Husband and Wife Realtor "Teams"

[mook]

Thanks dick Im a real estate agent

My parents have been married for 35 years.
My dad is the Broker/agent
My mom is the agent
...they have been very successful

Sorry to offend you, but I've bought and sold three houses now, and as far as I can tell the realtors involved did nothing but complicate the process and get paid a commission.

The single biggest service I can see is that they get houses listed on the MLS, and that's about as much work as building a good Craigslist ad. The open houses are nice, too, I suppose, but I've never really bought or sold a house because of one, so I've always wondered how effective they really are.

Particularly as a buyer, I find it very advantagous to represent myself. Most people don't think this through, but when you represent yourself and the seller has a realtor, that realtor is suddenly the buyer's best ally. Why? It's in the seller's realtor's best interest to get the deal closed with you as fast as possible, because by not having a realtor of your own, you are doubling that guy's 3% commission to 6%. If you as the buyer walk, the next buyer might have a realtor and suddenly the seller's realtor has to split the commission.

So I go in with a very lowball offer, knowing that the "seller's" realtor is going to be my best friend in trying to convince the seller to accept the offer ASAP. "As your realtor, Larry, I gotta say this isn't a bad deal. I've seen houses this nice sell for a lot less. I think you should take it (and pay me the entire 6% commission!)."

 

[The_Lillard_King]

Sorry to offend you, but I've bought and sold three houses now, and as far as I can tell the realtors involved did nothing but complicate the process and get paid a commission.

The single biggest service I can see is that they get houses listed on the MLS, and that's about as much work as building a good Craigslist ad. The open houses are nice, too, I suppose, but I've never really bought or sold a house because of one, so I've always wondered how effective they really are.

Particularly as a buyer, I find it very advantagous to represent myself. Most people don't think this through, but when you represent yourself and the seller has a realtor, that realtor is suddenly the buyer's best ally. Why? It's in the seller's realtor's best interest to get the deal closed with you as fast as possible, because by not having a realtor of your own, you are doubling that guy's 3% commission to 6%. If you as the buyer walk, the next buyer might have a realtor and suddenly the seller's realtor has to split the commission.

So I go in with a very lowball offer, knowing that the "seller's" realtor is going to be my best friend in trying to convince the seller to accept the offer ASAP. "As your realtor, Larry, I gotta say this isn't a bad deal. I've seen houses this nice sell for a lot less. I think you should take it (and pay me the entire 6% commission!)."

I have now bought and sold three houses on my own . . . and I agree with a lot of what you are saying. (I have a lot of funny stories during negotiations (each house), but won't bore you with all of them . . . one of them I had the seller's agent agree to only take 3.5% and take another 2.5% off the sale price of the house to make the deal work)

I'm just going to add that one thing I think an agent brings to the table is distance between the buyer and seller. Too often negotaitions can be affected by emotions . . . by having the agents negotiate, it takes the emotions out of play and negotaiting strickly in a business mode is more likely going to get done.

Being the one always doing the negotiating when buying or selling a house, I am amazed at how often emotions control decisions.

 

[DaRizzle]

The single biggest service I can see is that they get houses listed on the MLS, and that's about as much work as building a good Craigslist ad. The open houses are nice, too, I suppose, but I've never really bought or sold a house because of one, so I've always wondered how effective they really are.

Stats that Ive been told by my office is that Open Houses lead to only 5% of the sales. Open Houses benefit the Realtor more than the client by him meeting prospective buyers. On the flip side clients WANT open houses so agents do them. Vast majority of listings are sold by networking with other local agents or within your company.

Particularly as a buyer, I find it very advantagous to represent myself. Most people don't think this through, but when you represent yourself and the seller has a realtor, that realtor is suddenly the buyer's best ally. Why? It's in the seller's realtor's best interest to get the deal closed with you as fast as possible, because by not having a realtor of your own, you are doubling that guy's 3% commission to 6%. If you as the buyer walk, the next buyer might have a realtor and suddenly the seller's realtor has to split the commission.

So I go in with a very lowball offer, knowing that the "seller's" realtor is going to be my best friend in trying to convince the seller to accept the offer ASAP. "As your realtor, Larry, I gotta say this isn't a bad deal. I've seen houses this nice sell for a lot less. I think you should take it (and pay me the entire 6% commission!)."

This is a highly touchy subject in the real estate world. Many state have outlawed "dual-commission". CA still allows it but Ive heard its on its way out. Obviously the your scenario is highly unethical since the agent is focusing on his pay rather than his ethical duty to BOTH clients. They say by law "you have to service both sides equally and fairly"...you can see how that can sometimes get ugly. Agents who do a dual commission are have a WAY higher chance of getting sued because of a cynical (or maybe right) client in one of those deals.

"As your realtor, Larry, I gotta say this isn't a bad deal. I've seen houses this nice sell for a lot less. I think you should take it

Here is the hole in your story. As ou said earlier the MLS is a vast array of info for agents which also of course includes records of home sales and their specifics. You can always talk down or talk up a property a bit but the numbers dont lie. When the client asks to see the comparables hes talking about and they exist for the price range he mentioned then where is he being shady? It IS a fair price regardless of what the agent is getting paid.

On a personal note I witnessed my father do a dual commission when I was just entering the business. Him and the seller agreed to 6% total commission (3% a side) EXCEPT if my dad got dual commission. They agreed if my dad found the buyer the commission total would be reduced to 4.5%. It worked great for everybody involved. The buyer had "free money" added to his offer. The sellers got a reduction in commission if accepted, and my dad made a little extra. The offer and "extra money" was virtually the asking price and the home was sold within five days. My parents since have become good friends with the sellers.


PS. Hope you know the ins and outs of a real estate contract and where the responsibilities reside for each part. Money you are saving now could bite you in the ass later (years from now)because of disclosures you might have overlooked and now all of a sudden you found something horribly wrong with the structure.

PSS According to studies having an agent to sell your house adds 8-12% to the sale price....which if you didnt notice is more than the commission payed out (which is usually less than 6%)

 

[hasoos]

Just look at the bright side. Maybe they are into having sex in empty houses. Then they would have a lot of fun on the job.

 

[DaRizzle]

Just look at the bright side. Maybe they are into having sex in empty houses. Then they would have a lot of fun on the job.

You cant (if you wanted to) in CA anymore. All lockboxes are digital and record when and who accessed the home. I dont think there are clients looking at homes at midnight

....not that I ever thought about that

 

[barfo]

You cant (if you wanted to) in CA anymore. All lockboxes are digital and record when and who accessed the home. I dont think there are clients looking at homes at midnight

....not that I ever thought about that

It's possible to have sex at times other than midnight.

barfo

 

[maxiep]

Here is the hole in your story. As ou said earlier the MLS is a vast array of info for agents which also of course includes records of home sales and their specifics. You can always talk down or talk up a property a bit but the numbers dont lie. When the client asks to see the comparables hes talking about and they exist for the price range he mentioned then where is he being shady? It IS a fair price regardless of what the agent is getting paid.

Of course, the residential realtor gets to pick the comps. When the deal gets close to happening, residential realtors switch sides--the selling agent tries to get the seller to drop his or her price and the the buying agent tries to get the buyer to raise his or her offer. It costs them only a few bucks, but costs the buyer and seller thousands. Steve Levitt did a study on housing prices by homes represented by realtors and homes sold by realtors themselves. The study shows that the average selling price--with all other factors adjusted--achieved for their own homes is 3% higher than those they merely represent. Furthermore, the homes they represent are sold faster than their own--meaning they push the client to make the deal so they get their commission.

PS. Hope you know the ins and outs of a real estate contract and where the responsibilities reside for each part. Money you are saving now could bite you in the ass later (years from now)because of disclosures you might have overlooked and now all of a sudden you found something horribly wrong with the structure.

Oh, dear. Do you really believe that residential realtors add value on the RE contract? Nowadays the contracts are mostly standardized by state and there's enough information out there for everyone to see what the problems are. The issue you're talking about can be cleared up with a simple inspection. Heck, that clause used to be a rider, but is now part and parcel of any standardized sales contract.

PSS According to studies having an agent to sell your house adds 8-12% to the sale price....which if you didnt notice is more than the commission payed out (which is usually less than 6%)

Which studies? The numbers I've seen have shown that residential realtors do no better than the average seller. Perhaps these studies were put out by the NAR and didn't standardize for condition of property (FSBO homes are generally in poorer condition and on the lower end of the price scale than agent-represented homes) or make other upward/downward adjustments.

The internet should kill residential realtors for all but the most lazy and people who are relocating to new areas with a few years. The MLS we held over everyone and the information we kept private has been completely democratized with sites like zillow.com, trulia.com and realtor.com.

To them I say "Good riddance". They've been a remora on the residential RE process for far too long.

 

[DaRizzle]

Of course, the residential realtor gets to pick the comps. When the deal gets close to happening, residential realtors switch sides--the selling agent tries to get the seller to drop his or her price and the the buying agent tries to get the buyer to raise his or her offer. It costs them only a few bucks, but costs the buyer and seller thousands. Steve Levitt did a study on housing prices by homes represented by realtors and homes sold by realtors themselves. The study shows that the average selling price--with all other factors adjusted--achieved for their own homes is 3% higher than those they merely represent. Furthermore, the homes they represent are sold faster than their own--meaning they push the client to make the deal so they get their commission.



Oh, dear. Do you really believe that residential realtors add value on the RE contract? Nowadays the contracts are mostly standardized by state and there's enough information out there for everyone to see what the problems are. The issue you're talking about can be cleared up with a simple inspection. Heck, that clause used to be a rider, but is now part and parcel of any standardized sales contract.



Which studies? The numbers I've seen have shown that residential realtors do no better than the average seller. Perhaps these studies were put out by the NAR and didn't standardize for condition of property (FSBO homes are generally in poorer condition and on the lower end of the price scale than agent-represented homes) or make other upward/downward adjustments.

The internet should kill residential realtors for all but the most lazy and people who are relocating to new areas with a few years. The MLS we held over everyone and the information we kept private has been completely democratized with sites like zillow.com, trulia.com and realtor.com.

To them I say "Good riddance". They've been a remora on the residential RE process for far too long.

Your post is flawed on many levels...You have just had shitty agents if this is your opinion

 

[DaRizzle]

Of course, the residential realtor gets to pick the comps. When the deal gets close to happening, residential realtors switch sides--the selling agent tries to get the seller to drop his or her price and the the buying agent tries to get the buyer to raise his or her offer. It costs them only a few bucks, but costs the buyer and seller thousands.

Its called offer and counteroffer...have you never haggled on price in your life? Price is only one facet of an offer also. The other terms of the offer are just as important and sometimes even more.

You are already assuming the realtor is unethical for "picking the comps". Purposely hiding comps can get you sued and out of real estate real fast.

 

[maxiep]

Your post is flawed on many levels...You have just had shitty agents if this is your opinion

I see you can't answer my post with specifics. I've never had a shitty agent because I've never been represented by an agent. I've sat across the table plenty of times by agents who didn't act in their clients best interests, however. Once you realize how to play the residential realtor, you own them. Hook them with an easy close and then get close enough to where they can taste the commission. Hook, like and sinker.

I've purchased residential properties both to live in and as investments. In my 19 years of residential RE investing and in dealing literally with over a thousand realtors, I have run into exactly ONE who I would consider to be really good at his job. If you ever buy RE in LO, his name is Mel Brown. That guy is a pit bull who would rather lose a commission than pay too much for a house or sell a house for less than it's worth.

Realtors don't understand contracts like lawyers, they don't understand valuation like appraisers, they don't understand financing like mortgage officers and they don't understand closing processes like someone at a title company. I've never even found them particularly good at negotiating. They understand how to insert themselves into a transaction better done without them. Like I said, unless you're lazy or moving to an area you don't know, residential realtors are practically worthless.

 

[maxiep]

Its called offer and counteroffer...have you never haggled on price in your life? Price is only one facet of an offer also. The other terms of the offer are just as important and sometimes even more.

Gee, thanks. Having executed over $3B in real estate transactions, I appreciate you letting me know about the negotiating process. What are you going to throw my way, how to split up closing costs? When to take possession? A contingency purchase? DaRizzle, you're out of your depth here. This is what I love about Realtors; they have to pump themselves up as an integral part of the process, when most people just look to minimize their impact.

You are already assuming the realtor is unethical for "picking the comps". Purposely hiding comps can get you sued and out of real estate real fast.

It would be tough to prove. And I say that as an MAI. A realtor can pick and choose, or not make upward or downward adjustments, as a way to include/not include or properly value a comp. And Realtors do it all the time. If you're really in the business, you know it happens.

 

[mook]

Stats that Ive been told by my office is that Open Houses lead to only 5% of the sales. Open Houses benefit the Realtor more than the client by him meeting prospective buyers. On the flip side clients WANT open houses so agents do them. Vast majority of listings are sold by networking with other local agents or within your company.

Interesting. I didn't realize open houses were so futile. I guess it makes sense though. If I'm interested in a house, I'll contact the agent. I won't say to myself, "I wonder if there's an open house?"

Here is the hole in your story. As ou said earlier the MLS is a vast array of info for agents which also of course includes records of home sales and their specifics. You can always talk down or talk up a property a bit but the numbers dont lie. When the client asks to see the comparables hes talking about and they exist for the price range he mentioned then where is he being shady? It IS a fair price regardless of what the agent is getting paid.

If the realtor is getting a potential double commission, it'd be pretty easy to cherry pick the comparables to only show houses that sold below market value (perhaps for structural or other reasons not shown in the listing). My real point, though, is that the seller often thinks he's paying for a "seller's realtor to represent him," when in fact the truth is that the only one representing the seller is the seller. The realtor represents the realtor.

PS. Hope you know the ins and outs of a real estate contract and where the responsibilities reside for each part. Money you are saving now could bite you in the ass later (years from now)because of disclosures you might have overlooked and now all of a sudden you found something horribly wrong with the structure.

I'd no sooner rely on a realtor to advise me on a real estate contract or on structural issues than I would allow them to advise me on a how to invest my 401k. Realtors are not real estate lawyers (I do use one of those--my dad. He works cheap!) Realtors are not home inspectors (I do use one of those--an uncle of mine.)

Realtors are in the business of selling real estate. They make money when property is sold. Period. Therefore, every financial incentive they have is to expedite the sale of real estate.

PSS According to studies having an agent to sell your house adds 8-12% to the sale price....which if you didnt notice is more than the commission payed out (which is usually less than 6%)

The most convincing study I've read about realtors was in Freakonomics.

The essence of the study concluded that a realtor selling his own property typicallly made 5% more than he did selling his client's property. Why? Because it's in a realtor's self-interest to churn through as many sales as possible. He doesn't care if the seller makes 5% more on the sale, because 3% commission on that additional 5% sale pales in comparison to the commission he could make selling two properties because he convinced the seller of each to take the first offer that came along.

Don't have a link to that study--it was in the book Freakonomics.

While trying to find a link, though, I came across this story:

http://www.nytimes.com/2007/06/08/business/08home.html?hp=&pagewanted=all

The conclusion, in a study to be released today based on home-sales data from 1998 to 2004 in Madison, Wis., is that people in that city who sold their homes through real estate agents typically did not get a higher sale price than people who sold their homes themselves. When the agent’s commission is factored in, the for-sale-by-owner people came out ahead financially.
The study is to be made public on Northwestern’s Web site.
Madison is home to one of the biggest for-sale-by-owner Web sites in the country. The economists pitted that site against the local multiple listing service operated by real estate agents.
There are asterisks. The authors cautioned that they did not know whether the results from Madison applied to the country as a whole; certainly, selling a house without a real estate agent would be harder in a city without a heavily trafficked for-sale-by-owner Web site. The authors are also analyzing Madison data from 2005 and 2006, when the housing market cooled after a long run-up, to see how their findings might have changed.

 

[DaRizzle]

I see you can't answer my post with specifics.

No, because I know you just like to argue against me no matter what the issue so id rather not waste my time.

Realtors don't understand contracts like lawyers, they don't understand valuation like appraisers, they don't understand financing like mortgage officers and they don't understand closing processes like someone at a title company.

Thats why they arent lawyers, appraisers, mortgage officer, or title officer...they are a realtor...

what you wrote could be said about any occupation so....whats your point? Damn the restaurant for not making the pasta noodles from scratch

Real Estate agents are like a contractor. They set you up/recommend the other professions you mentioned to help aid in the process. Whenever I give references for say a mortgage broker I ALWAYS give out at least 3 choices. They are free to choose who they want.

 

[DaRizzle]

The conclusion, in a study to be released today based on home-sales data from 1998 to 2004 in Madison, Wis., is that people in that city who sold their homes through real estate agents typically did not get a higher sale price than people who sold their homes themselves. When the agent’s commission is factored in, the for-sale-by-owner people came out ahead financially.
The study is to be made public on Northwestern’s Web site.
Madison is home to one of the biggest for-sale-by-owner Web sites in the country. The economists pitted that site against the local multiple listing service operated by real estate agents.
There are asterisks. The authors cautioned that they did not know whether the results from Madison applied to the country as a whole; certainly, selling a house without a real estate agent would be harder in a city without a heavily trafficked for-sale-by-owner Web site. The authors are also analyzing Madison data from 2005 and 2006, when the housing market cooled after a long run-up, to see how their findings might have changed.

Okay...notice the dates of that study...1998-2004, when home prices were going through the roof and homes were on the market for days if not hours (in CA at least). The "Help-u-Sell" companies were a GOOD option in that time. Homes were being bought for OVER asking price. Your right, you dont need an agent for that part and "Help U Sell" and the likes did at least make sure the paperwork was kosher.


Do that survey now or early 90's and you will get a VERY different result

 

[maxiep]

No, because I know you just like to argue against me no matter what the issue so id rather not waste my time.

I don't like to argue with you. It's just that you're pro-terrorist, pro-Realtor and--the worst offense of all--pro-L*ker.

Thats why they arent lawyers, appraisers, mortgage officer, or title officer...they are a realtor...

Then what's the role of the Realtor? If they don't add any value, then why do they take 6%-7%? At any point in the process, you can hire someone cheaper and more capable to do the same job.

what you wrote could be said about any occupation so....whats your point? Damn the restaurant for not making the pasta noodles from scratch

I wouldn't go to anything but a fast food joint for a place that didn't at least cook a few of the ingredients, and then I order off the $0.99 menu. Also, a restaurant offers ambience. Again, what is the value proposition that Realtors provide?

Real Estate agents are like a contractor. They set you up/recommend the other professions you mentioned to help aid in the process. Whenever I give references for say a mortgage broker I ALWAYS give out at least 3 choices. They are free to choose who they want.

And that's worth 6%-7% of the price of the house? And let us not forget that you're not necessarily recommending the least expensive or best alternative, just the ones that throw you business or that are your buddies.

Let me ask a question: When one of your clients use one of your recommended people, do they get their mortgage done for 25 basis points instead of 100-150 bps? Do you send them to an inspector you know will tear the house in two and find every single problem, which may kill the deal? What is your criteria for making a recommendation?

 

[maxiep]

Okay...notice the dates of that study...1998-2004, when home prices were going through the roof and homes were on the market for days if not hours (in CA at least). The "Help-u-Sell" companies were a GOOD option in that time. Homes were being bought for OVER asking price. Your right, you dont need an agent for that part and "Help U Sell" and the likes did at least make sure the paperwork was kosher.


Do that survey now or early 90's and you will get a VERY different result

The rest of the country wasn't like California.

 

[DaRizzle]

It's just that you're pro-terrorist

Go fuck yourself....that was a nice two months I took you off my ignore...bye prick

 

[maxiep]

Go fuck yourself....that was a nice two months I took you off my ignore...bye prick

I thought pro-L*ker was the real insult. Jeez, lighten up, Francis.

 

[mook]

Okay...notice the dates of that study...1998-2004, when home prices were going through the roof and homes were on the market for days if not hours (in CA at least). The "Help-u-Sell" companies were a GOOD option in that time. Homes were being bought for OVER asking price. Your right, you dont need an agent for that part and "Help U Sell" and the likes did at least make sure the paperwork was kosher.


Do that survey now or early 90's and you will get a VERY different result

I don't know. Maybe, but I doubt it. I would think salesmanship matters less in our current climate. People are out of work, nobody has any money--all that really matters in this climate seems to be price.

If I can sell my house for 6% less than my neighbor because I don't have to worry about paying commissions, I like my chances of selling my place before my neighbor does.

As a buyer, I like my odds of negotiating a lower price for the same reason.

 

[DaRizzle]

I would think salesmanship matters less in our current climate. People are out of work, nobody has any money--all that really matters in this climate seems to be price.

Its not just salesmanship, its also networking. Bringing compatible buyers and sellers is harder now than almost ever in recent history. A competent Realtor knows everything the surrounding area has to offer which is valuable no matter which side he is representing.

 

[The_Lillard_King]

Come on darizzle, I gave you something to hang your hat on . . . most people are uncomfortable with confrontations, including negotiations. Real estate agents do the dirty work of fighting for their clients who really aren't comfortable negotiating for what is likely their biggest purchase. Real estate agents give their clients peace of mind that someone who knows the industry is on their side . . . that is a valuable service to provide.


Sounds like mook, maxiep and myself are not afraid of and even invite that kind of negotiations . . . but for many people you provide convenience and peace of mind. Sellers who use agents should not complain about their commision, they wouldn't get the agent in the first place if they thought they could do it on their own.

I know very little about the mortgage industry . . . so I don't mind paying a good mortagage brooker commision for convenience and peace of mind. I don't have time to stain my deck, so I don't mind paying someone to do that . . . without real estate agents, less houses would be sold and bought. IMO.

 

[maxiep]

I don't know. Maybe, but I doubt it. I would think salesmanship matters less in our current climate. People are out of work, nobody has any money--all that really matters in this climate seems to be price.

If I can sell my house for 6% less than my neighbor because I don't have to worry about paying commissions, I like my chances of selling my place before my neighbor does.

As a buyer, I like my odds of negotiating a lower price for the same reason.

It's actually financing that seems to be the real stopper. People simply can't qualify for financing in this climate. For all intents and purposes in CO you need to bring 20% in equity. And if you have more than 70% LTV on your previous property, forget it. Lenders aren't making assumptions that your previous house will sell for a price high enough to cover the previous mortage and it's being factored into your debt coverage ratio.

 

[maxiep]

Come on darizzle, I gave you something to hang your hat on . . . most people are uncomfortable with confrontations, including negotiations. Real estate agents do the dirty work of fighting for their clients who really aren't comfortable negotiating for what is likely their biggest purchase. Real estate agents give their clients peace of mind that someone who knows the industry is on their side . . . that is a valuable service to provide.


Sounds like mook, maxiep and myself are not afraid of and even invite that kind of negotiations . . . but for many people you provide convenience and peace of mind. Sellers who use agents should not complain about their commision, they wouldn't get the agent in the first place if they thought they could do it on their own.

I know very little about the mortgage industry . . . so I don't mind paying a good mortagage brooker commision for convenience and peace of mind. I don't have time to stain my deck, so I don't mind paying someone to do that . . . without real estate agents, less houses would be sold and bought. IMO.

Well said. Repped.

 

[DaRizzle]

Come on darizzle, I gave you something to hang your hat on . . . most people are uncomfortable with confrontations, including negotiations. Real estate agents do the dirty work of fighting for their clients who really aren't comfortable negotiating for what is likely their biggest purchase. Real estate agents give their clients peace of mind that someone who knows the industry is on their side . . . that is a valuable service to provide.

I havent mentioned that yet but it is very true. Without RE agents things could get personal. People would not take offers just in spite of the prospective buyer. People like it or not have prejudices too. If you can distance the buyer and seller from each other it is more easier to focus on the terms rather than the who. You might be level headed but maybe not the buyer/seller.

 

[mook]

Come on darizzle, I gave you something to hang your hat on . . . most people are uncomfortable with confrontations, including negotiations. Real estate agents do the dirty work of fighting for their clients who really aren't comfortable negotiating for what is likely their biggest purchase. Real estate agents give their clients peace of mind that someone who knows the industry is on their side . . . that is a valuable service to provide.


Sounds like mook, maxiep and myself are not afraid of and even invite that kind of negotiations . . . but for many people you provide convenience and peace of mind. Sellers who use agents should not complain about their commision, they wouldn't get the agent in the first place if they thought they could do it on their own.

I know very little about the mortgage industry . . . so I don't mind paying a good mortagage brooker commision for convenience and peace of mind. I don't have time to stain my deck, so I don't mind paying someone to do that . . . without real estate agents, less houses would be sold and bought. IMO.

Good post. It's the reason why most NBA players have agents, even though the salaries are pretty obvious to negotiate in most situations. (Brandon Roy knows about how much he's going to make in his next deal, and so does Steve Blake.)

Confrontation isn't fun. The price you pay to avoid it (at least in real estate) is 3-6%. To me, that's way too much, but I can see how it's worth it to many.

 

[MARIS61]

Since pretty much all realtors are useless, this seems doubly useless.

Spoken like the #1 owner of swampland in America!

A man who acts as his own Realtor has a fool for a client.

 

[MARIS61]

Sorry to offend you, but I've bought and sold three houses now, and as far as I can tell the realtors involved did nothing but complicate the process and get paid a commission.

The single biggest service I can see is that they get houses listed on the MLS, and that's about as much work as building a good Craigslist ad. The open houses are nice, too, I suppose, but I've never really bought or sold a house because of one, so I've always wondered how effective they really are.

Particularly as a buyer, I find it very advantagous to represent myself. Most people don't think this through, but when you represent yourself and the seller has a realtor, that realtor is suddenly the buyer's best ally. Why? It's in the seller's realtor's best interest to get the deal closed with you as fast as possible, because by not having a realtor of your own, you are doubling that guy's 3% commission to 6%. If you as the buyer walk, the next buyer might have a realtor and suddenly the seller's realtor has to split the commission.

So I go in with a very lowball offer, knowing that the "seller's" realtor is going to be my best friend in trying to convince the seller to accept the offer ASAP. "As your realtor, Larry, I gotta say this isn't a bad deal. I've seen houses this nice sell for a lot less. I think you should take it (and pay me the entire 6% commission!)."

You must not live in Oregon or you are severely misleading yourself.

Oregon was the first state in the union to enact Real Estate laws, way back in 1929, and have the most stringent laws, and an additional binding Code of Ethics. The seller's Realtor must represent the seller's interest faithfully and has a fiduciary duty to act in his client's best interest.

The scenario you describe if in Oregon would result in revocation of the Realtor's license, monetary fines, criminal penalties and possible jail time.

Also, in the current market, some Realtors have an agreement to return part or all of that half to the seller if no other Realtor is involved.

Either way the commission is always paid by the seller so a buyer who uses a dedicated Realtor gets FREE advice and major assistance not only in finding the perfect property (only about 60% of the properties for sale in Beautiful Central Oregon are on MLS), but in every step of the transaction which usually includes negotiation for the best price, quite a few forms which must be filled out correctly to protect the buyer, research into the property's history, permits, code violations, leins, past repairs, possible tax situations both positive and negative, red flags which may suggest a bad investment, construction or demolition plans in the neighborhood's future, HOA fees, utility hook-up fees, septic feasibility, water quality and average well depth in the area, well report, and can usually offer extensive details of any neighborhood's pros and cons which may not be common knowledge.

Clearly worth your investment to the Realtor ($0) as a buyer to protect your investment (price you pay for property) as a buyer.

 

[MARIS61]

Steve Levitt did a study on housing prices by homes represented by realtors and homes sold by realtors themselves. The study shows that the average selling price--with all other factors adjusted--achieved for their own homes is 3% higher than those they merely represent. Furthermore, the homes they represent are sold faster than their own--meaning they push the client to make the deal so they get their commission.

You mis-interpret the findings.

What it means is the Realtors who sell their own homes, a minority as most Realtors are much smarter than that, price their homes too high so it takes years to sell them. Mostly these are investments and not primary residences and they are willing to wait years for the market conditions to be right. Meanwhile they pay on interest-only loans and hope to beat the balloon pmt deadline.

Currently something like 10% of all foreclosures in Beautiful Central Oregon are owned by local Realtors. I know several personally who have lost 5 or more homes each in the past year. They represented themselves and because of that they could not make rational decisions on their home's value due to emotional connection.

Very few sellers have the luxury of taking years to move their home, and as the study points out, Realtors will get their home to sell faster, and for about 20% more than if they do an Assist-to-Sell, o FSBO. They will also greatly decrease the likelyhood of any future legal problems surfacing after the sale.

Rule of thumb, in Oregon (as many state are pretty much unregulated) if you don't represent yourself in criminal trials, don't perform medical operations on yourself, you probably shouldn't represent yourself in Real Estate transactions.

 

[MARIS61]

It would be tough to prove. And I say that as an MAI. A realtor can pick and choose, or not make upward or downward adjustments, as a way to include/not include or properly value a comp. And Realtors do it all the time. If you're really in the business, you know it happens.

Marine Accident Investigator?

Yes, a criminally-minded Realtor could cheat his client, just as you seem quite proud to conduct your own business in that manner, but it's an extreme rarity in Oregon, and almost always results in prosecution.

Don't confuse a Realtor(trademarked) with a "Real Estate Agent". Nationally, it's the difference of being strictly regulated and highly educated in the field, or just a guy who tries to sell houses with no particular training or guidelines.

In Oregon you are either a Realtor, or you're illegally representing in the field.

In addition to learning the entire library of Oregon and Federal Residential Real Estate Laws, FBI background check, credit report, paying a couple grand in fees to start and re-licensing every 2 years, most Realtors have a genuine love of the business and thoroughly enjoy the thanks and admiration they receive each time they put someone into that dream home they never thought they could have, or succeed in selling their client's house in a reasonable time frame so the client can get on with their life.

All Realtors are required to meet 30 hrs a year of specific continual education in order to stay licensed.

I would guess that even you who are involved in the field careerwise would seek the assistance of a Realtor, even if it's a friend, for a little assistance were you considering home-shopping or had some property to move or exchange.

 

[MARIS61]

Its not just salesmanship, its also networking. Bringing compatible buyers and sellers is harder now than almost ever in recent history. A competent Realtor knows everything the surrounding area has to offer which is valuable no matter which side he is representing.

Exactly, you can spend 8 hours a day every day for a year looking at homes, and not come close to the personal knowledge the AVERAGE Realtor has of the area. You could look at the same house 5 times and not notice the defects the average Realtor has already committed to memory.

If you represented yourself in buying a home you had no prior knowledge of, go ahead and feel proud of your accomplishment and be happy, but just know you probably would have come out even better with some professional assistance.