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klarek
2009 Jun 26, 12:15am
RE agents are absurdly overpaid, that much is certain. The excuses given that their brokers get a significant chunk, therefore justifying outrageous commissions is so insulting. It's about whether the service rendered is worth the commission paid. If I buy a $400k house that I do all my own comp research on, why should some piece of shit get $12,000 to open the door of the house for me, and fax a few papers? It's complete bullshit.
And yes, they are insultingly condescending towards renters. Anyone that says renting is "throwing money away" deserves to be punched in the face. They are entirely self-serving and obsolete.
Property managers are actually pretty easy to strong-arm. Right now people are consolidating to save money. Rent typically goes down during recessions. Increases in rent because of "rise in property values" is rubbish. Do they lower the rent by 50% when the values drop that much? Of course not. It's entirely supply and demand. Moving sucks, but if they pull that crap on you, go on craigslist and I guarantee you'll find a nicer place at a lower rent than what they are trying to force you with. Show them that, and give them the ultimatum to either LOWER the rent, or risk having a vacant property for a few months. Uncertain economic times might force them to come to their senses and not take that risk.
The 6% comission sounds not so bad for some areas when you are looking at houses that go for $50,000 - 150,000, but with the wildly over inflated prices of today in CA (even though some have decreased) then the 6% is outrageous - I think that they should be made to account for their actual costs.
Multi-unit facilities are also not taxed the same as SFHs or Duplex/Fourplex units. They get quite a break, in fact, so I don't see how rising property values really figures in to a rent rise.
We had a Tech industry bust in 2000 and both rents for residential and commercial dropped for a long time. It never recovered back to 2000 peaks.
Now we see RE bust with some landlords ahead of forclosures increasing rents in hope of mad rush to rentals. But that didnt happen in the BA. Fact is there is more rentals and rents declining due to recession.
Even REITS like Avalonbay saw their value drop by over 66%
http://finance.yahoo.com/q/ta?s=AVB&t=2y
This is their comments from latest earnings announcment.
"In terms of portfolio performance, the recession is continuing to negatively impact renter household demand. For the quarter, revenue declined by about half a percent with three regions holding onto modest year over year revenue increases and three showing year over year declines"
Hi all
I've been lurking here for months; time to step in and tell you a bit of my story. I got out of the property market a few years ago at almost the top of the market and rented for the first time since my 20s. I was appalled at how poorly I was treated by property managers and real estate agencies generally. Realtors treat you like they want you to be their best friend if you're a potential buyer, but if you're a potential renter, you must be a 3rd class citizen. Now bear in my I'm an ex- banker (not the leech-f#@k type, nor from the USA) and if I had a US FICO score, it would be 850 or so.
My first rent increase in Jan 2008 was for 18%, and was justified by the "...general rise in property values in the area...". I sucked that up, but when asked for a 12% increase a year later (a bigger % with compounding) I refused and went house-hunting. Well guess what? Every agent just LOVES me and now I negotiate hard....very hard and pay $800k cash for a home I would have paid $1.3m for a few years ago.
Yes, I gave my notice for my rented property and yes, they wanted to try and zing me for picayune stuff such as the traditional cheese splot on the grill. I sent them a long letter, reminding them of all the bs I'd put up with as a tenant which was still going on, how I had deliberately avoided using their firm to buy my new home, and the thousands in commissions they'd missed out on because they were greedy and mean-spirited. Some costly cheese splot, eh guys?
There can be few professions as dearly in need to justify their existence as real estate sales and property management. If they were all to disappear tomorrow, do they really think we wouldn't be able to do everything they do? <snicker>
Next up, why I got out of banking or "How securitisation can really ruin your day."
#housing