patrick.net

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.

ChrisKolmar says

the incentive structure

A Real Estate agent is in the business of Real Estate. Every Real Estate agent I know is buying, or selling property for themselves.

My area of expertise is called don't wanter properties. If you don't want it I might take it to fix, and resell. Other agents buy for cash flow, others work with new construction, and some finance projects.

Every agent I know has a hand in the game, and has skin in the game.

You, the buyer, and seller are an add on. I'm looking for property, and not every property will suit me, but it might suit you. I list property that looks like a good deal, and in most cases it's a challenge. My company has brought thousands of properties to market at the direction of other Real Estate agents.

In other words, an agent needs to be involved in the Real Estate business, and know the other agents in the area. You can collect all the data in the world, but it doesn't tell you what is or isn't a good deal.

The very idea that Real Estate is a commissioned sales position is ridiculous, because there is no money in that.

The incentive in the Real Estate business is to create wealth.

Best of Luck

ChrisKolmar says

I lost this thread in the forum too.

I'm glad tis is back. You ask good questions.

Some agents, they can't spell, can't form a sentence, you can tell they barely graduated H.S. some have bad personal etiquette, pushy, they lie to get a listing, often they fill the paperwork out wrong. Since buying RE is such a red-tape kind of transaction with all these different parties involved, buyer, seller, two realtors, appraiser, tax assesor, banker, title company

It's a flippin circus.

ChrisKolmar says

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.

Not necessarily.

1. I can and have paid real-estate lawyers flat fees to deal with real-estate contracts and paper work and doing so cost me hundreds of dollars instead of thousands.

2. Homes that are affordable to a large percentage of buyers, in move-in condition, and priced right pretty much sell themselves where there's traffic on foot or via the web.

HOWEVER

1. Most buyers are convinced that they need an agent to buy. My wife told a prospective buyer "We don't care whether we pay a selling agent or knock 3% off the asking price. Hire a real estate lawyer for a few hundred dollars to protect your interests and you can pay thousands less" and he came back with an agent that earned a few thousand dollars an hour (as little as 40 hours of training) versus the lawyer's few hundred (four year under graduate degree plus three years of law school) to hold his hand. Most of those have the agent drive them around to listings and steer them away from FSBOs which won't bribe at least the selling ("buyer's") agent.

2. The places buyers search on the web are all fed by the MLS.

So to make a fast sale likely (you have carrying costs if you're not living there) you need to pay to get a property on the MLS and offer a big enough bribe that selling agents don't steer their "clients" away from your property too strongly.

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".

Sure. I've paid lawyers $400 to deal with up to 3 contracts and $300 for an appraiser for pricing advice where coming up with comparables was not entirely straight forward which aren't too far out-of-line with what other trained professionals billing hourly net for similar training requirement/work combinations. $6000, $12000, or $24000 (at $200K, $400K, and $800K for comparable properties in various markets) would have been ludicrous for the same work even when the package price included amateur photos and staging (which is easy enough - get rid of your junk and create scenes where buyers can imagine living with their junk).

I think you and I are on the same page. You just replaced the word agent with lawyer, which is fine.

For what its worth those that think they are going to save 3% by not bringing in their own agent are almost always disappointed. That's usually already spelled out in the contract with the seller and the buyers commission goes to the selling agent. We almost always do dual and only once did the selling agent give up some commission to make the deal go through, but only when it became apparent that the deal wasn't going to happen otherwise.

everything says

It's a flippin circus.

A Real Estate transaction is a circus, and you need to know how to navigate that.

In order to use a lawyer you need to know what questions to ask. It's the same with all legal matters. The lawyer only advises about the law, and what the law says. The lawyer does not negotiate for you, they can only relay what you say.

Sure all you need is a high school diploma because you never know who will be good. The best Real Estate agent I have ever known drove around in a pick up truck with a dog. He made a ton of money, and bought properties, but he kept the truck.

Of course he retired, and managed his portfolio, and a couple of others, but he still helped people who were referred to him.

What some people say is that Real Estate is a ham fisted industry, of people who work in order to know what is best.

I know that the intellectual elitists, or I should say educational eleitists want Real Estate to be more sophisticated, but it's not.

David Losh says

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.

Obviously you get it. A real estate agent is either throwing a life-line or an anchor line to me, and that's how I think of them. It's about money and nothing else. There ARE some very sharp and savvy agents/brokers, but most people end up getting the bored housewife or beginner agent that the company sold training and testing to, and just became an agent. Those kinds of agents give everybody a bad rap. I don't have the time or patience to deal with those two types and they hurt themselves more than anything. Unfortunately those make up a large percentage ofthe agents in most offices of any given company.

A few more reasons...

It takes very little time and education to get started. Hence, it's not very respected among professionals in general. The really good agents out there hate this.

Their primary objective is to move property. The details and the benefits to the party they are representing aren't as critical to them as long as the property moves. Of course some of the more experienced ones understand that customer satisfaction means repeated business so they are teetering on a fine line.

Because it is a relatively easy occupation to get into, there are simply too many of them.

Their success depends on how consistently they can get property to move. Unfortunately, this often involves tactics that aren't in my best interest.

If I am a buyer or seller, my agent's interests are misaligned with my interests causing me to be careful and suspicious.

There's too many bored house-wife types in the industry with limited experience. There are many agents out there that work hard and have plenty of experience to be fair. But most do not fit into that category from my experience.

Back in the 2000's there were alot of real estate companies teaching classes on how to become an agent with the testing too. Any given big company had about a third of the agents that never moved any property at all. The few that did sell a couple of properties made the whole process a living nightmare for everybody involved, and in my opinion those companies shot themselves in the foot. But, those same companies are big and have control over the whole system because of the total numbers that they sell in an area. The banks walked all over those inexperienced agents really bad also, and that hurt a lot of buyers. Most experienced agents and people in the real estate industry saw some fall-out coming, but maybe not to the extent that it went.

If you have free time and are interested in buying I suggest you make looking at properties a hobby. Real estate agents are part of the entertainment. After reading Patrick, looking on line for a few years, and visiting a hundred or more properties you will know the score. Also, if you have no friends, are lonely, or want to meet people, real estate agents are always available. They are very friendly if they imagine you might buy when the action is slow. But like waitresses who work for tips, don't expect them to be totally genuine. If you are perceptive you will learn who is who. Don't expect them to know the whole story. Some don't know much at all but will happily provide a supply of lollipops and sunshine. Don't expect them to tell you the whole story, ever. Don't expect them to school a fool. When you know more than they do consider buying.

You really have to go back to the height of the bubble....era 2003-2007.

Sometime around 2003 a handful of people were thinking "whoah, 25-50% yoy increases are unsustainable. We are in a bubble". Mostly these people kept it to themselves. Then later in 2004, more people realized it and did not keep it to themselves. They started posting on internet sites.

Immediately they were shouted down and vilified. Most of those doing the shouting were real estate agents. It got progressively worse to where it was VERY clear by late 2005 that we were in the mother of all bubbles, but every REA out there was like "Buy now or be priced out FOREVAH!!!!!!!"

Seriously, it was a complete feeding frenzy and the REA were completely out of control.

People who were proclaiming "bubble" at that time were simply shouted down, told they were the biggest idiots of all time. And they are never going to forget that. The preying, used car salesman attitude.

A whole bunch of clueless buyers hired a whole bunch of clueless agents. The clueless buyers bought at the top and lost money. Who do you think they blame? What happened to personal responsibility? :)

It's very similar to clueless investors getting advice from clueless stock brokers and lost money. Who do they blame? :)

dodgerfanjohn says

You really have to go back to the height of the bubble....era 2003-2007.

It's about timing. Wrong timing can be a bitch. Prices are back to 2005 level in my area. It was at 2004 price level in 2009.

In some parts of the Bay Area, home prices are already back up to 2006 level, with few exception north of the peak level. Borrowing $1M at 7% interest rate is not the same as borrowing at 4%.

upisdown says

Back in the 2000's there were alot of real estate companies teaching classes on how to become an agent with the testing too. Any given big company had about a third of the agents that never moved any property at all.

The franchises make all their money from the agents, not when properties are sold. They milk them for desk fees, member's fees, advertising fees, and anything else they can get them to pay for.

The result is that big franchises don't care about the quality of agents, they just need as many as they can to make the most amount of money. The entire incentive structure is pretty nucking futs when you put any thought at all into it. From the top levels all the way to individual sales.

ChrisKolmar says

The franchises make all their money from the agents, not when properties are sold. They milk them for desk fees, member's fees, advertising fees, and anything else they can get them to pay for.

This is mostly true... they do make a good chunk of change as their cut of our commission.

That's almost like indentured servitude. We always called them truck drivers, like the numerous schools that teach truck driving, that most "graduates" also never seem to ever drive a truck.

They don't care who pays or where it comes from as long as somebody does. At some point there had to have been a line that crossed into counter-productiveness.

NAR isn't looking out for the public good, they are looking out for themselves and their membership as a mass. What they say and do may be good for boosting membership or even sales, but it's usually so disingenuous it makes decent agents look ridiculous.

Many agents aren't worth a fraction of what they are paid. Others are worth even more. A great agent can benefit a buyer or seller far more than the costs of having them involved.

Unfortunately, there's a lot of truth in the rants on this board and others. Many agents have no business being in the business. And there are some real, fundamental flaws with the established compensation norms.

While the industry and most agents deserve criticism, there are some great ones out there. Hate the game, not all the players.

E-man says

It's about timing. Wrong timing can be a bitch. Prices are back to 2005 level in my area. It was at 2004 price level in 2009.
In some parts of the Bay Area, home prices are already back up to 2006 level, with few exception north of the peak level. Borrowing $1M at 7% interest rate is not the same as borrowing at 4%.

For us, the good deals were gone back about 2010, and now the real deep pockets will bid up a property chasing returns to a point we're not willing to go to. Now we focus on getting a part of that return through services, and while not the exact same numbers-wise, it's rather good.

taxee says

When you know more than they do consider buying.

Great advice right there

I hate them because none I've ever dealt with have ever been professional. One made comments about a house I liked, not outwardly saying but hinting that I wouldn't like the neighborhood because it was predominantly black (we were both white). Another really thought she had the expertise of a home inspector, and would (inaccurately) assess supposed defects in the house (she even mistook a piece of plywood that was chewed by a dog as termite damage). One thought everything that wasn't in a gated community with HOA dues higher than the mortgage payment was "dumpy." And ALL of them were emotional, shared awkward gripes about their personal lives, and treated it as if they were shopping for themselves, not for someone else who has different needs and tastes. They always seem to be bored and uneducated housewives who found an excuse to go house shopping all day by taking strangers with them.

David9 says

blown off for whatever Realtor reason.

Was blown off by a rEALTORS greatest sociopathic attribute, what's in it for me...

ChrisKolmar says

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.

Didn't you answer your own question?

Beause todays agents are enabling predatory investor groups that use cash at auctions. The small guy can not compete with that. These groups just do a half Hass job restoring the homes without touching the plumbing, wiring ,windows, insulation roofs and flip for insane profits. Then the connected lenders will not accept VA buyers beause they may need to wait an extra week for an appraiser. the system is so messed up and cut-throat, this is not a real market and prices are being pushed up again.
Thank you greedy Wallstreet and investment groups.

I have yet to meet a real estate agent who added any value to the transaction. They want thousands of dollars to list on MLS, raking in the dough just for posting a few photos and a piss poor description of property full of typos. If I could list on MLS as a private citizen without bowing down to the cartel I might consider them decent human beings. As it is , they are vultures.

Thanks, I've checked, it's not available in my whole state. None of the cartel members has crossed that line here, not enough competition I guess. But thank, you. It is a good idea, an agent had to be willing to accept the flat rate. Since they are mostly scum, it ain't happening here.

ND

Hausmeister T says

Try this link:

http://mlsmyhome.com/default.asp.pg-NorthDakotaFlatFeeMLSListingCoverageArea

Only lists on realtor.com, not MLS

isn't that just a territory??

Vaticanus says

ND

When I bought my house in 2003 I went through several bad realtors until I found a good one. Most of them were just trying to get me to buy a house that was way more expensive than I wanted.

SoftShell says

isn't that just a territory??

Vaticanus says

ND

Yep, gets purty hairy out there sometimes, the indigenous people shooting arrow at us and whatnot whilst we head to town in the wagon for supplies. No country for old men.

Hausmeister T says

Last time I used mls2u.com, I liked it a lot, you do everything with them via web forms and email (at least in NY). According to their website they do MLS in ND:

http://www.mls2u.com/USA/ND/go.php

I appreciate the idea, I actually took your suggestion last night and signed up. This morning however I got notice that they had refunded my $399 . Apparently no one in ND is signed up after all! What a disappointment!!!

Insert obligatory realtors are cartel scum comment

Let me make a distinction here between Real Estate sale people, and Real Estate agents.

I think there are plenty of people in the Real Estate business who work with clients. It's hard to make the distinction, but you should be able to make a decision during your research, and interview process.

Let me also say that you will never know more than some one in the business, who has longevity. It takes doing deals, winning some, and losing some, to know the business.

I have worked with several realtors over the past few years as a contractor and I am sad to say that only a handful of them have prove to be worthy of representing other people's interest. For the most part they are sneaky, slick sales people who have little to no ethics .. I just fired my own realtor because he can't seem to understand that sending out unlicensed and uninsured contractors to his clients homes is ILLEGAL !

I am sorry to say that for the most part I hate realtors