” to review the contract for them. I’m assuming that they would each want to have their own, so there is no conflict of interest. So, we now have two on-line agents, or contract reviewers, or whatever.
The contracts are reviewed, everyone understands what’s happening, and the deal goes to a title company for closing.
The whole process sounds feasable, but there are a few problems:
1.) This scenario presumes two very savvy parties who are willing to go it alone. This seems to fly in the face of the modern American ideal of “having someone do it for you.” Many (most?) will not have that kinda gumption.
2.) There is still gonna be a “realtor” or attorney involved. Granted, the fees may be reduced, but they are still in the picture. Their role has just been diminished.
3.) I believe that the potential for law-suits in this scenario is tremendous. Maybe not. . .
4.) Uh. . .that’s good enough.
So, what’s a potentially marginalized Realtor to do? Start an online transaction outfit? Become an attorney? Get into another line of work? Start a website that connects buyers and sellers? Oh wait. . .there already exist. Maybe they just haven’t caught on yet. Guess we’ll wait and see. . .
Meanwhile, in my town, 98.97% of all real estate transactions are conducted through agents. Guess I’ll just hang in there with my head in the sand. . .
Allen
April 10, 2008 — 11:48 am
Barry Cunningham says:
like I said..a matter of time…not a foundation for a sustaied busienss model. It’s short term thinking.
As for serivce..of course some will opt for that route but then price compeition will be an issue. Can’t have it both ways
April 10, 2008 — 12:03 pm
louis@homegain.com says:
Larry
Good points. Most people, however, if they have the inclination or incentive and spend the time and/or money could do anything themselves, including represent themselves in a real estate transaction.
But that doesn’t mean that they should or have any interest in doing so.
During my interview with you I couldn’t help but thinking that you could become an opera singer with that booming voice (assuming you are not already one).
Does that mean you should? Probably not, unless it is one of your main goals in life and you want to spend the time and money on singing lessons and practice.
But I am sure you could do it. But alas, you have a radio show to run!
People can make their own beer, bake their own bread, fix their own cars, or even represent themselves in court (not advisable).
Certainly people DO work without Real estate agents, but the percentage of people doing so, to my knowledge, has not gone up very much or at all over the last ten years.
For most people buying or selling a home is a once in a lifetime event with hundreds of thousands of dollars at stake.
For these people first time on the job real estate training may not be at the top of their lists of new skills they are looking to acquire.
April 10, 2008 — 12:17 pm
Don Reedy says:
Hi Barry,
Wow, I think the premise you’re laying out here is pretty faulty. The phrase “The devil is in the details” is “unrefutable”, but not NEED verus DESIRE.
You started to lose me when you outlined the deal. Let’s take a look at why there really is a NEED, a real NEED, in even the deal you set out.
1. Property Selection: Is local knowledge EVER important? Yes, the client found this one, but is there another one, a better one, a more suitable one?
2. Due Diligence: A flurry of emails, and you think you’ve got due diligence, especially in “an state we were unfamiliar with?” If this isn’t an area that calls out “I NEED….”, then what is? Particularly with regard to value, both in terms of the transaction itself, and certainly as to the home in question, unfamiliarity NEEDS to be overcome….not wished away.
3. Contract Offer: I’m sure you didn’t mean it like it came out (I’m aware of your standing in the community), however, I had to stop here and go back to the top of your article to make sure you weren’t writing an April Fool’s article. “We got the offer. The bank ‘struck a couple of lines.’ “Added an addendum.” Do you think, even for a minute, that the client that COULD do laundry, COULD write a computer program, COULD handle their own criminal defense……SHOULD? Not on your life. The disintermediated clients you are describing honestly NEED a friendly face looking over their shoulders, NEED a knowledgeable, experienced counselor, NEED someone who perhaps will even provide legal advice through the agent’s company legal staff. In short, you’re describing a scenario that ought never to play out without adequate representation. Put another way, every client in fact NEEDS this, even if they believe they can do it on their own.
Now, so as not to go on too long, let’s just take up a few more of the items you seem to be indicating aren’t really NEEDED.
You were provided with Transaction Tracking. But do you KNOW when to begin to worry if something is slipping? Do you know how hard to push if it does, and why?
You had an inspection, and the GC report came back fine. Who’s the inspector? What kind of inspection does he or she do? Unless you are a very sophisticated buyer, one with not only experience with purchasing, but also with the nuts and bolts of electrical and plumbing, etc., you are severely in NEED of a hand to help guide you through that inspection report.
Well, you see where I’m going. In the end, and with no ax to grind on behalf of the real estate industry, clients who purchase a home, almost all the time, NEED, really NEED the services of a quality agent to guide, advise and direct them.
I don’t get paid for “what I know.” I get paid for what I do. If you are purchasing a home, you NEED what I do, and the “what I know” part is just a bonus.
April 10, 2008 — 1:48 pm
iamutahrealestate-Marty says:
Next on the chopping block…. Lawyers, Doctors, Stock Brokers!!! We don’t need ya!
Professionals will always be needed. I believe Realtors compensation will increase as technology continues to evolve. We may not be paid on a commission basis, we may become mediators like divorce mediators, but professional Agent’s will always be in demand. This is my theory or SWAG.
I do not know the exact statistic, but I know transaction’s not involing RE Agents have a VERY HIGH drop out rate.
Barry… you sound like a savvy investor, and know Real Estate. The fact is you will always need professionals. You had to hire an attorney for your scenario, You probably will have to hire an Agent to get your property marketed and sold.
Just wondering… your transaction above… how often does that happen? I assume someone spent a lot of man hours to find that one deal.
Great discussion!
April 10, 2008 — 2:04 pm
louis@homegain.com says:
A Realtor is needed even more in a down market.
Earlier this year I predicted that real estate agent commission might even RISE this year as consumers turn to experienced Realtors to help them sell their homes.
http://blog.homegain.com/ten-real-estate-predictions-2008
April 10, 2008 — 2:24 pm
Barry Cunningham says:
don, no insult intended but are you honestly saying that most real estate agents can explain a contract? Please….
You all seem to be missing the point. The point being that this is not rocket science. Never has been never will be. What I am saying is that one could very well educate themselves into being as knowlegeable about a real estate transaction as MOST realtors.
There are obviously some exceptional realtors but for the most part are any of you saying that in time the consumer that chooses to can’t be as knowledgeable as most agents out there? Think hard before you answer that. Don’t answer from your experience..I am talking about MOST agents.
Don..I hate to break it to you..no I don’t need you and never would need you even if I bought a property in your backyard I would not need your services. I may desire them but I don’t need them. I don’t think you’d like to have that challenge.
Iamutah…I did not NEED an attorney, I used an attorney because I do business with an attorney for one reason and one reason only. Most real estate agents would NEVER know the reason why. I don’t ever need to hire an agent to”market (now there’s a joke) our properties on the exit either… As for the transaction above, how often does it happen? Over 75% of the properties we have purchased over the years have been bought sight unseen and many have been sold in much the same fashion.
Man hours….maybe..and I do mean maybe…3 hours total of our time invested.
I am surprised agents aren’t aware of what’s going on in the market place today. Virtual wholesaling or virtual real estate investing is becoming HUGE and realtors are missing the boat.
We don’t NEED real estate agents, but sometimes if we are brought a deal we will work with an agent. Deal has to make sense.
Guys this is not about pointing fingers. You have to see the writing on the wall. Let’s be business men and move beyond emotion.
Business models utilize forecasting. We use trends and data and adjust for long term shifts in the business. This post was about realtors seeing into the future. It’s not about today.
It’s being prepared for the future. Like Greg said, a prudent blacksmith would have seen what was on the horizon and been prepared. What kind of forecasting and vision are most of those in this business engaging in..that is the intent here.
Thanks for the debate.
April 10, 2008 — 3:39 pm
Louis Cammarosano says:
Barry I think you are highlighting that we may have too many realtors and too many that are not too good.
That doesn’t mean that we don’t need great Realtors.
Professional standards are probably not what they should be in all professions – the legal profession has charlatans, the medical profession quacks, the teaching profession has people who fit the “those that can’t do, teach” stereotype.
HOWEVER a true professional, whether a realtor, lawyer, doctor or teacher is well worth the money as they do know things and have experience that the lay person does not and can help immensely.
If you have a bad lawyer represent you in a contract negotiation, you might argue that you could have done better yourself.
If a quack doctor provides a mis diagnosis, you could argue a self diagnosis would have been more accurate
If you were taught by an unskilled teacher you might argue that self study was a better option.
The foregoing examples don’t mean that we don’t need lawyers, doctors or teachers, it just means we need better ones.
Saying that you are able to figure out a real estate transaction and claim that it is not rocket science only highlights that, like most disciplines, the basics are not too hard to grasp or even execute. Its the finer points of professions that are worth paying for.
If your Realtor does not have negotiating abilities, transaction knowledge, local knowledge, organizational skills etc and you do, I agree you might be better off doing the transaction yourself.
April 10, 2008 — 3:53 pm
Ann Cummings says:
Barry – I’ve read several of your posts and I just don’t understand why you feel the need to take every opportunity you can to bash and belittle REALTORS. Sure, there are some that shouldn’t be in this profession, but most of the REALTORS I network with are outstanding agents and do a terrific job for their clients. Just as there are lousy radio announcers and lousy investors, there are some that are very good at what they do – same goes for REALTORS and real estate agents.
Instead of being so negative and venomous in your attacks on what we do and the services we provide to our clients who choose to hire us, why don’t you turn your energies around and use them to teach consumers how to do what you claim to do in investing? Save the world from lousy REALTORS and teach consumers, those who want to know, how to go it alone and do just what you do.
Your continuous attacks on the profession I take great pride in are really getting old.
April 10, 2008 — 4:45 pm
Spencer Barron says:
All that and some Barry.
While the perception of a need may change, the truth will always remain. The majority of people are unwilling or unable to take these steps themselves. The cost for the services will change with technology and the free market should determine the price for the services. Costs will definately change as will representation but that’s not really disintermediation.
Sure you can believe that there is no human element needed to navigate the process but then you probably would also believe your Zestimate is correct, you should represent yourself in a divorce and you could cook like Wolfgang Puck if you just had the recipe.
April 10, 2008 — 5:13 pm
Barry Cunningham says:
Ann..did you actually read the post in its entirety?
It’s so tiresome for some to say we are “bashing” realtors. What is it with this clan? Why is that AR members who come outside the confines of AR find it necessary to accuse people of being negative without the slightest bit of substantiation.
I used to play football, I had no problem when someone called out the subpar performers on the team. Why is it that there is some kind of rallying cry around a p”profession” of independent contractors. And please..can we all agree to stop comparing realtors with doctors, layers and teachers…c’mon people let’s get real.
For the record, we make the bulk of our revenue from buying and selling houses. I am in the business of real estate. I am not an outsider.
You’re right. There are lousy radio hosts and lousy investors and I hope they get called to task as well. Hardly is there a call to arms anytime someone mentions either of them.
What do you find to be a venomous attack? what is negative? Point out a single sentence in this post that is venomous and insulting? I challenge you.
Is reading that what you don’t like to be considered negative? Is an opposing viewpoint negative?
The attacks that you see, are upon me. Like your comment. You make baseless accusations and say I am the one attacking.
I outline a transaction from start to finish, which in its essence does exactly as you direct, and you find it “venomous”.
A post that details a real world recap is venomous? A post that details and seeks discourse on the future of the business is considered venomous?
C’mon Ann, you as a business woman can’t possibly take opposition with that which is written in that post. If you do then as Greg states, back it up factually, not personally and emotionally.
What is in fact getting old is real estate agents who expect all to be flowery and hunky-dory while ignoring studies about consumer perception.
Let’s make this business about becoming realists. Not sugar-coating reality.
I understand that the business, based upon NAR statistics, is made up of predominantly people over the age of 51, 85% of whom have no business, sales or management background before entering the business and who only average 1-3 sales per year..is that the problem? Are there just a lot of agents out there that don’t want to look at the facts?
I don’t want to belittle the industry..that happened long before I got here. My objective is to improve the industry and expose sub-par performers for what they are utilizing NAR stats and proven business accumen.
Is that venomous and negative? Is wanting to improve the business that puts food on my table negative?
When proven and researched fact is brought to light it is uncomfortable but it is hardly venomous.
One has to look outside of the box beyond their own office or neighborhood and see where this business is headed.
I personally believe that agents can command even higher fees if they showed their worth. However if one can’t I am all for the consumer removing them from the process.
Discourse is warranted and sometimes, discourse is tough.
April 10, 2008 — 5:18 pm
Louis Cammarosano says:
Barry
If Realtors were going to be put out of business by technology, it would have happened long ago.
Your argument merely highlights what Ann, Spencer and I are saying – there are indeed incompetent realtors such that they are not needed and you indeed can do better on your own.
I am convinced however that a good experience Realtor will be able to represent their clients far better than most all customers could do on their own.
How much they get paid for their services will be a result how the market values their services.
Fun fact: HomeGain consumers surveyed overwhelmingly said that the top reasons they pick an agent from our agent evaluator program was because of years of experience and that they received a customized prompt proposal.
The agent’s stated commission rate was close to the bottom of the list as a reason consumers selected one of our agents.
April 10, 2008 — 5:23 pm
Barry Cunningham says:
Spencer…like Ann..you missed it. I am not sure if you guys are tuning out on purpose or what. It is obvious you can not be reading the entire article.
I did not say that the elimination of Realtors was a certainty. What I said was that there will most likely be an ongoing desire for a Realtor to be involved in a transaction. Yet, this desire is borne of convenience, not need.
So are you and Ann haggling over those two words..desire and need?
Are you saying that the consumer is so dumb that they could never obtain the knowledge to execute a real estate transaction on their own. That the need for realtors is absolute because consumers can’t learn the transaction on their own if they wanted to? If you believe that i shudder to think what kind of clients you and Ann have.
On the other hand, what I said was the DESIRE to utlize a realtor is what the consumer will gravitate to. Is it negative to be desired? Is it wrong to say an agent will be desired rather than needed?
Desire means a client that trusts you, who seeks you, who selects you and ultimately trusts you to take care of what they don’t want to take care of.
I could cook my own steak. I don’t need a Chef cooked steak, but i would gladly pay more to have it prepared for me.
Which I have done way too many times.
What I am saying is that Realtors need to focus on becoming desired instead of denying transparency and trying to sell their NEED in a transaction.
Why can’t you guys understand this simple business precept. It’s been a business model staple for years. No insults levied but geez..something is wrong here if you guys are not getting this.
April 10, 2008 — 5:29 pm
Barry Cunningham says:
Is there something in the water..OMG what is going on???
Louis..you just wrote:
“HomeGain consumers surveyed overwhelmingly said that the top reasons they pick an agent from our agent evaluator program was because of years of experience and that they received a customized prompt proposal.”
Was there an option that stated if you could save $15,000 and be shown how to do a lot of the transaction yourself would you pick an agent that would show you how to do so?
Notice the word “PICK”…..that is a choice. That means they had a choice. The survey did not ask them anything about NEED!
Here’s something ..a survey you can put out:
Do you feel that you NEED a real estate agent because the thought of buying a home is something you could NEVER handle on your own even given specific instruction or do you DESIRE to work with an agent who will take care of you from start to finish?
April 10, 2008 — 5:41 pm
Louis Cammarosano says:
Now that is a great point barry.
Realtors need to generate interest in their services such that the consumer WANTS to work with them, not because they HAVE to( I think we could all agree that any one COULD perform a real estate transaction if they put some time into learning the basics)but based on the value add they see beyond just convenience.
My position is that professionals that can do this will always be in demand,even if we don’t technically “Need” them.
Your restaurant analogy is a good one. Technically they are not needed and charge far too much for a meal that you could cook at home for a few dollars.
Or maybe I am arguing against myself,restaurants are overpriced and the only reason we go to them is a culturalo selr
April 10, 2008 — 5:44 pm
Ann Cummings says:
Good grief, Barry, of course I read the whole post. I suspect Spencer did as well. And I did not come here out of AR. I am on the outside, and yes, I am also on AR. I am my own person. Don’t paint us all with the same stupid broad brush.
Why is it okay for you to be insulting to many, yet not okay for others to disagree with you?
April 10, 2008 — 5:56 pm
Barry Cunningham says:
We indulge and it fulfills our desires. Demand as you know is distinct for need.
I had dinner laswt weekend and had South African lobster. It was expensive. While I am on a diet I certainly did not need that lobster, but because I desired it I paid a price based upon demand.
Now that’s the real estate model I want to be in. I want people to call me becasue they desire my service or product and are willing to pay what the market bears..based upon demand!
Precisely!
April 10, 2008 — 5:57 pm
louis cammarosano says:
barry ill ask you to conduct a survey. here is the situation. what if when you walked into a restaurant and they asked you “did you know what we have on the menu could be made at home for 5x less money. in fact we are offering free cooking classes next sunday, would you like to come back then?”
do you think that would be the best way to promote the restaurant?.
I would,t want to try and convince homegain consumers NOT to use realtoes because MY business is to promote their services.
in any example you can always show people that they can do things themselves the real question is do they want to and can a professional do it better in a cost effective manner
April 10, 2008 — 5:59 pm
Carole Cohen says:
There isn’t an agent in my office, even the one who has only been around for a year, who CAN’T explain every page of our contracts. I take great umbrage with you dissing a group of people when you are the one without facts.
I agree with Ann Cummings, do something constructive like teach and let those who want to follow your path take it. I can count on one hand the number of poor agents I have worked with, and if you really knew what you were talking about you’d know the percentages are small. And don’t bother asking me ‘did I really read what you said’ which seems to be your answer for anyone who disagrees with you.
And if you think by saying no insults intended or levied, that means you haven’t been trashing an honorable profession (yes, honorable) you are wrong.
We spend many hours trying to help people save their homes…NE Ohio is like that. You are not a colleague of mine so I’m not even sure why you feel qualified to say that we can’t read or explain or understand a contract. You really are a peice of work. No insult intended, just an observation on my part
April 10, 2008 — 6:00 pm
Ann Cummings says:
Barry, and why do you not think that’s exactly why the consumers who hire us think? Just like your South African lobster, consumers call us and hire us because they WANT our service and they willing pay the market price, whatever that may be. If they didn’t, they’d go hire someone else or do it on their own, but they don’t……
Precisely!
April 10, 2008 — 6:01 pm
Spencer Barron says:
You can quibble over the meanings of need and desire if you like, but your take on it is clear. You feel agents are going the way of the caveman as more efficient business models take over.
Agents weren’t always around and even now, I’m pretty certain every seller and buyer considers doing it themselves anyway. But I’ll tell you now, you stick a seller and a buyer together at a table by themselves, I would bet somebody is going to leave feeling like they got screwed. Within 20 years, agents would be back at the table in some form or another. I know because I’ve bought and sold without an agent…and the other guy always felt like he got screwed. May the best man win, right?
Sure, to you it may seem like a convenience to have an agent but to most, it’s not a convenience; it’s clearly a need. My mother can’t change the oil on a car. Well, she physically could, but that doesn’t mean that to her it’s not a need.
All these startups and business models that don’t address the fear factor will always fail or barely scrape by.
The part I do agree on is what you are saying about the need for Realtors to sell the ‘NEED’ more instead of just relying on NAR to defend them. At least on that you got it right…
Sure hope you’re not a part of any of those businesses you mention; they could be ill conceived.
April 10, 2008 — 6:20 pm
Josh says:
Barry
I read the whole post and the comments, it was a lot to take in and excuse me if this has been addressed.
Without details of your portfolio or anything of the like, how long and how many transactions before you went completely ‘online’? Everything happened so quickly in this transaction I would venture to guess you knew what to look for, had an attorney in mind before hand, and probably some sort of list that made sure you were dotting the i’s and crossing the t’s. In short, it’s clear you’ve done this many times.
Would you recommend this to a first, second, or even fifth time investor? Do you have a website or list of websites they can go to in order to learn about all the details they don’t know to ask about, that you apparently did, before they go through with this?
The point is this, I don’t think anyone doubts that an ‘agent-less’ transaction is possible, even fulfilling and more profitable. My main concern is your preaching, and that’s what it’s become in a short time on this blog, is to the main stream. It should really be going to investors who’ve been doing it for so long they’ve practically become agents without the license. For these select few, going online may be a viable option.
I’m a young RE agent who learns something with every transaction, and I’ve been party to more than a few. I shudder to think of the heart break that could, probably would, happen with a newbie going it alone feeling empowered from your advice.
To pre-empt whatever condescending remark you may have about my feelings being hurt from negativity, save it. I’m genuinely curious the answers you have to these questions, and I’m willing to have my mind changed.
Much obliged.
April 10, 2008 — 6:30 pm
louis cammarosano says:
barry
i’ve had many experiences with fsbo site wanting to partner with homegain. you know why? many of their customers fail on their own and the fsbo operators want to be able to show value to their customers so they want to have homegain agents help them when their customers strike out trying to do it themselves.
It ain’t as easy as it looks.
April 10, 2008 — 6:48 pm
M Dugan, REALTOR says:
There are too many real estate agents who have no business in the industry and are doing a disservice to the public, making the true professional look bad. If you can’t sell homes, sell something else and stop wasting your own time, and the public’s.
Barry you are a breath of fresh air here. I think you get more comments than Brian Brady, who is my personal favorite, and in my opinion the best writer.
April 10, 2008 — 7:26 pm
Allen Butler says:
Barry is the Howard Stern of real estate. He enjoys being an agressive provocateur. It’s fun. Maybe Realtors are thin skinned. Oh well. . .
Here’s the thing though: what Barry has described in this post is that he has found a way to practice real estate without the benefit of a license. Or perhaps I’m wrong. Maybe he is licensed. If I am reading this correctly, he connects investors with REO and short sale properties. I presume they are then resold later for profit.
Question is, who sells them later? A Realtor perhaps? Furthermore, how does Barry get paid? Is he connecting these investors with these properties for free? If so, we’ll have to start calling him “The Real Estate Jesus,” as that’s pretty generous of him.
Fact is, Barry practices a very different kind of real estate than the masses here and on active rain practice. I think it may be disingenuous and unfair for him to impose his world of real estate on ours. The two are completely different, and may their paths never meet.
Barry, correct me at will. I can take it.
April 10, 2008 — 7:31 pm
Teri Lussier says:
One of the words I track on Twitter is “Realtor”. I don’t do it to get fired up about any agent bashing, which happens daily, I do it to eaves drop on consumers- those fantastic people who pay me to perform specific services. If someone is happy with their Realtor, that’s great and I’d like to know why. If someone is unhappy, I really really want to know why.
The consumers pay my bills. If they decide I’m not worth it, then I need to fix something. Either my business model stinks, which means it isn’t responding to the needs of consumers, or I’ve not done a good job of explaining my value. Lucky for me, I’m in control of both of those.
Will consumers ultimately decide they don’t need us? Not if we can prove to them that we can provide something of value. Value is in the eye of the beholder, not what we say it is. So, I’m listening to you, Barry, and I’m listening to twitter. I appreciate the feedback.
April 10, 2008 — 7:43 pm
Bob says:
That’s my business model. Right now it’s a seller a day calling.
April 10, 2008 — 7:44 pm
Barry Cunningham says:
Carole and Ann:
Wow..you can surely pick out the Active Rainers can’t you? You sure told me..2 snaps up girls…
Talk about transparency..lmao…
Listen Carole or Ann…, since you took this to a place you should not have…why don’t you back up what you say. How about we give you a call tomorrow, live on the air, and we talk turkey. We’ll simply debate this live with substantive fact minus expletives and see how it plays out. No comment to be deleted, no AR members to the rescue, if you think you have something to say by all means let’s talk..otherwise..well you know
Spencer: Have you read the latest Harris Interactive study? Do you think what has been written is a thought that I alone conjured up? Do you not feel that the American consumer as a whole has a HUGE problem with Real Estate agents and how they currently handle business?
Josh: Yes…we are experienced and have hundreds of transactions under our belt. We have been buying and selling properties successfully for 7 years.
New investors can contacts us and we would be glad to show them how and those who want to learn on their own can google virtual real estate investing or virtual wholesaling. We have associates around the Country who are doing deals such as thses and these individuals have varying levels of experience.
Fact of the matter that one would not have to go it alone.
Have you read RE Trends by Stefan Swanepoel or anything from Michael Russer regarding outsourcing transactions?
What you regard as preaching and only for experienced is being taught by highly regarded mainstream real estate coaches as the future of conducting real estate sales. There is no distinction between investor, agent or even homeowner for that matter.
Josh, unlike the Active Rainers who come, spew venom and run…I would be more than happy to share with you a great deal of information as to how to apply some of these techniques to allow you to improve your business. As a young agent your willingness to have an open mind is key to your development and evolution.
To many are angered by change and too many rebuke those who speak about it. I would LOVE to work with you and put you in touch with some of the brightest minds in the business who can provide you with a great deal of support and truly eye-opening strategies.
Do I have an advantage in my transactions, of course I do…but there is no reason anyone can’t do it.
Accordingly Louis you are correct, “it ain’t as easy as it looks” but it ain’t as hard as you think either. The difference is learning how to do it.
AR members aside, clear heads prevail and keep an open mind and seek out change and its rewards rather than fear it.
I thank you and Josh for engaging in open discourse instead of the usual suspects from AR doing what is expected.
April 10, 2008 — 7:52 pm
iamutahrealestate-Marty says:
A question about your transaction… You stated
“1. Property Selection: A property was found online through tax records as being owned by a bank. The bank had not as of the time of contact contacted or retained an agent. The bank was contacted and the decision maker at the bank communicated their willingness to receive an offer.
15. Commission Savings: REO Bank saved $18,000.00 in commissions and liquidated a property they wanted off of their books.”
Without the property being marketed on the open market you CANNOT prove this! A good Agent like myself might have made the REO Bank more. IT ALL DEPENDS ON THE MARKET. Also… what type of investment strategy are you looking at? Long term hold, Flip, lease-option, What? Your savings might be chewed up by whatever strategy you go with.
And as far as your “The Anatomy Of A Realtor-Less Transaction” it looks like ASS!
I have enjoyed your other posts. I respect and understand what your saying, I strongly disagree with this post! Barry You are not the authority on this. You think you are but your not. Get your ego out of it.
Your other statement… “And please..can we all agree to stop comparing realtors with doctors, layers and teachers…c’mon people let’s get real.” Barry I am a PROFESSIONAL!!!
By the way, if you didn’t need your layer, sorry attorney, why did you use him? Just do it yourself.
April 10, 2008 — 7:53 pm
Louis Cammarosano says:
Barry
I agree one can learn or do anything if they put their mind to it. I’ve heard from rocket scientists themselves it just takes some extra studying to become one.
Are we moving to a world where everyone does everything by themselves or are we moving to a more interconnected world where we allow others to do for us things that we neither have the time, inclination or expertise to do?
Barry next time I am on the show can you sing an aria for us to open up? I am sure you can learn how to do it-then you won’t have to buy any more Pavoratti cds
April 10, 2008 — 7:57 pm
Barry Cunningham says:
M Dugan..thanks for the comment
Allen..howard Stern of real estate…naw..more like the Rush Limbaugh of real estate..PROFIT IS KING.Proud to be a capitalist!
“without the benefit of a license”….ummm what’s the benefit? Here’s our business model..we find deals that make sense, we either purchase them for futue re-sale or hold for long term rental.Any deal must cash-flow.
Sometimes we are lucky enough to have a true homerun wherein we sell the contract (assignment) and make our money without ever closing. If we NEED the services of a realtor I walk out into our office and ask one of the three that are there to come into my office and then we strategize and put the deal together..oh yeah..we utilize realtors when we NEED to. Have you figured out when we NEED to? (bet you could if you think hard enough)
Why is a “different” way of practicing real estate a BAD way of practicing real estate? Don’t you want to maximize your profit in a transaction? Is that bad..we developed a working strategy to ensure we maximize our profit on all transactions. Stuff your broker does not teach….but most asuredly legal. Why should the paths of our business model never meet? I don’t at all understand.
Teri and Bob, You guys get it. I love what Teri says and it’s so true..if you don’t bring your game everyday and show the consumer your mettle then you are in trouble.
April 10, 2008 — 8:06 pm
Barry Cunningham says:
Louis I can’t sing nor could I be taught to do so..
“Are we moving to a world where everyone does everything by themselves or are we moving to a more interconnected world where we allow others to do for us things that we neither have the time, inclination or expertise to do?”
You said “allow” ….That would then be one who desires to hire someone else..not needs to.
April 10, 2008 — 8:09 pm
Louis Cammarosano says:
Will you at least hum a tune at the start of the show?everyone can learn to hum.
April 10, 2008 — 8:16 pm
Barry Cunningham says:
for you my friend..anything..LOL
April 10, 2008 — 8:21 pm
Louis Cammarosano says:
BTW Three Maxes are headed your way so you can have a quartet rehearsed well in anticipation of my next appearance on your show. There was once a band called Barry and the Remains. While the name the Monkees is already taken, Barry and the Gorillas might work…
April 10, 2008 — 8:27 pm
Barry Cunningham says:
can’t way to see max!!
April 10, 2008 — 9:18 pm
Cathleen Collins says:
My goodness, there are thirty-eight comments as I write this. Haven’t read them all yet, so my comment might be redundant. But here’s a gem that Barry has given us:
April 10, 2008 — 9:55 pm
Louis Cammarosano says:
Barry
While you are waiting, here is the place for all things MAX
http://blog.homegain.com/category/max
April 11, 2008 — 12:01 am
Joe Hayden says:
I couldn’t stomach reading all of the comments due to the fact it became a little personal, but Barry does raise some interesting points.
If consumers were so inclined they certainly could handle all facets of a real estate transaction themselves, no doubt. Even ones of relative complexity. Face it, it is not a highly technical job. It is far more of a relationship business than anything else.
I wonder what model the future will favor. You will never take the human element out because homes are so fundamental and dear to our individuality, family, and community, but a great majority of the process will become automated in some way, allowing those so inclined or savvy to easily take the transaction into their own hands and save what money they are able.
April 11, 2008 — 12:45 am
Late Night Austin Real Estate Blog says:
I think the view that realtors wont be needed in the future is a little black and white.
There have always been transactions without realtors. And I doubt in the future there will be 0 realtors. I am still getting clients that went it alone intially only to realize the difficulty of dealing slimy sellers and wanting an experienced agent to help them through the process. I dont see how web 2.0 is going to change that.
April 11, 2008 — 2:01 am
Ann Cummings says:
Barry – I have no intention whatsoever of joining you on your ‘show’, and I have no need to ‘talk turkey’ either. I’ll actually be working with and for the clients who desire and see merit in my services, talking and walking the REAL talk and walk with my clients. Just as Teri said, consumers who see value in our services and in what we have to offer will hire us, and I have a long track record of just that.
You know, it’s funny in that you persist in calling certain people who comment on your posts “Active Rainers”. Sure, I’m a member there, but that’s not who I am. I’m a member of several other networks as well, again none of them define who I am. If I’m not mistaken, you’ve said you leave comments over on AR and have at least one post written by you on there as well, just as some here do. So, hmmm, are not you and your partner, Brett, “Active Rainers” as well??
April 11, 2008 — 3:43 am
Geno Petro says:
All the more reason to want to own a used record store.
April 11, 2008 — 5:05 am
Ann Cummings says:
Geno – or a coffee house……. 😉
April 11, 2008 — 5:26 am
ines says:
I’ll take an espresso!
April 11, 2008 — 6:52 am
Barry Cunningham says:
Ann..what I persist in calling out AR members on is the fact that you can spot them by the tone and volatility of their comments. 40 or so comments made herein and one can easily read the ones that were off topic and personal. The point being, it is typical and expected when the usual suspects at AR respond.
Don’t you think we know how most AR members will respond? You are right, We have made posts on AR (not at all for the reason you think) and have seen hundreds of comments , many from as we call it, the usual suspects, and invariably they can NEVER back up what they say and then end up saying something like you and your AR cohort said above.
Bloodhound Blog elevates the discussion to being above the mantra and party line responses. Notice the DISCUSSION between many of the commenters and myself on this post.
Then read the responses from you two AR mavens. Like I said..expected and par for the course.
I notice you are a ReMax agent. You would be surprised how many ReMax offices have had us come in and teach their agents how to be more productive in today’s Web 2.0 world.
We are validated by the offices and boards that ask us to provide instruction. So either the hundreds of agents we have taught and the many others enrolled in our personal coaching program are wrong, or maybe the likelihood of reality beaming a great beacon has shone on those agents who indeed want to prepare for the future.
Obviously given the popularity of our blog and radio show indicate the latter.
Incidentally, somehow in between all of my “venomous” and negative posting we somehow had a chance to interview and give props to Mike Lefebre who won the AR Video Contest.
Like I have said over and over…it’s not AR i have the problem with, it’s the CERTAIN non-sensical members who follow mantras and party lines like Stepford Wives and can not engage in spirited discourse without resorting to emotion filled outbursts.
If you have opposition to what I have written then perhaps a better articulated, substantiated response would have been in order. Absent that, yes, it’s a typical, much expected, usual suspect AR member response.
By the way, my post was inspired by Greg Swann’s post from Wednesday…did you happen to read that and respond as vehemently. I checked, you didn’t so one can only conclude is that you were frothing at the bit to get a piece of me.
Sorry, didn’t work. Have a great day!
April 11, 2008 — 6:53 am
Glenn says:
Barry does make a good point the real estate industry and the profession are going through changes. Change is inevitable and will have an impact both from a technology and professional standpoint.
I might be quite a bit older than most commenting here, so I have seen many changes, computers (punch cards, circuit boards, less scientific programs, etc.), no typewriters (are they worth anything today?)or typewriter repair persons, visiting a travel agency to book a flight (isn’t there someone out there that changed how we book travel now in real estate?), lengths of stays in hospitals (increase in outpatient services versus over night stays) for procedures.
IMHO, we as real estate agents need to raise the bar for both professionalism and knowledge (present company excluded), when we all know that NAR is membership driven without any continuing competency requirements. It is truly sad, when I have to present an offer where the boilerplate is not filled out, the wrong documents attached, or lack of documents required by state law to be attached.
I admire what Barry did within the timeframe stated, however, I do take exception to “…that we were unfamiliar with.” – might be an ethical issue here.
Change is inevitable and it will be a rocky boat for those that don’t things change with time.
April 11, 2008 — 9:38 am