A not very nice person who calls himself “candybags” wrote the following:
“You all need to either get real or get off that high horse of pomposity you rode in on. Comparing a Realtor with a surgeon??? what next?? Auto appendectomies indeed! Who do you think you are kidding? You are lowly paper pushers compared to doctors and lawyers who had attended YEARS OF SCHOOLING PEOPLE to get what they have. They didn’t take an online course and sit an easy written test of 150 questions. I am sick of reading about parallels between doctors and Reel-torrrrs. The old adage is alive and well – no one thinks more highly of a Reeltorr than the Reeltorr himself. Perfect. Get real. Be prepared to be disintermediated. Dinosaurs. I won’t be paying no stinkin 6%,5% or even 4%. Try 3%. IT WONT BE LONG NOW. ”
__
I don’t compare myself to a surgeon except in the income department – I make more than they do. I don’t think I am kidding anyone. You can think of me (and other Realtors) in any way you like (lowly paper pushers). I neither need nor want your approval. If you live in the Phoenix area you would not be able to pay me any amount, because you are exactly the kind of person I choose not to do business with – and if you somehow snuck in under the radar, rest assured, I would have spotted you anyway and cancelled your listing.
No matter what you write or where you write it I am going to go right on surviving quite nicely – as are all of the other Realtors. Further one of my primary objectives – why I am here posting at all – is to let the rest of the real estate community know that people like you (I’ll be much more specific in just a bit) should just be avoided, no matter what fee you would be willing to pay. So thank you for getting me to make this post at this time.
80% of all of the people in the world are Social Personalities. They are nice people. They may have an “off day”, but they will always try and do the right thing if at all possible.
20% of the people are Potential Trouble Sources. They tend to be a “problem” no matter what is done for them. 2 – 3% are hard core crazies. These (approximately 2.5%) keep the rest of the 20% in an almost constant state of upset and factually are the source of most of the trouble in the world.
There are twelve specific characteristics of the Social Personality and twelve specific characteristics of the Antisocial Personality. The information is linked from here in four articles:
Who is Stopping You – part 1
Who is Stopping You – part 2
Who is Stopping You – part 3
Who is Stopping You – part 4
Jeff Brown says:
L. Ron Hubbard?
November 9, 2006 — 12:10 am
Benjamin Bach says:
Hey Russell
Keep up the good fight! I bet the person who left the comment on the last post works at Zillow…
Be Great
Benjamin
http://www.benjaminbach.com
November 9, 2006 — 6:34 am
Shannon Hubbard says:
AAAhhh…the 80/20 rule. Unfortunately, I’m oh-so familiar with these 20%, especially the 2-3% like Candybags. What Candybags doesn’t realize is that people like him/her are a big part of why ‘Reeltorrs’ charge the commission they charge. These 2-3% are the people who make all business cost more for everybody. These are the people who sue the ‘Reeltorr’ after they move into a 40 year old house and find out there’s a burned out lightbulb that the ‘Reeltorr’ didn’t tell them about. As co-owner of Homewerx Home Inspections, I come across these people now and then. Don’t get me wrong -like you said in your post, the majority of the people we deal with are good, hard-working people who realize that you get what you pay for in life. But these 20% are very high maintenance, hard to deal with people. They expect twice the service as a normal client, for half the price, and they constantly complain and ask for more. As a consumer myself, it’s completely beyond me why any reasonable person would actually seek out a discount home inspector to inspect their home, or a discount ‘Reeltorr’ to write their purchase contract.
And a discount Listing Agent is even dumber. I can’t tell you how many sellers I know who’s 3% discount on their listing agent ended up costing them 10-20% in purchase price and another $10,000+ in negative cash flow while their house sat vacant waiting to be sold (by their 3% listing agent who was busy tending to her 6% clients). AGAIN, YOU GET WHAT YOU PAY FOR.
Candybags sound to me like one of those Reeltorr-hating bubble bursters. There’s this whole sub-culture of blogs that are cheering on what they think is the collapse of the real estate market. Personally, I think they’re either angry renters who were priced out of home ownership in the recent boom, or they’re bitter ex-mutual fund salesman that are still pissed all of their clients cashed out and bought real estate a couple years ago. Either way, these are hateful people who are very angry at anybody who owns real property or makes money in real estate. I won’t give any links to these sites since the garbage they write doesn’t deserve mentioning, but I’m sure you know who they are…they’re the 20%…no, they’re the 2-3% 🙂
November 9, 2006 — 9:17 am
Candybags says:
I love the smell of burnt Reeel-torrr in the morning!!
Yah know, Mr. Russell Shaw, I’ve already asked you to get down off of that high horse of pomposity that you love to ride around on. Thank you for your predictable elementary psych evaluation (upset you did I, eh?) plus accompanying links (which I didn’t even bother to click upon – don’t waste your time bud). Be prepared to be disintermediated, oh pontificating reeel-torrr, like it or not. How about an enlightening post showing us what you actually DO for your 6%, instead of going off on some childish tangent? Big f*cking baby. Not so surprising to me that your very first post in response to my observations would be an insulting one. That is to be totally expected. Because pompous pontificating loudmouths who exhibit traits of OCD (such as yourself natch) would STILL imagine themselves to be irreplaceable even if reduced to the realm of a stone tablet and chisel. I can already tell by your burblings that you are one sandwich short of a picnic. Did you ever see the movie “Falling Down”, fool? That’ll be you, standing there with your pocket protector with a “Huh??” look on your face, wondering why there had to be an “internets”.
As for the Hubbard post, you couldn’t be more wrong ma’am. I’m not surprised to see that your refusal to see the writing on the wall is firmly rooted in the characteristic of denial which you share with Russell-Shaw-Pontificating-Reeltorrr-Elect.
Reeel-torrs do NOT deserve 6% of the equity in my house and I’m glad to see that that statement chaps Shaw’s ass. It should. Reel-torrs don’t deserve even THREE PERCENT of the equity in my house. Reeel-toorrrs need to realize that the Internet is DIS-IN-TER-ME-DIA-TING THEM, even as we sit here this morning. The wave of the future: Flat fee listings, buyers themselves paying the buyer agent, service “menus”. Continue to burble on about the “value” you bring to a real estate transaction. Let me tell you about “value”. Too many newbie reeeel-torrs who don’t know what the HELL they are doing, running around with paperwork half of them can’t read or explain. That’s “VALUE”?!? No. That spells DISASTER for the unsuspecting buyers who suffer the misfortune of crossing their collective path.
Reel-torrs are NOT DOCTORS. Reel-torrs are NOT LAWYERS. Reel-torrs attend a shout-along cram course on the weekend at a some lower end hotel or other so that they can memorize their way through a 150 question test. THAT’S A REEL-TORR. GET REAL. STOP trying to draw parallels with the higher end professional who sees the lot of you trundling up the driveway with your fridge magnets, who laughs and refuses to buy into your spiel of CRAP about your perception of “VALUE”, and who then promptly logs on to Craigslist instead. Who else loves the internet as much as I do?? It is the equivalent of a neutron bomb for Reeel-torrs and I LOVE IT 🙂
Here’s a heads up for those of you who, like Russell Shaw here, HATE the internet for what it’s “done to them” and who just don’t get it yet. I listed my house for under 3% TOTAL. That 3% included the buyer agent’s 2.5% grab-n-run (I was OK with that :P)The listing agent’s total take was WAYYY less than 1%. In return for that wayyy-less-than-1%, the listing agent worked her ass off and got my house sold herself in under the average DOM. She didn’t need to rely on no stinkin’ boycotting reeel-torrs. No sir. AND AT MARKET PRICE TOO. Did you hear that, Hubbard Reel-torrr?? MARKET PRICE. It works.
So the ball is your court, all you Reel-torrs out there. Go for it – show me and everyone else who may fall over this blog what EXACTLY it is you do for your 6%. Make it good. I don’t anticipate that there’ll be too many illuminating posts.
November 9, 2006 — 10:53 am
Benjamin Bach says:
POLL:
Candybags…
(a) failed her Reeltorrrr exam and is forever bitter
(b) works at Zillow and is trying to ‘sabotage’ realtors
(c) failed the reeltorrrr exam and took a job at Zillow to get even
November 9, 2006 — 11:08 am
Candybags says:
HAHA you wish 😉 No bitterness here on this end 😉 “Trying to sabotage” reeel-torrs??!! TRYING to sabotage reel-torrs??!!! No cigar for you, bub. You all collectively did that by yourselves, as well you know. The words “greedy”, “under-educated” “screwup” and “realtor” are synonymous with each other. You see, this thing that you carelessly write off as “just” the Internet is capable of amazing powers. It allows anyone, anywhere, anytime, sitting in their jammies, or nothing at all ;), to SHARE their opinion in such a way that the opinion expressed gets to be shared with millions of people. Disquieting, eh?? Scary. Yes. Sorry that my opinion differs so radically from yours but …. instead of posting pointlessly shiteous garbage, why don’t you all just enlighten us all and tell us what it is YOU do for YOUR 6%? Cat got your e-tongue? Zillow rocks. And, no, I don’t work for Zillow. But I do need to get back to work 😉 Waiting breathlessly for your response.
November 9, 2006 — 11:27 am
Kevin Boer says:
Candybags,
I think we all agree on two things:
1) There isn’t a commission low enough to convince you to hire one of us.
2) There isn’t a commission high enough to convince us to work with you.
Ergo — We won’t be working together on a real estate transaction any time soon…and I think we’re all somewhat relieved by that, both you and us.
November 9, 2006 — 2:03 pm
Benjamin says:
Candybags
I have a property listed where the commission will be in the neighborhood of $200,000. The owner will net over 3.5million profit in the deal if its sold at the asking price. If I can put a deal together to net him many millions, and he is happy to pay me a small amount (and relatively it is a very small amount) as the fee for finding him a buyer, then it sounds like a win-win-win (I’m happy, my client is happy, and the new owner of the land is happy). Sounds pretty nice, no?
Benjamin
November 9, 2006 — 2:55 pm
Candybags says:
Major league YAWN* Kevin Boer spouts more shiteous nonsense. How bout telling us how you earn your 6% KEV??? I didn’t think so. How bout putting your money where your YAP is?? The odds of me making it through your listing rhetoric without rolling my eyes and kicking you to the curb are zero – you and I both know that. You have a bad case of literary diarrhea. And you are wrong about your commission statement – I found an excellent agent and I am recommending her to all and sundry. She has more business than she can handle. How about you??
Ben, if you truly have a client netting over 3.5 mil then I have to truly wonder how smart this “client” is? Was the property an inheritance, I wonder? Where do you fit into the picture? Seems to me that anyone with property gainfully acquired that will “net him 3.5 mil” is smart enough to NOT need you. Again, shiteous rhetoric with no hard facts. What are YOU doing for this supposed six figure commission?
Coming from folks who defend their greed turf so vociferously, it is nonetheless disappointing that not one of you have defended said turf in any way that matters. Aside from the expected denigrating comments
that are to be expected when the kitchen lights have been turned on and the cockroaches scatter every which way, the questions is:
Where is the MEAT??!!
A simple question: What exactly do you do to deserve 6%? And not one worthwhile response. Not ONE of you seems to be willing to go out on a limb and define what it is to be a reeel-torr in the 21st Century. Not one of you seems to be willing to explain with any degree of clarity what it is you do that gets a house sold for 6%, 5% or even 4% of, let’s say, $400K.
$24,000, $20,000, $16,000 of someone else’s money!!! With no real defense of the 6% commission. Does that strike anyone else who may be reading this dreck blog as SMELLING NASTY?? LIKE BAD FISH?? DOES THAT SPEAK VOLUMES OR WHAT? Your days are SO like numbered man, and it’s FUNNY to listen to the rhetorical bullshite.
Having fun at Nardigras? How SILLY is that? The only reason NAR exists is to keep all the under-educated reeel-torrs in the job market – it’s the biggest, most misunderstood union in this country.
It’s so easy to do a shakedown on you hucksters. So easy I’m almost ashamed of myself. ALMOST.
Oh and by the way Russell Shaw, pompous blog extraordinaire, I would remove that post that claims Redfin are criminals before one of their attorneys sees it. I have absolutely no doubt that they have more capital than you. OTOH, maybe a nice lawsuit would be all it takes to make you skitter back into your hole.
November 9, 2006 — 3:10 pm
Benjamin says:
C-Bag,
My Client is a farmer who used to farm the land. He’s owned it for decades. He now farms other land, and now this piece of land has become very valuable. He is happy to pay me a good fee (and none of it up front) to spend much time (months, maybe years) and money marketing this unique property to the right buyer. When I am able to put a deal together, for him to make a substantial profit off of a piece of land he doesn’t farm anymore, he is happy to pay me. That’s what successful people do – they pay others good money to handle matters professionally for them.
“If you’re going to shop based on price, you better pick the most expensive” – a wise man
Be Great,
Benjamin
http://www.benjaminbach.com
November 9, 2006 — 3:59 pm
Jeff Brown says:
I’ve stayed out of this so far, as Candybags seems just a tad bit peeved, resulting in a somewhat emotional conversation here. I’ll only speak for myself though, so please don’t damn the others for my words. 🙂
Although I’m in the investment side of the business, clients still pay me the same way, through commissions. I charge 6% to sell and never, ever take less. So the answer you’re looking for is how do I earn it, right? Here’s how.
I’ll use a real client as an example. The Walkers came to me just under six years ago wanting to begin an investment program. They had just under $70K in cash, solid credit, and were ready to roll. They’ve followed my advice with only two exceptions. To make a long story short, they are now worth just over $2Mil.
Their next move is going to involve tax deferred exchanges of over two dozen properties and take place in three states. It will result in their legal avoidance of over a quarter million dollars in capital gains taxes, an increase of over $80K in tax write-off, and the immediate realization of over $200K in TAX-FREE cash, just for giggles.
In just the first 12 months following this humungous transaction, they’ll reap cash benefits, counting taxes saved, tax free cash received, and minimum captial gain of another $800K.
They’ll pay me roughly $200K to get this done, plus I’ll make another $300K on the properties they’re trading up to. So I made half a million bucks, one client, one year.
Oh, I forgot a couple small items. The Walkers have both quit their day jobs which together added up to $105K/yr. By following my advice their current annual income is well over $150K – and that’s after tax. She’s 37, and he’s 42.
A show of hands please. How many folks would love to give me less than $70K today and be where the Walkers are in way less than 10 years? Line forms to the right.
Candybags, if you think the Walkers haven’t received solid value for the fees I’ve charged, I’m open for discussion.
And while we’re at it, I’d like to add a final thought about Benjamin’s deal. What Ben was too modest to say is that the reason his client was going to net $3.5Mil was probably due to Ben’s previous advice over the years.
November 9, 2006 — 4:05 pm
Shannon Hubbard says:
Candybags wrote: “Seems to me that anyone with property gainfully acquired that will “net him 3.5 mil” is smart enough to NOT need you.”
No, just the opposite Candybags…Benjamin’s client is smart enough to realize he DOES need Benjamin’s service. There are alot of things I’m physically capable of doing myself, yet it still makes financial sense for me to pay someone else to do these things for me. Doing so leaves me with the time I need for money-making activities.
There’s obviously nothing anybody can say that will change your way of thinking, and trying is a waste of our time. That’s what makes you part of the 20% that Russell mentioned earlier. In fact, I think you made his point for him: there are certain people who you cannot satisfy no matter what you do, so identify these people before you waste your time with them.
Your comments have simply proven that Russell knows exactly what he’s talking about.
November 9, 2006 — 5:37 pm
Athol Kay says:
Sorry I starting laughing when C-Bag here starting suggesting Russell Shaw HATES the internet. No matter what ANY blogger is writing about, I’m pretty damn sure they very much LOVE the internet.
November 9, 2006 — 6:16 pm
Candybags says:
Kudos to Jeff Brown for being able to read. Thanks for answering in part a question that I had to post here several times before receiving even a remotely intelligent response. Concede please that market timing had a lot to do with the success of your investors. Other than that, I am sure they are happy with their real estate success. I know that I am content with mine likewise – again, just a case of buying in at the right time and doubling my investment handsomely. Concede also that one real estate transaction is also pretty much the same as the rest – yes, there will be variations but they too will come and go and become incorporated in the method. I too have invested in industrial investment land. Oh wow .. here I go, giving up some information 😉 In my situation, the family was basically sitting on worthless land for the longest time until – shazam – building went nuts, encroached further toward the acreage out there in the one-time middle of nowhere, and suddenly, the worthless dirt is worth a couple of mil. Again, market timing and urban sprawl. I sold the land myself. Did a bit of research on the internet, knew what to ask/look for, had a neutral third party handle the details and stuck a sign at the side of the road. I checked the buyer out, disclosed all that had to be disclosed and pocketed a cool couple mil. I saved (coincidentally) that same $200K in commission that you mention. I bought more investment property. My point is, anyone who can fog a mirror can sell their own real estate. For too long, reeel-torrs have held a steely lock on information and the internet has cracked that lock wide open. The open MLS is coming and then the fun will really begin. You really will be dealing as exclusive buyer agents or seller agents, once the seller can post their own house for sale on an open MLS. It’s not difficult to sell a plot of land if your brain cells are firing on all eight. However, my question was not directed so much at investment transactions. It was directed solely at the regular, run of the mill, tract home – you know the ones, rows and rows of sameness. What justification is there to charge 6% to a homeowner who can surely use that money he or she is wasting on overblown commissions? I have yet to receive an intelligent response to that one simple question. Almost 24 hours later after Russell “Pompous” Shaw posted his STUPID blog about being comparable to a surgeon, for god’s sake!!! “Auto-appendectomies”, I think, was when I finally lost it with the stupidity of it all. Because the thing is, that silly analogy was pilfered from another set of stupid reeeel-torrrs who, too, think they are akin to a doctor’s training and knowledge. PLEASE. STOP with trying to draw a comparable with surgeons and lawyers and then maybe you reeel-torrrs can get on with repairing your incredibly damaged collective “reputation”. It wasn’t me who said that reeel-torrrs were looked upon by the American public as being less than a used car salesman for chrissakes!! You can thank NAR for making the findings of THAT survey public knowledge. You people need all the help you can get believe me. In a year or two?? Discount brokerage will rule the roost with commissions going still lower and lower than what my agent charged me. And yes, I did go with an agent to sell a rental. I was far too busy to deal with it. But pay 6%?? Not on your life. So here it is again:
What do you reeel-torrs do for your 6%?? The fact that no one is willing to stick their pecker out tells me that you know the answer. And it’s the same as mine.
November 9, 2006 — 6:16 pm
Candybags says:
Quit laughing Athol Kay because you’re another prick who has f*ck all to say. Besides, your breath smells. You probably laugh like Mr. Ed ….. uhhuh uhhuh uhhuh loser
and it’s MR. Candybags to you son.
November 9, 2006 — 6:22 pm
Shannon Hubbard says:
I think somebody forgot to take their Prozac this morning… 🙂
November 9, 2006 — 6:27 pm
Candybags says:
Yes. You.
STILL didn’t answer the question, did you? The jig is up.
November 9, 2006 — 6:28 pm
Shannon Hubbard says:
So you sold your property all by yourself – what do you want, a pickle? If you’re so sure of yourself, why do you hide behind the anonymity of a stupid name like Candybags? Notice that nobody else here’s afraid to reveal their true identity…just you. What do you have to hide? I will not answer your question because:
1.) you already think you know everything
2.) you’re part of the 2-3% that will never be satisfied anyway
Quite frankly, you’re not worth my time. GOOD NIGHT and remember to take your Prozac so you won’t be so angry tomorrow.
November 9, 2006 — 6:50 pm
Candybags says:
Hmmm defensive. That’s OK – it’s only to be expected 🙂 I would be defensive too if everything I had staked my life upon was about to be torn out from under. Evidently I know a lot more than you my dear which is why I for one would NEVER pay YOU 6%. You most certainly are not worth a fraction of that. Evidently. I’m sure a peek into your medicine cabinet would give your prospective customers and clients second thoughts about having anything to do with you. Prozac indeed. Have YOU read your PDR lately??
November 9, 2006 — 6:57 pm
John K says:
Candybags: you lost me around the third or ninth time you said “disintermediated”.
November 9, 2006 — 7:16 pm
Candybags says:
John, I am sure it would not take much more than that to lose YOU. How bout answering the “What do you do to deserve 6%” question instead? You know, instead of whining and trying to be clever. Silly reeel-torrr!!!!
November 9, 2006 — 7:18 pm
Kevin Boer says:
My, my, Candybags…having fun?
Realizing full well that this will be a complete waste of time, let me put forth some vignettes.
First, a correction. I don’t earn 6% on a transaction. I earn 3%, my half of the 6%.
Vignette 1, representing a buyer: Spent 4 months with them, averaging around 10 hours a week. Previewed ~20 potential properties for them weekly, and showed them the 3-5 that made sense. Made offers on two suitable properties, both of which were rejected because we were outbid. Each offer involved quite a bit of work, going over a 200 page disclosure document, making sure my client understood everything in it, getting the bid document ready, having them sign it, and then doing a lot of thinking and guiding my client about what the right terms were. Finally, on 3rd attempt, we won a bid and were in contract. The escrow nearly fell apart at the 11th hour because of a mistake on the seller’s agent’s part. Spent probably 10 more hours patching that one up. Closed escrow, and then helped line up and interview a host of contractors to make certain repairs and upgrades. I earned about $175 an hour on that deal. Now, Candybags, I’m sure you’ll be upset because I earned more than what you think I’m apparently worth, which is probably minimum wage in your opinion. Personally? I think $175 was a bit on the cheap side.
Vignette 2, representing a seller. This one took a year. It was a really unique property, one that grabbed everybody who saw it, but only really suitable for a small subset of folks because of its funky architecture, layout, and character. Spent the first two months, about 15 hours per week, project managing getting the home ready for sale, including repairs and extensive landscaping. Over the next 10 months, did around 15 open houses, and did 20 private showings, each of which took several hours. On this one, I probably earned $225 an hour or so.
Vignette 3: Representing a buyer…this one’s sweet, it’ll make you wish you’d gotten into this profession, Candybags. Client had already identified the property. I came in, negotiated the deal, dealt with the paperwork, escrow, and inspections process. Quick and easy. Probably $350 an hour.
Vignette 4: Representing a buyer…spent 10 hours a week on this client for about 3 months. He was very cautious (understandably), methodical, and analytical. We put together 5 offers, each of which required a fair amount more work than normal, since my client wanted extensive Excel-based pricing analysis. We hit it lucky on the 5th time, but unfortunately the escrow fell through. My client then decided to pull out of the market and not buy after all. My compensation? Nothing.
The average of vignettes 1 through 4 still comes out to a pretty nice living, well above minimum wage, thank you very much. Don’t know if this answers your question, Candybags?
BTW, what profession are you in?
November 9, 2006 — 11:04 pm
Broker Bryant says:
Candybags, Quite the rant we have going on here. If I take away all the nasty words and cut downs, I actually agree with some of what you are saying. I think the public perception of what Realtors do, is getting worse. Some of this has to do with disintermediation and some of this has to do with the massive influx of new Realtors that unfortuantly do not have a clue of how to conduct the business of Real Estate. And unfortunately, clueless Realtors, are probably in the majority. But fortunately, their percentage of the business, that is being handled, is very small, maybe a couple of deals a year if they are lucky.
Now, on to your question. Why would you pay me 6% and what would I do to earn it? Well, first, I charge more than that, so at 6% you would not be able to hire my services. But maybe, if you were a good qualified Seller, I would consider giving you a little bit of a discount.
I’m a Broker, in Florida, and work by myself, from my home and have done business this way for about 12 years. I do work in a very specific area, that is basically track housing, in the $200,000 to $300,000 price range. I only work with sellers and do between 40-60 transactions per year. My reputation is excellent and sellers come to me. I turn business down quite often because I max out at around 20 listings. If I get more sellers than this they go on a waiting list.
So why are they willing to pay me top dollar for my services? Because I truly care about my sellers. I spend time with them discussing their needs and I counsel them on the best way forward, which by the way, may not be to sell their house. I am a trusted advisor. I help people through a very difficult time in their lives and they trust me to do this. I deal with folks that have just lost a spouse, are going through a divorce, bankruptcy, foreclosure, illness, job transfer, going into assisted living and a myriad of other life challenges.
I am very good at what I do. I talk with my sellers almost daily. They are my friends. I just gave one of my sellers $2,000, out of my pocket, so they can pay a bankruptcy Attorney. I may or may not get this money back. It doesn’t matter. They are 80 years old and have no one else to help them. The equity in their house is not enough to pay off their consumer debt. So I helped them. And not just me, but several other Realtors chipped in. I could go on and on about why I am worth what I charge but I think you get the point. You can not get service like this from the Internet. Period. That is why I will survive and in fact excell during this period of disintermediation. Lack of care and concern in the Real Estate biz will just make my services more valuable. And I am truly excited about that. Real Estate is about people. not money!
November 10, 2006 — 7:21 am
The Lovely Wife says:
Good Morning Greg and Company,
I have been reading this and find myself somewhat dismayed. I see a lack of professionalism coming from my peers which actually does not help our profession. Your responses to Mr or Sir Candybags (whichever he prefers) are proving to him and me, that rather then answer his question you are easily diverted by words. They are just words. CB has posed a good question. So, far he is correct that no one seems to care to address the “meat”…I know my husband Broker Bryant has just done so. This needed to be done…
The bottom line here is that Real Estate should never be about money, it is in fact about the consumer. Our Code Of Ethics indicates this. The consumer needs should come before our lovely little wallets. In this case CB has a need, he has posed a question. That question is a good question. Answering it would have been your best most professional foot forward. Have you accomplished anything here by not answering the question? Nope. What you have done is help prove CB has a good case. He may be somewhat “Gruff”…But sometimes under the “Gruff” there lies an actual human being with a need. I certainly hope all my peers in the Real Estate Industry will at least try to read between the lines.
CB…I am speaking to you now. Please be polite to me, I am a Lady. I would like to tell you that over the summer a site for Realtors was opened. It is called ActiveRain.com, this site is providing a place where people like you can get to know “Realtors” better. We are not all bad “Realtors” there are many who are excellent at what they do. There are incompetent people in every profession. My hopes for ActiveRain is that we will be able to help train the incompetent…I hope you will take a moment to visit ActiveRain and get to know us better. We are not all bad, we are people just like you.
Thank you for your attention,
The Lovely Wife From Active Rain
November 10, 2006 — 8:20 am
Candybags says:
Kevin, don’t split hairs. You know full and well what the general average American consumer thinks when they think “selling my house” – they think 6% because that is what the contract says most of the time. Sometimes 5%. Whatever it is, the agent taking the listing “negotiates” a total fee right up front. But OK I take your point. You get half of the agreed upon total fee … most of the time. Unless you find a buyer.
As for me having fun, I stumbled upon this blog and read once again the ridiculous comparable that reeel-torrrs try to draw between themselves and the higher professions. Doctors, lawyers, neuroscientists, ad nauseum. A simple request for justification brought us all to this point.
I thank you for taking the time to answer my question, instead of jumping all around it like a pile of steamy dog sh*t. I have my own opinion on whether or not I would take such a hit or miss approach to making money. There are too many people out there who would drag you all over the planet, only to stop returning your calls the minute they cut a private deal with the seller. From reading your post above, that seems to be the main focus of your profession – driving people around and filling out paperwork that may or may not lead to a final sale. Isn’t the bulk of that paperwork online via your Board of Reeel-torrs??? All you do is fill in the blanks, yes? For the most part? As for “guiding on terms”, why bother? The client can only get what the lender’s willing to give. The lender basically decides what the terms are going to be – not you. Unless the seller is financing and has already decided the terms to offer ahead of time (say 4% fixed rate) and makes those terms an incentive to purchase, let’s say, to get a buyer quickly. Or the client comes in with cash and gets a break on the asking price. Other than that, the lending institution decrees the terms – not the reeel-torrr. You can tell the buyer whatever the buyer wants to hear, but if the buyer has a 530 credit score that deal ain’t going nowhere.
In case 2, beyond obligatory phone calls and generalities, did you actually dig the flower beds? Did you paint? Or did the contractors do it at the behest of the owner? I’m trying to get a feel here for what it is reeel-torrs do for that percentage – and, let’s face it, if you miraculously bring in the buyer (over 90% of reel-torrs do not – they rely on the MLS to sell it for them) then you get the whole pie. I want to know what it is you do for the seller. I already know that you drive the buyer around, which I personally would not do straight out of the gate – I have my own opinion regarding how I would run the show if I were a reeel-torrr but that is a whole other subject. I am not a reeel-torrr.
It seems to me that the seller pays a large sum for entry to the MLS. The reeel-torrs rely on the MLS to sell the house. I was hoping to read some really interesting innovative methods that reeel-torrs use to get a house sold (beyond open houses), something that really shows that the lights are on. I won’t pay such a ridiculous sum for the MLS. There was no way on earth that I could be convinced that reeel-torrs earned a 6% cut prior to this discussion, and I am glad that I stuck to my guns in that regard because, so far, I still ain’t seeing it. Your business model is broken and way outdated – you do realize that the fundamentals of said business model date back to the second world war, yes? Based on that one fact alone, it is time for a change. Embrace it. Because the days of pulling the wool over the eyes of the American consumer are over. We now have access to all the info – I can go out right this minute and look at a whole slew of houses without even thinking of involving a reeel-torrr. Once I’ve found something I like, I could give Redfin a call and have them open the door for me. And I get a large chunk of change back in return when I cement a deal on the house I like. Who wouldn’t go for that?? Those are the winds of change, reeel-torrs, I don’t see how you can compete with it.
BTW,I work for NASA.
November 10, 2006 — 8:34 am
Benjamin says:
“BTW,I work for NASA.”
And we’re the ones with the outdated business model? Why don’t you do something useful like go build a new shuttle!
November 10, 2006 — 8:40 am
Candybags says:
Broker Bryant, thank you for your reply. You are indeed more correct than you know regarding the masses of under educated reeel-torrs running around with contracts. It is frightening and it should not be allowed. One should be required to complete much, MUCH more than a shout-along session in a seedy hotel combined with a super easy test to be able to hold such responsibility. And that is not a joke. How many transactions do you suppose have been handled by “agents” who had not a clue of what they were doing? I have no doubt that we are talking about thousands of transactions that would fall into such a category. The agent who didn’t know what to look for and allowed a defective transaction to finalize, agents who can’t even balance their own checkbook – you and I both know they are out there en masse. You, sir, are in a minority if indeed you care about your clients as much as you say you do and I have no doubt that you are true to your word and that there are others like you. There are exceptions to every rule. In general, the real estate industry (and what an industry it is!!) is in big trouble. Are you saying that you would take a listing for a total of 7% commission on a $300K house?? You may indeed be a caring individual but you have been plying this trade for 12 years – you know as well as I that you have a streamlined method by this time. A modus operandi whereby you can work efficiently and thus take in more business (or so I would hope). $21K is too steep. That is a huge chunk of change for a qualifying homeowner who is evidently in the mid to lower income bracket (depending upon interest rate). I know for a fact that homeowners such as this could use that money for something more productive in their lives than just “giving” that money away. Assuming a 50/50 split with a buyer’s agent, what do you do for this homeowner to get this house sold? Put it on the MLS and hope for the best? It is all well and good that you counsel your clients – I do the same thing at work. My colleagues b*tch constantly about how much their kids cost. This is just a generalization on my part of course 🙂 because I don’t have the time or the room here to go into a dissertation on why I think homeowners have been taken to the cleaners for the past 20 or so years.
What I will say is that the barrier to real estate needs to be raised. But, then, it is already too late. There is a ton of money to be made and if you guess that the internet companies won’t rise to the challenge, guess again. If you’re smart, you will carve a niche. Working with seniors would be a great place to start because you KNOW that most of them don’t even know what the internet is. Forget the under 40 market, which soon will be the under 50 market, and so on. Hence, the process of change. I do agree with you also that our senior citizens must be protected – they are fortunate to deal with a scrupulous broker such as yourself because, too often, they fall victim to the scheming sh*tbags out there whose sole reason for holding a real estate license is to part the unsuspecting from their property. I read about this every week, no kidding. The volume of corruption out there between the mortgage brokers and the reeel-torrs combined is criminal. So tell me what it is you physically do for your cut of the pie to get a house sold? I am not talking about counselling or discussing terms – terms are decided by the lender and to discuss anything outside of your realm of real estate would be foolish and incendiary to a lawsuit. We all know the American public loves to sue – and the legal “system” is a whole other beast. How do you justify that large sum of money – let’s say $10.5K – and, aside from the MLS, how do make a homeowner feel like he or she got their money’s worth?
It was never my intention to come on here and turn into an a**h*le. But I am detail and results oriented. When an outlandish claim is made, my first kneejerk reaction (call it a character flaw if you like) is to either prove or disprove it. I know how to wheel and deal in real estate, I’ve been doing it on the side since I was 18. I refused to be bamboozled into parting with $200K on the sale of some land that had been in the family for YEARS and eventually sold for just over 2 mil. I took the time to educate myself and, people, it wasn’t that difficult. What did I do to keep my $200K. I’ll tell you and then you can tell me where I went wrong. As far as I am concerned, I did everything I needed to do but I am asking you as real estate professionals to tell me what YOU think I missed, if anything:
1. I received the offer to purchase our mostly undeveloped land (with a run down house on it) from an unrepresented buyer – offer was good, we (the family) accepted. The family put me in charge (bless ’em) I made sure of the following:
(a) buyer received a plat map of the acreage and signed off accordingly that he knew what he was getting per the county, where the roads and boundaries were.
(b) Buyer received the preliminary title to be sure he was receiving clean and clear title, which he was. The land was free and clear.
(c) I had the buyer approve the Tax Roll.
(d) I gave the buyer an equivalent of a TDS, detailing any and everything I knew regarding the property and signed it.
(e) In writing, I told the buyer to check everything:
legal subdivision; proof of zoning; natural hazards (I ordered a report that the buyer needed to sign off on);
legal access; grading; told the buyer to get a property survey to make sure of boundaries; confirm the presence of utilities including power and water; get a well inspection to make sure of well output and potability;
environmental check (to cover my a**) – I told the buyer to pay for core drilling if he was worried about anything geological and soil boring to check for soil contamination – a biggie these days – I also told him to at the very least get a soil/hazardous waste test), septic tank certification for the house, a seperate perc test for anywhere else on the acreage that he planned to build, a geological survey as the buyer saw fit, check for bond assessments, conditional use permits, toxic substance control records, the presence of easements that needed to be investigated per the preliminary title report. I think that’s it. Needless to say, I don’t think I’ll be getting sued because I think I covered all the bases but those among you who are land brokers may feel differently. What did I miss? DID I miss anything?
If I can do this, what makes you think no one else can? All I did was a little research on the net. But, hey, I’m not a reeel-torrr but I have just shown you what I did to save $200K in commissions!! What is it YOU do for YOUR fee? Let’s keep it general – let’s stick with tract homes. Nothing fancy. Broker Bryant, what do you DO for your cut? BTW, lovely wife, I would never e-attack you because you sound sensible and intelligent. You haven’t elevated yourself to the standard of a surgeon, in other words. You have also shown a degree of professionalism that not too many others have displayed here and you expressed that in an eloquent and straightforward manner. I hope you have a great day today 🙂
Russell Shaw, however, has his head WAY up there.
November 10, 2006 — 9:30 am
Candybags says:
Does the word “Aurora” mean anything to you Ben? I didn’t think so. Hey, do I detect censorship here? I posted a really, really, really, enlightening entry, describing in great detail how I sold my land. It didn’t post. And I don’t have time to repost. But I will thank Broker Bryant and his Lovely Wife for their intelligent replies 🙂 have a great day you two.
Russell Shaw is a censor. Either that or this blog has a word limit. That sucks. Find a better blog provider dude.
November 10, 2006 — 9:39 am
Greg Swann says:
> Hey, do I detect censorship here?
The spambot put you on hold. I will kill a comment only for extreme obscenity or plagiarism.
November 10, 2006 — 10:07 am
Candybags says:
OK fair enough. I don’t plan on being extremely obscene, just a little. And you will find no ilk of plagiarism on my part. Where are the reeel-torrrs???
November 10, 2006 — 11:24 am
Broker Bryant says:
Candybags, Thanks for the kudos. I think. Anyway, please let’s address the issues not beat up the person. First I take a lot of pride in what I do and I am a Realtor, not a Reel-torr. I think most Realtors, that are worth their salt, will agree that our licensing requirements need to be improved. But since this varies State to State, that may be difficult. Where it could change is the requirements to become a Realtor. I am all for extensive training on various State laws and ethics prior to becoming a Realtor. Even though this is not a cure all, it would help. Character cannot be taught, you either have it or you don’t. So unfortunately there will always be people in our profession, or any other profession for that matter, that are in it solely for the bucks. Personally, I choose not to do business this way. I love what I do and I’m very good at it. Looking out for my sellers is what I do, making lots of money, is a by-product.
My commission is earned at the listing table. I am not one to tell people what they want to hear. I tell them what they need to hear. I am an expert on pricing and getting sellers to understand what it will take, from them, to get their home sold. I have no magical marketing plans that will miraculously get their home sold. It’s all about price. Period. The difference between what I do and a less experienced Realtor does, is in pricing and presentation. My listings sell in a average of 38 days in a market where the average is 98. Range Pricing is one of techniques I use to achieve this, however this thread is not the place for me to get into how this works. The biggest thing I do, to earn my compensation, is eliminate stress from the transaction. Selling a house can be very stressful and I am an expert at keeping sellers focused on the end result. By doing this they are able to make financial decisions instead of emotional decisions. This, in itself, more than offsets my fee. My success rate runs at about 98%. I have not had an expired or withdrawn listing(that was re-listed) in almost 2 years.
BTW, I never work with buyers so always only get the listing side minus any costs I may incur on the seller’s behalf.
But let’s talk price. Home values are based on recent sales and what a buyer is willing to pay. The buyer is the one bringing the money to the table. RE commissions are built into the value of the house. Remove the commissions and the values come down. For example, when an appraiser is appraising a home he uses the recent sales as comparables. These sale’s prices include seller closing costs and RE com. So based on what you are saying, if commission across the board came down to 2-3% or less, then property values would do the same thing, eventually. So really the seller would be getting nothing in exchange except the chance to go it alone and screw up. The great thing about a free economy is that the consumer has choices. I have no problem with that. If, like yourself, they feel they can handle the deal by themselves, then go for it. If not, then pay a Realtor. Even by choosing to use a Realtor they have many options of how much to pay. Let the consumer choose, it’s their choice. If they don’t want to pay for my services, then so be it. I have plenty of folks who are happy to pay for my services. There will always be room for me and Realtors like me to make a good living in this profession. So what do I do to earn my fee? I get the job done in the shortest amount of time with the least amount of stress. And people will gladly pay me for that so they can get on with their lives. I hope this helps.
November 10, 2006 — 11:35 am
Kevin Boer says:
Candybags,
Glad you’ve calmed down, and thanks to Broker Bryant and his Lovely Wife for calming us down as well. Civil discourse, while possibly less entertaining, is always more enlightening.
You bring up a lot of good points. It is too easy to get a real estate license, and there are a lot of pretty bad agents out there, unfortunately, who are poorly qualified and/or unethical. I’ve met them, I’ve done business with them, and it’s not a pleasant experience. Presumably you’ve met your share of this type of agent as well.
To answer your question on “terms” — by that I did not mean the financing terms, which as you correctly pointed out are largely dictated by the lender. What I mean was the terms of the deal — how much we were going to offer, which contingencies to waive or keep, how long of an escrow to propose, etc. In a competitive situation, each of these things makes a difference.
You are to be commended for doing a stellar job on representing your family in selling your property. You did your homework; I would expect nothing less from a NASA engineer, who, obviously, tend towards the fastidious. Congrats. A mediocre agent would have done less; a great agent would have done more, and probably better, but it would be disingenuous of me to suggest that such an agent could have gotten a price more than 6% higher for your property.
Since you are offended by the reference to medical professionals, how about an analogy with accountants. I don’t need an accounting degree to do my own taxes — I can just download a copy of Turbo Tax and run with it. For the last 6 years, I’ve made the calculation that I’d rather do my taxes myself, and each year I’ve done it successfully, probably not getting quite all the tax breaks I’m entitled to, but well more than good enough. I’m now getting to the point, however, where my tax situation is getting complicated, with shares in six investment properties, running two 1-person companies (investing and brokerage), etc. For the 2006 tax year, I’m definitely hiring an accountant.
Wrt to real estate, you may or not one day decide to use a professional for much the same reason.
Two final points for you:
1) Since you’ve done some real estate on your own, why not just get a license (which as you say, isn’t that difficult) and practice on the side? NASA folks are not paid anything near what they deserve, so this would be a great way to supplement your income.
2) If you happen to work at the NASA Ames center in Mountain View, California, contact me and I’ll take you out for lunch. I promise not to try to convince you to hire me, or another Realtor, for your next deal. 🙂
November 10, 2006 — 11:48 am
Shannon Hubbard says:
You guys have fun at lunch. My guess is that Candybags will spend most of it complaining about the food, the poor service and the ‘Reeel-torr’ he’s eating with. He will be rude to the waitress, have her run around like crazy trying to satisfy his needs (which is impossible) and then he’ll tell her he could cook the food and serve it better himself. And to top it off, he’ll tell you not to leave her a tip because she didn’t earn one.
I agree that there are way too many real estate agents in the world, and many are unexperienced. But as was pointed out earlier, this is true with any profession. The bad agents give us all a bad reputation and nobody is more annoyed by them than others in the industry. However, reasonable people do not just attack someone they don’t even know because of their profession as Candybags did to Russell. He’s not a reasonable person, and by the frequency of his comments and his anonymity, he probably doesn’t even have a job. (Remember, you can be anybody you want on the internet!) And now his rude, unprovoked attack has turned into a love-fest and doing lunch? Only in America!
I think Russell’s original point was lost somewhere in all the name calling. His point was that the 20% will consume 80% of your time if you let them….that’s why you have to identify and avoid those 20% early on. Point made, Russell.
November 10, 2006 — 1:14 pm
Jeff Brown says:
Russel is playing with you guys. He’s Candybags.
November 10, 2006 — 1:22 pm
Greg Swann says:
Candybags hit the jackpot. His most recent comment was nothing but insults and obscenities. I’ve deleted it and put him on the persona non grata list. First time I’ve banned anyone. None so deserving.
November 10, 2006 — 4:53 pm
Jeff Brown says:
So hey, How ’bout those Suns?!
November 10, 2006 — 4:58 pm
Greg Swann says:
> How ’bout those Suns?!
Tonight’s their night. They can’t lose!
November 10, 2006 — 5:35 pm
Jeff Brown says:
Drinking before 6 – well it’s 6 somewhere, right?
November 10, 2006 — 5:42 pm
Doug Quance says:
At the Bloodhound Blog… when you miss a day – you miss a lot!
LOL
Kudos to those who decided to tackle this provocateur… cause the only people I need to convince about my worth are potential clients.
November 11, 2006 — 1:29 am
pop says:
Sure, realtors are professionals … professional cons, that is.
Well, you made your bed (and poohed in it as well). Good luck making any kind of income on the down-side of this bubble.
All you had to do is be honest about property values in relation to incomes. Both sides would have been happy about moderate growth. Greed ruins.
The sad thing about this whole situation is that the economy is strong and only now starting to falter a bit. How are RE values going to hold up when incomes are STILL flat in 5 years, and we have higher risk premiums because global credit excesses have (finally) been wrung out?
At least you can take some solace in the fact that while your profession greatly contributed to negative savings rate of consumers, it had little to do with government and institutional excesses.
November 11, 2006 — 6:48 am
Beach City Real Estate Info says:
pop: It never ceases to amaze me that REALTORS? are blamed for prices going up and down in the real estate market. Really, do you think if we had that type of power the market would be where it is now?
Here’s a secret known only to greedy, unscruplous REALTORS?…. we have nothing to do with the ups and downs in the real estate market. Buyers and Sellers are responsible. Buyers actually have more power then sellers. Basic market principles of supply and demand determine the market not agents. In the current market Buyers stopped buying when they determined that prices had gone too high. You can’t sell something if no one is buying. Sellers have two choices.. take their property off the market or reduce the price to a point that a Buyer finds value.
Believe me if I could “make” someone buy or sell real estate whenever I wanted I would make Bill Gates look like a pauper. I would be in my private jet somewhere between Maui and Hilton Head and would always be playing golf on the best courses in the world.
November 11, 2006 — 12:59 pm
pop says:
BCREI:
Your statements are lies. Clients generally have day jobs, and rely on professionals for good advice when making a purchase. Realtors don’t disclose, and most clients don’t realize, that increases in transaction volume and transaction price are the realtors lifeblood.
Realtors generally are more than willing to recommend financing sources, especially for that sub-prime buyer.
Realtors also advised their clients during the multiple contracts spending spree of the past several years. Statements like, “Real estate never goes down.” or “You’d better get in before you get priced out” have strongly contributed to buyers decisions to over-extend themselves. Afterall, to the average schmuck, Realtors are the experts.
Realtors certainly know appraisers that will make sure the property meets or exceeds it’s finance target.
And, most importantly, Realtors (being in sales) certainly have a ripe understanding of the role that emotion and buyer psychology have in setting a price point. Appealing to greed and fear at the margins of the transaction have done wonders for price appreciation, haven’t they?
Sure, realtors don’t sign the forms. But, they (more than any other agent), control the transaction environment which directly affects pricing and volume.
Your deceitful comments are EXACTLY why Realtors are not generally thought of as professionals. you never hear of a Dr., Lawyer or engineer commenting that “It was their decision, I just made the recommendation.” Professionals are held accountable for their opinions; they don’t just attribute bad results to their clients dimwittedness.
Well, buyers are only human, and greed and fear work just as well on the way down (actually better).
November 12, 2006 — 2:20 pm
Beach City Real Estate Info says:
pop: I’m guessing you have not had a good experience with an agent in a transaction. But believe me I do not lie and I do disclose. If I am the listing agent and my clients want to know what they should disclose.. I tell them everything.. You can’t ever disclose too much but you can disclose too little. If the bottom part of an outlet isn’t working and the top is.. disclose it.. DISCLOSE EVERYTHING you know about. In my last transaction there had been two leaks two years before.. the leaks had been repaired by the association and there was no evidence to show there had been leaking.. I had my clients disclose anyway. I disclose everything I can physically see and I walk through a property extensively taking notes.
If I am working with buyers we do a through inspection. I work with an excellent Independent Inspector who never takes less then 2 1/2 hours on an inspection.. he goes underneath the house and on the roof ( unless it’s a tile roof) He checks everything that is visible.. if he sees something that may require further investigation he notes it. Has he missed something.. yes .. but he is 98% accurate. Have I told buyers to walk from a property .. You bet.. there will always be another property. I never advise a client to buy a property with major problems. It has been my experience through the years that when you walk away from a property the one you eventually find is much, much better the the one you walked away from.
I go to all inspections whether I represent the seller or the buyer. I’ve crawled under houses and been in attics. If something is called out I want to see the problem.. I don’t rely on a report.
As to lenders I’m afraid I don’t know any subprime ones. If clients have a lender they like I don’t try to switch them to anyone else.. if not I give people 4 names of local lenders.. 2 mortgage brokers, one bank and a direct fund broker. I tell my clients that their rates should be similar but fees will vary and to choose the one with the best fees for the loan that suits them. I do not get involved with the appraisal process.. all appraisers in our area are hired by the bank that makes the loan. They must be on the bank’s approved list of licensed appraisers.
As to deceitful comments.. I never say anything I can’t back up.. The truth is always easier to remember then a lie. I give my clients, buyers before making an offer or sellers to decide a price, a written market analysis of properties that have sold in the last 3 months.. not 6 months as the most current information is the most reliable.
My goal in real estate is to have repeat business from my clients.. that doesn’t happen if you are not honest with them. I still work with people I met when I first entered the real estate. I’ve been in business for 27 years in a small area. If I didn’t have a good reputation for being honest I wouldn’t last very long. My Dad, while not a broker, was in real estate. He bought all types of property, he could build a home and do everything from laying the foundation to building the cabinets. He didn’t do a lot of building but every home he built is still standing and in great shape. If you want to hang wall paper in one of his homes you could measure on the floor and hang as every wall was plumb. Yes, my family owned property. My Dad saved his money and put it into property. We didn’t live beyond our means. One of my first jobs for an allowance was helping to clean houses to get ready for new tenants. So I grew up believing in the value of real estate. But I know real estate goes in cycles.. sometimes up and sometimes down. I’ve bought real estate at the top of the market and seen the value drop but it always comes back up.. if you hold it long term. Real Estate is a long term investment not a short term get- rich- quick type of investment. My Dad believed in Real Estate and so do I.
November 13, 2006 — 12:12 pm
Kimberley says:
Honestly guys. All this C-Bag wants is to get us upset and say things that he can turn against us to make us look bad. The best thing to do is to ignore any comments by C-Bag and maybe he will go away. Lets just use our time more wisely to answer legitimate questions and help someone. Although, I must admit the amount of time he has wasted talking to us is a little bit of justice in itself.
November 13, 2006 — 3:03 pm
Brandon says:
Amazingly enough , I happen to charge a higher comission % than anyone has thrown out in this blog more (Yes , more than 6%). And guess what ? I have yet to have a SINGLE PERSON complain about my comission.
The answer to why is pretty simple – I’m worth it , I have quite a bit of expirance in web promotion and the like. I offer services that many in my area do not , so I charge for it.
If you complain about a 6% comission , maybe you should complain about the 1500% markup that the local store makes on you when you buy soda. If real estate agents weren’t worth it ,then we wouldn’t still be in business.
November 28, 2006 — 8:53 am
JoeyBagadonuts says:
Homeowners can choose to sell their home at whatever commission they want 8%, 7%, or 6%. You choose!
Obviously, these jerks dont know what it entails to move properties. They are just ignornat.
November 29, 2006 — 1:36 pm
cpowers says:
You want facts. Here are some facts. Please, add them up. Advertising in local paper : $180/month/paper
Advertising those ads online as well :$20/month
Open House Ads: $20/ad/paper
Real Estate Magazines (these cost vary from 200-400):$250/magazine
Realtor.com : $370/month
Homes.com : $330/month
MLS (fees vary in different states): 30/month
Those are just some of the costs of marketing YOUR home.
We also market your home to other agents and by marketing ourselves.
We must maintain E & O Insurance (Errors and Omissions for those that aren’t aware) so that we can be protected when we are sued. It runs about $360/yr.
We must join the local/state/national board of REALTORS to get MLS access for advertisement (it runs about $400/ yr)
We buy signs to put in your yard
We make copies of your mls sheet for open houses
We make brochures about your house
We try to assist you in making your home ready for marketing
We try to get you to list at the proper price so we don’t waste a year of money on a home that is going to expire and that you’ll blame us for
We set up appointments to view your home
We make sure buyers are pre approved
We do the paperwork for you
We want to make sure you get the best deal
We negotiate with the other agent or buyer
We have to take classes to stay up to date for you
If you don’t think that is enough, please respond. I can go on.
Also, I don’t appreciate being called uneducated. Before I got into real estate, I was an organic/analytical chemist. I am not a failure. I have never failed at anything I’ve done. Nor am I as ignorant as you to assume that agents aren’t intelligent people. You need to take a look in the mirror and reevaluate yourself. It is people like you that make this world a horrible place. I try ever day to make the world better. What do you do besides breed hate and contempt?
December 13, 2006 — 3:25 pm
Interested says:
What would be the disadvantage of listing a home with a Realtor who charges a flat fee based on services provided?
January 9, 2007 — 12:19 pm
Brian Brady says:
I’d like to take stab at this question:
It’s economics. There is a school of thought that suggests that Realtors are clerks; some are. It has been my experience (as a Lender working with Realtors) that you really do pay for pricing expertise when you hire a Realtor. If you hire a Realtor for a flat fee, it may remove the incentive she may have to negotiate upwards.
I have been a fan of incentive-based compensation that would actually raise the net fee to the Realtor if pricing and timing points were met.
http://activerain.com/blogsview/22686/Pay-For-Performance-A
If you’re selling your home to your cousin, you don’t really need a Realtor; you could hire a real estate attorney to insure that the state disclosures have been met, and contracts are compliant with state laws. Just accept the fact that you really didn’t try to get the “best price”.
There really is only one way to get accurate pricing and that is from a Realtor who knows the local market.
January 10, 2007 — 12:59 am
Interested says:
Hello Brian. Thank you for responding.
You said, “If you hire a Realtor for a flat fee, it may remove the incentive she may have to negotiate upwards”. What does that mean? What incentive to negotiate upwards?
January 10, 2007 — 2:21 pm
Interested says:
Hello again Brian. I just glanced at your blog and think I know what you meant about incentive to negotiate upwards.
Your blog post addressed, “…the real estate agent’s DISINCENTIVE to hold out for higher prices for their clients.” I read this to mean ALL Realtors versus Realtors who charge a flat fee based on services provided. Did I misread that?
January 10, 2007 — 2:30 pm
Brian Brady says:
You did, Interested. A flat fee removes all incentives for performance.
The percentage of price model provides more of an incentive than a flat fee model but it’s not perfect.
I’m for paying Realtors much more than the currently accepted “percentage”…if the perform.
But…I tip 25% if I like the service.
January 10, 2007 — 4:15 pm
Interested says:
Brian are you suggesting that a Realtor might be disinclined to protect the interest of his/her client specifically “holding out for higher prices for their clients” depending on pay structure?
January 10, 2007 — 8:32 pm
Brian Brady says:
Interested:
I am a student of economics and human nature and not a Realtor. My answer will be uneducated but I’ll give it a whirl by posing this question to you:
If I paid you a flat fee if $500 for selling my cherry 64 Corvette and offered 50% of the amount above $40,000, would you be inclined to advise me to hold out for a better offer than $38,000 if you felt in your gut it was attainable?
January 10, 2007 — 10:15 pm
Interested says:
Brian, if I was to sell your car would I be obligated legally or otherwise to:
1) Fiduciary Duty
2) Code of Ethics
3) Standards of Practice
January 10, 2007 — 10:36 pm
NYCJoe says:
Brian,
But what if the car was only worth $37,500?
Doesn’t there come a point where the incentive model starts to tip against you, where you run the risk that the person that you’re trying to incent starts to think of their own interests ahead of yours?
January 11, 2007 — 12:02 am
Brian Brady says:
Great question, Joe. All the more important to hire a “pricing expert” upfront. I like the incentive model as a way to align both interests. As a seller, I’d prefer the agent price an negotiate the fee properly upfront.
Nothing is perfect. My appraoch and idea is academic (as your comment is also). Excellent question and comment, Joe.
January 11, 2007 — 12:28 am
Brian Brady says:
Interested:
I’m curious what those three things mean to you. Can you expand upon that? I think you are trying to get me to suggest that a Realtor shoudn’t allow compensation to interfere with his representation; he shouldn’t.
Doesn’t it make good sense to offer any kind of agent, car seller, ticket agent, Realtor, entertainment agent, etc, a compensation model designed to reward stellar performance before the agreement is made?
Which compensation model to you believe to be superior: flat fee or pay for performance?
I took this idea from the book Freakonomics; I’m sure you’ve read it.
January 11, 2007 — 12:36 am
Interested says:
“I think you are trying to get me to suggest that a Realtor shoudn’t allow compensation to interfere with his representation; he shouldn’t.”
Beyond that I’m saying that in most cases a Realtor either by law or contract has duties or obligations to his or her client.
Your posts seem to suggest that a Realtor might be disinclined to protect the interest of his/ her client (or put another way a Realtor might be inclined to dismiss his or her duties or obligations) depending on pay structure. Did I read that wrong?
January 11, 2007 — 5:21 am
Brian Brady says:
I’m not suggested that at all; I’m suggesting that a proper compensation plan allows you to NEVER have to ask yourself that question.
January 11, 2007 — 2:08 pm
Interested says:
Ok, then allow me to ask the question again, “What would be the disadvantage of listing a home with a Realtor who charges a flat fee based on services provided?”
January 11, 2007 — 4:22 pm
Brian Brady says:
See comment thirteen comments up, Interested.
This is circular. You may have the last comment as I’m sure that’s your intention.
January 12, 2007 — 12:12 am
Interested says:
Hello Brian,
I don’t want this to be circular. If it seems that way I apologize.
I believe the comment you’re referring to is when you posted, “If you hire a Realtor for a flat fee, it may remove the incentive she may have to negotiate upwards”.
I hope this isn’t the case. After all, aren’t some of the selling points of using a Realtor that they are a “Trusted Advisor” and that they “Protect and promote their clients interests”?
Maybe the more important questions is… Is that the only disadvantage of listing a home with a Realtor who charges a flat fee based on services provided?
January 12, 2007 — 7:13 am