patrick.net

Also, you market yourselves as “Real Estate Professionals”. Average Joe Q homebuyer may not ever realize that you are licensed (at least in the states I have lived in) as “salespeople”. In short there is a misconception regarding what a realtor is and is not.

They are not financial advisors. They are not lawyers, and the educational requirements to get ones foot in the door are minimal. Yet the assist people in making the largest financial transaction they will make in their lifetime. As a consumer, I’d expect that much more from a “Real Estate Agent” than a “Used home salesperson” But when you get down to brass tacks, they are one and the same.

Kind of like asking why people hate child molesters. How can you not hate them.

I don't put the energy into hating realtors that many here do, but I can tell you that almost every one I ever met lied constantly and pretty much the first minute I met them.

That's enough reason to dislike them strongly or not want to have anything to do with them.

If a realtor would simply help handle a transaction or a real estate search or a sale that would be OK with me. They constantly tell you that now is the time to buy no matter what. They have pretty much all said so for the last 6 years. They really don’t care at all for their clients. It’s not hard to come to the conclusion that they ain’t got no soul.

Biff

Jealousy???

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

Biff,

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

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?

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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!

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.

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.

Until APOCALYPSEFUCK comments on this thread, it is incomplete.

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.

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. :)

http://www.youtube.com/embed/UlXMboPnETU&feature=related

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.

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.

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).

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".

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.

ChrisKolmar says

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!

Actually I don't think it is the system. No system can make me lie.

If you are a realtor who does not lie and does not tell me anything about the state of the market, I would have no problem with you. About 99.999% of them all read from the same script. They all say that it's urgent to buy right now, whenever now is.

And I don't listen to them. I do take responsibility for my actions in a deal. But I don't like them. I don't like liars and people who abuse others for personal gain.

Biff

The NAR is a criminal cartel, similar in many ways (and linked) to the big banks/wall street etc... they have become obscenely outsized compared to actual value they bring to our society, like a giant tumor sucking blood from more important areas of our economy.

Due its grotesque size the NAR has the financial means to buy and bribe our political process thus perpetuate its corrosive presence. Realtors are the foot soldiers, carrying out and benefiting from this organizations fraudulent activities.

Realtors are parasites on normal people, exploiting the built in conflict of interest in their "profession" to extract maximum profit from their "clients".

ChrisKolmar says

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

Some of the blindness is knowingly held over the buyer. The agent knows the buyer won't have access to some of the information the agent uses in everyday work. The agent then uses that information to get the buyer to buy and buy at a higher price.

So if there were any sense that the process were transparent, it would be different. Instead, with so much money to be gained, the agents knowingly use their information advantage so that the buyer buys quickly and for more money.

Once you see the process that way, I don't know how you will be convinced to participate.

Its really lie anything else in any profession: There are good and bad professionals working in the industry. I'll be honest. I had a very low opinion of RE agents for years. When we started looking we in fact met probably 8-9 different agents. Almost all of them were slimy and clearly looking out for themselves. A few tried to use scare tactics on me. We did get lucky and the one we wound up using was fantastic, didn't push us to buy anything and was always spot-on when it came to the type of homes we we liked. This agent busted their ass for us and went above and beyond what was called for. It was an overall positive experience. I'm sure others have had bad experiences.

I'd say part of the gripe comes from the fact that buying a house is probably about the most stressful thing you'll ever do. So of course a lot of people are probably going to have some angst towards RE agents.

FunTime says

So if there were any sense that the process were transparent

Seattle is the home of redfin, and they are all about the transparency of the Real Estate transaction. I'm always more than happy to give any one all the data they want, but the nuance is in the interpretation.

I'm a lousy Real Estate agent, because I don't lie, and lack some of the people skills most associate with a sales person. I know what I know, and have bought, and sold more than a couple of properties.

Real Estate is a lot of money to pay for a place to live. There are all kinds of housing units, and more coming on the market every day. You want some one, especially now, who knows the market, and the value of property.

When some one starts telling me what they want, I shut down. I may not be able to get you what you want, but I can get you what you need.

Let me clarify that with the upper end market place, where it is all cash you can dictate your market.

With a bank loan, you are trapped. Banksters are the enemy, and you want to be done with them as quickly as possible. That is what you need. You need cash, and equity. You need a deal, and park the dream house at the door until you can pay cash for it.

Grow up, get with the program, be brutal, and get a deal.

How's that for warm and fuzzy?

SkyPirate says

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.

I just needed his name on a few pieces of paper.

E-man says

Jealousy???

The word is "envy".

SkyPirate says

these days a buyer's agent simply acts as the guy to let you in the homes you are interested in

I left this thread sit here to see if any one would pick up my trolling on this topic.

The thing about Real Estate blogs is that no one who is active in the Real Estate business ever comments. People talk about how things should, or could be, but no one ever tells the truth.

We are in the Real Estate business to make money. If you are looking at something else, rent. There are plenty of great properties to rent.

If you are buying a property you should be buying the property with the idea that you are going to make a profit. If you are looking for a nice place to raise the kids, or some excuse like everybody has to live somewhere, rent.

I especially love all these nickle, and dime players telling me they are cash flowing properties. What is this, 1980?

We are in the business of Real Estate to make cash.

We buy low, and sell high, and we trade in cash, or get to cash as soon as possible.

There is no top, or bottom to the Real Estate Industrial Complex, there are only good deals, and bad deals.

You are getting to cash, and grinding out the rest.

I went looking for this thread on the Real Estate forums, and couldn't find it.

Anyway, what you hire a Real Estate agent for is to know the market place.

You hire a Real Estate agent to know what a good deal is.

Anybody can tell you what market conditions are, or look up tax records, but an agent knows the market by experience.

I've seen good deals in every market there ever was since 1972. That's what people pay for, but the only reason that I have time to be here today is there isn't a deal to do.

This Real Estate market place is driven by idiots, and every Real Estate agent who knows anything knows that.

An idiot comes in, loaded with data, and wants to buy something, anything, just cause it seems like we are at the bottom of the Real Estate market place. What a bunch of morons.

I lost this thread in the forum too.

Thanks for the insight David. I don't think the average person has any idea about the market and has very little data on the subject. Real estate agents *should* be the one to show and decode that data in a digestible way and xperince would play into that.

On the flip side, the incentive structure prevents most agents from making unbiased recommendations (just by human nature). So it might be better if they just look up tax records for you and don't give recommendations on market conditions.