How are realtors still a thing?

Being a former Realtor I know everything about the business :tongue:

I think the debate should be about a fair price for the services rather than asking whether or not they're a value-add in the process. Not everyone needs a realtor, some are knowledgeable enough to buy alone. That's probably <10% of people though, and some of them will overpay for repairs and/or get a shitty inspector that doesn't keep the sellers honest.

3% commission in a fast moving market is a little high for a standard home. For a hard to sell property it can actually be a deal though. think luxury land parcels, remote properties, etc.

What do you guys think about paying 20% to 40% markup at a retail store to help pay for the goon standing behind the counter? Makes three percent for a competent agent who actually works hard and takes on some of your liability seem not that bad.

Also, it's been said, but like any profession there are some who work their asses off for you, and a lot who suck. Speaking as a real estate agent, I hate most real estate agents, especially when I'm working twice as hard as them for the same amount of money.

Some people are certainly savvy enough to represent themselves, but just because OP can doesn't mean everyone doesn't want or in some cases really need some help.

Either way, seems like one of these threads pops up about every month, maybe you guys should get together and just have one thread where you can discuss how worthless you think real estate agents are.

I would recommend this guy to anyone in the LA area.

https://www.linkedin.com/in/derek-huff-0336a2102

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Originally Posted by jvskinn

Either way, seems like one of these threads pops up about every month, maybe you guys should get together and just have one thread where you can discuss how worthless you think __________are.

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So, like a fill in your favorite profession thread?

Actually I don't think one of these threads has popped up in a while. We've been quite busy discussing genital herpes, how to obtain police reports, and flippin' the bird to Benny.

This has been a welcome respite.

RE worth is volitile and can change in an instant, even tho I negotiated a discount which the agent agreed to cuz it was a sellers market with low inventory pre-the-world-falling-apart. I did the deal & very soon after had sellers remorse so I was lamenting to a friend from back home maybe I had not asked a high enough price to which buddy replied "no man everything is for sale right now & prices are dropping ... you did great!"

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Originally Posted by Foggy_Goggles

If I lived in WA, Oft would be my realtor. Seriously.

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Thanks foggy! I may convert that to my signature.... :fm:

Here's what I tell my clients about asking price (which is, unequivocally the price a ready, willing and able buyer is willing to pay at that point in time), and this is very different from any sort of retail environment:

In any real estate market - good, bad, buyer's, seller's, hot, cold, economic downturn or boom times - the concept above will always, absolutely correct an asking price that is not exactly the price that it would end up selling for without any contingencies. And how often does that happen?

If your price is below "market value" i.e.. the price a ready, willing and able buyer is willing to pay at that point in time, more buyers will show up, make offers and ultimately bring the sales price to actual market value. In a hot market like Seattle or San Francisco or many others this usually happens quite quickly and the seller is pretty much in control of the transaction. Buyers will ditch their contingencies, not ask for concessions and close quickly.

This is what some in this thread seem to be referring to as 'underpricing'. In my mind there really is no such thing, only strategic pricing (as has been mentioned). Brokers use this concept to increase the eventual price that a seller gets. That's their job as seller's agent.

Some sellers have a tough time with this concept because they're fearful that someone will only offer them the asking price. Well, guess what? If that's what happens that's what the property is "worth"!

On the other side of the coin, a property on which the asking price is too high, the market will also correct it (downward) and this usually takes much longer.

Unlike a retail product the price of any piece of real estate that is sold anywhere is fluid and market-dependent. You can't just mark up your product by 100%+ (whoever said 20%-30% doesn't have much grasp of most retail) and wait for someone to walk in the door and take it home.

The notion that we have no incentive to increase a seller's yield is absurd. It pays many dividends in the form of referrals and future business to have happy and loyal clients.

timing to move a property is also affected by the asking price

pretty sure I mentioned that..... ;)

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Originally Posted by oftpiste

Bottom line is that your agent knows more about that field than you do. As does your plumber, electrician, lawyer etc. Where just about any professional earns their keep is when the shit hits the fan and they know how to fix it because they've fixed it before. Of course if you get a crappy professional it's a different story.

The shit doesn't always hit the fan and professionals like it when things go smoothly. The money's better and there's not as much stress for any of the parties. This is good for clients and good for the professional's business. That's why they're there; to make sure things go smoothly.

The professional you engage can not only fix a problem but prevent it from happening in the first place. Most of the time the client will never see this because the professional is doing their job with skill and care.

This is why realtors are 'still a thing'.... and plumbers, and electricians, and code warriors and medical and public safety professionals (not that I'm comparing them to realtors in their importance), and lawyers, and insurance companies, and accountants and website designers and forum operators, therapists, and on and on and on ad nauseum. You study something, do it many times for many years, you get so you know more about it than most other people. Others will pay you to help them. Pretty simple.

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Most of these "Realtors" couldn't balance a checkbook and are hacks who couldn't sell used cars. Less than 5% have a clue.

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Originally Posted by oftpiste

pretty sure I mentioned that..... ;)

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yes, but in different terms I thought
i was trying to emphasize that the house's value, as defined by how much the market thinks it's worth (which I think was your overall takeaway), is not necessarily a fixed number
(maybe not worth noting in the end...)

it's a fluid thing that you wade into in your daily business...the "same" house in different neighborhoods or different times has differing values
not envious of staying on top of that at all -- it appears somewhat nonsensical from the outside and is tied into people's emotions about a place & money in general

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Originally Posted by VTeton

Most of these "Realtors" couldn't balance a checkbook and are hacks who couldn't sell used cars. Less than 5% have a clue.

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Not in my experience, not at all. But then people say that same crap about lawyers, and that is also a huge fallacy on that score too. But it seems to make people feel better to act like 95% of the profession they don't like is made of bottom feeders, so knock yourself out.

All true!

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Originally Posted by acinpdx

yes, but in different terms I thought
i was trying to emphasize that the house's value, as defined by how much the market thinks it's worth (which I think was your overall takeaway), is not necessarily a fixed number
(maybe not worth noting in the end...)

it's a fluid thing that you wade into in your daily business...the "same" house in different neighborhoods or different times has differing values
not envious of staying on top of that at all -- it appears somewhat nonsensical from the outside and is tied into people's emotions about a place & money in general

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I think the number is considerably higher than 5%, but I won't argue that there always have been and still are an awful lot of people making an awful lot of money who really suck at being real estate agents.

Many of those really good at getting people to sign contracts but that's about it, and that does not a skillful broker make. They're the ones who inspire people to start threads like this, and that's not great for the good ones.

Of course, I'd make the worlds shittiest car salesman.

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Originally Posted by VTeton

Most of these "Realtors" couldn't balance a checkbook and are hacks who couldn't sell used cars. Less than 5% have a clue.

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Originally Posted by oftpiste

I think the number is considerably higher than 5%, but I won't argue that there always have been and still are an awful lot of people making an awful lot of money who really suck at being real estate agents.

Many of those really good at getting people to sign contracts but that's about it, and that does not a skillful broker make. They're the ones who inspire people to start threads like this, and that's not great for the good ones.

Of course, I'd make the worlds shittiest car salesman.

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Heh, I missed his used car comment. And from my perspective, a good realtor shouldn't be good at selling used cars (or rather, that is an unrelated skill). I don't see a realtor (either as a buyer's or seller's agent) as a salesman at all.

Tell me of another business where one can basically reinvent themselves....regardless of their previous profession or misdeeds (minus hard felonies)?

Hence, low barrier to entry gathers a lot of people that are lazy, dumb, unethical, in-between-careers, etc.

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Originally Posted by esseff

Tell me of another business where one can basically reinvent themselves....regardless of their previous profession or misdeeds (minus hard felonies)?

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Snowboard instructor.

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Originally Posted by esseff

Tell me of another business where one can basically reinvent themselves....regardless of their previous profession or misdeeds (minus hard felonies)?

Hence, low barrier to entry gathers a lot of people that are lazy, dumb, unethical, in-between-careers, etc.

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Originally Posted by Viva

Snowboard instructor.

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Heh. In my town, backduring the 2008 RE crash there seemed to be a pretty serious shake-out in the brokerage ranks. And coincidentally, there were hundreds of yoga class ads and flyers showing up all over the place around that time.

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Originally Posted by esseff

Tell me of another business where one can basically reinvent themselves....regardless of their previous profession or misdeeds (minus hard felonies)?

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not enough room for the list. are you really asking this as a serious question? think for more than a moment and I'm sure you will come up with many. like, virtually any profession there is?

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Originally Posted by VTeton

Most of these "Realtors" couldn't balance a checkbook and are hacks who couldn't sell used cars. Less than 5% have a clue.

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QFT! One of the bigger earning realtors in town casually let this roll off his tongue:

"Ahhh... a real estate license... a law degree in seven days..." Classic!



At a party once I heard a realtor say there were something like 700+ licensed real estate agents in Teton County.

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Originally Posted by esseff

Tell me of another business where one can basically reinvent themselves....regardless of their previous profession or misdeeds (minus hard felonies)?
.

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I always heard a lot of Barbers were ex-cons.

say the average house is 250,000 a 3% commision isn't that much once you figure it fees to the firm and taxes, the take home is less than 2% it's not really a ton of money unless your doing big volume

the problem is once houses (like where I live) sell for 1 million or more the 3% fee is pretty stupid, which equals stupid money, then you have to listen realtors and all the bullshit they spew, I have yet to meet a realtor in summit county that isn't a complete moron, I have yet to meet a realtor where I live that doesn't have their head so far up their ass and completly detached from reality, this is where they get a bad rap, you figure a house here turns over every 6-10 years, thats alot of bs money for nothing, selling the same thing over and over

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Originally Posted by XXX-er

where ever you are can't be as bad as Vancover they got some crazy shit going on

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Yeah man, properties are being traded up to several times before a deal closes which allows the realtor to make multiple commissions and investors to profit tax-free from houses that are not yet technically in their possession. Basically, sellers are receiving less for their properties than what buyers are willing to pay, and the buyers (usualy Chinese investors) pay more than they would if the realtors weren't involved. All of these properties are worth millions. You can't get a condemned single detached house in Vancouver for anything less than a couple million. places on my block have been sold, torn down, rebuilt and sold again in the past 6 months, and they were decent houses to begin with.
http://i.imgur.com/SCyathZ.jpg

That's a pretty anomalous set of circumstances right there. Can't really blame agents for it, especially if buyers are pushing the whole thing as it appears. I've heard things were crazy there, but is it really that bad?

$50k of that agent's $75k in your example is not actually a commission but a finder's fee offered by crazed buyers. I'd take it too if the threw it at me like that after a conversation that involved me telling them they were likely not making a good decision.

Realtor here. Can you sell your own home. Absolutely. The reason we are not going anywhere is that selling, buying, and moving a home is an emotional and stressful process. We are there to guide people through the transaction and handle the moving parts. It is a huge financial decision for most people. A good Realtor is worth what he/she charges. I've saved clients tens of thousands of dollars, and made them even more money through investing in real estate on deals they never would have known existed.

The barrier to entry into this business is WAY too low, and the bad agents have really hurt the public's opinion of us. And as mentioned, 10% are doing 90% of the work.

The flat fee shops always open up in a seller's market, but as the market shifts back, they always seem to disappear.

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10% are doing 90% of the work

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Is that another way of saying 90% suck? I think we've gotten to the point where we can agree that 10% are worth their money. I've worked commission sales jobs and understand that there is little correlation between how hard you work for a client and the resulting commission (at least in the short term).

The incompetence I see, manifests itself frequently as a complete lack of professionalism. Every realtor should wake up everyday, look in the mirror and say "I am not a contractor, inspector, appraiser, mortgage broker, building inspector, expert on zoning regulations, a well driller, etc."

As a contractor, I've got to so many customer meetings were the new owners says, "My realtors said it should cost XXX" which is generally about 50% of estimated cost. I usually response by asking the client what led them to believe that the realtor had any level of expertise is estimating to cost of construction projects. The blank stare usually comes next. I follow up by asking if the realtor cashed their commission check yet. Then they start to get it.