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Why do you guys hate real estate agents so much?


By ChrisKolmar   Follow   Wed, 24 Oct 2012, 2:50pm PDT   13,778 views   85 comments   Watch (1)   Share   Quote   Permalink   Like (2)   Dislike  

I know I am probably going to get trolled out of my mind on this thread, but could you please convey to me why you literally want to eat Realtors' brains.

Reasons I can think of:

1. Dual Agency
2. Most of them have very little experience (Only ~5% do 10 transaction sides a year)
3. Horrible incentives on the buy side
4. Somewhat merky incentives on the sell side
5. ???

To me, you guys get on realtors a lot simply for trying to get people to buy/sell. Shouldn't buyers take more responsibility for their own actions and not blindly follow a salesman? For example, I don't pay attention to car salesman when I buy a car or eye glass salesman when I get new glasses.

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Biff Baxter   befriend   ignore   Wed, 24 Oct 2012, 6:14pm PDT   Share   Quote   Like (1)   Dislike     Comment 6

E-man says

Jealousy???

Yes. I wish I had a job where I lied all the time. They must feel very secure.

And the majority of them don't make much. They sell real estate because they didn't finish school.

Biff

E-man   befriend   ignore   Wed, 24 Oct 2012, 6:17pm PDT   Share   Quote   Like   Dislike     Comment 7

Biff,

You sound jealous. Thanks for confirming my believe. ;)

David Losh   befriend   ignore   Thu, 25 Oct 2012, 12:28am PDT   Share   Quote   Like (2)   Dislike     Comment 8

I'm a Real Estate agent and I can tell you no one wants to hear the truth.

There are some properties worth owning for a variety of reasons, schools, condition, location, or price. That isn't how people shop for a home. People have dreams, and buy fantasies all the time.

I worked with six investors for most of my selling career before switching to listing properties for sale. We also have a set of Real Estate services, like cleaning, painting, and yard work with the idea of preparing properties for sale.

I know a lot of good Real Estate agents who do care, and are fair. Most people don't seek out good agents. Most people hire any one who spins a great yarn.

I'd say in Seattle there are maybe as many as 100 good agents out of the thousands of people who have a license to sell.

Being a Real Estate agent is hard work, takes a 24/7 commitment, and you are constantly learning, or you lose the edge that made you good to begin with.

I know agents who grew up in the business, own plenty of property, don't need the money, but wouldn't do anything else, because it's fun, interesting, and a daily challenge.

So, I would ask the same question, why do people hate Real Estate agents?

ChrisKolmar   befriend   ignore   Thu, 25 Oct 2012, 12:47am PDT   Share   Quote   Like (2)   Dislike     Comment 9

Just to be clear, I am not a real estate agent. I do, however, work for a real estate company that partners with real estate agents.

Cutting through what you guys are saying I am actually hearing:
1. They are salesman and not experts, yet label themselves as experts.
2. The time they spend on a transaction isn't worth the commission.
3. A perception that they lie all the time to get a deal done.
4. Don't have proper credentials to help facilitate a large purchase.

I think some of these perceptions arise from the fact that of the 1mil+ agents in the country something like less than half complete more than 1 transaction a year. David says it best here:
David Losh says

I'd say in Seattle there are maybe as many as 100 good agents out of the thousands of people who have a license to sell.

imo, the biggest problem is the lack of transparency. Right now, I could find more information about the soup at the IHOP down the road then I could about the actual best agent in the bay area.

I think the general public would have a better perception of agents if there was more transparent information on transactions and reviews. Additionally, there would probably be far fewer real estate agents if people could easy figure out who was good and who was bad.

bubblesitter   befriend   ignore   Thu, 25 Oct 2012, 1:09am PDT   Share   Quote   Like (3)   Dislike     Comment 10

5) 6% of transaction cost just for lying and cheating both buyer and the seller.

Ironman   befriend   ignore   Thu, 25 Oct 2012, 1:17am PDT   Share   Quote   Like (2)   Dislike (1)     Comment 11

ChrisKolmar says

1. They are salesman and not experts, yet label themselves as experts.

The cost of entry to be this "expert" is like $300 and take a test.... doesn't really produce "experts" or "professionals" in my opinion.

ChrisKolmar says

2. The time they spend on a transaction isn't worth the commission.

True.... does it take twice as long to sell a $300K house vs. a $600K house/ Yet, they make twice the commission....

Plus today, much of the housing info is available online, so the buyer can prescreen a house by looking at location, maps, photos, taxes, etc before deciding to see a house. Saves the realtor a load of time.

ChrisKolmar says

3. A perception that they lie all the time to get a deal done.

That's NOT a perception... it's reality...

ChrisKolmar says

4. Don't have proper credentials to help facilitate a large purchase.

See my note above.... taking a quick-study class then making people "believe" you have the ability to help them with the biggest financial decision in their life... well.......

ChrisKolmar says

Shouldn't buyers take more responsibility for their own actions and not blindly follow a salesman?

Yep, that's the last big problem, most people are "sheep" and can be lead by a "professional" right to their shearing....

ChrisKolmar   befriend   ignore   Thu, 25 Oct 2012, 1:22am PDT   Share   Quote   Like   Dislike     Comment 12

bubblesitter says

5) 6% of transaction cost just for lying and cheating both buyer and the seller.

That's just 2 and 3... Thanks for consolidating?

Call it Crazy says

True.... does it take twice as long to sell a $300K house vs. a $600K house/ Yet, they make twice the commission....

Prices in not CA and not Bay Area are much lower, but I agree with the point none the less.

I think the rest of your points would be taken care of with some kind of clear yelp for agents type thing. It would just eliminate all the agents that never close deals and never get good reviews.

rdm   befriend   ignore   Thu, 25 Oct 2012, 1:29am PDT   Share   Quote   Like (1)   Dislike     Comment 13

The term "used house salesman" sums it up. On both the buy and sell side there is a built in incentive to at the least "shade" the truth in order to make a sale
happen. Yes there are some few "good" agents out there but I would posit that the nature of a commission driven business inherently corrupts all that participate in it. Thus for those who have participated in the real estate game as seller or buyer said corrupted facilitator produces a foul "taste" engendering the reactions often seen on this board, which though extreme are often IMO warranted.

elliemae   befriend   ignore   Thu, 25 Oct 2012, 1:32am PDT   Share   Quote   Like (4)   Dislike     Comment 14

ChrisKolmar says

For example, I don't pay attention to car salesman when I buy a car or eye glass salesman when I get new glasses.

You should "pay attention" to the auto snake oil salesman. If you don't, you're screwing yourself. But then again, look at the job you do. Like a car salesman, you wait for subjects, pounce, fill out a bit of paperwork and wait to collect money you didn't earn. I'm not trying to attack you personally - just an observation about realtors in general.

Realtors are useless. Their "knowledge base" is an outdated system called the MLS, which used to hold and corner on the market for listings.

all realtors do is put up a sign and wait for people to buy. They take a commission for this - and attempt to use fear & intimidation to keep or gain customers. For example, telling people that they complete all of the notifications necessary for a sale.

they do a fraction of what a re attorney (a real professional with education) does for alot more, with crappy results much of the time. They complete forms that anyone can get off the internet and the "referrals" they give for inspectors, etc are laughable.

Realtors are leeches whose "profession" is waning and, sadly, require no education, experience or service/product.

37108605   befriend   ignore   Thu, 25 Oct 2012, 1:42am PDT   Share   Quote   Like (3)   Dislike     Comment 15

EastCoastBubbleBoy says

suddenly a few short years later, the $180k home is now worth $350k (or more).

"Worth" has NOTHING to do with asking prices.

killerhertz   befriend   ignore   Thu, 25 Oct 2012, 2:02am PDT   Share   Quote   Like (1)   Dislike     Comment 16

I largely agree with the general sentiments about realtors, but my realtor is actually quite honest and listens to my wants and needs. She lets me look at my own pace (I've been renting in the DC area for 5 years and looking at RE occasionally with her for 2) and never complains.

The key is to find a good realtor through referrals or keep trying new ones until you're satisfied. You can tell after the first ride along if you've found gold imo.

zzyzzx   befriend   ignore   Thu, 25 Oct 2012, 2:03am PDT   Share   Quote   Like (3)   Dislike     Comment 17

Fast food employees work harder than real estate agents. So it's reasonable to expect unskilled labor like real estate agents should earn less than a fast food employee.

ChrisKolmar   befriend   ignore   Thu, 25 Oct 2012, 2:11am PDT   Share   Quote   Like   Dislike     Comment 18

elliemae says

But then again, look at the job you do.

I don't get it, I'm a product manager for a website...

killerhertz says

The key is to find a good realtor through referrals or keep trying new ones until you're satisfied. You can tell after the first ride along if you've found gold imo.

Pretty sure that's the answer. It's just hard to test drive agents.

37108605   befriend   ignore   Thu, 25 Oct 2012, 2:15am PDT   Share   Quote   Like   Dislike     Comment 19

killerhertz says

but my realtor is actually quite honest and listens to my wants and needs.

There are certain people who when one on one "actually appear quite honest" and listen to "wants and needs" ...for money.

FortWayne   befriend   ignore   Thu, 25 Oct 2012, 2:16am PDT   Share   Quote   Like (4)   Dislike     Comment 20

I don't think people here hate all real estate agents. It's the system that is so rotten that it is despised by many.

Just read patricks book. If you are not already aware of, you will read a lot about the kinds of fraud that goes on there. How brokers hide offers, fake offers, lie about offers. How they screw both buyers and sellers to make themselves or their flipper friends lots of money.

Commission isn't where the problem is, it's the lies and abuses that are not spoken about. Now I've heard that some places try to make it more transparent as a selling point, like redfin, but I can't confirm, could be all the same for all I know.

But reality is that in real estate you are dealing with a system that is rotten and corrupt through the core. And I think this site teaches both buyers and sellers to be aware of it, detect it, and now to deal with it.

ChrisKolmar   befriend   ignore   Thu, 25 Oct 2012, 2:28am PDT   Share   Quote   Like (1)   Dislike     Comment 21

FortWayne says

I don't think people here hate all real estate agents. It's the system that is so rotten that it is despised by many.

Best answer yet. Thanks FW!

Mr Happygoluckofus   befriend   ignore   Thu, 25 Oct 2012, 2:47am PDT   Share   Quote   Like (4)   Dislike     Comment 22

RE agents in my experience in 2010, I had hard time finding one that wasn't cherry picking the most optimal potential buyer. Don't forget that in 2010, right up to buyer tax credit expiration and for a short time there after, Realtors were still optimistic that the RE market was going to rebound back to peak values any day now.
So when I told them I my price range was between $120K to $175K they weren't interested in that deal at all. Sure there houses out there going for that, but those houses were for THEM(the investor class with cash), not ME the lowly would be domestic home buyer.

I had to dig up a retired RE agent I did carpet for back in the late 80's to actually be my buyers agent, after I found the place I'm in now.

SkyPirate   befriend   ignore   Thu, 25 Oct 2012, 2:52am PDT   Share   Quote   Like (3)   Dislike     Comment 23

Real estate agents' financial interest (higher sales price for a higher commission) are in direct conflict with the buyer's financial interest (lower sales price).

For the seller, the interests are aligned but I think a 6% commission is steep, especially for a more expensive home. Imagine a home that sells for $500,000. At 6%, the seller pays $30,000 in commission. The buyer and seller agents each pocket $15,000. For what? Putting it on a listing service and taking a dozen digital photos?

Sellers should negotiate a better deal with their agent. Say, a flat fee of $1000 for listing, a monthly retainer of $100, and a 10% commission on any amount above a mutually agreed fair market value. Example: Seller and seller's agent agree FMV is $500,000. Home sells for $550,000 after 6 months. Seller's agent gets $1000 flat fee + $600 (6 months) + $5000 (10% commission on above FMV) for a total of $6600.

As for the buyer's agent? Sellers should simply state they aren't paying his commission and that he'll have to get it from his buyer. When buyers are on the hook for the bill, they'll wise up and pay their agent in a way that doesn't increase with sales price.

rooemoore   befriend   ignore   Thu, 25 Oct 2012, 2:55am PDT   Share   Quote   Like (2)   Dislike     Comment 24

Until APOCALYPSEFUCK comments on this thread, it is incomplete.

dublin hillz   befriend   ignore   Thu, 25 Oct 2012, 2:59am PDT   Share   Quote   Like   Dislike     Comment 25

People are just frustrated because ideally the process to purchase a house should be as seamless as purchasing jeans in a department store. However, that's not what we have, instead we haggle and hassle like in the middle east farmers market and obviously people are scared that realtors are not looking out for their best interest and may fleece them.

SkyPirate   befriend   ignore   Thu, 25 Oct 2012, 3:07am PDT   Share   Quote   Like (1)   Dislike     Comment 26

CaptainShuddup says

RE agents in my experience in 2010, I had hard time finding one that wasn't cherry picking the most optimal potential buyer. Don't forget that in 2010, right up to buyer tax credit expiration and for a short time there after, Realtors were still optimistic that the RE market was going to rebound back to peak values any day now.

So when I told them I my price range was between $120K to $175K they weren't interested in that deal at all. Sure there houses out there going for that, but those houses were for THEM(the investor class with cash), not ME the lowly would be domestic home buyer.

I had to dig up a retired RE agent I did carpet for back in the late 80's to actually be my buyers agent, after I found the place I'm in now.

I've experienced that too. When I told an agent I was looking for properties sub-$100K, he politely told me that I wasn't worth his time. I found another agent who was more hungry/eager and understood I was approaching this from the perspective of an investor. We moved aggressively and fast and I didn't waste his time - I found what I wanted in a couple weeks, spent another couple weeks on due diligence, and shortly thereafter closed all-cash.

With the internet and online listings, these days a buyer's agent simply acts as the guy to let you in the homes you are interested in and handles the administrative work to close the deal. Nobody is going to scour listings and go through past sales and tax assessments with as much detail as YOU. It's your money on the line, not your agent's money. Use him and drive him like a horse - you are in command and your horse doesn't care about the mission at hand. He only cares about the bag of apples that you are dangling in front of him. Tame the beast and he will serve you well.

And obviously guys, this is just an analogy. Don't whip your agent like a horse. :)

37108605   befriend   ignore   Thu, 25 Oct 2012, 3:12am PDT   Share   Quote   Like   Dislike     Comment 27

&feature=related

Dan8267   befriend   ignore   Thu, 25 Oct 2012, 3:12am PDT   Share   Quote   Like (2)   Dislike     Comment 28

ChrisKolmar says

Why do you guys hate real estate agents so much?

Same reason people hate used car salesman. Whenever there is a big purchase that happens rarely and the customer isn't going to repeat business, salesman take a very adversary role and try to screw the customer as much as possible. After all, the salesman isn't going to get repeat business from the customer one way or another, so it makes sense for him to fleece the customer the one time he can. This is why all short-term relationships are less healthy and mutually beneficial than long-term relationships.

David9   befriend   ignore   Thu, 25 Oct 2012, 3:15am PDT   Share   Quote   Like   Dislike     Comment 29

I wasn't going to comment, but, my friend called a listing agent on a Burbank house and was blown off for whatever Realtor reason. She is ok. 'F*ck them' she said.

Ironman   befriend   ignore   Thu, 25 Oct 2012, 3:16am PDT   Share   Quote   Like (1)   Dislike (1)     Comment 30

SkyPirate says

As for the buyer's agent? Sellers should simply state they aren't paying his commission and that he'll have to get it from his buyer. When buyers are on the hook for the bill, they'll wise up and pay their agent in a way that doesn't increase with sales price.

That's the part that has always bugged me!! Why should the seller have to pay for the services of the buyer's agent? The buyer's agent is working for the buyer, he should pay for his own agent.

Where else in the real world does this happen? Does someone else pay your accountant when he does your taxes? Does someone else pay your attorney fees? Does someone else pay your plumber when comes to replace your hot water heater? Does someone else pay your mechanic when he fixes your car?

But, when you "hire" a realtor to help you buy your house, the seller gets to pay for it (which leads to higher house prices)... it's nuts!!!

SkyPirate   befriend   ignore   Thu, 25 Oct 2012, 3:20am PDT   Share   Quote   Like   Dislike     Comment 31

In a booming market, agents are in strong demand and have leverage to make the rules for buyers and sellers alike. In a weak market like what we have now, agents are hungry. The leverage has shifted back to the client. Negotiate - the worst thing that will happen is that the agent will say no and you can find another one (there are tons of them begging for your business).

ChrisKolmar   befriend   ignore   Thu, 25 Oct 2012, 3:31am PDT   Share   Quote   Like   Dislike     Comment 32

Common theme I am seeing is that the incentives are completely backwards and that the commission split is illogical. Both make sense to me.

I like Sky's concept as a potential substitute as I think there is a need for some sort of RE agent/adviser in the transaction.

I'm looking at FSBO as a real world substitute for a no agent concept. A very high percentage of FSBO turn into MLS listings eventually (I'm going to pull a number of like >75% out of my a$$ right now, but I'm pretty sure it is that high.) So there is some kind of need for agents, either in 1) helping do all the mind numbing paperwork or 2)marketing.

Transactions happen so infrequently for any individual (with the exception for investors and people that move very frequently), sellers would pay for guidance in the process past just "taking pictures and putting the listing on the mls".

SkyPirate   befriend   ignore   Thu, 25 Oct 2012, 6:36am PDT   Share   Quote   Like   Dislike     Comment 33

I think the biggest problem with FSBO is that they are often very deluded about the market value of their property. Their asking price is so high that often times I wonder if that's the reason why they aren't represented by an agent - the home will never sell.

I think if Craigslist came up with a more refined way to post FSBO listings, it could be very successful and revolutionize the real estate market.

IMO, experienced buyers would be happy to negotiate directly with the seller, and financially it benefits the seller for saving on agent commissions.

The only thing that is truly needed in the entire transaction is the closing attorney. I imagine a Craigslist program that works as follows: Buyers would submit their financial info to a Craigslist closing attorney to show proof-of-funds (whether cash offer or pre-approved for a loan). Craigslist would then "certify" them as a buyer that has shown proof of funds when his offer is submitted (behind the scenes the buyer may be have shown proof of even higher funds, but it won't reveal this). The seller can then entertain negotiations with that buyer with greater confidence that he's good for whatever he's offering and he's not wasting his time.

Craigslist could charge the seller $50 to list and charge the buyer $50 for certifying proof of funds.

When they are ready to close, Craigslist would do it for a published flat-fee.

Biff Baxter   befriend   ignore   Thu, 25 Oct 2012, 6:36am PDT   Share   Quote   Like (1)   Dislike     Comment 34

ChrisKolmar says