Real estate agents are next

Take a few more bricks out of the anticompetitive walled garden real-estate agents have built around their unearned 6 percent commissions. The Times reports today on the imminent and much-anticipated launch of Zillow — a site from the founder of Expedia with big backing that will provide more open data on home prices — and throws in other sites aiming to break up the real-estate gang: Redfin, which will allow online bidding and negotiation, and PropertyShark, which takes listings in 15 cities. Add these together and you have the means to knock agents out of pricing and listing and negotiation.

There’s just one thing left: Scheduling visits and accompanying the buyers. I’d love to see someone start a concierge service to do this (and many other tasks): They don’t market or sell the house (hell, real estate agents don’t really, either) but only schedule appointments and accompany prospective buyers. Sellers and buyers can figure out pricing via Zillow; they can bid via Redfin; they can list via PropertyShark or Craigslist; they can handle closing and the next ripoff dying for a competitor — title insurance. And maybe we spend 2 percent on the cost of sale. And we keep 4 percent.

That day is coming — slowly, but it’s coming. The days of businesses that make their money by getting in the way are numbered.

  • Mumblix Grumph

    Ooh…I could do that! All smarm and no paperwork! I like that idea.

  • Jorge

    Yes, lets take away all the workers and just send the check strait off to the corporation.

    I have a great idea otherwise. If the sellers or buyers income is less than $25,000 then have the RE Agent send their bill for commision to the Federal Government.

  • http://www.buzzmachine.com Jeff Jarvis

    Uh, Jorge, what corporation? The money stays in the pockets of the buyers or sellers. It is the internet dividend. There is no moral entitlement to real estate commission!

  • Mark S.

    Scheduling visits and accompanying the buyers. I’d love to see someone start a concierge service to do this (and many other tasks): They don’t market or sell the house (hell, real estate agents don’t really, either) but only schedule appointments and accompany prospective buyers.

    How about a calendaring application. I put up a link to my calendar with times blocked out for people to visit the house. You want to look at my house, go to my calendar and schedule a time.

  • http://unbeknownst.net KirkH

    From an LA Times article:

    Real estate agents are naturally furious. “It’s a commission-avoidance scheme,” sputtered one who works for Wisconsin’s largest real estate broker. As if when I sell my house I have some patriotic duty to fork over a chunk of the sale to a third party.

    Emphasis, disgust, mine.

  • brad

    Sad to see you lump all real estate agents together. Bad personal experience, perhaps?

    My wife works her (part-time) ass off for that percentage, and earns every cent of it. She takes pride in her job and gets honest satisfaction in finding buyers their future homes.

    ‘Getting in the way’? Not all of ‘em, Jeff.

    • bill

      Actually although I’m sure your wife is indeed a hard working honorable woman as many others are as well, the truth of the matter is real estate agents are now as irrelevant and unnecessary as railroad firemen in the age of diesel engines…and it took a LONG time to get rid of those guys so I suspect it will take a while to get rid of agents as well. Yes they can make the whole buying expereince better but at what cost. We have a jewelry store here with beautiful babes to assist you and bring you bottled water and coffee and belgian chocolates…is it nice? sure. But it’s not worth double the prices that they charge

      • Brittany

        There are creative agents. Try visiting www. strossarts.com our marketing with some of the best photography and the online presenations we do for our customers help to sell their home significantly above the average in price and less days on the market. You can have all of the internet sites do the markeitng for you, but if your house doesn’t stand out and looks like crap good luck! Most homebuyers and sellers have no clue what they are doing. Sure if you are savy, have an education and marketing background you could sell your home yourslef. But most Americans are dumb in this regards.

  • Hunter McDaniel

    Let’s just hope we can keep the realtors from throwing legal roadblocks into their disintermediation the way car dealers have.

    There are plenty of things that realtors do which will continue to be needed, and I’m sure we’ll find a way to pay someone for doing them. But I’ll be more than happen to forego the free refrigerator magnets and calendars and pocket the difference.

  • http://www.forsalebyownercenter.com Jessie B

    Tools are constantly being developed and I’m sure that this is just the beginning. Zillow will have a significant impact as it makes an already real estate obsessive US even more obsessive about it. My prediction is that you will begin seeing a greater fluctuation in real estate prices and now each parcel is view like a stock. Just take a look at the swings in stock prices and volume since 1997. Soon you will see the same in real estate, since most people already view real estate as an investment instead of a “home”. Tools like this and services like For Sale by Owner Center for listing properties for sale for free with satellite views and rss feeds. The diy movement will only gain momentum and price cutting will continue like all other business… there will be the WalMart & the Barney’s NY. The two extremes of cost and service, discount and boutique are only a few years away.

    • Brittany

      Most of the time the values on Zillow.com don’t even make since. If you disagree, I can prove it in over 100 ways.

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  • http://amomentwith.typepad.com/ Easycure

    brad Says:

    February 8th, 2006 at 1:58 pm
    Sad to see you lump all real estate agents together. Bad personal experience, perhaps?

    My wife works her (part-time) ass off for that percentage, and earns every cent of it. She takes pride in her job and gets honest satisfaction in finding buyers their future homes.

    ‘Getting in the way’? Not all of ‘em, Jeff.

    Maybe she does work her butt off, but that doesn’t mean that I, personally have to go the commission route. In the past I’ve had no other choices. Now, I’m getting them.

    So are you going to hate me if I save $12000 on the sale of my house? Maybe! Am I gonna care? Not a whit.

    • http://www.ubuntu.com NoAngentIncluded

      Wow, with that 12k, I could afford solar panels on my new home. Then the house would make power, and not just consume power. I Like It!

  • Fred

    It seems to me it all depends on the market. In a hot market, it’s pretty easy to sell a house without an agent. Throw a sign in the yard or list it online somewhere and wait for the offers to roll in. I just sold a house in a not-so-hot market, and think my agent was worth every penny – she sold our house in 3 months in a market where 6-9 is far more typical. It wasn’t just the MLS; it was connections and marketing and knowledge about the local market that Zillow doesn’t have, nor does Craigslist or your hypothetical concierge service. An extra 6 months of mortgage and utilities is worth about 4% of the sales price in my case.

    These developments are good ones, and of course no one has a moral entitlement to a commission, but some agents actually do earn the commission they’re paid.

  • George Lipper

    The villification of real estate agents here might benefit from a bit more factual information. My wife is a real estate agent. I know her to work diligently and sincerely in behalf of her clients, whether buyers or sellers.

    Readers should first be aware that the real estate agent does NOT get a 6% commission. All commissions are split between the agent representing the seller and the agent representing the buyer, each of whom have specific, detailed and legal requirements to follow. Each side gets 3%. Even then, the agent does NOT get the 3%, but rather a portion thereof, depending on the contractual arrangement she has with brokerage for which she works. In my wife’s case, her commission is 70% of the 3%, or 2.1%.

    Out of that 2.1%, she has expenses, including advertising, sign purchase, automobile, etc. Depending on market conditions she may (an frequently does) lose money on listings in which the owner has demanded an unrealisitc listing price, or a buyer backs out of a purchase . Sometimes, in order to obtain a listing, in a competitive market place she has to reduce her own commission to obtain the business. Like any business owner, the difference becomes hers to bear.

    To be sure, there are unethical, greedy members of this group, not unlike any other business or profession. And certainly, there are those who draw justifiable criticism to the industry for boorish, ill behavior. But I also assure you that there are real estate agents who work hard to satisfy their clients needs; and well earn the compensation they get.

  • Bert

    If Real Estate Agents did not perform a useful place in the Market they would not exist.
    There is an art to bringing a Buyer and Seller together and creating a transaction and believe me we earn every cent we are paid.
    There are cut rate Brokers who will list your home for 1%..I suggest you hire one the next time you want to sell a home….YOU will be getting just what you deserve.

  • http://unbeknownst.net KirkH

    Brad, if I work my butt off building 8-Track players it doesn’t mean I’m entitled to be compensated for my work. Hard work and productivity are two entirely different things. Free markets only compensate productivity, and the internet is creating something close to 100% market freedom.

    When the RE business shrinks or dies like classifieds ads the money saved by consumers will be spent on other, more productive products that will benefit the economy more than the RE industry did. It’s like asprin vs. a pin prick. The pin is painful for a short period of time and in a small location, but you’ll remember it more than sustained relief from a 12 hour Advil.

  • http://www.buzzmachine.com Jeff Jarvis

    Well, no surprise that real estate agents and their spouses would defend the job.
    Bert: The problem is that they have an anticompetitive hold onto MLS. Break that and you will get to a real marketplace.
    Those of you who want to pay 6 percent can continue to. I have never found their efforts to be worth that.

    • http://www.miraculousmemories.org Tim

      I find it interesting that you’ve decided to pick and choose who to respond to and who not to, and in that decision you’ve decided not to respond to George, who has presented the most factual information thus far. Your off-handed dismissal of credible, factual information says more about your arrogant disregard of that facts and the only thing it says about you is that you’re nothing more than a pompous ideolog.

      Most realtors only bring home about 1% out of that 6% comission, and George’s wife is lucky to get as much as she does. Some brokerages are working on trying to change that, like Keller Williams who offers profit share and a maximum fee cap for well performing agents, because they recognize how little the actual brokers bring home compared to how much work they actually do.

      The new tools you refer to, like zillow.com, are exceptionally flawed in their analysis most of the time and actually hurt the industry more because they give sellers false and (more often) inflated hopes of what their home is actually worth. There are a multitude of factors zillow does not take into account when valuing a home, not least of which being condition, condition of the neighborhood, or whether or not the home sits on a busy intersection. Often times it also has critical information wrong, as in the case of my own home, where it’s adding in an extra bedroom and has the age of the home off by about 40 years; not to mention working with someone who maintains errors and ommission insurance is invaluable in making sure your sorry ass doesn’t get sued for screwing up the type of transaction most people only make once or twice in a lifetime…

      Your assumptions are quite libelous, and I wouldn’t be surprised to see a lawsuit headed your direction as a result, if that hasn’t already happened. If I wasn’t reading your book as required for my journalism class, I would have stopped when I got to this particularly vitriolic portion of words.

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  • http://www.Kens411.com ken b.

    Maybe some day.

    I used this cool money saving Zillow.com site to see how it works with my property. Yes, I’m a Realtor, I have personal and intimate knowledge of the local market.

    If I thought Zillow was the answer and I used their valualtion of my home…I would save 6% and cut the local pro agent out of the deal…the only problem…according to Zillow…I would price my home about $65,000 less than what I should and could realistically sell it for. So…I would save a 6% ( $15,000) and loose $57,000 by pricing it incorrectly, relying on a piece of software that evaluating a market place it doesn’t know and properties it’s never seen.

    Great idea….if you’re a dim bulb.

    Mabe some day?

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  • http://deadnewspapers.blogspot.com Gutenberg

    We spoke to PropertyShark awhile ago about partnering with them and discovered, after talking with our high-priced IP law firm, that there are potential copyright problems with hoovering content out of brokers’ websites or other sources (local newspaper, etc.). The issues aren’t dissimilar to those faced by other content aggregators (content wants to be free, yada yada), except it seems that the Realtors have tended to be NRA-like in the protection of their franchise.

    I, for one, would love to see real estate fees be reduced to something more comparable to the value provided. In NYC, an apartment that cost $300,000 five years ago now exceeds a million, but do you think that the cost of marketing and selling the property has increased from $18,000 to $60,000? There are literally three brokers in NYC to every listed property (and nearly every one of them has called me while I recently was selling a property FSBO), but the regulations of the major real estate firms keep commissions artificially high (although there are some renegades).

  • http://www.redfin.com/blog/redfin/ Glenn Kelman

    What a lively discussions! A Wall Street Journal survey asking whether agents earn their commissions reported this week that 83% of respondents said no.

    But I’ve found that real estate agents are like lawyers. People often complain about ‘em in general, but love their real estate agent in particular. And for good reason: most agents are pretty good.

    At the end of the day, whether you want a traditional agent is a matter of personal choice. What seems indisputable is that consumers would prefer to have a choice, between traditional service and electronic service.

    Nobody likes having to pay for services they don’t want just to be able to buy a property. And most folks haven’t paid attention to the fact that some people actually prefer electronic service over traditional service, regardless of cost, just so they can shop for a home at their own pace, with lots of objective information readily available.

    So it seems natural that at some point an Internet service would offer people lots of new information and a choice, which is what Redfin is trying to do as an online brokerage.

    Regards,
    Glenn

    Glenn Kelman
    Redfin

  • David

    Well…I had to check things out! I went to zillow.com and “tested” the accuracy of their pricing. I currently have a home on the market for $600000 and zillow estimates it at $532,113 (a difference of 11.3% or $67,887). If I went to my sellers and requested a price change to even $550,000…they would fire me on the spot. The house has not sold yet , but we just reduced from $610,000 and have had 3 buyers go back in for the second time. Additionally, we just sold one on 2/2/06 for $357000 and the zillow price is $338,333 (a difference of $18,667 or 5.2% and a couple thousand dollars under the total commission). Ask these sellers if they needed our services OR were we worth our commission: the day before settlement (these buyers were buying another house and the sellers were buying another house) the lender had to switch loan programs which necessitated us to extend settlement by 4 days. All agents involved negotiated deals that allowed all buyers to move some personal belongings in and ultimately settlement occurred…we had some VERY SATISFIED sellers and buyers; can zillow do that?

  • http://www.jordanrealty.biz louise jordan

    I wonder if Jeff has ever negotiated 2, 3, or 5 contracts for the same property only to have the buyers not be financially qualified, the seller not fully disclosing serious structural problems, low appraisals, negative termite reports, EPA involvement (yes, residential oil tanks leak), flood zones, asbestos and/or radon abatement, even failing seals in insulated windows? My guess would be “No.”

  • http://marginalizingmorons.blogspot.com/ CaptiousNut

    When a thread slams newspapers the jurassic editors start spamming the blog with their pathetic defenses.

    Now we are getting spouses of real estate agents doing the same? This is borderline ridiculous.

    I have plenty of experience in real estate and family in the business yet have no qualms about saying that real estate people are 75% scumbags.

    One poster mentioned that the agents don’t get the entire 6%. No sh*t Sherlock.

    While he somehow thinks that 2.1% makes the agent more virtuous, he couldn’t be more wrong.

    That commission split is PAYOLA. In the brokerage industry it would be called payment for order flow. Eliot Spitzer calls it a “conflict of interest”.

    Go hire a buying agent and they won’t take you to any listings that are “For Sale by Owner” or don’t have the kickback. They will try to sell you a home that is best for them.

    I have no problem with agents being self-interested scumbags. They make their money from economically illiterate customers, people who generally deserve to be ripped off.

    Whining agents and spouses posting here aren’t going to change reality or anyone’s opinion. Customers may not understand real estate transactions, but they are smart enough to realize who is a jerk and who isn’t.

  • http://www.montclairconcierges.com Serge Lescouarnec

    Jeff

    I guess you are not aware that I have a Concierge Service based in Montclair and serving New Jersey (mostly the northern part). I have been helping people moving, dealing with repairs, estimates and the like. All these time consuming things that either you do not have the time or the envy to deal with.
    I market my services as Montclair Concierges and New Jersey Concierges.
    This is why my blog is called ‘Serge the Concierge’.
    Debbie Galant of Baristanet gave me that name.

    Your (almost) neighbor

    Serge
    Business Websites:
    Montclair Concierges: http://www.montclairconcierges.com
    New Jersey Concierges: http://www.njconcierges.com
    Blog:
    Serge The Concierge: htpp://sergetheconcierge.typepad.com

  • http://www.themediadrop.com Tom Biro

    Now if only it had any data for the entire section of town that I live in, in the NY metro area. So much for hype.

  • Andy Freeman

    While David’s sellers may appreciate the extra money they’re getting, the buyers may not be nearly as happy.

    BTW – Most realtors have figured out that maximizing their revenue is not the same as maximizing the price on every house that they sell. Deal flow helps them and doesn’t necessarily help sellers or buyers. And for those folks who think that effort matters, the more flow, the less work per deal said realtors actually doing.

  • http://natewarner.com/blog Nate

    Just as the car and airline industry dealt with hotwire and expedia; the real estate industry will deal with zillow and redfin. The question is how quickly the consumer will adapt to using an online service for their home sales.

    To a middle class family their home represents their largest, most valuable investment in their financial landscape. Building enough trust and credibility to instill confidence of the service into a seller or buyer will be the crux of the matter.

    While people hate paying a commission, people do love to feel comfortable and safe and a good real estate agent does that. Jeff is right- a free market is dependent on choice it should be interesting to see what the consumer chooses: value or value-added.

  • http://creativerealestate.blogspot.com Kenny Medlin

    I checked out the Zillow service and although interesting, it does not (at this point) have accurate data. I searched three houses of which I am personally knowledgable) and the data is not as accurate as I would have thought. The market value of a property must have relevant data. ie. one house (mine has a January 2006 appraisal at $300,000. Zillow offered $220K. The land actually is 2.59 acres per county records.. Zillow shows it at 1.5 acres. That alone is a huge difference. Granted Zillow allows you to alter some of the parameters regarding the improvements which brought their value somewhat closer, but it would not allow an adjustment for the acreage. I agree that the traditional Realtor role has changed. The buffet style realtor can be seen on the horizon.

  • http://creativerealestateconcepts.blogspot.com Kenny Medlin

    By the way, I offer general real estate information on my blog. would appreciate a review and comments

  • http://4mysales.com Randy James

    The fact of the matter is that the real estate market is changing very quickly. A number of online real estate related services are poping up and the role of the real estate agents has got to shift to a value-added service model where agents act as consultants to make sure that all parties in the transaction are protected.

    -Randy
    http://www.4mysales.com

    • http://www.ubuntu.com NoAngentIncluded

      Sorry, pal, that is so not true. Agents are looking for their cut in the deal, only. I asked the agent I was using to be my broker, but as soon as I signed the papers, the bitch stated that she worked only for the home seller. I nearly flipped.

  • AllForOnline

    I am the director of web marketing for a large broker. In my previous life, I spent years squeezing productivity out of software to benefit the user/consumer, etc. There is definitely massive change on the horizon for the real estate sales process. I am in favor of doing what is right for the consumer. If the real estate consumer wants to do more work on their own, I am here to make that happen. If the they want a realtor, I am here to make that happen as well.

    My prediction (along the same lines as Jessie B):

    Starter homes (based on each market) will become commodoties. They will be bought and sold online for the most part. Banks will evenutally be allowed to broker real estate – this being said, the problem of showing homes will be handled by the bank’s MORTGAGE business, online and offline. One stop shopping for mortgage, real estate, and title (economies of scale will prevail). Online transaction systems for real estate are already available and in use by many brokers. No surprise here.

    The higher end homes will be handled by the boutique shops that know how to coddle their richer clients. The higher end home buyer needs someone to look out for their best interest, which the “walmart” like shops will not do, nor want to.

    Zillow is just starting. A few years from now, it will probably be able to accomodate the transaction – start to finish.

  • http://www.uscondex.com james haft, director, US Condo Exchange

    at US Condo Exchange ( http://www.uscondex.com), we believe the value of technology is to enable the participants to go about their business faster, easier and cheaper.

    By offering tools for developers, brokers, buyers and sellers we are removing the barriers to all partipants reaching each other with fuller information, for at a lower cost. While brokerage fees may decline, as they have done in many other industries, we believe there will always be a role for the broker in the process and that the broker with the right approach and tools will always be able to earn a premium.

  • formeragent

    The whole idea that real estate brokerage will somehow disappear because of a few new websites is totally rediculous. Remember brokerages did not just spring up and wedge themselves in between buyers and sellers. Like any other industry, it came about because the market demanded it, and still does.

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  • http://www.HomePriceMaps.com HomePriceMaps

    i am not sure i would call Zillow.com nor http://www.HomePriceMaps.com DATA PORN, i mean aren’t we helping the consumer make better informed decisions, thus not relying upon the realtor as much, or at least giving the consumer the ability to know when his realtor is screwing him over?

    since when is that porn?

  • JohnnyRealEstate

    You’re an idiot. really. truly an idiot.

  • Stephen

    just another “gimmick” from a bunch of pencil geeks with nothing better to do.
    I heard the same idea ten years ago with the inreased use of the internet.

  • http://www.NielsenHomeTeam.com J Nielsen

    Hi all,

    You get what you pay for in this world. You can of course always sell your house yourself.

    I think what we all are forgetting here is that commissions are negotiable.

    If you want an agent to place adds, hold open houses, create flyers – brochures ETC – should you not pay someting for that? What Real Estate Agents really do (good ones) Is MARKET your property. Like an Ad campaign. Driving up the value of your home by exposing it to many customers. Secondary a good agent is there to protect you from liability. there are strict disclosure and disclaimer laws set by the States.
    Third everybody LOVES to talk about Real Estate. If you mention at work that you want to sell your house – There will be people falling over themselves saying that they are interested! Wow you think, this is easy.

    So you talk to Johnny and he wants to buy – you call Sally and say it is sold. You draw up a “website” contract. All is good right? NOOOOOO!

    Turns out that Johnny could not get the loan he thought – he actually didn’t even try and because you are “friends” you didn’t ask for a serious earnest money deposit – or you got one that now BOUNCED!!
    Your house is back on the market – and you are back to calling Sally – who found another house…… Happens all the time. 90% of FSBOs eventually use an agent WHY?

    Sure you save $20K but end up in court because the Buyer really doesn’t want to live in your house. The Buyer will hire a lawyer who will go over the contracts with a FINE COMB! They will find something unless you have done some extreme research. 85% of the time FSBO leave a lot of money on the table. They believe that they know the market! If the market changes with each sale- can you really know the market. The true value of a property is what someone is willing to pay- never forget that. A great Agent is worth the money – they can create their own value by marketing a property.

    I am an agent – if I can’t bring some great value for my client I DO NOT TAKE THE LISTING! It is that simple. I still help people sell the property themselves. I guess I’m a good hearted sucker, but that’s how I want to run my business. Honestly and fairly.

    I agree with you all that if the agent is just sitting on his A.. expecting a fine commission without doing anything for you – FIRE HIM!!!

    As in all trades -there are silver tongued devils out there. Don’t beleive that they are all the same. WE are not!

  • http://suttonsynergy.com Peter from Sutton Realty

    As an experienced Realtor, I feel the need to add my own thoughts to this forum.

    Will the real estate industry change? It has already. I am currently selling property in a very hot market. Buyers are motivated and are looking for homes regardless of whether or not they are listed on MLS or are FSBO, and alot of FSBOs are successful. When so many homes are being sold privately, we are put into the position of responding to suggestions that we are no longer necessary in the free marketplace.

    The bottom line is that one can undertake to do many things themselves if they so choose. If you want to save on dental costs, you can decide to pull your own tooth. If you want to save on the cost of going to a professional hairstylist, you can cut your own hair (or get your wife to do it). Sure you’ll get results, you’ll save some money, but will you put dentists and barbers out of work? No.

    I would be dishonest if I said that I choose this line of work for reasons other than the opportunity to earn a high level of income. But having said that, nothing comes without a sacrifice, and in real estate, as in most other types of sales work, your result is totally dependant on your efforts. As in all professions, there are those who excell and those who don’t. The ones who don’t are quickly forced to find other work. The agents who last are those that work hard, adapt to new trends and continue to demonstrate that they provide a required service to the marketplace.

    Are commissions high? Typical commissions in my city are 7% on the first $100,000 and 3% on the balance, but those are negotiable, and of course are split with the buyer’s brokerage. These conventional rates have been in effect for years and even though the price of doing business has gone up regardless of market conditions (gas, insurance, printing, office fees, MLS fees, board and professional dues) real estate commissions have remained the same all along.

    I’m still standing and expect to be for many years to come.

  • William R

    There is a new Real Estate Trends report that talks about real estate commissions a little bit.
    I found the Real Estate Trends report at the Real Estate Bookstore web site. They currently have a promotion for a free Search Engine Optimization (SEO) report specifically written for real estate agents. I don’t know how long the promotion is supposed to go for. But to get the free report, you just have to use the Promo Code SEOBONUS13 at checkout.
    You can find more information about the Trends Report at http://www.realestatetrendsreport.com

  • Mike

    It’s interesting to see what the general public perception is of the real estate profession. It’s also sad to see that many feel that “The Wal-Mart Way” of screwing so many, but never being undersold , giving value to a society that demands it is sad. We all deserve 50% pay cuts due to a freer open market and our perception that we’re all worth much more than we really are…. The only place we get true value in our society is from educators who give us exactly what we pay for…no other sector of our society can say that

  • Paul Martin

    I am currently in the process of buying a house in Massachusetts which is FSBO, and while the agent who showed me homes in Connecticut did a great job for us there, the seller does not see any reason to “pony” up 3% of the gross sales proceeds for the services of a buyer’s agent, as we found this house ourselves by driving around the town we were interested in living in.

    It would seem as though the cost to the brokerage firms as a percentage of the sales proceeds should themselves be coming down, and that agents’ roles should evolve into being advocates for their clients, as the good ones already are.

    From my experience with buying and selling 3 houses, however, there are a number of agents – including ones I’ve used – who have no interest in communicating concerns between the buyer or seller, or protecting the parties’ respective interests, but rather in getting to a sale as fast as possible. We almost bought a house in CT, only to determine that the well water had some serious issues; the seller’s agent, as opposed to being up front about these problems, first tried to argue that the well tests were performed incorrectly, and then, when that argument fell through, how we could live with 4 times the allowable radon levels with remediation. While this may very well be true, it was clear that she was only interested in moving the house, not in adressing our concerns.

    While the seller’s agent obviously has a different agenda from the buyer, the whole process left a very bad taste in our mouths, as we found the agent to be unduly contentious and irritating; she was insistent that all communication to the seller be through her, which simply slowed down the process: as a matter of tactics, I can see why she wanted to be in the middle of things – if she were not somehow in the thick of things, why would there be a need for a middleman, after all – but this is not a long-term strategy. Adding value is a long-term strategy, and she added no value to the transaction, made vague threats about suing the company that did the well-testing, when a reasonable person would have stepped back, and determined that it might be possible to achieve the objective in a different way.

    Agents are not real estate lawyers, and are generally not knowledgeable about contract law principles, but this nevertheless does not stop them from offering guidance on “how things are done” (by which they generally mean what their pre-printed forms say).

    Compared with other countries where I have lived, the training of the average real estate agent in the US is very poor, and there are simply too many agents. It would seem as though the historical monopoly on information previously enjoyed by real estate brokerages is starting to disappear, and the profession will involve less horse trading, and there will be a fewer number of more highly qualified and scrupulous agents adding value as advocates to real estate deals, paid not out of the proceeds – which I consider a real conflict of interest – but for their time.

  • max

    Dealing with owners is a pain. They don’t know the process, their ask is higher sometimes than Realtor listings. They wouldn’t know a “comp” if it hit them in the head. As a buyer, what’ the Realtor downside??

  • http://terryfordrealty.com Terry Ford Realty

    So, I guess more than 20 years of toting buyers who never bought and sellers who overpriced their houses until everyone went away has now earned me a big fat retirement reward of “0”. Thank you fellow citizens for nothing. Has anyone ever imagined the value of all of the trickle down business that reaps the reward of my one lousy listing that took 6 months to sell in NY because of all the layers of people sold or that buyer’s hand that I held for a year or more until they finally bought a house. How about all the tag along salaries that are paid out. Oh, Mrs. Ford can you recommend a good insurance agent, and I will need to contact a new lawyer and an accountant can you please refer someone.
    And I will need a painter, a carpenter, a mason, a roofer, some new carpeting and appliances. Who would you recommend? I will be driving further to work so I think I will need a new car. Is there a good car dealer you can recommend? GET THE PICTURE — AND THERE ARE COUNTLESS OTHERS WHO BENEFIT FROM A REALTORS EFFORTS TO PROMOTE AND SELL PROPERTIES. WE SELL OLD, WE SELL NEW, WE SELL LAND, WE SELL BUSINESS, WE SELL RENTALS. My accountant once told me that I earn on the average of 15 cents on the dollar after all the time and expense of doing business is factored in. And for you out there who earn a steady pay check but never do diddly squat to grow the economy, keep throwing darts at the real estate industry so that we all quit. Then watch your steady paycheck go down the toilet. You will go out with the spoils as well.
    Thank You to those of you who support realtors and for those of you that don’t enjoy your free ride for a while.

  • Nicole

    I think Matt said it best ……….

    “Professional Realtors with world class client service and real estate Brokers with full-service business models will be around for a long time. The personal attention desired by some people will never be replaced by the magic box. ”

    Matt

  • tc

    The idiot who started this blog simply thinks he is a real estate expert because he either bought or sold a home before. Well I had surgery before and I think I shouldn’t have to pay for it. As a matter of fact, I don’t think anyone should be able to sell anything as a profession. I want to buy everything my family needs online. And I don’t want any fancy advertising. I want Times Roman font and just the price. Hell, I don’t even think I should have to pay to have things shipped. As a matter of fact, I’m tired as hell of going outside my house and seeing brand names on the flipping cars that drive around and the billboards make me puke. I think I’ll stay in my house forever (I’m certainly not going to sell it) and I’ll collect welfare because no one makes a fair wage. I won’t even turn the darn television on because all they try to do is get me to buy something I don’t even want. I won’t even groom because I’m tired of getting direct mail advertising for hair salons. Maybe I’ll stop my postal service completely. That sounds just like you idiot, that doesn’t want to pay for services! I’ll bet whatever profession you’re in, you had to sell yourself to get the job. Unless maybe you are just an entitlement chap like you sound like.

  • bevhills agent

    interesting,

    I’m an agent in one of the most competitive and expensive areas in the nation. when zillow first came online a number of people asked me about it and i spent time on the site searching homes in the areas i was familiar with. in some areas the price estimates were over by $200,000. in others, zillow was under by one million dollars. thats right, a million bucks. now certainly these poor valuations shouldnt be taken as representative of all the estimates zillow can perform for individuals looking to get an estimate on home prices. but, it does highlight that the service can make mistakes that can be costly. it also points out that the service does not take into consideration a countless nuances that make up an accurate price appraisal.

    is zillow the first step toward getting rid of real estate agents? no way. not even by a long shot. in a city like los angeles where home prices have skyrocketed and people are finally starting to realize the increasing value of land here, the last thing they will turn to is a website to get a price on their property, and then another site to market and sell the property themselves. theres no reassurance that those sites are up to date with the latest neighborhood info. and in los angeles, that info changes on an almost weekly basis. perhaps in a small quiet town that would make sense, but in a large metropolitan city where homes sometimes sell for 1,000 to 1,200 dollars a square foot that would be risking financial suicide.

    in markets like the west side of los angeles good agents provide an invaluable service no website can match. insight. they know neighborhoods better than any buyer or seller ever will: what homes are being remodeled, how many are being redone in a specific part of the neighborhood, which ones are being torn down and rebuilt completely, which builders are building those homes and how much have their previous projects sold for, is the neighborhood up and coming or has the transition stalled, do the living room windows face too far west heating up the house in the long summer afternoons, etc. etc. etc.

    with an increase in price comes an increase in liability. in a transaction a good agent removes the risk of bearing liability for anything that may go wrong in a transaction that cut rate brokes and fsbo’s simply cannot provide. why? they cant afford to take on the potential risk that could cost them countless millions in litigation. top rate brokerages provide disclosure coverage for almost anything and ad more to the list on an almost monthly basis. did the trees in the front yard of the home you just sold/bought die several weeks after the new owners moved in????? guess what?? someone can be held liable for that. the possibilities for open litigation by a disgruntled buyer/seller are endless and frequently pursued. but a good agent will umbrella you from such situations. discount and do it yourself places dont offer such comprehensive coverage and going without that with the kind of money involved these days is simply idiotic.

    along with this is simply the need to have a human touch involved in the process of buying/selling a home. its reassuring for people to have an expert help them along in a process that is far more complex than it appears on the outside. contacting title company officers and city employees about specific ordinances or variances on a specific property are just a few of the countless things a great agent takes care of so that the client (who, mind you, most likely works full time and has neither the time nor the patience to follow up on these matters himself/herself) doesnt have to be bothered with. that is something that zillow and other such sites cannot supplant.

    what will get rid of real estate agents? other real estate agents. and a slowing market. for too long now countless people have gone out and gotten a real estate license thinking it was a quick and easy way to make a buck (ask any truly successful agent and they will all have been in the business a while, and will all admit that the first few years they starved). its unfortunate that obtaining a license is so easy. it has diluted the professionalism of the industry and because of that, our reputations have suffered. with the coming slowdown in the market, however, these individuals and their cut rate/poor service brokerages, will be laid to waste. a hot market allowed them to make a little money while doing the bare minimum, and thats a shame. but their sheer numbers and lack of stability will put them out of business soon enough in a slowing market.

    now, only those with solid business and marketing plans for listings, great reputations for providing fantastic service to clients, and strong referral bases will continue on. and they should. theyre the ones that add real value to a transaction and make the home buying/selling process a quick and smooth transaction that websites simply cannot duplicate.

  • Mike

    I really think Real Estate Agents that don’t utilize all the tools available are lazy or cheap. For instance I look on Realtor.com for a home and the information is nice. The one thing lacking are Photos and or Virtual Tours. I select show me virtual tours first and I get maybe 5 pages with Virtual Tours and 30 with only the photo of the front of the home or nothing at all.

    I would never list with an agent that didn’t take pictures, Offer brochures and 24 hour access to at least look at the home online or have a website of some kind. Here’s a novel idea.. Tell the home owner what they can do to help you! If you are too lazy, cheap or offer a lower commission give the seller some ideas on how they can market their homes on the Internet outside your service.

    Most people don’t call an agent when they first start looking for a home. They start on the Internet and most go to Realtor.com. Then they call the listing agent or seller.

    Put yourself in the buyer’s shoes when it comes to the Internet. Do you think they aren’t going to click on that little box that says show me Virtual Tours first? They will and do.

    I see so much money wasted on News Print. What do you think a home seller will want more? Ask them this the next time you go to a potential listing. “How do you want me to market your home? I can put your listing in front of most listings on Realtor.com and in front of millions of potential home buyers by doing a Virtual Tour or I can spend the same money for a 4 line ad in the local paper.” I am not saying News Paper Advertising is bad but that’s all you “aged agents” know how to do outside the MLS.

    Every one I talk to that has visited Realtor.com always comments on the Virtual Tours they see and they do wonder why more agents don’t use them. People tell me they don’t even look at a listing without Virtual Tours or additional photos.

    If nothing we humans are motivated by the visual aspects of life.

    What does this you?
    1. A potential Home buyer just starting out looking for a home is going to call an agent that has a virtual tour even if they don’t buy that house because that agent is on the first 5 pages.

    2. The most powerful & cost effective thing you can do is offer a virtual tour on each listing. For the same cost of a News Paper ad you get in front of millions of home buyers and sellers.

    3. Your listing is automatically moved to the front of the pack on Realtor.com in front of all the listings that don’t have them.

    4. Who do you think a buyer is going to call even if they aren’t completely interested in your listing?

    5. Other agents will use your listings and send them to potential home buyers because it does have a virtual tour and it is appealing. Other Agents will be working for you at that point.

  • Joe

    If realtors can’t adapt then they’re gone.

    I could care less if they’re out of a job. No one is entitled to anything.

  • http://MyPropertyExchange.com WellWisher

    A great new site, MyPropertyExchange.com provides Free Listings for both, the sellers and landlords, to share the details of their properties with prospective buyers or tenants. It also has a very nice slide show feature, using which one can display more than a dozen photos of the property.

  • Tom

    Sounds to me like too many of you came out of the dark ages and realised this is a capitalist world, funny that.

    Any online company, with some fandangle new idea they pass onto jane and john doe, proclaiming they’ll save you money and time…it’s just another way for someone else to make money. Big deal, sounds like a real estate agent…although not.

    Get this, society now doesn’t want to pay for anything. They want music for free, entertainment for free. Think about it.

    Whatever happened to paying someone for the job they’re doing. Wether you agree or not on wether their job deserves this or that much money. I bet the only people here that really complain, are the ones who don’t have all that much money. True?

    I bet anyone here could think of certain occupations, that in their mind, didn’t really add up, in terms of how much you pay them for what they actually do.

    So instead, how about paying for your music. Paying for your dvd’s. Paying the realestate agent for doing their part.

    If you can’t afford something, don’t purchase it. If you have a house, sell it, then complain about ther percentage a real-esate agent recieves, maybe you need to go out and earn more money (Or not own a house in the first place), or stop spending money on over-feeding yourselves with completely shit food.

    It’s that catch 22….plenty of people dislike the Police, they bad mouth them, complain complain…..but who do they end up calling when they feel unsafe, someone is stealing from them, and/or are shitting their pants?

  • jay

    I would really like to see this new process start as soon as possible. I know a real estate agent who does not have a college degree and makes anywhere from 50 – 70 grand a year. And with a college degree working my ass off I make about 15 to 20 grand less than her. Thats f.cking ridiculous.

    I would love to see those Blond hair blue eyed real estate agents simply vanish and find some real hard working jobs. I know most of you will start whining about my comments but… just give up. And brace for the change.

  • Jim

    Jay,

    There are those dumb real estate agents that have no degrees and make 50 – 70 k a year based on their looks. However, there are also competent, intelligent agents that do have college degrees and do work hard. As a Stanford graduate, I do have a degree, which I worked incredibly hard for (in math and computer science) and decided that something I enjoy doing is working in the Real Estate industry. There are agents in my office that do lounge a lot, but there are some that work very hard. Just thought I’d share that.

  • Mike

    I just want to add my 5 cents, rebated down to 2 cents.

    Folks first off do you believe Zilow.com is an accurate source for pricing information? Man if Zillow is not the definition of the Blind leading the Blind I don’t know what is! Correct – Directly related Comps from Zillow – are you joking?? Accurate Bank Appraisal data is NOT reflected in Zillow and never will! In Texas Zillow.com is useless and if a Seller is relying on Zillow to price their home, they are taking a big financial risk that could cost them more than an agent fee.

    I agree on new methods for Real Estate Representation to a certain degree, and I employ them vigorously in my Texas Realty Business, but when you need accurate LOCAL information and a network of agents representing thousands of prospective buyers, there is nothing like MLS and knowledgeable LOCAL Agents to get the job done.

    Last year I SOLD my own residence. Well, heck let me sell it MYSELF! Put a sign in the yard, advertise on my website, newspapers, open houses (4 in a row!) I mean my house was popped and very competitively priced. But it DID NOT SELL! So I listed it into MLS and 10 days later it is under contract. I gladly paid the agent 3%. The deal went smoothly. Hard to argue with MLS results.

    Offer writing service? Seller’s agents showing buyers being represented by an offer writing service? You call this a business model? In fact Sellers are offended when this happens in many cases. Having to pay 3% to a “virtual” agent? Listing agents have already begun writing into their sales agreements that 3% is only offered when the buyer arrives with their agent, otherwise a 1% fee will be paid to any non present agent or offer writing service. I feel the quality of the offer is lessened when a “virtual agent” is involved and the opportunity for a “bust” increases. Also I offer BIG discounts to Seller’s if I sell their home.

    As a Listing Agent the quality of the offer received and the probability of Closing are much higher when a Realtor is involved for the buyer. Investors and other buyers represented in unconventional ways just do not have the same Closing rate from my experience and as the failure rate of “Offer Writing Services” begins to be widely “known” I believe they will be their own eventual undoing. BUT in the process, the rates traditionally charged by agents will lower. The bottom line is the public should see traditional rates come down as the market reacts.

    I mean if this “Information Age” thingy is about SAVINGS, then the Seller wants part of the SAVINGS too and one of the ways they can do this is to NOT pay “Online Offer Services” 3%. And so listing agents in many respects are now writing this into their listing contracts.

    Look if you want the ultimate savings just go FSBO and accept all the liabilities of pricing wrong, high or low, of screwing up the contract to where you are out thousands of dollars “you did not see coming” and so on. FSBO has been around a long long time.

    Good discussion thread!

    Bottom line, if real services are diminished in all of this, do the buyers and sellers actually “win?” I don’t think so.

  • http://www.EZHomeFacts.com Chris Loiacono

    I have scanned some of the comments on this subject and to add a few. from a uniquely mixed perspective: Just as was expounded by an interesting WSJ article a few years ago, technology changes everything in ways similar to the changes brought about when the North American continent became a matrix of steel rails. Products and services were delivered faster, more reliably and more intact.

    Due to the laws of the land, a real estate transaction is a very complex and delicate package to deliver in one piece and often, a person’e life savings, or more are at stake. One missed detail and the future of an entire family can be ruined. Combine a streak of such errors and an entire community can be affected. The process is as complex as it is because in this complex world, it needs to be. it has grown to this out of necessity.

    With the Internet having been equated loosely to the growth of the rail system, it too will have positive effects once we get through the learning curve. Those aware of the early years of the railroads know of the countless disputes, lawsuits and technical problems that had to be experienced before being overcome. With more technological choices than ever, more players and infinitely more capital, the changes in the way real estate transactions are managed will be even more painful – until the hysteresis becomes manageable.

    yes, some real estate agents today appear to be shameless self promoting bufoons and others seemingly the conscientious semi-professionals they are – all have something in common: they have developed systems and tolls and techniques that enable them to orchestrate the promotional, transactional and emotional aspects of ongoing real estate deals – most often without the intervention of the courts. Take them away too fast and expect the MAL (Mediation – Arbitration – Litigation) channel to fill faster than anyone can anticipate. In time, whatever we will call the facilitators of these transactions will have different roles and will be compensated differently – but they will be there. Real estate has been described as the basis of the US economy and nothing in the great moving wheel of the US economy is going to allow the process to change so quickly as to push half or more of a nations real estate transactions into courthouses. The agent is often the buffer that prevents this from occurring today.

    another look at modern history also tells much. I believe it was Coldwell, or Banker that started the oldest real estate brokerage in existence by offering services to a devastated San Francisco population. At first glance on may think of this early venture as an opportunistic one – and it may well have been. What can’t be overlooked however, is that while the process of buying and selling real property was simpler then, the average family and small business owner was moreso at the mercy of the wealthy property-owning class. The services they were provided acted in large measure as a protection that prvented many from being swindled.

    I have been observing and have been employed by a number of saavy investors and simple family folks alike. Now that the market has slowed significantly and as inventories swell to all time highs, both are challenged more than ever before. If you don’t believe that it takes a professional marketer, negotiator and process manager to go from the idea of selling a home to a successful escrow and title closing, you may be misled. Without the agent ensuring that state and federal laws are adhered to, one party – or both will suffer. If you’ve done one or two such deals yourself and think you’ve mastered the art, good for you. Your experience in no way simulates the result of turning loose the thousands of buyers and sellers that transact such deals every day to stumble through it on their own.

    While Craig’s List may be free, it is no substitute for mass advertising or even targeted marketing. It’s common knowledge that Craig’s List shoppers are mainly bargain hunters. Posters are at the last resort phase of their sell cycle. Who is this medium fair to? Obviously it leaves much to be desired from a seller’s perspective.

    And to cap off a previously posted comment, yes, print advertising of real estate has risen in cost significantly as an effect of the law of supply and demand. Cross media marketing has become the norm for successful agents, and this multiplies costs. Throw in the $3.00 per gallon liquid gold and combine with people that must be driven to every property for sale in a 50 mile radius, and a career in real estate becomes a lot less inviting.

    The one lesson learned from historical adoption of technology is that while each new wave is supposed to provide cost advantages, the outcome is generally that of providing a better product or service at a cost that is justifiable for the increased returns- but not less. It has to happen in this market in a similar manner.

    here’s a test for this theory: The “Discount Broker” model that frightened multituded of ‘full service’ brokers a few years back now has taken a hugely insignificant 2% of market share. Might this have something to do with the fact that even traditional brokers have adopted enough technology to streamline their processes and minimize per-transaction costs. Any new solution set that will have a chance at succeeding must provide all the protection that both parties in a transaction, plus the governing authorities will see as needed – plus, whoever is orchestrating will need to make a decent living to boot.

    Someone else wrote about the commission splits agents are faced with, now think about the vendors and service providers agents and their brokers employ. They all deserve to make a living also, right? They all have voices that will be heard by our elected and appointed regulators.

    So slow change made piece by piece, beta test by test is the orddr of the day – until the percived needs of all involved change significantly.
    Go ahead and prove me wrong….

  • http://www.EZHomeFacts.com Chris Loiacono

    BTW, I forgot to mention that, like Mike (above) A couple of years ago I tried to sell my home myself and spent hundreds of $ per week on newspaper ads, my own web site(s) and opened the spotlessly prepped up to date and under priced home all to no avail – just bargain hunters and folks not qualified to buy a used car showed up.
    In about 21 days in the hands of a reputable agent and an major MLS system listing and we had a happy for all contract with a qualified buyer followed by a good clean closing.

    NAR’s annual survey of 10’s of thousands of sales shows consistently year after year that the FSBO seller actually sells for 15% less than an MLS listed and agent/broker represented seller. Even after a 6% commission, that’s 9% more to the seller – and many less headaches. When you put aside all the strong DIY emotions, the facts support the idea that the present full-service model will be around for a while.

  • Adam

    Honestly, the realtor is truly a road block for the new consumer world. There have been many arguments on this thread defending the realtor’s job.

    One was saying that the job came about because of demand and it is therefore needed. That may be the case, but you could say the same for a lot of different businesses, companies, and markets. But as new technology arrises, and consumers change, so does the demand for a product or service. I liked the 8 track reference made before in reply to a person who defended the current real estate system because of the time and effort that his wife puts in. She may be very determined, work hard, and be considered great at her job, but her job might not be needed at some point given the rough technology. The lock on the MLS is limiting the advancment of the technology on this market. It is truly a shame. I do beleive that there is a huge market capable of and willing to use a “self service realty” shop. The same market that is paying their bills online and selecting “no more paper statements” from their phone carrier and electric companies.

    I used to be a programmer for a company that supported Corporate calling cards. I worked very hard and the application that we created to help companies provision corporate calling cards was great! It even recevied several awards. But, guess what…That department collapsed once cell phones started to take off. And guess what else? I saw it coming and jumped ship way before all of my co-workers were let go. My previous statement was not to show my intelligence, but rather to prove the point that for most other markets, competition and advancements in technology are valid threats and you (and your wife), if you are concerned, need to stay ahead of it in order to survive.

    IMO, the reason why these sites cannot get off the ground is because of the lock that the real estate companies have on the market via MLS. And the statement earlier about the “demand” for the realtor is true, but now there is demand for something else, but the pioneers are being blocked from meeting these demands. The consumer knows that they still have a better chance of selling their home and buying a new home by contacting a realtor MOSTLY because they know that the realtor has more choices( more customers and more house listings.)

    I was just remembering a time when I was looking at a house that I found on Realtor.com. I called the relator listed next to the listing. I left him a voicemail. I then called another realtor. The second realtor took me to see the house that evening. The next day, the first realtor called me back and said he wanted me to come see some houses that he thought I’d be interested in. I went with him. He then took me by the house I had seen already the previous night. I tild him I saw it already. he was FURIOUS. He claimed that I should be loyal to him. LOYAL? I don’t even know him. He doesn’t even know me. He didn’t even find the house for me!!! He didn’t even call me back for a whole day. I am a consumer who will use whatever resources I have to get what I want. If you cannot give me what I want, that’s your fault. Go find someone who needs you. And there ARE people who will still need you. Just give the rest of us the resources and the option to use these resources without getting in our way.
    Anyway, I’ll end my post with this run on sentence…lol….The drive up movie business is no longer in existence(or rare), floppy disks are no longer floppy, calling cards do not have the market they once did, a significant # of people no longer have a home telephone line, but rather a cell phone, Google has made it less necessary for me to go to the library for small research or to pick up the “Yellow Pages” or CNN and MSNBC has given me less reason to buy a newspaper; Cable modems are putting a dent in the dial up business. The small town pet store, book store, and tool store are rare; and your large brokers no longer own the market of the average salaried day trader…..

    That’s just the way it is. That’s the way it should be. I really hope that the creators of Zillow make this work.

  • http://www.marshallreddick.org steven

    realtors will simply need to keep up with technology… period.

  • Sam

    Yes Real Estate Agents are next, so are Brokers, Mortgage Brokers, Lenders, etc. all next in line for a wave of class action lawsuits when the suckers realize they have been had holding massive debt on garage they cannot sell. LOL its pure theatre watching this real estate fiasco unfold.
    That’s my personal opinion.

    Frankly to bottom line this entire real estate BS. Remember one thing as your average Joe on the street talks about 500K like it’s five dollars.

    “No drug, not even alcohol, causes the fundamental ills of society. If we’re looking for the source of our troubles, we shouldn’t test people for drugs, we should test them for stupidity, ignorance, greed and love of power.”
    P. J. O’Rourke quotes (American political commentator,Journalist, Writer and Humorist, b.1947)

  • http://www.bdov.com Ben Dover

    Real Estate Agent – def – a lying parasitical organisim that has failed at every endeavor and now has one last chance to try to feed themselves.

    Let’s see, after graduating HBS I couldn’t decide: McKinsey, Bain, Goldman Sachs or a Real Estate Agent.

    Bottom Fishing parasites – nothing more or less

  • Steven

    The problem is that people are able to get a license too easily. They can just go out into the Internet and go to such sites as the License Professor to get their license. If it were harder, perhaps that would be better. I had to work hard for my MBA. Only fair realtors do too.

  • http://www.zillows.org zillows fan
  • http://www.bikini-dontwearpants.com Dave
  • http://www.floridarealtyfinder.com Mabelle Sese – Real Estate Agent

    6% Real-Estate Agents Commission Battled..
    Recently, the 6% real estate commission has been under assault. However, the hits just keep coming and are getting more sophisticated. Three Internet upstarts are the latest to take a shot.

    Redfin, which covers Seattle and San Francisco, and coming soon to Los Angeles and San Diego, superimposes for-sale information, as well as recent sale prices on an aerial map.

    Launched in February, Redfin also acts as a buyer’s agent and refunds two-thirds of the agent’s commission–usually 2% of the total sales price–to the buyer. CEO Glenn Kelman said that they had agents write in blogs about breaking our kneecaps,. .

    The second is the PropertyShark , which coverage is mainly New York City, publishes property record data in an online property report. Casual users can receive six reports a day for free; unlimited access costs $250 to $550 per year. Founder Matthew Haines says that when the site launched in January 2003. He said that he really agitated the brokers because they were used to having an information advantage.

    Zillow.com has national coverage. Aggregates information–such as aerial photos, assessed value, comparable recent sales, and lot size-on about 65 million of the country’s 85 million single-family homes, with enough data to peg a value-a “Zestimate”-on more than 45 million of them.

    The site, which is run by the founders of Expedia and Hotwire.com, had nearly three million visitors during its three weeks live in February.

    Mabelle Sese
    http://www.realestatepress.org

  • http://miamirealestate.line.us Tracy McKirk Real Estate Agent

    Agree, some realtors work really hard to earn their commission…In some cases they work but they get nothing at the end…

    It is not an easy job….

    Tracy
    Miami Real Estate Agent

  • mike

    bottom line here is, just like the attorney’s and insurance industries the real estate industry is too big to lose out to us little people. Sure we’ll have more choices with the advance of technology, but you can bet that the real estate industry will change very slowly and in many ways the industry will remain the same. It’d great that people who don’t want to pay for realtors services can skip it if they want to go another route, but this is like saying the flowbee will make barbers and hairstylists obsolete. Homes like cars and hairstyles are not investments they are expressions of who we think we are or want to be. If they weren’t all homes cars and hairstyles would be be for the sake of perfect efficiency – exactly alike

  • Mitch

    I can’t help laughing at all these posts from people who hate real estate brokers so much and think some technology that will be obsolete in 6 months will actually replace a really great salesperson and will net them more regardless of the commission. Sure there are sleazy brokers, just as the internet has created scams and fraud. Been there done that heard it all before. The video recorder was going to put movie theatres out of business when I worked in the film and television industry. In 1999 I was lured away from the television industry with stock options by two different DotComs. One was a travel search engine database of online tour packages launched by a major B2B Publisher meant to be a tool for travel agents. It did help eliminate travel agents but travel agents were order takers for airline tickets and were already in serious trouble. The next one was a B2B marketplace auction for the entertainments industry, backers were Steven Speilberg and many of the major players. They burned through 60 million dollars a month, new rounds of financing every 6 weeks, changed the business model every month, the technology sure was fabulous databases of directors and cinematographers, visual special effects on reels on mpges all on a searchable database online. Clients loved it they said I was doing Gods work. One little problem no revenue stream. I would say to the ceo don’t you think we should be making money. “Oh your from old media once we reach critical mass, we’ll be relevant will replace the intermediaries “the Hollywood Agents” , the production managers everything will be done online. They went down the toilet pretty fast, yes it was fun while it lasted. In 1991 I got my real estate licence. I made my first sale on September 8th, the Friday before the world trade center was attacked. A lady from Conneticut and she didn’t back out and I closed the sale. A few months later I sold apartments in Battery Park which is where the trade center is. I sold an apartment that faced the river and the statue of Liberty with a breathtaking view rather than east facing ground zero. I have since resold the apartments and my sellers love me so much that I saw such an opportunity to buy there when everyone else was fleeing. My sellers made a $300,000 profit in 2 years and also got $20,000 a year from the government for moving to Battery Park. I got them a record breaking price. The highest ever in their building. They were more than happy to pay the commission. Frankly it’s usually first time sellers and buyer’s or novices that are chizlers and hagglers about money. In New York you have to have a lawyer REALTORS are not allowed to write contracts. They use a form from staples show up at the closing and get paid even if the deal fall through. There seems to be this entitlement sentiment from techies that everything is public domain. A listing is the property of the seller, the seller should decide where it is advertised. Just because a website can download the data off another website doesn’t mean they have a right to that content. Is the NY Post allowed to print unauthorized ads from The New York Times in their paper. If you think a database that has some inaccurate or even accurate records of what something sold for is going to replace a good agent your’re dillusional. Knowing what another comparable house sold for doesn’t mean you can get the same price. Markets change there are different variables. It aint rocket science, newspapers have been publishing real estate sales data for decades. What about Domainia The’ve been around and are useless. Most sellers have a pretty good idea of what their homes are worth. Everyone is an expert it’s all anyone ever talks about. New York City the biggest real estate market in the world doesn’t even have a dominant MLS that the major brokerages belong too. Frankly my data is in my head. Furthermore Zippy and Redfish or whatever other little cutsie dot com that will put pictures on a website might work in some markets it will never work in New York. We do things very different here. We have coops buildings the coop board interviews the buyers, they need to see a whole financial package even if the seller accepts an offer the building can turn them down if they don’t have a high enough income or liquid assetts or good references regardless if they can get a mortgage. Anyone with a pulse can get a mortgage. Try presenting a board package in a good building without a broker. Good Luck. Another thing about pictures on a website, great I know how to make a property look a lot better in a picture than it really is. I can airbrush a river view into a picture of a property that faces a brick wall or a garbage dump if I knew someone would be stupid enough to click and they bought it. I trade stocks online, I bank online but I sure would never buy somthing as tangible as a house without seeing it. So basically what it all comes down to is just another advertising vehicle. Big Deal. Next year I will probably be getting 7%-8% maybe 10% when the rising glut of homes sends prices reeling, Too many sellers; no buyers when a three year supply of properties hit the market and have to be absorbed. Any market where there has been a construction boom is going to face it. Good thing I work with alot of buyers because it’s a buyer’s market.

  • http://none Steve A

    Anyone who brings in a buyer and actually sells something for you is worth their fee- in the case of real estate, roughly 3%.

    The problem with RE today is the other side, the listing side. This side also gets 3%, as though the priveledge of ‘announcing’ your home for sale (in MLS) is worth 3% also.

    If there was one website for every town that listed every property available in that town by price range, we could eliminate this 3% listing fee. Then the selling agent would still be responsible for pricing, showing the home, open houses, negotiations, closing the deal. On a million dollar home, $30,000 sounds like enough money to cover overhead, the agents income, and the brokers income- anything more sounds excessive.

    And this is where the battle now lies- with brokers websites currently showing most homes for sale in a town , and the search for property much easier now, people resent the agents for basically driving them around in their mercedes to show them homes.

    Realtors do add value in the sale and closing of a home, but not in the listing and the showing. I predict that technology and consumer revolt will drive the average commission down to around 3%, but this will take some time as the RE (pick one: ‘lobby’, ‘union’, ‘cartel’, etc…) resists.

    The tide has turned though and there eventually will be no way to stop it, only slow it for a while.

    Steve in Ct.

  • Sebastian

    Is it me or is every other person these days a real estate agent. I mean my goodness, where I live in Maryland, every restaraunt I visit is hosting numerous cards of real estate agents. In the mail I get at least 3 brochures of real estate agents telling me they would love to be my agent. Last week, my friend gave me his sister’s realtor card, and the same day my neighbor told me his friend just got a real estate license and he gave me his friends card too. Some one please stop the insanity.

  • John

    OK. You all have convinced me to sell my own house. I want $200,000 but since I don’t have to pay an agent, I will ask $212,000. If I don’t find a buyer within 6 months, I will have to think of something else to speed up the sale because I will have spent over $9,000 in interest for mortgage payments (ouch). I found out that property disclosure forms and lead paint disclosures are required by law in my state, so I will go ahead and have my attorney print them out and explain what I have to disclose and what I don’t, but if a buyer doesn’t come along within 30 days, I will have to print more because that’s the most time the state allows. That’s only $325 and I can stop by his office once a month to get new ones for just a dollar per page. These generic ones for free don’t seem to list the things my state requires, and I sure don’t want to be sued and fined on top of that. I checked prices on the local magazines and newspapers that the agents advertise in (the ones that don’t require advertisers to be Realtors). There are 4 magazines and 3 newspapers, and with just a 1/8 size picture ad, it’s only about $500 per month for the magazines and $165 for the papers. I’m pretty good at learning new things, so I’m going to get a cool domain name and build my own web page. I’m reading that if you pay the big search engines a couple hundred bucks or something, they can have your site in their search results in less than 90 days. I have already arranged to be off work for up to 5 hours per week so I can run home and show the house to prospects, and the loss in pay will only be $175 per week. Since I will be out of town a lot setting up for my new job, I am thinking of adding a security system and update my insurance because around here, FSBO houses for sale get broken into a lot, especially if you show nice furniture in the pictures. It’s only $2,300 and will allow me to raise the price of the house to $214,300. My buddy is going to stop by every couple of days to check everything and turn off and on some lights. I’ll slip him 100 bucks a month or something. My answering machine will hold up to an hour of messages, so I won’t lose anybody calling to ask questions. It should only take me an hour, 2 tops, to speak with everyone when I get home from work every night. I wish there was room in the ads to put all the things like you find on those MLS sheets agents give out so I wouldn’t have to answer a lot of dumb simple questions for a ton of people, but it just costs way to much for that kind of space in every ad. You all have scared me a little talking about buyers who say they have money but turns out they don’t. I will just ask them all to run down to First Union bank and get a qualification report before I allow them in the house. Surely they won’t mind, and the lady at the bank does it for free all of the time. My attorney said that our state has purchase contracts that are a lot different from other states, and that I better make sure that every little detail is covered or I will wind up in court over some piddly thing that was left out. He said he only charges $360 for typing them up for a buyer, so I’d feel better about the whole thing if I required them to use my attorney if they want to buy my house. I’ve been thinking…. It might be easier if I just took some classes like the Realtors take. If the thing looks like it just won’t sell, it would only take me 6 weeks to get a real estate license, and that only costs $650 at the local real estate school. Then I can join the board of Realtors and MLS, which they said is only $1,430 for the first year and 125 per month for MLS dues. All those extra things you see the agents have aren’t necessary…cell phone, pda, wireless mls, fancy car to drive people around in, all those GRI, ABS, blah, blah, blah, Insurance, blah, blah, that take forever to get the classes over with and would cost a fortune, and Chamber of Commerces, business cards, etc. I just won’t need them. When someone calls about the house, they can just leave a message on my machine if they are serious enough about buying it. I figure it would only cost me somewhere around $20,000 for expenses and lost interest, time off from work, etc if I can find a buyer and get the septic, water, termite and Radon inspections done, and get it closed all within 5 or 6 months. That will give me $194,000 if I can get a buyer to bite at full asking price. I don’t like to haggle. Sure would be nice to know what my house should really sell for without hiring an appraiser. Anyway, enough rambling. I think selling it myself is way better than giving an agent 6%, the dirt bags!!!!!!!

  • John

    ….Oh!, I forgot the most important point in this blog. My 2nd cousin’s sister-in law’s brother’s friend used one of these new online real estate companies to help sell her house. They sold it in just 1 day, and she got $50 more than the county has it assessed at! They even showed her the official county tax document that said what her property was really worth. Amazing! Ya know, I called a real estate agent one time and asked him for his opinion about my place. He came out and looked it over, measured some things, and then went back and printed out a bunch of papers from his computer. When he came back out, the price he suggested was less than I have in the place. It’s a good thing that his opinion was free! I must get a lot more money for my house because it has special panelling on all of the walls that I had put in back in 1972. The labor costs of today would be over $20,000 to do the same job. Plus, I can account for over 5,000 hours of work I have put into this place over the last 75 years. What the neighbors are getting for their homes is irrelevant to me. If I had to choose an agent, I would not choose one that sold a Billion dollars worth of properties last year. Big deal….If he can afford to pay 5 assistants to do his work for him, and have all of those 3 letter designations after his name, he has enough money already. I would choose one that doesn’t have a giant ad in a color magazine because he/she might be hungry, more knowledgeable than the big shot with 5 assistants because he/she just got out of real estate school, and it’s more likely that I can talk ‘em down 2 or 3% off their commission. All real estate agents should be the same, just like mechanics…right?? The only difference is the price they charge! If an agent didn’t find a buyer willing to pay my price in 6 months, it wouldn’t be good enough that I didn’t have to pay him a dime. He should have to pay me all the money I have lost in house payments, plus more for all of the stress that I went through from him bringing me offers for less than what the price is, and calling me during dinner to ask if he could show the house to someone that is in town just for the day, yeah right. That would just be unethical, and I would report him to the Board of Realtors, State Real Estate Commission, and sue him for my time he has wasted. I would make sure he doesn’t have a license or a penny of money left to ever do business again. It would make me so mad that I would take out ads in newspapers to tell the world what bad things he had done to me. If someone saw the Realtor sign in my yard and came up to me wanting to buy my house for more than I would get after paying the agent, I would just keep it quiet and let the listing expire. Then I would get a contract drawn up for my buyer. After all, the agent didn’t do anything for this buyer and doesn’t even know his name, right? He just came to me directly so I don’t owe the agent a dime! The next guy can pay him. That’ll be plenty enough to cover the work he did for 10 houses, even in a slow market and only 1 sells! Yep……I’m surely going to sell my own home!!!

  • http://aaronoklahomarealestate.com aaron

    And when you get sued,,i assume you’re going to represent yourself in court too right ? after all — the law is just WORDS ? ! right ? i mean ,,all you do is go into a COURTROOM,,,hell ,,why do Attorneys charge so much ??? i can talk to a judge,,,

  • http://www.miami-realestate.net Tracy – Miami

    John,

    “OK. You all have convinced me to sell my own house. I want $200,000 but since I don’t have to pay an agent, I will ask $212,000″

    I think you need to ask 12K less not more since you are saving that money :)
    On your calculation, you save 12K by not paying to an agent, you charge 12K ..and you end up making 24K :)

    Tracy

  • John

    We can stereotype any profession, however we all know there are great performers in every field who provide tremendous value. As a Broker in the business, I agree that most agents do not do what they say they are going to do. If an agent really does his job, the liability he/she assumes is huge and the work and emotional dealings that occur throughout a transaction require a true professional.

    The “hard” working agents will not only survive, they will receive high grades which will reflect by the income they earn. Zillow will pick up the consumers that unfortunately had a weak agent experience. This coming down market will weed out the low and non performers.

  • Why Use Agents

    Why not just go to an agent and ask why you should pay them that much? If the can’t give you a long list, chances are they aren’t going to work hard for you. Also, ask why it would be better then doing it your self. If they come up with some stuff you didn’t think of, then hiring them might be the better way to go. Besides, everything is up for negotiation. And if you want to pay less, then the agent will either walk away or offer some discounted service.

    And the sales prices are determined by the buyers and sellers, not the agent. It’s compared with what others house sell for in your area. And do you really want to have to go to the court house and look up restrictions and what ever else that buyer wants to know, be there for inspections (and those buyers can have LOTS of inspections) and then loose your deal because you didn’t have something in place to protect you from the $1800 termite treatment that the mortgage company demands? Let’s face it, for most people, if they can’t get a mortgage, they can’t buy your house!

    Bottom line: do your research, do what you feel comfortable with. If that means having an agent do all the dirty work for you-go for it! If you like to be hands-on and handle it all on your own-go for it! Some people do like to handle it alone, and do a great job. But only you can decide if having a professional in your corner is best for you.

    BTW, discounted brokers around here do offer MLS services, but only if you pay additional fees to be in it, and then you have to offer some kind of payment to whoever sells it. So what are you really saving?

  • http://www.siestakeyrealestate.com Troy – Sarasota

    John,

    I totaly agree with the following comment – “We can stereotype any profession, however we all know there are great performers in every field who provide tremendous value. ”

    There will be always good and bad agents.. It is consumers duty to differentiate them…

    Troy

  • http://www.ggigi.com AGENT 24/7

    As an agent I must say we do earn our commission. For the one person that we may sell a house so quickly it offsets the buyer who has dragged us out for no kidding 75 to 80 houses in a year! Count gas, time, mileage, and when that person buys a FSBO after all that it’s disgusting. NO Thank you. NO I’m sorry but… Just Oh I bought a fsbo.
    Please remember we are 1099. no insurance, no salary it’s all on our own merit. 24/7.

  • http://cyberrealtor.typepad.com/ Teresa Boardman

    The problem is that realtors are all self employed. Anyone can be self employed but most people can’t handle it and can’t make any money so instead they sit sround and talk about how to replace realtors and about how much money a realtor makes.

  • http://www.sarasota-realestate.biz Sarasota

    It is all up to you to either use or not use an agent.. I know some real estate agents work very hard for their clients and they and up being betraied by their clients…

  • Denise

    I’m a full time, full service Realtor for over 7 years. I work damn hard for my money and love every minute of it. I came from the corporate world earning a great guaranteed salary and for the most part had a start and end time to my work day with weekends off. Not in real estate. Nope, no one’s handing me a pay check. No 401k. No benefits. No paid vacation time. No, I never really get a true day off. My phone starts ringing very early in the morning and often rings until late at night. I have clients who will call after I’ve gone to bed and am sound asleep because they need to talk about their real estate transaction. People need their hands held during the entire process. Does Zillow, Redfin, or PropertyShark do that? Can you call them up at 7:00am to ask if the window treatments are staying with the house? Or perhaps call them at 11:00pm to find out if that great John Deere riding mower is going to be included in the sale because hey, that’s a valid reason to wake up your Realtor, right? And aside from us agents guiding buyers and sellers through the nightmares of underground oil tanks, asbestos, structural damage, water problems, radon, etc. Is Zillow going to tell you that that house you want to buy is in a Superfund site where dangerous chemicals have contaminated the well water? Or that the house you love was built on a landfill? Or perhaps that there are approved building plans for a big chemical company to move in that large vacant lot next door to the house your just dying to buy? Real estate agents do much more behind the scenes work that buyers and sellers never see and we have legal duties that encompass much much more than you realize. Those of us who do our jobs well, protect peoples interest, and truly care are worth every penny. I happen to believe FSBO’s and listing agents can co-exist………….but if you’re a FSBO buyer, who’s watching out for you? If you don’t know what you’re doing and are relying solely on an attorney to protect you, do yourself a favor…..hire a buyers agent. Final word: good agents are here to stay because there will always be financially intelligent people who will pay for our services.

  • http://BuyersLighthouse.com Kathleen Culley

    In response to:
    ” I’d love to see someone start a concierge service to do this (and many other tasks): They don’t market or sell the house (hell, real estate agents don’t really, either) but only schedule appointments and accompany prospective buyers.”

    I run an Exclusive Buyer Agency as do many others located throughout the US. Most of us belong to NAEBA (National Association of Exclusive Buyer Agents). We do more than schedule appointments and accompany prospective buyers. We write the offers, negotiate, attend inspections, educate the buyer thoroughout the process and follow through until closing. We never list homes for sale. The Buyer receives 100% representation at no cost to them in most situations.

    We are located in the St Petersburg/Clearwater/Tampa area. Visit our website to find out more.

  • Grant Gabriel

    First real estate agents are not professionals. They need a high school diploma and must pass an exam slightly easier than the driver’s license exam. They also, of course, must be able complete “fill-in-the-blank contracts. These hardly compare to requirements of real professionals.

    They have desperately attempted to protect their anti-competitive behavior but the Department of Justice is clearly on to them and we will see a steady increase in both consumer awareness of and embracing the “rebate” model. The referral “dot coms” to get a foot in and thankfully they will take over a major share of the market altogether.

    Nevertheless, in litigation the self-laudatory comments submitted by the NAR in response to DOJ’s anti-trust lawsuit may be useful to hold them to a higher standard when they drop the ball on any given transaction.

  • http://www.DowellTaggart.com Chris Dowell

    If it is so easy and real estate agents make so much unearned income, why aren’t you doing it. I’m mean easy money right? Yo sound just like a newly licensed agent who is going to change the world and 6 months into it you find out how hard you need to work. 90% of new agents leave the business within 2 years because they think it easy money. I’ve been in real estate 18 years and have had to deal with about every situation. I bet you couldn’t last 6 months in real estate.

  • Pingback: BuzzMachine » Blog Archive » Death to the 6 percent

  • Denise

    Everyone looks at the 6% commission differently. Perhaps it’s best to speak with investors who regularly use real estate agents to help build their investment portfolio’s. They’re not complaining about my 6% commission, in fact, they tell me all the time that I’m worth every penny. I’ve helped my investor clients build their portfolio’s with some very lucrative real estate holdings and let me tell you, they can’t thank me enough. They are professionals who don’t have the time to hunt down deals and handle everything themselves. If you don’t see the long term value in paying 6% for this service you’re an idiot.

  • JB

    I’m in the process of listing my house… I’ve worked in the technology side of the residential real estate industry for 16 years, so I consider myself an “expert” in the way the system works, although I’ve only bought three properties and sold one.

    In preparation for selling my house of the past 8 years, I “interviewed” three re broker/agents. I asked them all for a “market analysis” and recommended listing price. The swing between the high and low listing amounts was $95,000!! Low end $580 and high end $675K.

    I truly believe the broker on the low-end “specializes” in convincing people to sell their house for less than market value… he and his staff have been putting the full-court-press on me since day-one. I plotted the “comps” on his market analysis in a mapping program, and they were ALL outliers (distance) compared to the comps listed by the other two! His “comps” are all dumps compared to my place.

    I thought “what the fuck?” Then I remembered, a broker makes money off the DEAL… his/her incentive is to make the DEAL happen… the financial difference to the broker for a “good” versus “bad” deal is most often negligible.

    Always remember where someone’s bread is buttered… the re agent is not looking out for you… he/she is looking out for “number one.”

  • chuck

    I have some direct recent experience with this process as a DIY guy.

    I helped my Mom sell her house, it sold for 610K. We ended up selling to someone we knew. I did go through the process of cleaning everything up making very nice info sheets etc. I spent less than 40hrs of work in the process and most of that was researching the price, repairing things and dealing with inspections and the escrow process. The total PSA + escrow price was $1300. Note that the lawyer and the escow work on fixe price.

    We just recently bought a house for 540K with no agents on either side. I spent at least 40 hours of time studying the market, looking at houses and listings (much of it using redfin). Redfin rocks! The home’s zillow number was 560-740K. Did we get a good deal, no a fair deal, since the house was very run down. In the end a very simple transaction costing $1500 for the escrow (divided by two of course).

    My complaint about zillow is that the day our purchase price showed up on their site I expected the price to come down (and perhaps the neighbors houses too), but there was no change! A July 06 purchase for 540K still shows up as being valued at 560-740K! That seems totally out of whack since they have information that says a buyer/seller agreed to terms within the last month. That 540k purchase price should have been the midpoint of the range…

    In the end zillow is a great starting point and a great way to track recent purchases (since they have the actual sale price). Do your homework though, the zillow number is suspect anywhere where there is great variation prices (e.g. nice new neighbor hoods very close to older neighborhoods). The house we moved out of was in a cookie cutter development and the number was VERY accurate.

    Everybody is different on utilizing this technology but for me it came down to me wanting to understand the RE process. The Internet tools + a modest amount of time (40ish hours) made me feel that my number would easily be inside of the 6% ‘margin’ of using an agent and for me with the big advantage that I ‘really’ understand the process.

    A few things I’ve noticed is that the RE industry is putting lots of FUD into the process making you think you will leave a lot on the table, or have to deal with BS, here are a few tips:

    1) Use zillow to do your own comps AND check them out. Look in person, at selling houses to figure out the price your house of interest. If you aren’t sure, have it appraised by someone who actually looks at the property. I had a mortage broker to an ‘appraisal’ for me to see if I qualified. An hour later they had an answer. Obviously they have an internal tool like zillow, but have no way of knowing if I have perfect landscaping, new paint, granite counters and a turnkey house, or a dump.

    2) Have the house inspected as a buyer or a seller. Most won’t agree with the seller inspecting their own house but it made things easier since I knew exactly what the issues were. This cleans things up AND limits another round of negotiation since issues were taken care of, or disclosed in the asking price. Had the seller of the house we bought done this (and found out his decks were all rotten) I’m sure he would have gotten more out of me since I negotiated down.

    3) Know the process, mortgage, PSA’s, escrow, inspections, septic etc. It isn’t complicated, there are just many steps.

    4) Know that agents can maximize their income if they make you feel good about the transaction AND they turn it quickly. I’m not saying they are unethical, just that the incentives are such that this is the natural outcome assuming that agents work to maximize their income. How would the industry work if the commision was the difference between the selling price and the appraisal?

    5) If you are a seller you must be honest if you want to avoid legal issues.

    6) These experiences were for ‘local’ purchases so I knew the local area, having lived there for 30 years. If I were relocating it would be much more work. The use of an agent would be more likely.

    Good luck!

  • http://www.holly-hill-real-estate.com/ Rita

    Real Estate agents have good holds but in case Of MLS that do not have good hold!!!!!!!!1

    By
    Rita

  • Hill

    I was look on real estate site and on http://www.holly-hill-real-estate.com/ i found good information for a home and the information is nice. The one thing lacking are Photos and or Virtual Tours
    Most people don’t call an agent when they first start looking for a home. They start on the Internet and most go to Realtor.com. Then they call the listing agent or seller.

    Put yourself in the buyer’s shoes when it comes to the Internet. Do you think they aren’t going to click on that little box that says show me Virtual Tours first? They will and do.

    I see so much money wasted on News Print. What do you think a home seller will want more? Ask them this the next time you go to a potential listing. “How do you want me to market your home? I can put your listing in front of most listings on Realtor.com and in front of millions of potential home buyers by doing a Virtual Tour or I can spend the same money for a 4 line ad in the local paper.” I am not saying News Paper Advertising is bad but that’s all you “aged agents” know how to do outside the MLS.

  • christopher credit

    As a recently licensed california real estate agent i can, with all sincerity tell you: agents are not at fault for the current economic/real estate miseries and woes. Look into it. Google: economic rape of america, the federal reserve bankers. Beyond that i can tell you that mortgage banking and housing investment done by syndicates (a mutual banking and investment collaboration scheme) has been an incomparable ripoff/economic rape of the american people- there are many professed “experts”, who are willing to say whatever they want you to hear, regardless of the real truth, as long as it profits them. The fact is that these same nice folks are often vehemently opposed to the real truth. why? you may ask. Because the real truth is that there are many simple solutions to seemingly insurmountable problems, such as truly affordable housing for everyone, but these same solutions are a conflict of interest to those who are profiting off the problems. Look into it… it’s ok to think. Think a lot. Think about deregulation of rent control and how such practice encourages those willing to economically rape america… that’s you, your children, myself, and my children. i love you all.

  • wes

    What a bunch of whinners!!!! Services is Services. I don’t care if it’s on-line, or agent. Reading all the above is funning to me. I wouldn’t want to deal with at least half of you, If you didn’t have something to complain about your life would stop.
    All I’ve read above, is there is no perfect way. The internet sounds like your taking a chance, Here’s some beach front property in AZ. I get there is alot of agents that don’t work the work for work, they are working for the money, not having money work for them. I don’t care what business your in, (life) you can do your best and one situation will change everything. We are human beings, there is no way in hell we can be perfect, internet/re agent. I hope the general public reads all the above and can make what feels right to them, and they feel served. Service/Service/Service Now all, complain, look at your life, your not only complaining here!

  • Sean

    With all things being said, everyone wants individual attention and the need for customer service will always be present. Realtors will always be needed and commissions may decline a tad but there will always be the need for the one-on-one interaction between Realtor and client. The online tools may help some but not the majority.

    Zillow does not give a good representation for market values either. Being a Realtor and an appraiser, I know how to determine market value for my clients and it is not a simple mathematical approach. Zillow values my house at $433,468 currently and by no means could I sell it for that, especially during the markets adjustment period we are going through. Online tools are just that, Tools… They are developed to HELP the consumer and not necessarily be relied upon for large financial decisions. This is what buying a home is, right?

    Therefore, Real Estate agents will always be needed, but the customers will have more tools available to help them with their decisions. This will cleanse the industry of agent who don’t know their trade and lead to better agent training. Just my 2 pennies.

  • Jorden P.

    Hello, I’m Jorden I’m just wondering is it possible to really make millions in real estate because my dad really has his heart set on this and if he doesn’t he doesn’t
    know what to do, someone E-mail me please

  • Dianne B

    Question: Are real estate agents allowed to list property in States or Countries were they are not licensed?

  • Leslie

    Diane,

    In the states, agents or brokers have to be licensed to sell real estate. Some brokers hold licenses in multiple states. There are international brokers, but the laws vary widely from country to country.

  • Micah

    Is this Fred guy really a writer? I think we all would like to save some money and headaches. NAR studies have shown that many agents actually save sellers money. Here’s how:

    1) Most sellers are willing to give an agent 3% if they bring them a buyer.

    3%

    2) Really good salesmen can get a seller an average of 97%-99% of the asking price. The bottom catagory sells for 94%-96% (most sellers would fit into that catagory.)

    Let’s say another 2%

    3) Add $100/wk in advertising over 60-90 days

    Add 6/10% for advertising

    4) Attorney fees ($500-$600)

    Add 3/10 of a percent to be conservative.

    5) Once you decide to sell your house, every month you hold onto it, it costs you 1% in terms of mortgage, no return on equity, taxes, insurance, utilities, and maintenance.

    Good agents sell homes in 90 days (michigan) and the average sells in 180 days. That’s another 1% in terms of time to get your house sold.

    6) The time you spend on open houses at your hourly rate…you can do the math on that…and we get 3%, 2%, 3/10%, 6/10%, 1% + your time involved….and we get about 7.5%.

    There are good and bad agents out there but no doubt the good ones add value. The key is finding a good agent to represent you.

    Peace!

  • BW

    The real estate broker that is supposed to be helping my process of buying a house has lied to me (did he not know that I’d find out??) and has basically faxed a few documents and bothered me with pointless phone calls in order to earn his cut. When I encounter a broker or agent that treats me with respect, I’ll change my mind about them.

  • Micah

    Sorry to hear that BW. The fact is I am an agent and there are a lot of other agents out there that I would not want to represent me. The key is finding one that you trust. Just because one dog bites doesn’t mean they all do.

  • Mike the lawer

    Sure, get rid of the Agents….I’ll just make MORE money off the homeowner! Yup, without full disclosure and a realtor pointing out the issues in a property the buyer will have that starstruck look in his eyes as he sees his “dreamhouse” through rose colored glasses. I’ll get more legal fees when the suit for fraud or failure to disclose gets filed. Everybody wants to eliminate anybody whose job they think they can do better, including lawyer’s jobs. I say, “OK, do it yourself.” This isn’t Home Depot territory here, if you screw up on a buy/sale you can’t just fix it for a couple of bucks. I love this do it yourself attitude; sooner or later we lawyers get called in to clean up the mess! LOL

  • Micah

    No question Mike. I might be able to perform surgery on myself..may or may not survive the night though. You can drive a car with your feet if you want to, that don’t make it a good freakin idea!

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  • DS

    I am beginning real estate classes this week, and looking online for any information regarding the selling of real estate. I’m pretty sure I don’t want to be a realtor right now in this market – I haven’t saved enough to go without pay to get started! But, am very interested in the field – escrow, loan officer, etc…. I looked up my old house on Zillow and the price is exactly what I sold it for. The last 2 houses I bought were brand new so I have never had to deal with a real estate agent, just the builder’s agent & was very happy with both transactions. It was pretty painless. It is enlightening to read the two sides on this site, the successful ones are probably worth their commissions for people who don’t understand much about the process.

  • dan

    I love the realtwhores who represent both clients, they are the listing agents and buyer’s rep. Now that is cool. But how do you ask the non educated PROFESSIONAL, who supposedley is working for you and who allegedley knows the market. “how much is this property worth” and “how much should I pay for it?”. They can’t answer because of ethical considerations. Well what are they good for? Where’s the value added.
    Tell me they don’t sit on their asses and let the mls sell the property, then dutifully fill in the blanks of the boilerplate sales agreements. As far as the dumbass lawyer in remarks on 1/29, hey I’ll just go to you right off, (how many times have you heard a realtwhore say “I can’t give leagal advice”) and save my self the trouble of even talking to an agent.
    Also any one who pays 6% of the total selling price is not smart. The commision is negotiable, 6% for the 1st 100k and 1 or 2% for the rest is good enought for these do nothings.

  • Efxman

    I’ve had to work with you bastards on a daily basis for your insipid websites during the last 2 years and loathed every bile-churning minute of it. I’ve never met more ignorant, high maintenance people in my life!!! You’re all so stressed out, I’d say you could give air traffic controllers a run for their money,but that would be in insult to Air Traffic Controllers. Fortunately, I have a life outside all this where I can leave the Realtors behind and deal with real people again. I have this to say.

    Fuck you, you miserable, stupid, screwed up, uptight, joyless, mongoloid, Real Estate twits!! Is it possible for you to actually read or listen to anything given you by clients or colleagues so you may actually learn something, or have your television addled, comatose minds simply squeezed out any potential for new information to be introduced?!? While you enjoy the monetary benefit of your chosen profession, keep in mind how very brief it will be. Once your market totally collapses and you’re left contemplating how to best end your existence after completely alienating everyone who once had respect for you. How about instead of continually bothering the poor individuals who have to endure your inane bullshit on a daily basis, you do us all a favor and drown yourself in the foundation cement for one of the homes you sell. You are a worthless waste of air and have no place in this world. Once all your clients wise up and realize they can handle every aspect of home sales on their own, your existence will have been for nothing. Your only contribution, keeping the ditch diggers employed. Never forget the “little people” who make it possible for you to get 6% commission on a 2,000,000$ home. That although we may assist you. We may answer your questions. We may even pretend to care. We all hate you! We wish you nothing more than unhappiness, despair, and eventual suicide, due to your failure to behave as a decent human being!!!
    Pray we never meet on the street. I’ve got a storehouse of hate to unload on you!

  • Micah

    Wow….lose the animosity EFX. You knuckleheaded bitch! Where do you get off acting like real estate professionals are the scum of the earth? You probably have a few of them in your miserable extended family. I think that if people really wanted to take on the task of selling their home themselves, there would be no market for us. Remember that a lot of people try to sell their homes themselves before coming to us…so they must see some kind of value in it. Your words are truly discrespectful to those of us who really enjoy what we do..and make a lot of sacrifices doing what we do. Go ahead…rip on the doctors, lawyers, or anyone else that provides a service in this country…we’re all here to stay.

  • Efxman

    That a glorified salesman can compare himself to a noble profession like a doctor, fireman, school teacher, or lawyer(well maybe not lawyers) makes me nearly fall out of my chair laughing myself silly. You have no justification for what you do. You’re all greedy monsters who care only if it means closing escrow. Kill yourself, kill yourself, kill yourself!
    Thankfully not a single soul in my family(extended or otherwise) Is involved in your (cough)line of work.

  • Micah

    That’s really shallow! Interesting that you judge the character of millions by the line of work they choose. Just like any other job…there are agents that really suck at what they do and I wouldn’t trust at all and there are some that I know that are well-respected in the community, give back, and care about others.

    If you hate our industry then don’t work on our websites and go be the head cashier at Wal-Mart!

    See you in line!

  • Efxman

    Thankfully, I’m nearly done with this nonesense and will be rejoining my fellow Animators. I can’t wait to give your industry the finger and leave all this behind me forever. Only a few more weeks of “pretending to be nice to people who don’t deserve it” and I’m outta here:)

  • Guy

    I am currently in the process of creating a comprehensive site for FSBO. I don’t want to get into specifics right now but I would greatly appreciate it if some of you that support the FSBO concept could write a one time article for the site. To add my site charges nothing, not to the seller nor the buyer. If anyone is interested please email me at torontofever@hotmail.com : title: Article(s)

    Obviously nothing vulgar, but be creative, and I appreciate personal stories, opinions, links to news paper articles, and academic journals. This would help speed along the content part of the site.

    I believe that there will always be a place for real estate agents, but not nearly the amount that exist today. What adds value is the appraisal and mls. I hope to compete with mls, and appraisals well I don’t believe software can compute it simply and accurately, but there are a multitude of different ways to get an appraisal. ie. Getting one from real estate agent.

  • Guy

    I thought I typed in a thank you, to those considering and willing to add content in the form of an article. I would greatly appreciate it, and would allow us to keep our retention rate high…
    THANK YOU

  • Micah

    Wish you the best of luck EFX.

  • C-Springs

    These virulent assaults on realtors are really misdirected, if often understandable; but the truth is that the complainers need to understand reality.
    1) Yes, many realtors are scumbags. Salesepeople in general lean that way. So do politicians, school administrators, newspeople, etc. In essence, lots of people take to lying to make a living, instead of representing thinhs honestly.

    2) Realtors generally bust their asses, work long, ridiculously irregular hours, and rarely know where their next paycheck is comom=ng from. Competition is fierce as hell, and buyers and sellers are often a fickle lot-as is their right to be, but none the less.

    3) Most realtors fail, outright. dead broke, losing thousands, and it is a hard road.

    4) 3% before splits with brokers is a lot on high priced homes in very hot markets (when an agent has put in the considerable time to have a lot of customers), but 3% is chicken-feed in a slow market, with a glut of agents, when there may only be a few sales a year. Even top agents can suffer 50% 0r more income losses in bad years. That would drive a lot of people to complete despair. It’s all high and mighty to judge realtors from afar, but walking in their shoes is NOT easy. About the best thing a realtor has, is relative freedom…to starve, if they don’t strictly manage themselves. Most employees have not a clue what that’s like.

    5) Within ONE YEAR of licensure, about 80% of new agents are gone…not even a chance of making a living. Within a few years, over 90% are out of business. Sorry, mr/mrs high and mighty, those odds alone justify a high standard of living for those strong and skilled enough to survive.

    6) There are a few honest brokers out there. My Parents were wonderful people, and their clients loved them. They were honest as the day is long, and they worked all the time. I have struggled to make it in a business that has grown unbelievably crowded, costly, complicated, legalistic and stressed, since my folks retired. It is almost impossible to make it in this business with anywhere near normal expectations of what work is. Mr/mrs high and mighty pooh-pooh realtors based on their personal peeves, but they fail to understand or acknowledge what the other end of the business is like.

    7) After the 6% becomes 3% for the individual agent, and after either hefty desk fees ( sometimes exceeding $12,000 a year!) or splits of 10%, 20%, 30% or MORE to employing brokers, realtors often spemd in excess of $1,000 a month for marketing costs alone. Adding it up, Sherlock? But wait, there’s more! Gas, O&E insurance, Realtor Association dues, Lockbox/Technology dues (all mandatory to function). Hefty auto costs beyond gas.
    And the ultimate kicker? T-A-X-E-S. How about taxes in excess of 30%!
    So, for the cream of the crop realtor, who grosses over $100,000 a year, there might be a net of around $50,000. That, for an indeterminate schedule, the need to respond anywhere, anytime, and the sure bet that n othing is sure?
    You bitchers have no doubt paid a lot to sell a house . I agree it sucks, on the face of it. But those realtors you worked with-scumbags or not- most likely busted their butts-and bounced out of the business anyway.

    No wonder realtors bristle at sites like Zillow. But the fact is, as a homeowner, seller buyer, investor-and broker, I KNOW from broad experience that a good broker trumps any cut-rate service. Real estate these days is terribly complex…at least it is riddled with landmines that blow up indiscriminantly, often years after a sale. An ethical, compotent realtor can diffuse many of these, and shoulders a lot of responsibility that virtually ALL home buyers/sellers have neither the skill, patience, fortitude, or desire to take on. Afterall, they have jobs already. You get what you pay for.

  • Micah

    Nice paragraph C-Springs! Most people just don’t see where the commission goes. They think the listing agent takes 6% home with them for putting on a lockbox and putting it in the MLS. HAHA. My desk costs are at $14,500 right now and go up every year! I’m 25 and work with many elderly agents that do this for a hobby…some in my company are very successful though.

    Jeff Jarvis is an asshole.

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  • http://www.jbprealtygroup.com JBPRG

    C-Springs said it well… I’ll add that many Realtors are not full time, but nearly all of the full time professionals I know work their butts off. Yes, I said “nearly all”…

  • http://www.vaspersthegrate.blogspot.com vaspers the grate

    Real Estate agents tend to be lazy, unimaginative, greedy, and inartistic.

    When both agents, representing the bank and the buyer (me) left a blood stained mattress in the livingroom and tons of garbage in the house and garage, and let the weeds run wild and ugly…they are like I just said.

    To succeed in a consumer smart world now, agents have to shell out money to help buyers sell old house and move into new house.

    Curb appeal, paint, and carpet are what agents should focus on, and use the web to collaborate faster and more effectively with buyers and sellers.

  • http://www.vaspersthegrate.blogspot.com vaspers the grate

    “Micah” is the worst kind of clueless troll, the pathetic webless wonder, the Anonymous Troll who uses blogs to bash bloggers and is too cowardly to embed a URL in their name.

    Anonymous comments have Zero Credibility.

    Coward troll.

  • Will

    Hmm, I’m not convinced the internet is the place to sell a home.

    I placed several of my rental properties up for sale on Zillow and never received a single call from any of those listings. I advertised them in the paper, and received one or two calls a month on some of them. I advertised in those “For Sale by Owner” magazines and had the same results.

    After 4 or 5 months, I got a buyer for one of them. Saved myself 6% in commission on a $100,000 house ($6000). But, the house was empty for that 4 or 5 months at about $800 per month. Then, when the house closed, I wound up paying prepaids and closing that costed me another $8000 because the buyers had poor credit and the lawyers had stiff fees.

    Of course their lender or lawyer didn’t let me know that in advance. The closing should have been about 4000, but because of my own ignorance, and the lawyer, buyer and lender taking advantage of me, I lost all that money. Then to add insult to injury, the buyer moved out 2 months later. Guess who got refunded prepaids I paid? Not me…the buyer. Walked away with about $2000 of my money.

    Well, a couple of months later, another one sold after being on the market 6 months. Of course my insurance got cancelled for it being empty so long, and I had to go with insurance that costed me 4 times as much, costing me major bucks.

    Finally, I gave in and listed with an agent. Most all the properties sold within 60 days and my agent caught several mistakes the lenders and lawyers made that would have costed me bucks. Additionally, I was getting 2 to 3 calls per week on most of my homes, and I didn’t have take time out of my busy day to show my homes. Some of the homes even had multiple offers, something I never experienced with a “for sale by owner”.

    From what I understand, agents have to adhere to certain laws and standards in order to remain licensed. Those rules are apparently fairly strict in my state. However, lawyers can remain licensed unless they do something grossly illegal.

    I’ve researched and found mortgage lenders do not have to be licensed nor do they have to stick with any standards, particularly internet lenders. I had a friend who paid $7000 in mortgage fees for a $250,000 home, and had a huge 2 year prepayment penalty tacked on.

    If there’s anything in the market that needs to be fixed it is with mortgage lenders and lawyers. The fees they charge for what they do are ridiculous. For example, they have one fee called an “express mail off fee” they charge $75 for. Another fee I’ve seen is a “fax” fee, which is $25. I’ve even seen some lenders charge a 1.5% mortgage brokerage commission on top of the 1% origination fee. At least we know what real estate brokers are gonna charge up front.

    As for me, I’m sold on my agent. Until the internet proves effective at bringing buyers for my properties and is able to effectively handle abstract situations, I’ll continue to use my agent.

  • Micah

    Yeah vaspers…I read your page..glad you’re not an athiest anymore and Liberal, well…depending on how far left you are you represent 15% of the population. Congrats!

    Last time I checked, it’s not the agent’s job to cut the weeds and take out the garbage in houses…unless it’s stated in the contract.-which I’m assuming it wasn’t. Sorry for your bad experience but we’re not either a gardner or cleaning person.

    What’s up with you and trolls? You live under a bridge don’t you?

  • Scott

    When will realtors realize that home owners are selling their homes and NOT THEIR DECOR. The first thing they do these days is to critize your personalization of your home. That’s what “home owners” do! Until realtors allow me to come into their homes and “critique” their personal decorating skills – they can keep “their” opinions to themselves. I have a wonderfully appointed home with very nice furniture and it’s clean from top to bottom, and is structurally very sound.

    I would suggest to every seller out there that the first question they ask of their respective real estate agent is – how do you feel about the overall appearance of my home – inside and out. Unless you find a realtor that can get past “decor” and sell your “home” – do yourself a favor – and find another agent.

    And, above all, with the RE market in its current shape, do not cave in to lowering the price of your home unless you absolutely have to, and to not offer buyer incentives such as paying “their” closing costs, or offering up $2,000-$5,000 realtor incentives. If a possible buyer can’t afford to buy your home then they can’t afford to buy your home – PERIOD. And in this RE market when the only buyers are “all cash” buyers because of the mortgage crunch, every realtor out there is going to find themselves looking for a “real” job. Ask yourself this – when was the last time your employer paid you a $5,000 incentive just for doing “your job”!!!

    And as a footnote – do not feel obligated to use the same realtor you used to buy your home when it comes time to sell. You’ll find that realtors treat a buyer one way and a seller entirely different. Do yourself a favor – and ask all the right questions of your realtor. Find out how many clients they currently represent, how many homes have they sold in the past 12 months irregardless of the current market situation, and above all – are they currently selling their own home! Because if they are – you know where they will be directing potential buyers FIRST!

    Bottom line – don’t be BULLIED by real estate agents for any reason – especially in the current market place. Why spend $15-30K on upgrades when you’ll still be taking a $50K cut in price??

    Common Sense Here!

  • Micah

    I agree with a lot that you are saying Scott. It’s is very important to ask the right questions to an agent and make absolutely sure that they are representing your best interest. Also, if you are buying a house…see you your friends used and if their agent did a great job and went the extra mile then it would be wise to consider using them as a buyer’s agent.

    One thing I respectfully disagree with, however, is keeping our opinions to ourselves. If I told sellers what they Want to hear as opposed to what they Need to hear, their houses wouldn’t get sold. If I have to tell a Seller that he needs to nutralize the purple and orange wallpaper if he really wants to get his house sold, then I will do just that. In fact, I would be doing him a extreme disservice if I didn’t, right! That’s one of the reasons people would hire me. If I was a doctor and needed to tell someone that they had a rare disease and may not survive, should I keep that information to myself just so I don’t hurt my patient’s feelings? Just something to think about…

    Also, buyers will Never be all cash. If that was the case, there would be No mortgage industry.. The mortgage “crunch” is balancing out. The sub-prime lenders are cleaning up, interest rates are still not bad, and things are looking good!

    I think the important thing is fixing up the things that absolutely need to be fixed prior to listing the house. Buyers expect for homes to have working furnaces, roofs that don’t leak, ect. It is something that can either be fixed at the beginning, or the Seller will be fixing after the inspection or providing an allowance (off the sale price) to accommodate their replacement.

  • Mr. Value

    Where have agents got us now? Well, let’s see housing prices are at an all-time high, but have since fallen significantly over the last several months due to subprime lending.

    People want to get into a place before it becomes too expensive. How did this happen? Well, it’s easy… If you price homes so high in order to get the highest commission then people will see this as being priced out of the market and consequently see the “need” to get in before it becomes too expensive.

    Is Zillow.com correct with their prices? Not entirely, but that’s why you compare and see what has sold and what hasn’t and what their price-points were, the landscaping, etc.

    I actually found my house without my agent’s assistance. My agent probably worked less than 20 hours on my house purchase…were they worth something like $800 an hour…I don’t think so!!!

    Unlike other service providers that have specialized tools/knowledge like Dentists, Real-Estate Agents don’t really have anything…contacts? Yeah, there are sites for that…Qualified buyers? There are sites for that. The internet will completely change the Real-Estate industry.

    Really you need only a few things: A selling price, qualified buyer, comprehensive contract, inspection, purchase, move out date, close transaction. All these can be facilitated by digital communication.

  • Nancy

    Take 1 (one) greedy scumbag real estate agent, 1 crooked scumbag mortgage broker, mix well with ignorant people that want to live far above their means, and you get an inflated housing market and homes selling for $900,000.00 that are really worth $150,000.00 on a good day.
    Now add a dash of government determined to allow the scumbags to stay in business. Another dash of the ignorant homebuyers getting out of their ARMs contracts without being held responsible for their actions.
    The end result:
    Responsible Americans scratching their heads wondering why they have been saving for years to buy the home of their dreams while the scumbags have been allowed to manipulate the market.
    Young couples that can never buy their first home at these outrageous prices.

    The scumbag speel: “You can get in this home for only $*** per month for the next 2 or 3 years. After that time you will be in a better position at your job, making more money and will be able to refinance for a fixed rate loan. Besides that, the adjustable has a ceiling and can’t jump more than **% per year. In that 2 or 3 years this home will have jumped another $100,000 in value, so it’s a win-win situation.”
    Doing this they have managed to become the only profession that makes 10 times what they used to make doing the very same job in a short amount of time. So much for HONEST agents. What a crock.
    I think they should be made liable for paying their huge commissions back to the government that is once again manipulating the economy so as to bail the ignorant buyers out.

    What about all the people that have been forced to sell because of adjustables over the past 10 years?
    What about all the people that have lost money in the stock market in the .com era? Who the hell is giving them a hand? Oh yea, they just went bankrupt and learned the hard way.
    What about the people with money in savings that are taking the hit on their interest rate earnings?

    All we are doing is giving the scumbags another opportunity to rake in some more big bucks at the expense of other Americans. Homebuyers that in some cases never put one cent down, will get away with owning a home they should never have even been shown.

    Tell me one group that has benefitted more than the agents involved in this outrageous market.
    The home buyer is getting stuck buying a home that is terribly overpriced.
    The home seller just becomes a home buyer that has to turn around and pay an outrageous price for what he is buying. It is all relative, after all.

    Ah but the agents, making that trip to the bank with a huge smile on their faces never giving a second thought to what is going to happen to the dumb buyer once that 2 years is over. The buyer is most likely in the same position at work and can no more refinance then for a fixed rate then he could qualify for it now. Do you suppose they lose sleep over it at night? Do you suppose they even consider that the home they just showed the buyer will most likely be lost in foreclosure when the rate adjusts?

    It’s time we allow the prices of homes in America to adjust the same way they did in the 80’s. Let them fall to where they should be taking allowing for inflation. I for one will get a great deal of pleasure in watching the agents commissions go back to what they should have been all the time. I also will love to see young families go back to the possibility of becoming homeowners.

  • Courtney

    If we take the agents out of the equation and the 4% they earn, then in turn the value of all homes would drop by the same amount. Why would I pay the same amount for a home, when I would be doing all the work myself when I can use and agent and pay the same price? It’s like the For Sale By Owners who want to price their home for the same amount as the house down the street who’s using an agent. As a buyer I know that they are trying to save money, and I want a piece of that pie!!

  • Micah

    Response to Nancy’s comments. You are unaware of the large taxes that are applied to Realtors as independant contractors. You are unaware of how the commissions are divied up among brokers (checks are split 4 ways). You are unaware that agents are not benefitting in this market (they get paid when they sell houses). If people can’t sell their houses, how does this benefit the agent?>

    If you think agents will stop helping buyers find homes because there is a possibility of a downward market shift in the future, then you are wrong. They cannot predict the future earnings or actions of their clients and they shouldn’t be held responsible. There are numerous factors that come into play when looking at the housing market. If everything goes electronic and agents are no longer needed, then so be it. But until that time, let’s hold off on the “blame-game.”

    Good idea though! The government should bail everyone out for every poor financial decision that is made…stocks..housing…ect. Newsflash: We live in a free enterprise society and the future is uncertain.

  • Josh

    In reference to Nancy’s remarks, Its not real estate agents and loan officers that have caused a housing crisis. Look up the definition of market value. -A price that a buyer and seller AGREE to pay in a market place. So nice try ignorant nancy we didnt hold a gun to your head and say buy this house or else. As far as the arms are concerned, maybe people should have looked in to what they were getting into, but thats the major problem with America these days , were all too politically correct, AND WE DONT TAKE RESPONSIBILITY FOR OUR ACTIONS its always who else can we blame now.

  • Micah

    Great point Josh. I totally agree.

  • http://www.DowellTaggart.com Olathe Real Estate

    It is sad that people write without doing there research. If it was so easy why don’t you do it. I have been in real estate for over 18 years. I have seen my share of people thinking they can get in and make easy money, only to see them the following year get out because they coudn’t make it.

  • Chad

    Here is a fun fact. If some of you say that real estate agents earn their 6%, think that most architecture firms charge 4% to DESIGN buildings. I don’t think anyone here can argue that someone selling the building should make more than someone who actually designs it and is legally responsible for the life and safety of the building’s occupants. I have heard all of the “they don’t actually make the full 6%” talk. Well, architects don’t make all of the 4% either. There is overhead just like any other field. In addition multiple professionals work on the design full time for months! These professionals need at least 8 years of combined schooling and internship, before they take a series of 9 tests to become professionally licensed. Now, most of these people get paid less than real estate agents half their age with nowhere close to their education and liability. Something to think about.

  • Micah

    I would agree with you Chad. My dad is an architect and works very hard. The thing is realtors don’t get paid unless they sell the property. There is no refund for hours worked, ect. Of the 6%, each side gets 3%. Of that 3%, the broker takes about half (keep the lights on, desk fees, ect.) We are taxes on that 1.5% and in my company, we sponser a minor league team which is extra on top of what the company already takes. Add in MLS dues, real estate fees, and other expenses, and we aren’t left with much. Many people are under the illusion that realtors don’t work hard for their money. Bottom line is if you don’t work hard, you can’t survive in the business. There are part-timers with a pension that could care less about selling a home. That is why you ask good questions and don’t hire them because they don’t NEED to sell your home in order to put food on the table.

  • Happy Renter in Vancouver Canada

    The reality is that a lot of real estate agents a bunch of lazy asses and let the market work for them. Still very true in Vancouver “Fantasyland”, British Columbia. Buying a bunch of ads on buses and in magazines seems to be their answer to “hard work”. I work in the financial industry and a 5% commission is nearly a crime these days. Here is a typical real estate agent’s spiel in Vancouver – “Oh, it’s a lovely property, look at the soaring heights over the dining room. Can’t you see yourself creating a life for yourself here.. You know Vancouver property never goes down, Mountains, Olympics, Ocean… blah, blah, blah… when do I get my commission”.

  • Micah

    I agree that there certainly are a lot of lazy asses in the business.

  • http://www.michaelpiercerealestate.com Michael

    I welcome competition becuase it generally will make me better. If the competition is good enough then it forces one to either adapt and overcome or be overcome.
    I feel that no matter how much information one has, this information will never be able to replace the knowledge and experience of a professional. Thanks to the internet I can read anything and everything there is to know about brain surgery. There is not one bit of information about brain surgery that I can not find out about off of the internet. Does that make me a brain surgeon?

  • Bobby

    My pet pieve is listing my property with a top-producing agent then never hearing from them again. I get feedback from their “assistant” but never from them. What did I list with them for if I never hear from them again? I don’t want to talk to the assistant, I listed with the agent!

  • Big Mike

    I’ve been a real estate agent for 7 years, and let me tell you, this gig is not easy. Believe it or not, we’re normal people just like you; we pay for own liability insurance, our own medical insurance, our own advertising and our own auto expenses. We have mortgage payments, car payments, food bills and insurance payments just like you…and we have kids! We drive buyers around all day that will never buy a house! We take sellers out to dinner that only want to know what their house is worth! Have you ever been a Realtor? I bet not, and if you have, you would’nt have posted this article. This is the hardest career I’ve ever had! Oh, I know when you see that closing statement with the agents commission you think; “Wow, that’s a lot of money”. Well, think about all the bullshit that agent had to go through just to get paid. And the worst thing is it’s all a crap shoot, you’re never guaranteed to get paid until it closes. So think before you criticize.

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  • James

    I am a broker, and while I can clearly see many of your points to be valid, in terms of our commission “not being worth it”, or that our profession is simply “getting in the way”, you are failing to understand why brokers are in the mix in the first place. This is true of all types of brokers, whether it be real estate, mortgage, stock, any other type of broker. It is because, most of the time, two prinicpals cannot reasonably come together in a transaction with the help of a neutral party between them. The dynamics of this fact are different between the various fields a broker is used, but I will explain the dynamics in play for a real estate transaction. First of all, a broker has a large pool of listings that he advertises in many locations. It is not practical to advertise ONE listings in those locations; it’s financially better to advertise multiple listings this way. This is where most FSBO attempts fail. A sign in the yard, alone, will get you roughly zero buyers. Oh, and we’re not talking about just someone who wants to buy a house… our job is actually to locate READY, WILLING, and ABLE buyers. You can’t possibly do this on your own as a FSBO. A buyer walking through a house, at least around here in the Midwest, does NOT EVER want to see the seller in person while looking at the house. If the seller is present, then the buyer is less likely to discuss issues or cosmetic ideas with their significant other, and most likely will try to end the showing prematurely. There are also many potential legal pitfalls scattered throughout Fair Housing Law and state real estate laws ranging from disclosure to discrimination that, if violated, someone can easliy sue you for and win, and will likely cost you far more than the $12,000 you’re trying to save by doing it yourself. These pitfalls are REAL, not just some scare tactic I’m throwing out there. When you use a broker, that responsibility to abide by all those laws are shifted to the broker, since they are handling the transaction on your behalf. What are these pitfalls? Of course, there’s discrimination. While you may have an idea of what type of person fits into your neighborhood, it is ILLEGAL for you to show prefferential treatment to any potential buyer over another just because of your feelings about that buyer. There are many protected classes of people under the fair housing law. Are you familiar with them? Something you say could be taken as discriminating, while it was actually not, simple you didn’t know to stay away from that topic or question. This stuff is not secret either, just look up fair housing laws for your state. One last dynamic I’ll throw out there is actually the most important one of all. A neutral third party can usually, if not always, negotiate better than you can yourself. Why? It’s because they are not emotionally attached to the item being negotiated. This may seem trivial, but in reality it has a HUGE impact on almost any negotiation, real estate or otherwise. This is probably the biggest reason people have been hiring real estate brokers for over 100 years. Why can’t you just have your buddy represent you in a negotiation as a neutral third-party? Well, it’s illegal. You MUST have a real estate license, at least in most states, to represent someone else’s interest in a real estate transaction. This is law because of the many, many issues than can come up. Big things, life-change things that can mess up your life if something goes wrong. That is why real estate transactions are so closesly governed by the laws.

    By the way, Zillow has zero impact on real estate since its inception. The data on there is usually inaccurate.

    Whoever was talking about getting rid of title insurance, that’s crazy also. Do you really want to just willy-nilly have real estate owership transferred without actually knowing for sure that the title is clear? You wouldn’t do that with a car, why would you do with with the most expensive thing you’ll ever purchase in your lifetime? When they issue title insurance, it’s because they sifted through all available public records regarding your property, and determined that all past liens have been released, all past owners legally and properly conveyed their interest, etc. They should be paid for sifting through all that.

    You can find cheaper brokers, like in 4.5% range, and I think that’s probably where it will gravitate to in the coming years. But when you get below that, considering what we actually do, what we have to know, the responsibility we bear, and the split of the commission itself among the agents and brokers, it gets to be not worth a person’s time to actually help you out. You have to put a value on your time. And I think that’s what it’s going to come down to. You can’t expect people (your agent) to work for free, and you really shouldn’t expect your Craigslist ad to do the work of a real estate broker.

  • http://Paris911.com Connor MacIVOR

    Hey Jeff, SantaClarita411.com pitched your new book – and I am happy with the purchase. Thanks for your hard work on that project.

    I was LAPD for 17 years and continue as a Reserve (hated profession, except in times of Need) 10+ Years in Real Estate attempting to peel myself away from the World View of Real Estate Agents.

    Point is that I have a bit of college – a huge amount of world experience seeing things that I wish I could forget, and a Code and Lines in the Sand that are more stringent than any Code of Realtors.

    The first time I bought a home I went to a FSBO and thought I would do it myself. All of my Down-payment went to attorney fees to sue the seller. I won – but no longer had the down-payment after going after the seller. The Seller had no more money, his attorney fee’s and due to the declining market he had no way to pay my attorney fee’s and the house went foreclosure, even after the order from the court. It was that “you cannot get blood out of a rock” – Thing.

    I obtained my Real Estate License. Vowing to never let any client of ours get SCREWED out of their Hard Earned Money.

    Necessary – I think so, Those contracts that are 8 pages to purchase are all the result of lawsuits throughout the years. The disclosures are even more pages. A couple of tree’s later – you have a file that is 2.5″ thick on Legal size paper.

    If we could remove the “lawsuit” element from society and inject “fairness” into all people, I would think you are onto something. But the world is not as friendly as the one in my dreams.

    Protecting the Prey from the Predator, and I do this well!

    Again, Love the book. “What would Google Do?”

    My BEST – Connor with HONOR

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  • http://www.2mrealty.com Mark Martin

    If Zillow, Redfin, Shark or whomever can supplant the real estate agent than their time is due. However, I think there is room in the biz for technology and improvement but the agent serves a valuable purpose.

    With the advent of WebMD we don’t need docs, TurboTax we don’t need accountants, LegalZoom we don’t need lawyers …and so on.

    Point is, we can all benefit from new technology changing the way we do things. But, when the %@*& hit the fan, you’ll be glad when a professional is there to step in and get things done.

    The cream rises to the top and the muck settles to the bottom.

  • http://www.yourviva.com Randy

    Hey Jeff, I bought yout book, WWGD. Congratulations, very interesting. Good blog as well! I’m going to read everything you have said about real estate (yes, I’m one of them!). Cheers.

  • Ernest Hemingway

    I worked in the wireless industry and for a while sold into the real estate niche when smartphones were coming on strong. At first I was so enthralled at the prospect because they were all so willing to buy a contract or switch their family plans over. Before creating a wireless contract I had to run their credit. I was appalled when I started to run credits on these people and no less than 40% could not even get approved for 1 line by the carrier. Many others had limitations or required large deposits in order to create an account. I stopped messing around with that sector because so many of my sales never went through due to bad credit. The lesson I took from this was to be very careful trusting real estate agents with my money- real estate attracts all kinds of “get rich quick” type people, big spenders, and crooks. I should know, I worked in sales too. I now view their “profession” no differently than used car salesmen.

  • http://www.naplesguru.com/ Naples Condos

    I know this article was written many years ago but not too much has changed. I too would have expected that the margins start to fall. One thing is for certain…if the margins change they will likely come from the listing agent’s end. I think most of the public finally realizes that it easier to list a property BUT there still needs to be considerable compensation to attract the agent with the buyer.

  • robby

    the commissions they make for what the do or create (nothing!) is outrageous. i hope the law regulates how much they can make. 1% if their lucky!

  • Shaun Marsh

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  • propertymesh

    I found your site while stumbling. allowed me to really understand this issue. I really learned a lot from your site. You are doing good work! I really loved reading your blog. It was very well authored and easy to understand. Real Estate

  • Anonymous Agent

    After 7 and a half years from this blog, how did your little prediction work out for ya? My family works in real estate and yes we actually work. Have you ever lived on a paycheck you didn’t know was coming from one month to the next? Probably not.

    Oh, and good real estate agents actually know their craft. We protect our clients and keep them from the pitfalls of the real estate transaction. Its not like buying a sweater. Its a house with TONS of state and federal laws regulating the process.

    Real estate agents are people too, Jeff Jarvis. Yes, some are not good at what they do, but many of us are. By the way, hiring a real estate agent to sell a house is a choice! And buyers don’t pay a flippin’ penny of a real estate agents commission.

    BUT, if the real estate business ever does fade out the real estate agent, maybe I’ll start up a blog and write books I can sell online like you. Judging by your quality of your content, I think just about anyone can do it.

  • Sluggo Magoo

    I have a good realtor
    scum bag douche bag story.

    My former real
    estate agent is also my next door neighbor. We became acquainted the same time
    I was interested in buy the house I currently live in. Make a long story short,
    I should have seen the warning signs but
    due to my inexperience I got fooled and lie too. Here’s what happen.

    When we decided to
    take a further look at the house and hire an inspector we were told that we had
    to make a deposit on the house. This was a lie, there’s no such requirement. In
    retrospect I wouldn’t have put a deposit on the house until after I had the
    inspected. This house did check out
    fine and the inspection did reveal some finding that were consistent with wear
    and tear maintenance that was coming due. This was all well and good. It gave
    me some leverage on the final closing
    price on the house which did work out to my favor. I wrote the deposit thing
    off as someone that was trying to do the sellers a favor but it was a lie none
    the less.

    As it turn out, one
    lie leads to another and then another and then another. During the process of
    buying the house I had a couple of question about the heat, the park across the
    street, the farm up the street and the humidifier in the downstairs closet.

    Regarding the heat I
    was told that the house had electric and propane heat and the realtor point to
    what she said was the propane furnace which turned out to be a one room propane
    space heater in the basement. The actual propane furnace was in the attic. Not
    knowing much about attics and furnaces I had the inspector check it out. It is ducked
    along with the air conditioning unit. To make a long story short, in New
    England you don’t want a heating source in your attic. If you have one and it snows,
    you will get ice dam in your gutters and then water will back up into the house
    and ruin you ceilings. Mine was in the area of $9500.00 a couple of years after
    I purchased the house. Due to learning that the hard way, I now use only
    electric heat when there’s snow on my roof. Lucky for me the electric rate has
    gone down and propane has gone through the roof (pardon the pun), I’m actually
    saving money because with electric I have a zone in each room. Not that all
    this is actually the selling agents fault but the seller should have been told
    by any knowledgeable agent that heaters in the attic wasn’t a preferred method
    of heating in New England. Also, either the seller or the propane company
    pulled a fast one on the agent and me during the closing of the fuel transfer.
    Someone file some fraudulent propane receipts for $900.00 of propane. Because
    the tanks had no gauges on them I couldn’t check. Three weeks after
    I closed on the house I almost ran out of propane. Yea, I could smell the
    warning order they put in the tank to give you a heads up that you’re running
    out of fuel.

    The humidifier
    turned out to be an exhaust fan which I had pointed out to her but she insisted
    it was a humidifier. Not knowing if she actually didn’t know what she was
    talking about or was lying, I wrote it off as her just being a douche bag and
    left it at that because it was a huge deal.

    On to the next two
    lies, the park and the farm! My wife and I took the realtor out to dinner with
    us to go over a couple of things. We started talking about the park and the
    farm and what activity took place there and how much noise and any odder of
    fertilizer. Being that she lived right next door to our house we figured she
    was a good source of information. Well this is what she said,“I never hear any
    noise coming from the park” and “I never smell any odder coming from the farm.
    Well either that was a big fat lie or the shit doesn’t stink on her side of the
    street. Also, I found out that coming fall that the local high school plays
    their home football games right over the tree line across the street. There’s
    an intercom system there that is so loud I can hear it in every room in my
    house.

  • Lakshman

    Now real estate portals are becoming big where even real estate agents are finding hard customers as most of them posting property in portals like metroplots.com, commonfloor, indiaproperties in india