The Newest ‘Endangered Species’?
A few readers wanted to discuss the real estate profession. “Topic: Nobility of the Realtor Profession.”
Another replied, “Amen brother. Disintermediation. The internet drives disintermediation. Just ask your neighborhood travel agent or read the Economist. Disintermediation will be a b**ch for your friendly realtor lacking basic skills.”
“There was an interview on NPR this morning, and the topic was how the internet will increase the pressure on real estate commissions and further disintermediate the industry. Interestingly, one of the observations was that areas with higher home prices have a higher concentration of real estate agents, which dilutes the amount of money an agent earns since there is more competition for listings and buyers.”
“You are correct. the low barrier to entry causes a flood of newbie real estate agents toward the end of the boom diluting earnings from the people who have chosen RE agent as a true career path. For all of the power of NAR they haven’t erected the barriers to entry to their profession.”
And the New York Times has a report on just this subject. “As it turns out, most agents don’t make very much money during a boom, because of one simple fact: the boom attracts way too many of them. Over the past 10 years, membership in the N.A.R. has risen by more than 75 percent. And why not? Compared with most professions, becoming a real-estate agent is quick, cheap and relatively painless. In economics, this phenomenon is known as free entry.”
“The second reason to feel bad for real-estate agents is even more dire: their very profession is about to join the endangered-species list. Think back for a moment to 1999. Travel agents still roamed the earth in vast numbers. So did stockbrokers. But their business models were being blown apart, largely by the Internet.”
No doubt there will be a lot of unemployed realtors in the coming months. How many are full time, I wonder. Because there are many who dabble in real estate. When they are forced out, it won’t be the same as the full timers who lose their entire livelihood.
I’d like to be the first to say that “disintermediation” is a 25 cent word for cuttin’ out the middleman.
I know many honest, long time realtors and the pro’s shouldn’t have to take the rap I think belongs to the state and national associations. Those that engaged in baiting people about being priced out forever, etc, are the ones that have made some enemies for the industry, IMO.
It would seem that the business is changing and the NAR isn’t really being a leader for it’s members. Perhaps the shake-up that is coming will change some attitudes.
I think some realtors are good for the homeowner. I do think they charge too much as do a lot of consumers. You are seeing a lot of discount agencies such as assist to sell, help u sell as well as fsbo sights like forsalebyowner.com and byowner.com. I think that realtors are going to have to lower commissions to remain competitive. The internet is helping to change a lot of the business too. People are able to gather more data and understand the whole situation better. I think that someday here soon a bunch of these discount brokers and fsbo are going to create their own MLS. The NAR and local associations are hideing behind the mls. Once this is penetrated it will get very more competitive which is good for the consumer
Realtors will help the market move downwards because they need transactions to eat.
They won’t move it down as fast as foreclosures or tax lien sales but those mechanisms take a while to wind up to full speed.
But the NAR lobbying machine is sponsoring bills that eliminate these competitors. They put in stipulations and pass laws that “YOU” need full service realtors and you must pay full commissions. This needs to be broken up as it is anti-competitive. While the local states get suckered into passing these laws and giving into their donors aka NAR, the Feds are opening up investigations into these anti-competitive practices. We as voters and consumers need to speak with our votes and vote these legislators that pass laws to protect the realtor and harm the consumer out of office.
I don’t know if the FED’s bite will be as bad as their bark–I persoally hope it’s worse.
Down with the NAR.
Yep they have a lot of lobbyists running around. Each sales associate who is a member of NAR pays them dues so they can hire lobbyists and keep track of statistics. In order to use the term “realtor” you have to be a member of NAR and pay them dues. So you have sales associates and realtors.I think they are losing the battle as time goes on and things will change soon.
I wouldn’t bet the farm on that. Especially with Zillow getting nice roasting in the L.A. Times today that will go away before realtors do.
Quote from the article-
Edelman is unhappy not only that Zillow got the particulars about her home wrong, but also that anyone can punch in her address and find out what they think it — and she — are worth.
“They have way more information about my house online than I am comfortable making public,” she said. “How much I paid in 1997 and what my annual property taxes are now — anyone can make an assumption about how much I’m worth and how much I could bear in damages if they wanted to sue me.
“People at dinner the other night were saying that they’d already Zillowed 10 or 15 of their friends and clients to see what their houses were worth. And I was sitting there wondering if they’d also Zillowed me,” she said. “It’s even become a verb already — Zillowed.”
Watch as that goes away and like I said long before the realtors.
She has a valid concern, but the information was already public. Nothing has changed, except that the info is now easier to access.
Therein lies the problem.
I would not welcome the disappearance of Realtors per se.
There are many good, hard working ones who are in it for the long haul. IOW, it’s their carreer, not a flash in the pan.
If anyone has ever sold their own home, you know what a hassle it is. If you are somewhat knowledgeable about money and RE, a good
agent can very well be worth the fee.
This will especially be a vital service in a RE bear mkt.
And in terms of recourse, one has a realtor on the line with them to some degree.
Also key is a good title ins company. They will also look after you if you know the ropes.
To me, the fees are worth it.
I certainly think there is a need for realtors, but their commish is often too high. To make 4-5K to move a craphole in a rough market is one thing, but to make 15K on a McMansion in a booming market before they even put the sign out? No wonder so many go FSBO.
The services of a Realt-whore are worth about $10-$20/hr. There’s absolutely no justification for a 6% commission.
In Europe, it’s more like 1-2%. Do the Realt-whores here do that much more work? How do you justify a $30,000 commission on a $500,000 house for maybe 10 hours worth of work?
No, it’s only that low in the UK where it’s completely unregulated and no cartel. In Denmark, for example, where I sold a property it is 4% + VAT (=5%) plus advertising fees so wound up close to the US norm. In Denmark you have to be a “state authorized property broker”. And it is the number one rip off country in the world for most service so it’s shocking that the US is just as bad.
I sold my place myself in NYC - in the frenzy last year, it was easy. Quite a few folks I know who used realtors in the past few years in the city described them as a hindrance rather than a help -once you signed the papers, they seemed to disappear -not offering help, delaying closings, etc. Their business in the frenzy actually caused a lot of realtors to blow off clients - especially ones who had smaller (commission) properties.
It may be when the market slows the realtors will work harder for their clients — even so, if I had to use one, I’d want to check out their references thoroughly.
I was thinking about attending the quickie Realtor(tm) school and becoming a licensed agent, just so I can represent myself in future transactions and possibly help out friends/relatives with their real estate needs…thoughts?
I was considering the same, only to avoid paying commissions when I finally sell my condo and buy a house in five years. I don’t mind paying for services, but I hate paying for secrets (such as MLS access). Hopefully a truly free market for homes will be established by then, and I won’t have to bother with the weekend classes.
For Sales: the money you earn from a sale will be self-employment taxable income, so that’s a drawback. There are countless listing agents out there that will get your place into the MLS for $500-1000.
For Purchases: a buyer’s agent who gives 1/2 of their commission back to the buyer is a good option. Most towns have cash back buyer’s agencies. Look in the phone book.
All things considered, IMO, it’s not worth the hassle of becoming an agent, just to save the amount you would pay to a reduced commission agency.
Careful about liability– Once you become an agent you have a legal fiduciary resonsibility. As an agent, it is much easier to get sued if anything goes wrong with the transaction. FSBO does not carry this extra burden of liability.
Agents don’t get sued. Their Brokers get the litigation.
An Agent is just that = an agent of the Broker. The Broker is on the hook for stupid crap his Agents do.
So many agents came on line in SanJoaquin valley (Stockton) that there are something like two agents per sale per year!!!!!
It follows the 80/20 rule, the top 20% of Agents make 80% of the money. This makes the remaining 20% of the sales go to the other 80%. I am allways being told by clients that “I was an agent” =). That is the key “was”. There are thousands of people that jump throught the licensing process at a cost of $$thousands for books/fees/associations/MLS/clothes/gizmos/on and on… and never sell a thing.
RE is not the cakewalk it is often described as. You work long hours on other peoples schedules in the hopes of getting paid.
The problem lies in the fact that your not paying a good agent for his time, your paying for his/her knowledge. RE is a serious business with potentially huge legal implications. A good Agent will solve many problems before they even have a chance to evolve. The new Agents (whose time you pay for) will not see these problems in time and the will become an issue costing you time, money, irritation and possibly a law suit.
The discount Brokers are a joke!! They allways pop up in hot markets only to fail in the downturn. The best agents know this and will not work there. RE depends on two parties Agents buyers and sellers. Buyer Agents will not work with the discounters because they don’t work other offices, or try to pay them substandard fees.
Internet, gimme a break. Thats fine for beenie babys, but RE is must see and feel purchase. Looking at RE on your computer is no substitute for having a real Agent take you through 6-8 homes a day until you really know the market your looking at. As far as I am concerned your a dolt if, as a buyer, you don’t use an Agent and see all available inventory that fits your needs. How the hell do you know your getting the best purchase if you pick a home on line go see it and buy without seeing most if not all of yout options?
FSBO, LMAO the vast majority of them fail and list with a Broker. The buyers don’t pay the Agents fee and see (justly) their value. The only real buyers the FSBO will attract are “SHUCKAMAJIVERS” trying to screw them or savey buyers that will wan’t the money the FSBO is (possibly) saving by not paying a commission. FSBOs that do complete their sale inevitably sell for less than an Agent could have got them with their access to hundreds of agents and thousands of buyers.
Spoken like a true Realtor.
ROTFLMAO.
Coffee is for closers…
I sold my house in Portland, OR FSBO, actually the wife did.
2 open houses, 4 offers, sold over asking, paid 2.5% commission to the buyer’s agent.
It only works in a booming market but it does work and it isn’t rocket science.
same here—–sold fsbo in less than 2 weeks in sd spring 05. Yes, listing agents are generally superfluous in a booming market. Paid no commissions and dealt with multiple offers…..some w and some w/o agents…..advertised two prices (w and w/o buyers agent)…..certainly not rocket science and plenty of info-resources available at a fraction of the price as compared to 4-6% commissions!!!! A competitively priced house will sell in any market i believe and there can be advantages to both parties in eliminating the middle man. Although general wisdom tells us that is is the seller that pays the $$$, the way i see it the seller pays with the buyer´s money!
Just sold my apartment FSBO; couldn’t have been easier.
The stress of showing the place on 8 different weekends to get a sale was offset by not having to deal with the RE flakes in my area…
The only thing I had to do was have about two more conversations w/ the kid who bought the pace than I would have had I had a realtor.
I go to CL and see the same places still listed by brokers at stupid prices.
FSBO works - I realy don’t get what it is that brokers add…
just my experience
Even if everything you say is true, it still doesn’t account for making $30K or more on a single sale. Even allowing that commissions often have to be split up in various ways, it’s still a lot to charge for knowing things that people could find out for themselves with a little work.
Or, to put it another way, for any given market, can Realtors demonstrate that they can sell a house for enough more than an FSBO to justify the commission? Suppose one guy gets $500K for an FSBO and his neighbor with an agent gets $550K. He is basically paying $33K to get an additional $18K.
Exactly. It’s just as much pain in the ass (or usually more) to sell a 200K place as it is a 600K one, so why the crap should I have to pay someone 3x as much for the same effort. I’m all in favor for paying for services rendered, but I’m sorry, 30K to sell a house? No thanks.
“Internet, gimme a break. Thats fine for beenie babys, but RE is must see and feel purchase.”
Why would you assume that a buyer looking at homes on the internet would purchase them without “seeing and feeling”? Internet listings make buyer’s agents obsolete. I can find all the homes in my area that fit my parameters, and either attend open houses or make appointments with the seller’s agent. The buyer’s agent simply becomes someone who gets half the commission for giving me tips on what to offer.
FYI sparky agents do get sued.
Heya sparkey,
They are not a party to the contract. They may get sued, but will not see a court on their dime. The Broker of the agent is responsible for everything his Agent do.
If they break a criminal law they may be litigated, but in civil proceedings their Broker is on the hook.
They would almost have to be convicted of a crime to enter into civil litigation.
I wasn’t trying to defend true criminals.
Civil suits are not going to touch them.
Sparkey.
Wrong again at least for the California arena. Civil suits will and can touch them. They just recently passed a law this year or last where the broker is no longer liable for the agents action if the broker was not a party. If I can find a link I’ll post it.
Yes, in CA agents can and do get sued all the time for the most most minute of technicalities. Misrepresentation and failure to disclose are big moneymakers for CA RE lawyers. If you have your own shingle to save money, you can’t hide behind a broker. Beware.
Very good point!
FSBO carries a whole lot more liability.
like…. or link?
bad news ben! you have a lot of reading to do. I hope this hasn’t been postd, the NYT Magazine is called the “real estate issue.” just about 200 pages and with quite a few bearish articles. they even have the 400 year Amsterdam price history study.
The Real Estate Issue
Home Sweet Debt
This Very, Very Old House
Did a brief survey of the Times’ Sunday Magazine. Have to say I was disappointed by the insipid nature of most of the articles.
Just curious, but, do you even need a college degree to join the ranks?
Also, a little off-topic, more news on China’s reserves adjustment. Some Reuters prick is trying to spin it, saying China won’t “reduce its holdings.” Given earlier state comments on the topic, I think it’d be reasonable to conclude that what is being said is that they plan to buy fewer bucks in the future. Should we care? Youuuuuubetcha.
Thoughts?
http://news.yahoo.com/s/nm/20060305/bs_nm/financial_china_reserves_dc
Nope, no degree needed.
http://news.yahoo.com/s/nm/20060305/bs_nm/financial_china_reserves_dc
Whoever at Reuters wrote this is either a moron or a prick. China has previously indicated that it would soon begin to move away from dollars. The only thing this article is confirming is that they don’t plan to suddenly sell a bunch of their current holdings. At the same time, it sure seems like they’re getting a little nervous about the idea of continually buying at current volumes. THAT is what we all expected from the previous statements out of China (what, a few weeks ago?).
Sorry if a similar post pops up somewhere.
Thoughts?
No currency trader I, but these Reuter guys seem a bit behind the curve.
There already has been a partial uncoupling of the yuan from the dollar, see
http://news.bbc.co.uk/2/hi/business/4714735.stm
As you indicate, they probably have a detailed plan in place to unwind their huge dollar holdings in a measured, prudent manner.
I guess it always helps to have a plan.
Is the moderation back on?
Ben I tried to post two counter attack sites of some other bubble blogs and their not going through. Are you blocking them from being posted.
I agree with arizonadude about realtor’s needing to get comfortable with lower commissions in the future and that many provide value added to the process of buying a home. We recently sold in one area and bought in a different state. Our agent made it possible to find good contractors and knows a lot of people, having lived in the area her whole life. We didn’t know the area - she made it accessible, made some very useful recommendations and helped us through the details of everything from getting a parking permit to suggesting restaurants.
You point out all the help and value you got from your Agent, but suggest she should get paid less?
How many people do you suppose she gives that service to and receives not a dime?
How much potential trouble could you have got into with a shitty contractor? She gave you a good one.
You seem happy with your level of service that the seller paid, yet you think your good agent should be paid less?
I feel bad for the negative karma your generating upon all the good karma you clearly state she bestowed upon you.
Rich,
People get a lot of good advice from reading this blog. It’s free (hopefully all have contributed to Ben’s donations and will continue to do so!).
Tens of thousands of people have paid millions (billions) of dollars to shucksters who sell “get rich quick” schemes on TV or in seminars.
The amount you pay for services isn’t always reflective of the quality of said services.
That being said, I think Realtors can be very valuable, especially in a down market. If you don’t have time to sell a house yourself or spend months looking for one, an agent is invaluable. They tend to be paid more per transactions when they are needed less (hot market) and get paid less when they are needed more (slow market).
If they provide a service, they should be paid what the client feels is a good price, not what the NAR monopoly thinks is fair.
Homelessbubbleboy tipped us off in a previous post regarding an open MLS. There is a petition:
***PDF WARNING!!!!!***
http://ag.ca.gov/initiatives/pdf/sa2005rf0145.pdf
It’s petition# SA2005RF0145, and proposes an open MLS system for California, with the possibility of going to other states. They suggest a bid system to control it.
did I? Wow…I don’t even remember now!
February 12th, though I can’t seem to get it from the archives. I sent an e-mail to Ben about it — that’s how I know the date. Like to give credit where credit is due. You said you were Googling “open MLS” if I remember correctly. If I got the wrong poster, my apologies.
That’s not going to happen. Not by a long shot. His approach is not ecomically feasible nor does it make much sense
….on real estate commissions and further disintermediate the industry….
On quick glance reading this post I misread it as “disinternment” and laughingly thought , well, ok if realtors all get buried they will be an endangered species, but do we have to then dig them back up?……….
There is a really funny anti-bubbleblog out there but I can’t post the Url. I assume Ben is blocking it because it is kind of a troll.
Anyway,Whomever made these blogs is an idiot. He/she actually thinks the typical 4% housing appreciation amounts to a 20% return on the typical 10% down on a $500,000 dollar house.
The idiot is ignoring monetary inflation and interest paid on the remaining $450,000.
Chicago Inventory Jumps from 70K to 90k+ in 45 days
This must be due to the cold winter weather — nothing like -0 degree F temperatures to put a chill on the housing market…
r u sure? I don’t see any drastic bubble signs in chicago land..can you post like to your data/article?
One company which will always be around is Right Home Realtor group: http://www.righthome.com
The owner Paul is a very honest guy and he was the person who started the 1% listing deal in CA about 5-6 years ago. Basically his employees are all on salary and all homes are sold at 1% or less.
What I like about him is the fact that he was on TV today saying that the market has gone flat, and will eventually go down for many years to come. So if you have a home with some BS loan, this might be your last chance to sell without a signigicant haircut. I think the NAR is going to put a price on this guys head. First, he starts selling/buying for 1% and now he is going against NAR propaganda. The funny thing is he is one of the richest people in the industry because he has one of the most listings and buyer agents in the area.
Bravo, Nick. I have a similar story about Realty Advocates in the North Oakland area (San Francisco Bay Area). The first time I used them was in 1989 (they’d been in business since 1986). Mind you, it was not the *usual* way folks bought and sold property at that time. We owned a duplex and sold the place to one of our tenants. At the time the flat fee was around $1,200 and each party paid $600. All went as smooth as silk. And then we used them again when we bought a condo.
Their site now says that the flat fee is $2,200 as the sale facilitator. Link below for those interested in more info.
http://www.realtyadvocates.com/AboutUs.htm
BayQT~
I had an awesome realtor when I bought in 1997. This guy worked with me through a short sale process, and then when the short sale wasn’t approved and the property went into foreclosure, he tracked the property almost daily for over 6 months so we could make a bid the day if was listed by the lender. That’s a lot of work, especially back then when sales prices were 1/3 of what they were now. He also worked for one of the major companies and I hear they get approx 50%. I never appreciated him until I hired another realtor to sell my place (stupid me for not sticking with a good thing). The new realtor did an o.k. job but really balked about taking 5% vs 6% and then assigned a trainee to do 99% of the work.
Amen, I worke my ass off in the 90’s for my clients and my chunk of the commissions was about $900. Ten years later as sellers these same clients, that I hade made hundreds of thousands of dollars, were crying about how greedy and overpaid Agents are.
That shit really pissed me off, ungrateful slugs.
It is actually funner to work in a down market where your clients appreciate you and there arn’t hordes of ignorant Agents that can’t even write a proper contract let alone close a sale without me doing their jobs for them.
you are on fire today, rich!!!!
lol
Amen to that. That’s what I keep repeating the real fun hasn’t even begun yet. The down market is where the real fun begins
“In a 2003 paper titled “Can Free Entry Be Inefficient?” Chang-Tai Hsieh and Enrico Moretti, economists at the University of California, Berkeley, examined the income of real-estate agents in various markets under various conditions.”
Interesting coincidence: I mentioned this work by Moretti and Hsieh here in a comment a couple of days ago. Levitt’s work on drug dealers who live at home is closely related to Morretti’s work on too many Realtors (TM).
LOL!!!
I am a Realtor and I agree with a lot of what is being said on here. One thing to keep in mind
a transaction often ends in a 4 way split. So your Realtor might in reality only come out with a ¼ of the total commission. I think current NAR stats show the average Realtor makes between 30k and 40k and sells just over 1.4 mill a year. I do not believe in the 6,7,8 percent commissions. I think a good Realtor should be able to set his own commissions but often the Broker will not let them do that. Plus the Help You Sells who list at 2995 do not put it on the MLS and they just put on a web site that has no PR Ranking and a sign in the yard so if go that route save your money and try and do FSBO.
Those that will put it on the MLS for you for 500 to 1000 dollars will still need to offer a commission to a buyers agent to show it. I have agents I work with that will not discount commissions which I do and I have a lot more listings than they do. The buyers agent gets paid more than I do on my listings . I am also giving consideration to offering a percentage of the commission back to the buyer due to the current market conditions. I spend approx 50k to 60k a year actively marketing and courting buyers on the net . So when I get paid I do have expenses that need to be paid before I make money.
There are a lot of stupid Realtor’s out their and some would scare me to have as an agent, just in the last 48hrs I saw one agent list and put Pending a condo in our area and stated that it was sailboat access. I called
Her up and told her you have to clear a 8.5ft high bridge to get into the river so it’s not sailboat access. All she had to do is look at a map to figure it out. Makes you wonder what other things is she not doing correctly. I had another this morning call me about a waterfront lot that’s priced below market to get it sold. She asks me if it has access to the Gulf , based on the current price it would be over 100k below the cheapest priced Gulf access lot. She than asks what lakes does it go to, I said look on the map and you can see for yourself. I told her if there is a weir in the way it blocks the access to other canal systems. She says
What’s a weir.
I do not think that Realtor’s will go away but those who do not have the ability to work with the internet will get shut out . I actually look forward to seeing less Realtors out their as that means more listings and buyers for the rest of us who (though have terrible grammar) do know what they are doing.
When I bought my first multi, I went through 3 Realtors before I landed the jackpot. The first 3 didn’t seem interested in returning calls or emails, didn’t ask me questions about what I was looking for or get a sense of my interests or concerns with taking on an investment property,… it was stunning. They were useless. When I finally called the manager of the office I received profuse apologies and given my 4th Realtor. I was wary but very pleasantly surprised. She spent an hour on the phone with me (I was out of state) and then sent a follow up letter summarizing our conversation. That was just the beginning! I couldn’t believe the difference! I’ve stuck with her ever since and wouldn’t dream of going with anyone else. Good agents are worth their weight in gold and really do earn their commissions, look out after your interests and make the process go smoothly. You don’t know how important that is unless you’ve experienced both sides of the coin.
Yep, good agents are worth their weight in gold.
Good luck trying to find one in your neighborhood.
CAn you say needle in a haystack.
Interesting and valuable perspective. What do you think is the failure rate of newly minted realtors? How would you go about finding a good realor?
Finding my great Realtor was obviously dumb luck, but now that I have some experience I would say as a general rule it is probably similar to finding a good doctor, lawyer or contractor. Interview them, first of all. Ask intelligent questions (try to do some research on your own to get some initial understanding for what you are consulting them for. I’ve heard it is a good idea to ask a few questions for which you already know the answers and see how thorough they are in their responses. Do they blow off your concerns with a knowing wave of the hand or a quick standard response?
Of course asking friends or neighbors may be helpful but I have friends who generally don’t care about getting the nitty gritty on anything so their recommendations are taken with a grain of salt.
I’ve also wondered what the failure rate of new agents is. It’s probably pretty high, especially for the ones now who have jumped in thinking they just have to get a client, sit back and let everything just happen.
“There are a lot of stupid Realtor’s out their and some would scare me to have as an agent, just in the last…”
Drop the apostrophe in “Realtor’s.”
“their” should be “there.”
Comma after aforementioned “there.”
Sentence should end at “agent.” (Semicolon would do, as well)
-Errors notwithstanding, I’d have to agree with your statement.
I’ve taken heat for correcting mistakes here before - heck, we all make them from time to time. But, come on, I’m in the MATH dept., for crying out loud.
Thanks,
The there and their I have problems with but we do not have to hand write a contract to spelling and grammar does not make or break things just as well as I have seen agents worse than me but are excellent Agents to have on your side either buyer or seller.Actually math is more important on a contract.
I think over half of the Realtors out their are gone in a year and 90% within 5 years are the last stats I heard.
Adrian
I disagree about Adrian’s (Adrian is the real estate agent) assertion that command (ability to read and write)of the English Language is not important to being a real estate agent. He should know that inability to write clearly is an indication that he may not have the ability to comprehend a contract. Realtors are responsible for writing contracts, reading contracts, giving clients advice, and understanding detailed financial terms. I have seen lots of listings where every word over 6 letters is spelled incorrectly on both the MLS site and on the brochure printed by the realtor. Would you trust your largest asset, (or just pay tens of thousands of dollars) to someone who cannot read and write. This person is responsible for a transaction worth several hundred thousand dollars. Adrian’s admission that he cannot spell (and probably cannot comprehend English above a 5th grade level) fully explains how realtors, who are being relied upon by buyers to give them advice on affordability, loan terms, contract terms, etc, operate. Just get the commission check and move on to the next transaction. Adrian does not understand that being an agent, is more than being a salesman, it is being a legal representative of the buyer or seller, and having knowlege to properly represent the client’s interest. Would you hire someone who cannot read and write proper English? Also realtors should understand that clients often select realtors by going to open houses in the neighborhood to see how the agent operates. When I see a brochure with bad grammar and spelling, it is an indication of either a broker who does not care or is not intellegent. Either way I make a note of it and will not use him or her.
I AM A FANTATIS AGENT!!!!!!!
vArie crapee spelir”;
Isnt’ splear chekier fantarstic.
Thunk gOd fer cumputiers.
Rich, you may think you are being funny, but I have seen listings and open house papers that were written as poorly as your entry. This is what separates the professionals from the agents that will be selling Kias, Nikes and Lazyboys when the bubble crashes.
Yea,I’m a realtor and I would have to agree being to able to read and write is right up there with math. Gerald you indicate you saw it on listing’s and open house flyer’s. I’ve seen it in contracts. Sometimes one word can throw off the whole meaning of a contingency. Would hate to be represented by someone who did not have a complete grasp of the english language
My sister became a realtor a year ago after a very successful and lucrative career (20 years) in sales, so she should be ‘a natural’ for this line of work. Unfortunately, because of all the competition, she is barely getting by and is rapidly depleting her once-substantial savings.
She’s already talking about selling her house and downsizing to get the current equity out to keep going. It would almost be better if she didn’t have any savings or equity, then she would have given up months ago. Instead, she’s got enough money to continue long enough to lose everything.
I tried talking to her, but she just quotes NAR-like propoganda about prices going “up, up, up!” and refuses to consider alternative scenarios.
You can warn people, but you can’t help them.
Will Realtors(TM) be entitled to future protection under the Endangered Species Act?
wow that was a slam.F.Y.I. Realtors do not write contract lawyers do. All we do is basically fill in the blanks, our contracts are 6 pages long I fully understand what it says. I am college educated,but being a bad speller does not make me an idiot but makes you a snob.I do not recall the last time I had a customer give me a spelling test or grammar test.
I defend the good agents, but I must admit I was fired once for poor spelling.
The client was a very nice retired english teacher. As soon as I handed her a note, on wich I misspelled something, I knew I was fired by the look on her face.
In 13 years that is the only time I know of that it has been an issue.
I am not spelling retarded, but I do pay more attention to it ever since then.
What if you have contigencies, or writing an LOI instead of a full blown offer. True the Lawyer’s wrote the contracts but Agents are responsible for tuning them to fulfill their clients wishes. Clarity is key, mispelled words does not ensure clarity.
contingencies LOL need spell checker on this damn blog
FSBO’d in the 80’s and 90’s easiest thing in the world- after the boom w/o internet. commisions will get crushed as did many go betweens via the net.
When ever I put listings or on the MLS I am going to make sure they are spelt correctly as I do not want to look like an idiot.It does amaze me though how little the average adult in this country understands the world around us or how bad their general knowledge is unless it involves Budweiser and football stats.I was talking to a group of youg adults the other day and they could not even tell me what the signifance of the year 1969 with the US space programme.
I agree with Mr. Speller. It is hard for someone to determine how well you can read, but people assume your ability to comprehend and your intellegence by how you write. You may not be technically an idiot, but you sure look like one when you cannot write a 3 line description in the multiple listing service listing without making a mistake. Everyone doing business with you is giving you a spelling and grammar test and using it to determine whether to hire you. It does not matter if mistakes are do to lack of ability or just being sloppy and lazy. Either way you are contributing to the poor image of our profession. You should know that in the real world employers give grammar and spelling tests in applications, some look more closely how answers are written than what was written.
I totally agree with what you say, as I confirmed above.I think it looks idiotic when someone put lani instead of lanai etc. I see that all the time on our MLS.On a board like this I do not double check my spelling and grammar (my fault) as I am more interested in the topic at hand than the way it’s spelt.
It’s hard for me to contain myself when asked about the “Nobility of the Realtor Profession” , but I will try.
I was wondering after reading some of your comments, about the possibility for Realtor resentment or backlash as the bubbles’ mighty hiss starts to blow down strapped homebuyers that had listened to advice and analysis from realtors.
I know all about the loose lending, speculation etc. But that’s not what this thread is about.
IMO, for right or wrong, the majority of homebuyers get their “take” on the RE market from Realtors or RE affiliated economist from these main sources:
Quotes in the local/national paper
Quotes on the local/national news
Seminars
Open houses
Any contact with a Realtor when purchasing/selling/looking for a home.
And self education aside, it’s difficult to lay all the blame on them for believing these realtors because the inept media give these spokespeople credibility by quoting them IN ARTICLES, not advertisements as “real estate experts” which they may be, but biased ones to be sure.
I often wonder what David Lereah and Leslie Appleton-Young say to their cherished loved ones in the privacy of their homes about purchasing real estate in the past 6 to 12 months. I wonder if they advise them like they do the rest of the county.
As has been discussed countless times on this blog, the vast preponderance of comments by Realtors, especially in the past few years have been decidedly declarative and never stated as “This is my opinion”.
15% slam-dunks for O/C appreciation.
“There’s no way you can’t interpret this as a slowing down of the market,”
“Sept. 11 changed real estate forever, the way people look at it.”
And of course the localized:
“No more land”.
“This place is special”.
“House prices always go up”
And on and on..
I have my opinion but do not want to slip into rant mode, which tends to disrupt my pleasant demeanor. I’m also aware that “There are some good Realtors out there”. But the quotes above and most of the similar quotes on the national stage are by the leadership of the NAR not just the rouge RE agent down the street. So I ask you my fellow bloggers…
How do you think the Realtor profession will be viewed in the post bubble era? And what, if any, changes such as regulation like the NASD, will come about in the aftermath?
this is the full quote from above…
“There’s no way you can’t interpret this as a slowing down of the market,” he said. “But no market goes to pot unless the underlying economy goes to pot, and that’s not happening here. We’re going through a cycle. This is a marginal change downward and the market will stabilize.”
Your post would have made an even better topic than this one. Please post it next week.
“How do you think the Realtor profession will be viewed in the post bubble era? And what, if any, changes such as regulation like the NASD, will come about in the aftermath?”
They will be viewed as they have always been viewed some will love some will hate some will be impartial. Why because at the end of the day each individual is responsible for his actions. As one judge put it too me in small claims court. Mr Income Stream doesn’t this happen in a lot of real estate transactions. Yes sir it does. case dismissed
Absolutely nothing. This is not the first time a bubble has burst. Most of the fallout/blame is going to go towards the banks.
As far as the comments, it falls under free speech.
Now I’ll go get fitted for my flame retartdant underwear.
After further thought here’s another reason why i don’t think you’ll see much change. Bottom line you’d have to either do one of 2 things either eliminate the industry and make all licenses worthless and just let buyers and sellers go for what they know. The entertainment value would be way up there and courts would fill up but I don’t think you are going to see that because there is too much money tied into the industry you would eliminate a lot of jobs. It wouldn’t just be Realtors and Mortgage Brokers. You would take a whole lot of money out of the economy. Not going to happen.
The other is to federalize it. Make one’s license good for all 50 states and then implement rules and guidlines that apply to all 50 states Actually thats the only way I see commissions being pushed down. Because as you’ll see during this down market there will be a whole lot of people considering 6% commission a blessing.
Other than that it’s all pipe dreams and wishful thinking.
My fiance’s Chinese friend just got her real estate license. She meets clients in Las Vegas, where they are just off the plane from Asia. Then they pay cash for California real estate. She just sold 3 properties this weekend.
The Asian boom - made in China, and buying up America.
During the last 2 RE cycles lots of Asian buyers bought RE for cash.
We get to buy it back for 30 cents on the dollar in 5-10 years.
See pebble beach, steamboat ski resort, rockefeller center, etc.
It is on element of the deflation (monetary “credit” destruction) that is impending.
Good Memory there Sunsetbeachguy, that was the raping of all raping
this is the full quote from above…
“There’s no way you can’t interpret this as a slowing down of the market,” he said. “But no market goes to pot unless the underlying economy goes to pot, and that’s not happening here. We’re going through a cycle. This is a marginal change downward and the market will stabilize.”
As mentioned before on this blog, the NAR is very rich and very powerful (translated: lot’s of politicians get paid by he NAR). So, don’t expect major reform of the industry anytime soon unless there’s some serious pain on the downside of the RE implosion.
But then again….the stock broker was once an independent profession unhindered by the SEC….until after a few stock market collapses.
On a pain scale from 1-10 with 1 being hitting your funny-bone and 10 as having your hand slowly crushed in an industrial press as you watch, I’d say oh, about 14 give or take.
By the time they get done with the banks. There will be no energy left NAR. As a consumer being mad at NAR, Realtors, etc. Is like being mad at the sellers of moon rocks, mood rings and beanie babies. The consumers of these exotic loans, inflated purchases etc at the end of the day have no one to blme but themselves. “NO” last I checked is part of the english language.
For those of you that object to the commissions we are paid, understand one very simple fact. Realtors have created a relatively efficient system for selling homes and the prices of homes is based upon supporting this system. Without Realtors, there would be a world of FSBO’s and prices would be much more than 5 or 6% lower. That might be a good thing for affordability and alot of you will say that’s why Realtors are the problem but everyone of you that ever sold a home wanted “top dollar” and would be pissed off not to get it. Face it, our homes are nothing more than a pile of sticks, a few bricks, some drywall and perhaps a little stucco. They are certainly worth a fraction of what they sell for based upon replacement cost. So I tell everyone I meet that that asks me about trying a FSBO to go for it! The price you want is based upon a marketplace Realtors have created but you might be one of the lucky few to beat the system. If you want to get rid of us all, so be it, but understand that the price of your home will drop precipitously without this efficient marketplace.
Just like any other profession, I’ve had good realtors and bad realtors. My first realtor took (stole) some of the former owners property that had not been moved. Of course they blamed me. I however agree with one of the former posters, a good realtor is worth their weight in gold. Especially when times are tought in these very slow markets. I was more then happy to pay the 28K comission on my last sale, they worked very hard. The problem I have is that all the other fees in escrow as a percentage of sale and have grown, when the internet has made title insurance, mortgage insurance and some of the other certifications much Less work and easy money makers.
It took us going through 4 buyers agents in ABQ to find the one we actually used. I also do check spelling. It gives me an indication about how careful someone is on a very large transaction. With spell check on computers, that should be very easy to check all listings, contracts, offers, etc.
I don’t believe Realtors are endangered…they do, however, need to become more efficient. Lowering the time/cost required to obtain new business would likely lower the cost of selling real estate for all of us.
A checklist for brokers/agents to save us all money:
1. Quit paying up-front for leads…you’re wasting your/our money chasing ghosts.
2. Quit paying for office space and take a home office deduction on your taxes.
3. Use the upcoming tax credit for small business to buy a hybrid vehicle to save gas while driving your clients around.
4. Quit paying for non-sense certifications.
5. Quit working for brokers who take too big a slice of your earnings (which is ultimately used to pay for needless overhead…see #2).
Right on Baron….
This is my 30th year…28 as a Independent….I have worked out of my home office for the last 20 and I agree with every word you stated above adding;
In General, the work ethic of realtors (how can I put this mildly)
SUCKS….
I have to say that I do not work quite as much as I used to but in the growing part of my career my day started @ 5:00 AM…That was the neat part of working from home…
California has far too many idiotic realtors. We should do like some other states and require that all “legal” transactions be handled by a lawyer. Why they carved out a niche for property transactions and then let any yahoo who can pass a test do these transactions is beyond me. California has the hardest bar exam ion the country and lawyers can read and write contracts, as well as have a grasp of all the other legal issues that may come up, not to mention have malpractice insurance. Now about the ethics problem, well, at least lawyers have the oversight of the state bar….
Don’t give me that lawyer crap…What makes them so qualified to assess real estate ? Because they went too law school and passed the bar ? What a buch of bull shit…
Compound those idiotic realtors with the overwhelming number of idiotic buyers and sellers and the court system wouldn’t be able to handle it. On top of that then those idiotic realtors would become idiotic laywers. You don’t need a law degree to pass the bar. So then it would just be one big idiotic clusterf*ck. And all you would have at the end of the day is a bigger pool of idiotic people chasing ambulances. I can see it now pass the bar for 299.99 at a local shopping center near you.
Don’t give me that Lawyer Crap…
Tell you what fence squater, when you decide to shop for your house, go hire a lawyer to do it for you…
He won’t do that lawyers don’t work for free and burn gas driving some idiotic buyer around town looking for his dream house on his nightmare budget at $250.00 an hr for lawyers fee’s that could get kinda painful
AND, let that “Lawyer” interpet all theose inspection reports and give you recomendations…I am quite sure he will stack up quite nicesly with my 30 years in Real Estate along with 25 years of home building esperience don’t you ??
This little prick realy pissed me off didn’t he…..
LOL I’ll say