Internet Changing The Home Buying Process
from the who-needs-a-realtor? dept
The common refrain in the early days of internet commercialization was that it would help get rid of "the middleman". The problem with this, of course, was that some middlemen (and women) are there for a pretty good reason. However, some areas are clearly getting squeezed. Real estate agents are discovering that most people coming to them have done much of the necessary research online and don't need nearly as much hand holding throughout the process. Because of that, they also don't expect to pay commissions as high as they used to. Having the real estate agent still helps, but it's in a diminished capacity. Of course, the internet also helps the agents by weeding out those who are less likely to be interested, saving them time on wasted house showings. Again, it sounds like this is a case where the internet is helping to change the role of a job, but not necessarily eliminate it.
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What a Racket
Sellers are generally locked into onerous contracts with these incompetent agents. The selling agent doesn't really need to do anything, beyond listing the home, to get paid a fat commission when the home eventually sells.
And since only realtors are allowed to see the addresses on the listings, your stuck dealing with them. Grrr.
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Re: What a Racket
Yeah, and I've got two relatives who are real estate agents. They're inept but still pull in something like $100k.
I heard a rumour that, even if you sell your own home, you still have to allocate a percentage for some realtor.
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Re: What a Racket
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Re: What a Racket
How would we get a percentage of your sale if you sold your home yourself ?
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Re: What a Racket
Just like any profession, there are those who are good at it and those who aren't. All they have to do is pass a test to get a license. I'm sure that for each of your horror stories someone can probably relate how their agent did an excellent job selling their house.
Probably the most important task the agent will handle, and the one that buyers and sellers most need the agent to handle, is the price negotiations. Many people are not able to do this on their own, especially when the deal is for such a large amount of money. People are more comfortable negotiating through an intermediary rather than than face-to-face. (I suppose that this could also be a good Internet application, to handle the negotiation process. The site could accept bids and counter-bids, and pass them back and forth.)
It is also good to have an agent guide the process from the contract signing through the closing. People are unfamiliar with the process and it can get complicated. Not to say that you can't figure it out yourself by reading a book though.
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Re: What a Racket
I would think that the listing agent would bend over backwards to sell to a buyer who comes directly to him because then he will not have to split the commission with another agent.
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Re: What a Racket
And the lawyers don't "draw up" home contracts anymore, they print out a form from they're "So you want to be a lawyer" CD and you fill in the blanks.
We fired our buyer's agent after a week of her showing us houses at the top end of our price range (and many above that). All she was interested in was the sale-- she had very little information to offer. She would basically just shrug and tell us it's our decision if we asked any questions or looked for any advice. We had explained to her at the outset that we were both, in no hurry, and had this, this, this, and this requirement. She led us on a desparate week-long whirlwind chase of homes that didn't meet most of our requirements.
We bought a for-sale-by-owner that met nearly all of our requirements and was in our price-range. We found it by driving around and looking for FOR SALE signs. We hired a home inspector through the yellow pages (after the one recommneded to us by our then landlord was unable to schedule us in time).
We saved thousands because there was no commision. By the way-- the guy who sold us the house fired his realtor after he wouldn't lower the list price to what other houses in the nighborhood were going for, so no one was interested and it wouldn't sell.
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Re: What a Racket
I concede a lack of understanding of your profession. Can you help me understand better? When you say:
The listing agent does not represent your interest and therefore will answer as little as possible about the listed home. They do not owe you any loyalty because you are not paying their commission. By jumping from REALTOR to REALTOR to "go look @ homes " the agents really didn't care weather or not you bought their listing.
As a listing agent, do you not get money when the house sells? If so, is it not in your best interest to be as helpful and knowledgeable as possible when 'advertising your wares'?
In your experience, are buyer's agents more able/willing to research customer's questions than selling agents? I was concerned that the extra level of question indirection (customer -> buying agent -> selling agent -> owner) would make getting information more difficult. Is that not the case?
Assuming getting a buyers agent is a good thing, how do you recommend finding a quality realtor? I understand that to establish that loyalty you speak of, customers are often asked to sign forms promising to stick with that one agent for a certain time period (i've seen forms saying 6 months). Do you recommend signing these forms? Is establishing that loyalty worth the risk that you might be stuck with an incompetent realtor (who will be happy to take his commission when you eventually find and research a home on your own)?
-Thanks in advance for the info
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Re: What a Racket
I rarely if ever want to sell my own listing because it just sets me up to be sued by oportunistic people looking for an easy check.
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Some advice ...
1. You are correct, as a listing agent I get a cut of the sale. My job as a listing agent is to market the property. Even so, I own my fiduciary responsibilities to the seller.
2. Yes, a buyers agent is going to work much harder to have your questions answered. He or she ( if they are good ) are going to take the time to investigate ( on their own ) weather the property ins marketable with a clear deed. ( Yes, I still go to the courthouses and research property myself ) A buyers agent will spend their time getting your questions answered from the sellers REALTOR. A buyers agent will also have the experience of thousands of homes and will be able to spot " red flags " and will point these out to you long before you write a contract. Ex: I can tell when a roof has been patched or replaced by someone who is not a professional. I also am not making my decisions based on emotions like most buyers do. I am looking to sell you a home you will be very happy with so that you will refer me to your friends and relatives & eventually will relist your home with me.
3. As far as buyer's contracts my feelings are this. I've never once required a buyer to sign a buyers agreement because I believe that by taking the time to do my job correctly I will build a relationship of trust with you and you will eventually purchase through me. If a REALTOR is highly pressuring you to sign a buyers agreement I would be wary. At the very most, I would not sign an agreement for more than 30 days @ a time. Believe me, @ the end of 30 days, you will know weather or not you trust your agent. I never had a buyer sign a buyers agreement until I went to settlement. Unfortunately there are good and bad REALTORS, just like Lawyers.
My best advice for finding a GOOD REALTOR is by talking to friends, relatives & people you work with. Generally the biggest producers are not the agents you want. You want someone who is involved in real estate sales because they truly love what they do. I never made 100K a year, but I also don't throw 30% of my income back into advertising to get clients ( like some agents I know ). My business has grown as a result of word of mouth and repeat business. Another good way to " interview " agents is to go to open houses and ask pertinent questions. This is a great way to find out if the agent is right for you and your needs.
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Re: What a Racket
2. REALTORS do help you to get a mortgage by knowing how to get you financed. Not everyone has sterling credit. By establishing a relationship with many different banks, mortgage brokers & lenders I can usually get you the best rate for YOUR credit rating. I'm also skilled in spotting " junk fees " added in by the mortgage company to pad their pockets. You, as a first time buyer are not aware that " document preparation fees " are bogus and probably paid them @ settlement. Check your HUD one settlement sheet tonight.
3. When I write a legally binding purchase agreement for you, I may write contingencies into it that will protect you in the event your mortgage is not approved, you don't get your primary home sold , etc.
It's a shame you wasted your time with an agent that was a joke. I don't make that much more commission by showing you homes at the top of your price range. I would much rather sell you a home you are happy with than shuttle you around to homes you can't afford.
4. Home inspector companies are not always reliable. I know of two in my area that will give ANY home a " thumbs up " just to get their $ 400 fee. I seriously hope you got a company that is reliable.
5. I highly doubt that a REALTOR would not reduce a home to comparable properties in the area. Why would I want a listing in my stable that is priced higher than comparable properties in the area ? This doesn't make sense. Also, if you think about it, you paid the same amount as comparable properties in the area. The person that made out on your deal was the seller that saved paying a commission. You saved nothing and did all the work yourself.
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Take a course !
I would advise EVERYONE to take the courses for getting your REALTORS license even if you NEVER want to become a REALTOR. Call your local REALTORS associations to find out who offers the courses and where. The $ 1000 or so you will spend on the courses is WELL WORTH it and you will be a MUCH BETTER informed consumer ! By being an informed consumer you will be much better prepared and more than likely save more than you spent on the classes.
Happy House Hunting to all !
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Negotiations ...
They may include possession dates, items included in the house, seller concessions, etc. I don't believe a software program can take these factors into consideration. Also, a computer will not never be able to have a gut instinct and know when to push for more.
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Real estate agents
The trick is to find a good one. When shopping for a real estate agent, you have to know what to look for. You should probably use a real estate agent agent to help pick a good one.
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No Subject Given
If you are selling - interview at least 3 realtors whose names you see everywhere in your town. Or get referrals from people who have bought and sold recently. Do not, I repeat do not, automatically go with the agent promising you the highest selling price. They are likely full of shit or clueless. If you are buying, use somebody that really really knows the area. You want the agent to point out stuff like the intersection leaving the neighborhood gets really really backed up in the morning, or that there is a new shopping center being built practically in your back yard, etc. That is where they earn their 3%, it is not in chaffuering you around.
A good agent is worth the money they are making. Unfortunately, and I believe AT will agree with this, the 80 / 20 rule applies, and good agents are the 20 side.
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Re: No Subject Given
My condolences for getting a shit of a REALTOR :-(
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Re: What a Racket
Rick
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Re: What a Racket
I have to disagree. There is nothing secretive about termite inspections, home inspections, local requirements, building permits, schools, mortgages etc. Any person who is able to do a little research can gain a good understanding of all of these areas. You are right agents aren't tour guides but they should care if someone buys their listing. They are supposed to want to sell their listing right? Don't blame the buyer for his lack of understanding- blame your peers for their lack of professionalism.
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Re: What a Racket
You were doing well with the first items and you had me thinking ok maybe agents do provide some value then you had to fall into that agent la la land of using scare tactics.
"I seriously hope you got a company that is reliable." Give me a break- not everyone is a blind consumer. Anyone can learn enough about home inspections to tell if their inspector did an adequate job. To some agents reliable means the inspectors will find every little thing wrong with the house and recommend numerous other inspections and professional consultations to give buyers ammunition to use in renegotiating the purchase price. To other agents reliable means the inspector will educate the buyers on the difference between significant and insignificant items, will provide accurate information on what it will take to correct the item and will help the buyers understand the maintenance the home will require. It sounds like these people weren't interested in trying to renegotiate the contract but wanted the home checked out so they knew what they were buying.
You don't really know if these buyers saved nothing and did all of the work themselves. There is really little work involved- the title company handles most of the paperwork. You don't know if the seller reduced their price and passed on some savings to the buyer either. If you were telling the truth you would have explained that using comparables are good but that the buyers would have had to look at the individual property itself to get a better idea of its true value. Why didn't you mention that an appraisal could have helped these buyers in determining price? It sounds like these buyers did the research, found a home and were happy with the results. Sounds like a big win to me for people without agents.
e there you go again- using those scare tactics to convince people they really need to use a realtor.
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