Why Real Estate Agents Have Good Reason To Fear The Web
from the marginally-useful dept
There have been a number of stories lately about real estate professionals lashing out against online real estate services like Zillow and RedFin, which are seen as threats to their traditional business. A new study done by two economics professors sheds some light on why they might be feeling embattled. In an examination of the housing market in Madison, Wisc., the pair found that homes sold using brokers did not fetch sellers any additional profits after commissions were taken out. What makes Madison interesting is that it has a thriving website of for-sale-by-owner homes, so sellers there don't have to do much legwork if they want to sell on their own. This means that real estate agents may still add value in communities where such services aren't popular, but it's value that could disappear as services like RedFin startt to take hold. Thus the agents' fear seems to have a legitimate basis, and their behavior conforms nicely to the rent-seeking tactics exemplified by similarly organized professional groups.
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Real Estate and the web!
I think there are two schools of real estate; old school, which is the typical model of "get the customer in the car, drive them around, showing them the properties that seem to match what they want" and the other, newer model of "internet centric and web focused", where the agent guides the customer using the web to eliminate the personal involvement. The Realtor still performs a valuable service in the carrying of the transaction, the opening and showing of homes and the overall marketing. In the latter, the Realtor® had better be a little more invovled in the web and have a savvy understanding of what the new real estate customer wants. My personal image is I am one of the most resourceful Realtors® in Amarillo. I provide information as my service. If you use my information, I think you'll use me in the final outcome.
My recommendation to modern Realtors® practicing today is to get a good strong grip on current marketing trends and what customers want. Customers are getting better at discovering the value added service that the modern realtor can provide.
Come take my class!
Amarillo real estate customers, give me a call; let me help you out with some information you may find helpful.
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Re: Real Estate and the web!
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Re: Re: Real Estate and the web!
Do you remember that part about the loan, or asking for credits, or the large section describing the law.
The Realtor is your local real estate expert. They'll be your tour guide to a new neighborhood, and an expert on the homes in the area. They should be aware of local trends, and they need to know the contract, backwards and forwards. This is one of the reasons houses sold by owner sell for less than listed by a realtor.
Also don't forget, if you are in a FSBO deal, you are legally obligated to disclose anything and everything. If you forget that one year you put a bucket in the attic to stop a leak (actually happened to a client of mine), you are now financially liable for repairs and loss of value. Where I have an Error's and Omissions policy that protects everyones liability up to $1million.
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Re: Re: Real Estate and the web!
Most States don't allow price setting so the commission is completely negotiable. Of course, the Agency that takes the listing must agree to the commission and a listing contract is written.
You suggest this data will be free someday. The data you speak of is actually historical sales data collected as a result of constant sales and the current listing data is actually just that, current listings.
Various companies are doing their best to accumulate this listing data and then to provide it for free but those pipes can be turned off in a moments notice by disallowing the export of that sales data (listings and history) to any entity that freely gives it away.
As a practicing Realtor®, I can tell you the business is full of "free" work. Work that I do that does not and will never result in a commission. This happens all the time. Most Realtors® wash out in the first year because they can't afford to pay the dues to the Associations they are required to join.
You speak with a seeming contempt for a typical Realtor® and it would truly surprise you to see all the work (and expense) conducted that is done speculating on securing a commission. It ain't easy and its almost broken me a time or to. I encourage you to befriend a Realtor® and then ride along on a typical day just to see how it goes. Its a lot of work and a typical work day begins about 8:00 am and often ends sometime around 9-10 that night. Its not a 9-5 job and your paycheck all depends on how concientious you want to be about what you do.
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Re:
I maintain an active real estate license. After going thru all the necessary course work and continuing education and seeing firsthand the many things that can go awry with a real estate transaction, I would never "go it alone." You get what you pay for with the 'discount' brokers that charge 1-2%.
A *good* Realtor(R) is absolutely worth the money.
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Come on!
No one said that you need to go it alone. How about breaking the monopoly and opening up MLS to individual service providers. I see no reason why one person needs to control the entire process and charge such high fees. Let a free market system decide who adds value.
Ignorance is assuming you know what's best for others.
In my experience "Good Realtor" is an oxymoron.
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Re: Come on!
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Real Estates
Project Name: NRI CENTER CITY
Per Sqft.650/-
Free Registration.
Negoitable price.
Contact no.9884516987
Iam waiting for your reply.
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Response to: Realtors need to get Real on Jun 8th, 2007 @ 12:50pm
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Real Estate and the Web!
1. The 5 or 6% that Realtors take on a commission is split between the two agents doing the deal. After all the costs associated with being a Realtor (advertising, office expenses), the vast majority make about the same as any middle-class work.
2. "Most realtors are door openers and process paperwork, very few EVER have the buyer's best interest in mind". Most business is repeat/referral business. I can't speak for all Realtors, but there is a very strict code of Ethics which must be followed that I follow religiously, and I always have my clients best interests in mind. Why would I possibly want to screw a client, when chances are if I do my job well, I may have them as a client again, as well as any friends/colleagues they may refer me to.
3. Commission on a sale pays for among other things, the advertising of a sellers house. In my particular case, we have websites, we are in multiple monthly magazines (Yeah, you know those ones in the supermarket that everyone picks up and thumbs through), newspapers, van tours, radio and TV ads. Can some Joe Schmoe who decides to sell his house himself get that kind of exposure on the local market? No.
Again I can't speak for all Realtors, but most of the ones I know work damn hard for their money and deserve every bit of it.
The hardworking "middle-men" are there to protect your ungrateful asses should anything happen along the way of the transaction.
Guess who takes the heat if there is a false claim in a transaction, and Realtors were involved? The Realtor.
Who takes the heat in the same situation if it's a handshake deal? Well, unfortunately you. Hope you have money saved and a good lawyer.
Oh, and modef, I'll pass along to my children (one of whom will be here in 2 weeks or so) that Daddy is devil's spawn, and that we'll all starve and die.
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Re: Real Estate and the Web!
one word... it's compound: craigslist. most homes don't stay listed in san diego for more than a day on that thing.
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Re: Re: Real Estate and the Web!
Let's be realistic even as door openers you don't do much. I recently toured a house where the seller showed it off and the realtor travelled behind saying "isn't she cute". Yeah at 80 she is cute and stupid for paying someone primo $ to do the job she is currently doing. Another friend went into a realtor's office to do the paperwork because the realtor had too much on his plate to write up the offer.... yeah you earn every dollar I am sure!
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I do happen to put in all of my houses that I have listed in Ads. They are advertised over and over and over again until the house sells, and then I (obviously) don't advertise them anymore.
I agree there are too damn many of us in this profession, but the vast majority are in it part time to make extra money. Some work full time (And by full time I don't mean 40 hrs a week. Most full time Realtors work at least 50-60 hours a week, every day of the week and are basically "on call" at all times).
Yes, there is little training, but there is training. There is first 120 hours of school work that have to be completed, and tests that have to be passed. Every 2 years you also have to complete an additional 60 hours of school work. Oh, and that's just on rules and regs, you have to basically "apprentice" to learn HOW to be a Realtor.
It's a shame that some of you have had bad experiences with Realtors, because I assure you they are out there. People who work long hours and (according to this board anyways) get lumped into a pool with bad lawyers and used car salesmen.
It is a commission based industry and I can't tell you how many times I've spent 20-30 hours of my time helping someone find a house just to have them walk away, change their mind, or be difficult over and over again. The last sale I did I spent well over 50 hours researching houses, pulling listings, showing houses, explaining contracts, and basically hand-holding throughout the entire process until my clients got exactly what they wanted. Tell me again how I don't work hard and I don't deserve every penny I get.
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200k home = $6000.00 or $120.00 per hour (gross)
500k home = $15000.00 or $300.00 per hour (gross)
Not bad for 120 hours of school and 60 hr of remedial courses every two years.
One of our fellow posters noted that there half million dollar properties "...in neighborhoods I would never want to live in."
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Re: Real Estate and the Web!
Assuming the Realtor works 50 hours a week, and 50 hours per house:
Hourly cost per house
$250k x 3% = $7500 or 150.00 per hour just per each house.
Over the course of 8 weeks, 50 hrs per week (approx 60 days):
$750k x 3% = $22,500 or approx $60.00 an hour (gross)
Still of course not taking into account any office fees (many brokers take somehwere between 30% and 50% of the commission before you receive it)
That drops the hourly rate to approx $30-42 an hour
Add in advertising, and any insurance, 401k and other benefits (which Realtors don't usually receive since they are self employed) and they make a pretty AVERAGE salary
These numbers are all for AVERAGE Realtors. There are most certainly big time guys who make $200k+ a year, some of them are definitely worth it.
I have never said there aren't shady Realtors, I know quite a few, but as Connie said, it hurts when all are lumped in the same category as a select few.
My viewpoint is of course from the Realtors side. I know it appears sometimes, especially when you sell a house, and you are paying your Realtor $10,000 or more that they must be making a fortune, but it's not like it happens once a week for everyone. That $10,000 took a lot of time to earn and is well deserved IF the job was done well.
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Real Estate Agents
Answer: NADA!! They take the listing, enter it into the MLS web app, and sit back and wait.
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Re: Real Estate Agents
Secondly, lots of money is spent on advertising and office expenses. A good realtor will at the very LEAST have ads in the local Homes magazines, and most now have a good comprehensive website which is easily found by Google.
Realtors work just as hard as anyone else at what they do, and they never get anything but the same old "scum of the earth" nametag.
How many of you who posted how sleazy and awful Realtors are have even purchased a house? Did you purchase it alone? Doubtful.
You shouldn't post a comment about something that you are obviously completely ignorant about.
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Re: Re: Re: Real Estate Agents
Per Sqft 650/-
Negotiable price
Free Registration
Contact No. 9884516987
Iam Waiting for your reply.
Fast moving in Sriperumputher
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Agents
A sharp Realtor has many contacts that he/she can tap to help market your home (when selling), which should shorten the selling time and get you closer to your asking price.
On the buying side an established (working the same market for years) agent has a more detailed knowledge of your desired area. That being said, Realtors need to back off the new web based service and let the playing field level itself. Wait, here's a thought... Why not partner with them, get the best of both worlds if done right. Times will change, move forward with them and profit, or fight the change and die.
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Real Estate Agents
I recently bought a house and the agent was great. She did a lot of legwork that I didn't have time for. My whole buying experience went smooth as silk. I don't begrudge her the commission she made from the sale.
As in any business there will always be good and bad people. You have to do your homework before you choose, it's no different than any other service you might use.
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Re: Real Estate Agents
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Who's next?
Seriously...anyone ever hear of someone getting paid on a title insurance claim? Anyone?
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So the real estate broker paid for the advertising, marketed the home, held open houses, did the contract work, and accomplished all of this work without costing the homeowner any money? Awesome! If a brokerage can sell your home for you at no cost, why wouldn't someone want to hire an agent? Why on earth would you want to do the work yourself by owner and pay for the advertising?
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“We’re trying to tell the public that they pay 16 percent more if they use us?” said an exasperated David K. Stark, owner of the Stark Company, one of Madison’s largest real estate firms, when asked about the national association’s claims. If that were true, he said, “all buyers should shop FSBO.”
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helpful...but not
He also didn't/couldn't help us much when we discovered just this year that the previous owners had failed to disclose some very vital information about this house since the statute of limitations has already run out on it, so we're stuck with the repairs ourselves. $15k + repairs for stuff we were not responsible for = no more agents for us.
On top of that a close friend got all the way up to closing on a house she was planning on purchasing when it was discovered there were a million and one liens against it and the property had other issues. This was while they were signing the paperwork and that's something that, as you realtors know, is supposed to be handled by the agent before it's even listed.
If we sell our house I'm simply going to list it as FSBO and hire an attorney to cover our asses for the disclosure in case we forget to tell them that we did some modification or the like. Since it'd cost me all of $300 instead of a few grand; that would nullify Elliot's fees while still getting me the benefits of the "errors and omissions" clause.
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interpretation
Lot's of realtors posting on the board today, wonder if that's cause it's a common secondary profession for smart people who don't want to actually work....
ok, ok, so there is 'some' work involved, but be realistic, did it require extensive training or just a little studying and passing a test? Were the courses similar to college level courses or more in line with trade school/online degree mills?
If you interpret the results the other way, realtors provided NO ADDITIONAL benefit to sellers over listing the home themselves. So while the relator may have got a little higher sale price for the home, this 'benefit' was wiped out by their commission, resulting in no actual benefit (and if you look at taxes and all other value related fees, you've just ended up paying MORE in taxes/fees because the realtor sold the home for more than you would have...)
Even if this all nets out and there is no difference to the seller between using a realtor and listing yourself, which would you rather do? Blood sucking leeches, I mean realtors, are no better than any other transactional 'middleman' who expect a cut of the transaction that could have taken place without them. They fit right in there with used car salesmen, credit card companies (biggest leeches besides politicians), and timeshare brokers...
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buyers vs. sellers
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Realtors should be on their way out.
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No need to fear the web
Like all businesses, real estate brokers must exist in the realities of the market. I don't fear the internet at all. I just focus on putting peoples needs first and use whatever technology is available. That's why I'm actually quite excited about the technology we are working on and how that will help our clients.
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Re: No need to fear the web
Project Name: NRI CENTER CITY
Per Sqft.650/-
Free Registration.
Negoitable price.
Contact no.9884516987
Iam waiting for your reply.
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Berkeley is a sellers market
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Real Estate Agents are like car salespeople
A friend of mine wanted to become an agent, and an agent said he would teach her. All she had to do is get a property to sit on and he would do the rest. She did, it was in Corona Del Mar, California which is an upper class neighborhood in Orange County. She became an assistant the other day to make things easier for a broker to teach her.
The agent who works for First Team in Newport Beach, decided this was easy pickins' and stole the deal from her by saying she would not earn one penny even if she sold the property, that he could not pay her anything even if the property sold. Well, I believe there is a thing called 'finders fee' and what he said was entirely wrong. This woman only wanted to learn the business, and this agent has pisst me off enough to ruin his world a bit by telling this story.
He used her to find a property, and taught her nothing, yet he humiliated her while she watched him get greedy as he had never worked around anyone that had the filthy rich toys as they do in Corona Del Mar, his head got big enough for me to take this event to the Real Estate Commission this coming Monday, June 11, 2007 and I want his license on a silver platter so to speak.
Agents are cut throat individuals who are ruthless. This man told her he had eight properties listed with First Team and she found out he has two listings worth approximately $500K each if he can hold onto them, and in neighborhoods I would never want to live in.
He is playing with the wrong league, and now he surely has met his match.
To make a small story short, he saw big dollars, and felt this black woman was not deserving, he is mexican, yeap, and typical indeed to say, that he feels he is better than she is, wrong. She is just a woman trying to earn a living and would have trusted anyone that would helpe her make an earnest living. He is an opportunist in a county where his type attempts to use ever person he comes in contact with, as the whites here definitely make a difference between races (I have lived in Corona Del Mar for 40 years and I see how we have evolved with this mexican thing.) and this time the 6 Million Dollar home is going to earn him a 6 Million Dollar lawsuit for First Team in Newport Beach for fraud.
Good Luck Phillip, you are going to need it these coming days if you still have a job when I get through.
OC_Boomer (You wish you could walk in my shoes.)
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The take
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Barrier to entry
Are there good realtors who earn their $$? Very likely. But the barrier to entry and the lure of the $$ that can be made I think can bring in unscrupulous types as well.
As information becomes more available for FSBO the commissions will come down. They should. It shouldn't take 5%+ to sell a home.
1% is realistic. And no, you don't have to drive me around to see homes I can meet you there, or in the case of FSBO they should be there, or the home open.
And if you want more than 1% you need to show me you can add more than 1% to the selling price to make up for the expense over me doing it myself.
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I also don't see the HUGE paycheck for very little work perspective. I average the same salary as when I was in the working world and I work double the hours. I work hard for all of my clients. There are a lot of success stories about people selling thier house on thier own and I applaude those people. But, I promise there are some real horror stories from a lot of people that were saved by a good Realtor that really cared about the client.
It really hurts when Realtors are called cheats and unethical when there are a lot of us out there that do care and provide a great service that surpasses all expectations. These days, providing great customer service is worth every penny. That is my opinion, take it as you will.
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Edit
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Real Estates
Project Name: NRI CENTER CITY
Per Sqft.650/-
Free Registration.
Negoitable price.
Contact no.9884516987
Iam waiting for your reply.
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My mother fed us thru real-estate sales....
It was a mind-numbing, and hard-work based job. And there were cheats and slimes back then just like there are today. She didn't like the work, but worked hard until she found other employment opportunities that allowed her to come home to be there for her children after school. Yep - all weekend, she was working, but my dad could be home then.
There are honest, hardworking agents who *WILL* work to help you find a house as a buyer's agent, or sell your house as a seller's agent, but they are as rare as cobblers these days. They are very few and far between, and do not deserve the reputation that the "I don't care what you want, I'm just going to show you what I need to sell for maximum commision" slimeballs.
Yes - they are anachronistic, but true professionals actually are working at selling real eastate, and helping folks buy the house they want/need. Sadly, they are nearly invisible in the platoons of fast-talking slime who take advanatage of the customers lack of time/resources and/or knowledge.
We read 7 different books before looking, including two on home inspections. It still didn't prevent the bee-atch that we got stuck with from nearly losing us the finanacing (deadline issues) because she opened the windows during the radon test. "oh - it won't ruin it to let some fresh air in!"
But one of those professionals got a friend's house sold that was on the market for a over a year, by actually showing it to people, and not just stucking an ad in the multi-list.
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A website just shows off the house. I think yea, realtors will definetely lose the monopoly on listing information. But you don't buy a house from the picture in the paper or online. You need to visit open houses, etc. If anything, I would think realtors would take over the different websites rather than be afraid of them.
They have their own place in the service industry. If websites did all this, then yea I'd be worried if I was an agent. But they don't.
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real estate agents
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Are you joking?
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Real Estate Agents Need to Change
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why to use a realtor
I have 99% of the time have met and worked with dedicated, professional, caring, highly ethical agents. And yes, there are the scum out there but sadly we get the reputation from the small % of scum. But the bias and close minded remarks about agents is just that!
Any industry has its scum: doctors, lawyers, plumber, etc., but to put everyone in an industry of this nature shows being self-absorbed and a lack of character of the complainer.
Fortunately, as an agent I can choose who I want to represent. And I will and have fired clients that were unethical, dishonest, and bias.
As for our fee, love the assumption that we should only charge 1%, I assume this is from someone who believes and earns minimum wage? Fine with me, have the seller pay for the advertising and the buyer pay the buyer agent fee. This has been done. Then the seller can decide on how much he wants to pay for marketing. And the buyer can shell out the professional fees for the representation.
See it only proves how our commissions are negotiable. Funny, there is a flood of lawyers but no one is complaining of their 20 to 40% commission rate on a class action suit? Or their high hourly fee? Maybe because the market has always or should always determine the fees of any profession.
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realtors make too much commission
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realtors make too much commission
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Real estates
Project Name: NRI CENTER CITY
Per Sqft.650/-
Free Registration.
Negoitable price.
Contact no.9884516987
Iam waiting for your reply.
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Realtors are glorified walmart door greeters
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Real Estate and the web
It seems that the issue of commission is a hot bed issue.
The documentation involved in selling a residential home does not change whether you price the home at say $220,000 or $300,000, you still need the Purchase and Sale Agreement, Escrow Instructions, Home Inspections, etc. Needless to say, I think that the internet will help more on the buying side. There are tech savvy individuals/couples who can choose a home that they like and visit it on the weekend, then pay a flat fee to Redfin and save on the buying commission.
I think the value/efficacy of brokers is more on the selling-end where busy couples/individuals may not have time to collect market data on home pricing or may not have much experience in marketing.
I do see that there is a resentment towards agents some justified, some not. As the housing bubble grew, there are so many new faces in the field, many of these new agents are unfamiliar with finance/construction/title/economics. At the peak of the market, I had a Realtor (r) trying to convince me that I would be priced out of the market if I did not buy (That was in June of 2007 here in Los Angeles. Since then home prices have dropped 16-24% depending on how the statistics are manipulated :) ) and I had tried to explain to her market equilibrium of the oversupply of houses and tightening mortgage/credit markets. Her only response was "Interest rates are going up. Wouldn't you like to have a place of your own?". As I continued to discuss policies of the Fed, it was obvious that she was new, unskilled, and trying to make a quick buck. Will be interesting to see if there is a structure change to the traditional agency/brokerage model.
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And now, here in the future...
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Real Estate Commissions
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Realtors are more important now than ever.
Clayton Bonjean, Broker - Realtor, MBA
Certified Distressed Property Expert
www.mainsailrealtycompany.com
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The only good real estate agent is a ...
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The only good real estate agent is a ...
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car
hourly car service in orange county
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I feel this topic is subjective
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bizlistpro
Quickly and Easily List & Sell Your Business Online - Get business broker for orange county, West Covina, Broken Arrow, Clovis, Daly City, Lakeland, Santa Maria, new york, Texas, Miami, Arizona, Dallas, and California
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