Why do you still need an agent to buy a home?
Grover C. McCoury III
Why do you still need an agent to buy a home?
By Douglas Gantenbein
"The first thing we do, let's kill all the lawyers," a character in a
Shakespeare play famously remarks.
I have a different suggestion: Make it realtors.
Here's why: Americans will spend about $1.14 trillion buying 6 million homes
this year-both records. Yet the flat commissions paid to the realtors who
handle the vast majority of those sales, averaging 5.1 percent, act as an
enormous tax on the transaction process, taking wealth from both buyers and
sellers in what for both is often the biggest financial transaction of their
lives. It's true that selling a house is a complex task. But so is writing a
will, and an attorney doesn't ask for 5 percent or 6 percent of your net
worth as compensation.
And what do Americans receive in exchange for that commission, which can
total up to $24,000 on a $400,000 home? In many cases, not much. A realtor's
license can be had after as little as 50 or 60 hours of training (the person
who cuts your hair probably has 1,000 hours or more). I've dealt with a
half-dozen realtors during the past seven years, while selling two homes and
buying three others. Last year, for instance, we sold a home in the $500,000
price range in the town of Newcastle, east of Seattle. It wasn't a perfect
home-a typical suburban place with too much garage, not enough yard-but a
very nice one, including a full theater room and a fantastic home office. We
wanted to sell to make a move to Port Townsend, a little town in the
northwest corner of Washington. One realtor we used to sell it was utterly
incapable of articulating how our house differed from nearby, newer ones
that basically were thrown up overnight and had cheap interior finishings.
Another was clueless as to how to market a house in our price range,
printing a cheap single-sheet black-and-white information flyer. (Our
experiences were generally better on the buy side, except for one seller's
agent who sought to discredit a skilled building inspector we hired who
found that the foundation of a circa-1880 home was a rat's nest of rotting
wood, faulty concrete, falling insulation and, well, rats' nests.)
But the real knock on realtors is a bit of simple economics that many people
don't understand. Whether you're buying or selling, they rarely work in your
interest. For the buyer, a realtor may seem like a dream-a "free"
home-finding chauffeur, who then negotiates the best possible price. But the
service isn't free-the sellers have likely factored the buyer's agent's 2.5
percent or 3 percent of the take into their price. Moreover, it's in the
buyer's agent's interest to have you pay the most that you're willing to
pay. After all, the higher the price, the larger their commission.
What about the sellers? They know only too well the service isn't
free-they're stuck paying the commission for their own agent plus the
buyer's. But "their" agent really isn't interested in seeing the seller get
the best possible price. Instead, that agent's incentives favor a quick
sell, at any price. Look at it this way: Let's say you've listed your home
for $290,000, and you owe $150,000 of that to the bank, leaving you with
$140,000 in equity. The home may well sell for that $290,000-in a few
months. But if the agent can persuade you to sell it for $270,000 in a few
weeks, he is better off having forgone only $500 or $600 in commission while
saving a great deal of time, energy, and uncertainty. That deal, though,
will cost you $20,000 in equity. When we sold the Newcastle house, in fact,
"our" agent actively worked against us in the final stages of the
transaction, doing more than the buyer's agent to knock down our price.
All of this was supposed to change with the Internet, which essentially put
travel agents out of business and stood stock brokerages on their heads. And
it's true that nearly everyone with Web access does at least some shopping
via the Internet when looking for a home. But the basic real-estate
transaction model remains utterly unchanged from what it was 50 years ago:
Homes are listed on a regional Multiple Listing Service, largely controlled
by local realtors. Virtually all of those homes have a listing agent, and
when buyers finally get around to shopping they'll almost inevitably have an
agent drive them around. And in the end, the seller will lose as much as 7
percent of their selling price in commission. True, as I mentioned, the
average commission today is 5.1 percent, which is down from the 5.5 percent
average of a few years ago. But since 2000 home prices also have risen by 20
to 30 percent nearly everywhere in the nation-in California, by that much
just in the past year-and agents' commissions have of course risen, too.
Moreover, the Web seems to have done next to nothing to make the real-estate
industry more efficient. The average realtor today sells about six homes a
year-a figure unchanged from a decade ago. About 1 million homes are sold by
their owners each year, a figure that is inching up with help from the Web.
Why the fossilization? Mostly, it's because of the power of the National
Association of Realtors, which protects its members' turf like a crazed
wolverine defends its offspring. The organization has defeated efforts by
some of the nation's biggest banks and even Microsoft to start their own
real-estate listings, and have largely protected the sanctity of the
Multiple Listing Service, enabling regular folks to scan bare-bones listing
on the Web, but keeping most of the good info for themselves. Overall, the
NAR has ensured that nearly all residential real-estate transactions still
are conducted between two agents in cahoots. And they're largely responsible
for keeping commissions close to that 6 percent level when any normal law of
competition would suggest they'd be lower.
Now the NAR is taking aim at what many realtors see as a genuine threat: the
growing numbers of "discount" brokerages. One of the most prominent is
ZipRealty Inc., which was founded in 1999 and currently is planning an IPO.
ZipRealty lists homes on its own site as well as the Multiple Listing
Service, offering sellers a 25 percent discount on commissions while still
paying buyer's agents their full commission. It also extends rebates of 20
percent of the commission to buyers who come directly to ZipRealty. This
knocks the total commission into the 3 percent range and attempts to
completely unwind buyers from their agents.
But ZipRealty's efforts to drive down commissions and even eliminate the
buyer's agent have drawn the NAR's ire. Early next year the NAR plans to
implement new rules that would allow local brokerages to bar their listings
on ZipRealty's site, a move that strikes directly at ZipRealty's model. The
NAR also wants to prevent online brokerage sites from funneling customers to
agents in exchange for a fee. That targets upstarts such as LendingTree,
which uses the Web to match customers and agents, then rebates to customers
part of the fee it collects from brokers. The NAR's moves have gained the
attention of the Department of Justice's antitrust folks, and have been
delayed twice already.
I'd like to see a strictly FSBO (For Sale by Owner) world. After all, escrow
companies and home inspectors already do much of the heavy lifting in a
real-estate transaction and add more value than most realtors while working
for a flat fee. The Internet, meanwhile, provides a perfect forum for buyers
and sellers to meet, just as eBay has transformed the marketplace for
everything from lace doilies to Ford F250s. I understand that isn't going to
happen anytime soon. Selling a home is indeed a hassle, and realtors at
least offer the promise of one-stop shopping. And there's the issue of
showing homes-realtors perform the legitimate service of vetting buyers and
safeguarding a seller's property. Out-of-towners can benefit from a local
realtor's expertise. And I've heard from sellers who have had agents who
really "got" how to market a home, probably earning their commission and
more.
Still, I'm hoping that upstarts such as ZipRealty, LendingTree, Foxtons (a
discount broker in the Northeast), and Catalist (a California discounter)
will soon blow away the traditional realty transaction model like they're
Puerto Rico playing the U.S. men's basketball team, dropping total
commissions on a house sale to 3 percent, or even 2, while still offering
the services people seem to desire from a realtor. Certainly, most people
realize that a 6 percent commission-or even 5 percent-is nuts, given that
e-mail alerts, Web-based home tours, and other services can easily give
buyers and sellers as much information as their realtors. It will be a
painful change for the 1 million real-estate agents out there-alas, a number
that is growing rapidly. But a little Darwinism is needed to thin out the
herd, and when it happens it won't give me much grief.
Douglas Gantenbein is the Seattle correspondent for the Economist
Jeff Strickland
"Grover C. McCoury III" <gcmc...@yahoo.com> wrote in message
news:RJ6dnYVNRdn...@adelphia.com...
> Realty Bites
> Why do you still need an agent to buy a home?
You need a realtor because a realtor is going to ask you what you want in a
house, how much you want to pay, what neighborhood you want to live in,
those sorts of things. Then, he (or she) is going to find a house that fits
what you said you are looking for, check it out to see if it is a dump or a
nice place, then take you by so you can look at it. Without a realtor, or
even just a real estate agent -- a Realtor is, by definition, a member of
the National Association of Real Estate Agents, some agents are NOT
realtors -- you will spend countless hours over several weekends driving all
over the region looking for a house you like. Once you find the house, your
realtor handles many aspects of the sales transaction that can drive a
stable person to drink.
Sure, there are lots of transactions that can be done on your own, but when
the Buyer's Agent is paid by the seller during the transaction, why not take
advantage of the services that are available?
The author of this article grossly over simplifies the role of the real
estate agent in the transaction.
</ top post>
Steve Horrillo
On 16-Jun-2005, "Grover C. McCoury III" <gcmc...@yahoo.com> wrote:
> I'd like to see a strictly FSBO (For Sale by Owner) world. After all,
> escrow
> companies and home inspectors already do much of the heavy lifting in a
> real-estate transaction and add more value than most realtors while
> working
> for a flat fee.
Where did you get this article from? It mentions a name but no attribution
where it came from. Sounds like from the newspaper. Wherever it's from, the
author is highly biased. Probably for shock effect to get his article
published. That's why it's beyond me why Brokers give away their money
advertising in a medium that is mostly against them. Their main classified
income comes from For Sale By Owners wasting their money on ineffective ads.
I use to feel medicine should be socialized until I visited England and
found that anyone who could afford it had a private doctor. Same thing with
lawyers. How many people who get in trouble represent themselves (pro-se)?
And how many would choose a public defender if they could afford a lawyer?
Even the one's who are technically indigent run to their family and friends
for money to a hire a private attorney.
Same with Realtors. Home owners try it themselves and when they get sick of
weirdoes and bargain hunters showing up. They're glad to pay that 6%. In my
presentation book I I have pictures of FSBO's I listed throwing away their
home made signs. Some photos are really good because you can see the look of
happiness and relief on their faces. I'll have some of those photos on my
site in a few days and you can see for yourself. A picture's worth a
thousand words as the saying goes. If there truly was a viable alternative
Realtors would be out of business tomorrow. But they're not and neither will
any sort of broker. Whether it be stock brokers, commodity brokers, marriage
brokers. You name it.
They're all still here because they provide a service worth paying for. All
these conspiracy theories about the AMA, NAR, or the BAR is a load of crap.
How ironic that members of these professional associations see their
associations as ineffective blood suckers while conspiracy theorists blame
it all on these "powerful associations."
If you want to see where the power lies just look at the solicitation laws
in your state. Realtors have to abide by NO-CALL laws but read your state
law carefully and you'll see that newspaper publishers are exempt. Gee I
wonder why? Next research which lobby groups were pushing for NO-CALL and
CAN-SPAM laws and you'll see that it was the newspaper and magazine
publishers because they see telemarketing and e-mail as a much more cost
effective alternative to their products. And you'll find documents showing
what their budget is. It pales in comparison to NAR's. Not that they didn't
try, but if NAR was so powerful Realtors would be exempt as well. But how
many are willing to do the research. Most would rather believe the snippets
they get from the boob tube and propaganda rags calling themselves
newspapers.
--
Warmest regards,
Steve Horrillo, Realtor | Trainer | Hypnotherapist
http://brokeragenttraining.com (Advanced training for real estate
professionals)
http://over100percent.com (Realtors earn over 100 percent)
Steve Horrillo
On 16-Jun-2005, "Grover C. McCoury III" <gcmc...@yahoo.com> wrote:
> Still, I'm hoping that upstarts such as ZipRealty, LendingTree, Foxtons (a
>
>discount broker in the Northeast), and Catalist (a California discounter)
>will soon blow away the traditional realty transaction mode
Rather than posting these ridiculous articles do a little research. I did a
goggle search on Foxtons using "problems with foxtons." Read the results and
tell me if you'd hire them.
http://groups-beta.google.com/groups?hl=en&q=problems+with+foxtons&qt_s=Search
You won't find as many complaints about ZipRealty because they pay the
buyer's agent full commission. Anyone that doesn't is preying on the
public's lack of knowledge of how the business works and how the mind's of
Realtors work. Especially the "old timers."
Sure the public will fall for it. A billboard that say's "pay 2.5%
commission." SAVE $20,000 will get you more leads. Anyone in sales knows the
saying that you appeal to their, "need or greed." But in practice you'll get
less sales, less referals, and a much higher Agent turnover. You'll find
yourself "creaming" the listing leads for yourself and a select few agents
and sending the bulk of your office showing homes. Your resistance won't
come from the seller, being that I've never in my 5 years in real estate
ever had anyone ask what the split will be even though it's written on the
contract. They don't realize the implications of not paying the buyer's
agent full commission. YOU SHOULD if you have any sort of experience and are
being honest with yourself.
Not just discount brokers are guilty. Weak Realtors have been pulling this
long before someone tried to package the concept and sell it to Brokers. If
the Agent gets chopped down to 5% to get the listing, they give the Buyer's
agent 2.5%. For 4% they give 2%. To Realtors I say, If you don't have the
skill or the self worth to convince a seller to pay what's customary, or if
you're too greedy to walk away from the prospective seller, then at least
have the common sense to take it out of your own pocket. And don't take it
out of your broker's pocket either. Get yourself some training and buy some
affirmation tapes or just work with buyers if you don't have what it takes
to negotiate a proper contract. If you can't even negotiate a standard
commission for yourself, how are you ever going find it in you to negotiate
top dollar for your client?
To the Broker thinking about changing your model and discount Brokers. Open
your eyes! This is just a come-on disguised as a "business model." Don't let
yourself be fooled by these franchisors. It all sounds good in theory. Just
remember their business is to sell a franchise. That's *their* bottom line.
Doing what's best for your client first and Agents second should be *your*
bottom line. Do lots of online research and see what home sellers, listing
and buyer's agents are saying. Speak to agents who've worked at these
places. Consider the consequences of "going against the grain." It's fine to
be a rebel if it only effects you. I'm not saying commissions will not come
down as a result of new communication technologies, but it's a long time
away. Nothing can stop an idea who's time has come. But those who were ahead
of their time died pennyless like Van Gogh. Start cutting commissions and
you'll soon find out why Van Gough found the need to cut off his ear. :)
--
Warmest regards,
Steve Horrillo, Realtor | Trainer | C.Ht.
Grover C. McCoury III
I find it quite amusing that a Realtor is claiming the author of this
article is biased...
"Steve Horrillo" <use...@stephenhorrillo.com> wrote in message
news:aqpse.132573$J25....@bignews6.bellsouth.net...
ElJay
news:RJ6dnYVNRdn...@adelphia.com...
> .... It's true that selling a house is a complex task. But so is writing a
> will, and an attorney doesn't ask for 5 percent or 6 percent of your net
> worth as compensation.
And lawyers don't spend hours and hours with clients who then either decide
not to buy, decide to buy a for-sale-by-owner property, or see a sign on a
property they like and just call that realtor leaving the first realtor
behind after hours of working with the client.
Unless you have a very strong, high-dollar case, a lawyer will not take your
case on a contingency (commission if successful) basis.
In most situations, a lawyer will either charge a flat fee, or will charge
you by the hour (in 1/10 of an hour increments) for any and all time they
spend that is related to your case.
If people were willing to pay a realtor by the hour, or even pay a flat fee
up front, realtors would be more than happy to handle cases for far far less
than 5% or the sale price. That's because they would know they will get
paid even if you change your mind about buying or selling, or suddenly
switch off to someone else and buy through them.
Of course, most people don't want to do that.
The buyers don't want to do that because they know they can now run multiple
realtors around the countryside and either walk away without buying
anything, or make a purchase and know that seller will pay the commission.
The sellers don't want to do that because they don't want to pay a realtor
money for their work only to find that no one wants to buy their house, or
no one wants to buy their house at the price, terms, and conditions that
they are asking.
And finally, if being a realtor is such a get-over scam, where all you have
to do is spend 50-60 hours getting a license and then can make outrageous
commissions, why aren't you (and everyone else) out there doing that?
The reality is that most full-time realtors work 60-80 hours a week, running
people around, and either find that they can't even make a modest living
doing that and get out of the business, or make a moderate income for all of
their time and effort in what is essentially a self-employment business.
Steve Horrillo
On 20-Jun-2005, "ElJay" <R...@LJLJ.LJl> wrote:
> The reality is that most full-time realtors work 60-80 hours a week,
> running
> people around, and either find that they can't even make a modest living
> doing that and get out of the business, or make a moderate income for all
> of
> their time and effort in what is essentially a self-employment business.
The reason is they work hard but rarely work smart. Most don't have any
background in sales and marketing so they rely on the broker for leads and
advertising. The only thing that keeps most Agents alive is referrals. And
you don't get referrals unless you are doing a good job. The one's I see
making good money are the one's that do well for their customers and/or have
found some sort of niche or specialty.
--
Warmest regards,
Steve Horrillo, Realtor / CEO / C.Ht.
http://brokeragenttraining.com (Advanced training for real estate
professionals)
http://over100percent.com (Realtors earn over 100 percent)
http::/hipfsbo.com
DA
> Why do you still need an agent to buy a home?
> By Douglas Gantenbein
Well, I have not sold a house yet, so I do not yet feel the pain of paying
the commission, but I did use help of a realtor when I was buying one,
which did not cost me anything. Since you've titled the topic "Why ...
agent to BUY a home", I should say that I did appreciate a professional
guiding me through the process, which is pretty cumbersome and does
intimidate, at least guys like me - first time buyers. The other important
thing was - my realtor had access to an online system with listings of
homes, which speeded the process up great deal. I cannot imagine having to
drive around or poke into the papers for listings. That would have taken
ages.
Cheers!
D.
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Jeff Strickland
>
> On 20-Jun-2005, "ElJay" <R...@LJLJ.LJl> wrote:
>
> > The reality is that most full-time realtors work 60-80 hours a week,
> > running
> > people around, and either find that they can't even make a modest living
> > doing that and get out of the business, or make a moderate income for
all
> > of
> > their time and effort in what is essentially a self-employment business.
>
> The reason is they work hard but rarely work smart. Most don't have any
> background in sales and marketing so they rely on the broker for leads and
> advertising. The only thing that keeps most Agents alive is referrals. And
> you don't get referrals unless you are doing a good job. The one's I see
> making good money are the one's that do well for their customers and/or
have
> found some sort of niche or specialty.
>
The one's I see doing well have been doing it for a long time, in addition
to the points you mentioned -- niche, good job, large referral base, and
repeat business. Of course, there is a certain amount of being in the right
place at the right time ...
Jeff Strickland
"DA" <rcdd_at_teledat...@foo.com> wrote in message
news:42b83398$1...@alt.athenanews.com...
> > Realty Bites
> > Why do you still need an agent to buy a home?
> > By Douglas Gantenbein
>
> Well, I have not sold a house yet, so I do not yet feel the pain of paying
> the commission, but I did use help of a realtor when I was buying one,
> which did not cost me anything. Since you've titled the topic "Why ...
> agent to BUY a home", I should say that I did appreciate a professional
> guiding me through the process, which is pretty cumbersome and does
> intimidate, at least guys like me - first time buyers. The other important
> thing was - my realtor had access to an online system with listings of
> homes, which speeded the process up great deal. I cannot imagine having to
> drive around or poke into the papers for listings. That would have taken
> ages.
>
Remember this when it comes time to sell your house, and call the agent that
brought you by. He'll be very happy to hear from you again. And, if you are
out drinking and playing golf, and somebody says that they are looking to
buy or sell, pass your agent's name along. Be sure to call your agent and
tell him that you gave his name out so that if the guy you gave his name to
really does call, and a sale is made, there could be a couple of box seats
at the ball park in it for you.
Grover C. McCoury III
"Grover C. McCoury III" <gcmc...@yahoo.com> wrote in message
news:RJ6dnYVNRdn...@adelphia.com...
Steve Horrillo
On 21-Jun-2005, rcdd_at_teledat...@foo.com (DA) wrote:
> The other important
> thing was - my realtor had access to an online system with listings of
> homes, which speeded the process up great deal. I cannot imagine having to
> drive around or poke into the papers for listings. That would have taken
> ages.
Yes but you never got to see the For Sale By Owners also on the market.
Right? If you'd had signed a buyer's agreement you could have seen it all.
DA
> Yes but you never got to see the For Sale By Owners also on the market.
> Right? If you'd had signed a buyer's agreement you could have seen it
> all.
I honestly don't think "For Sale By Owners" represent more than 10% of the
market (if that), so I'm not too sure I missed much. But let me ask you:
what is the buyer's agreement you are referring to? Actually pay money to
an agent to find you a home?
Cheers!
D.
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Donkeydode
access to MLS in your area, tell me what exactly a realtor can provide that
I couldn't find already? I have only used a realtor 1 time in 5 real estate
transactions. I can say that it was not difficult at all, the title and
escrow company took care of any issues that arose, which were very minor. I
have always thought that realtors were one of the biggest rackets going
right now. On the other hand if all mortgage agents were guaranteed 3% on
each loan I would protected it like a "wolverine".
"Jeff Strickland" <spamc...@yahoo.net> wrote in message
news:sPadnRRCQsX...@ez2.net...
Steve Horrillo
On 23-Jun-2005, rcdd_at_teledat...@foo.com (DA) wrote:
> > Yes but you never got to see the For Sale By Owners also on the market.
> > Right? If you'd had signed a buyer's agreement you could have seen it
> > all.
>
> I honestly don't think "For Sale By Owners" represent more than 10% of the
> market (if that), so I'm not too sure I missed much. But let me ask you:
> what is the buyer's agreement you are referring to? Actually pay money to
> an agent to find you a home?
I receive a list of about 50-75 new FSBO's a day just for my county, and
these are only the one's that the service is able to harvest from local
newspapers and website's. That doesn't even count the one's that only use
flyers and yard signs.
A buyer's agreement means that in the allotted time, say 3 months, any home
you buy the agent gets, say 3%. Even if it's a For Sale By Owner or even if
you find it. Without a contract the Agent has no commitment from you so if
you find one who's more committed to you than you are committed to her/him
consider yourself fortunate. Without a contract the FSBO can be an agent's
worst nightmare. Ask any experienced agent who handles buyers and they will
tell you stories of heartbreak. How they drove someone around for months
only to have them buy on their own. Or how they searched for properties only
to have the buyer go around them and make a deal directly with the listing
agent. Some accept it as the cost of business. Other's refuse to show homes
at all and refer them off. While other's come to distrust and even inwardly
despise the very people they are "hired" to help. I use quotes around the
word hired because without a contract, depending on the State, you haven't
really hired anyone. They are still legally obligated to the seller.
Furthermore, if you think that when you buy a house listed in the MLS that
it is the only seller who is paying the commission you are believing some
Buyer's Agent's sales pitch. It may be true from a legal / contractual
standpoint, but in practice it is the buyer that pays the cost. But just
common sense should tell you that the seller has already adjusted his price
upward to compensate for the commission. In fact statistically on the
average you the buyer is paying 6-21% more for the same type of house
(depending on who's stats you believe and when the study was done).
If you're being pitched by an Agent who wants to sell your house you will be
told they will fetch you over the 6% they charge. If you are buying a home
you will be told that it's the seller who's paying the commission. Both are
technically telling the truth. But look on the bright side. When it's time
to sell the home you paid over 6% for, if you hire a Realtor to sell, it
will be your turn to get 6-21% more. If you really want to get bent over,
buy through the MLS then try to sell it on your own. Of course I'm speaking
of averages. There's always going to be a percentage of people who will beat
the odds, or at least think they can. That's the lure of the FSBO. That's
what keeps ad services, online FSBO sites, classifieds, flat rate, discount
brokers, and gambling casinos in business.
Steve
agent. But if you have a sought-after property you shouldn't need to.
FSBO is not worth anything, and you don't need them.
1) put up a web page with complete info and photos of every room and
amenity
2) put an ad in the paper with the web address
3) list the property at 4-5% below market (agent-market that is)
4) Give it a month or 2
Think of your advantage if you can knock off $50K from the house next
door and still walk away with the same or more money? At the high end,
you can assume that anyone with that kind of money is reasonable
internet savvy. Or at least they have a kid who is.
Signing an agreement with a broker is totally foolish. Remember that if
you find a FSBO on your own, you have a bargaining position that you
don't have with a broker. If its a hot property you're going to pay
market or close anyway. But if the seller doesn't have to pay the
broker,and you are ready to buy, cash-in-hand, you can get a piece of
that 4-6% overhead yourself. It costs money for every month the seller
doesn't sell without a broker for advertising, carrying costs, etc, so
if you can buy quickly you can get a bargain.
Unless of course you're willing to pay $50K for a glorified chauffer.
Don
news:1119808773.6...@g43g2000cwa.googlegroups.com...
Another strategy that can work if you already know a potential buyer: Split
the savings in commission down the middle. If, say, an agent's commission
would normally be $10,000, offer it to a buyer for $5000 less than what you
would otherwise demand. I did this in 1998, and it worked fine.
Steve Horrillo
On 26-Jun-2005, "Steve" <tm4...@aol.com> wrote:
> Signing an agreement with a broker is totally foolish. Remember that if
> you find a FSBO on your own, you have a bargaining position that you
> don't have with a broker. If its a hot property you're going to pay
> market or close anyway. But if the seller doesn't have to pay the
> broker,and you are ready to buy, cash-in-hand, you can get a piece of
> that 4-6% overhead yourself. It costs money for every month the seller
> doesn't sell without a broker for advertising, carrying costs, etc, so
> if you can buy quickly you can get a bargain.
>
> Unless of course you're willing to pay $50K for a glorified chauffer.
You show your colors with that last line. The one's who don't hire realtors
are the one's with "issues" about them, are the kind that think they're so
smart they can beat the system, aren't really motivated, or don't have a
life/job and have too much time on their hands. Anyone who is thinking
clearly would never try it themselves. If you had a bad experience with an
Agent then learn how to shop for an Agent. If you've never used one you have
no business making any judgments.
--
Warmest regards,
Steve Horrillo, Realtor / CEO / C.Ht.
http://BrokerAgenTraining.com (Advanced Training for Real Estate
Professionals)
http://over100percent.com (See How to Earn Over 100 Percent at EXIT Realty)
http::/HipFSBO.com (Find a FSBO Friendly Real Estate Professional)
Steve Horrillo
On 26-Jun-2005, "Don" <dwz...@telus.net> wrote:
> Another strategy that can work if you already know a potential buyer:
> Split
> the savings in commission down the middle. If, say, an agent's commission
> would normally be $10,000, offer it to a buyer for $5000 less than what
> you
> would otherwise demand. I did this in 1998, and it worked fine.
The listing agent should already have a contract with the seller for 6%. Why
would the Agent settle for half? Keep in mind it's the buyer's agent that
does most of the work leading up to the closing. Unless the house was
grossly over priced and they weren't getting any action. Chances are you WAY
overpaid for that house.
Warmest regards,
Steve Horrillo, Realtor / CEO / C.Ht.
Ken Ward
Sorry for coming on a bit strong, but I genuinely belive this might help you
understand one of the key components in your success. Remember, the most
successful people do not do everything themselves. They are good at picking
their team. If you believe real estate is a place to secure your future then
your Realtor might be the most important choice you can make.
If saving $50K were as easy as finding a buyer then you would be right,
there would be no need to pay brokers. For some reason, even with all of the
comission pressure brought on by sub-standard agents the real estate
brokerage business model is stronger than ever.
On average 82% of FSBOs fail to sell. If the FSBO gets into escrow, they
take about three times longer to do so, they are four times less likely to
close and six times more likely to suffer litigation. Of those who close
escrow, their net proceeds will average 5 to 12% less and about 90% would
not do it again.
To your credit, the "glorified chauffer" you refer to represents about 90 to
95% of the real estate agent community. Some are inexperienced, while others
are rookies year after year. However, there are those of us who can, in your
manner of speaking, "chauffer" you in an airplane, on a dark stormy icy
foggy night, avoid traffic and hazards, prevent and solve malfunction,
navigate, communicate, delegate and observe a schedule, all without spilling
your drink. If there is any glory in that, it would be simply that the
client arrived at their destination in a safe and timely manner. Care to
give the pilots seat a go?
Though our job is to make it look easy, its not! There is no basic
transaction anymore. Modern transactions are deceptive because of the myriad
of issues they present and they demand an experienced professional to
deliver them in a safe and timely manner (all without spilling your drink).
A professional broker has no shortage of savvy and successful clients eager
to enlist their services. The question is can you find the right broker?
The following is an excerpt from my personal brochure, I hope this helps you
to be more successful:
In the past, agents controlled access to real estate information and deals
were relatively simple. Many agents were able to get away with average
service and many buyers and sellers (justifiably) felt agents were making
easy money.
In today's market with public access to real estate information via the
internet, agents no longer control information. However, the complex and
detailed nature of a modern transaction demands a much higher standard of
client representation.
Today's market places much greater emphasis on agent skill level and
professionalism than ever before. The standards by which the most capable
agents are judged are: Integrity, experience and results. Market, process
and financing knowledge. Marketing, negotiation and accounting skills.
Closing coordination and risk reduction ability.
By aligning yourself with the right real estate professional you will have
an entire team at your disposal.
Do you deserve these qualities when hiring your agent?
Ken Ward, Broker, REALTOR, ABR, GRI, Licensing Instructor
RE/MAX Realty Group, Ashland OR
"Steve" <tm4...@aol.com> wrote in message
news:1119808773.6...@g43g2000cwa.googlegroups.com...
Jeff Strickland
"Donkeydode" <car...@sp.com> wrote in message
news:U__ue.51076$iU.45752@lakeread05...
> Spoken like a man who gets most of his income from realtors...If you have
> access to MLS in your area, tell me what exactly a realtor can provide
that
> I couldn't find already?
The MLS is a subscription service that real estate agents/brokers have to
pay for. The general public hasn't got access to the MLS, this is a big part
of why it works.
I have only used a realtor 1 time in 5 real estate
> transactions. I can say that it was not difficult at all, the title and
> escrow company took care of any issues that arose, which were very minor.
I
> have always thought that realtors were one of the biggest rackets going
> right now. On the other hand if all mortgage agents were guaranteed 3% on
> each loan I would protected it like a "wolverine".
>
I have never used a real estate agent. I bought and sold my first house as a
FSBO. Actually, I bought it from an estate that was in probate, and don't
recall how the property was listed, but I didn't use a buyer's agent, I just
bought the house. Then, after living in it a few years, I sold it as a FSBO
(For Sale By Owner). I set the sign out in the late afternoon, and the next
morning I had a buyer at full price.
But, my experience does not mirror the vast majority of transactions. The
vast majority of people decide to move from one area to another, and they
know very little about the new area. They are faced with the prospect of
driving from home to the new place where they are interested in living, and
they have to scour the various sources for homes. The trouble is, they don't
know where all of the homes are, and just because a home is in the local
newspaper doesn't mean that it is in a desirable part of town. You enlist
the assistance of a buyer's agent to have them search for properties for
you. The idea is that they know the neighborhoods, and if you want a
particular neighborhood feature, your agent should know that the feature
exists in one neighborhood or another.
I bought my current house when it was new, and I went every weekend for
something like 10 weeks before I found a house that met my criteria. If I
was looking at previously owned homes, I'd have driven myself and my wife
crazy driving all around the region looking for a house.
AspiringBroker
to sell".
Steve, your statement "FSBO is not worth anything" is simply not true.
I sold through FSBO
and I am glad that I paid $350 instead of $4200 for an agent. I am
thinking of becoming a
broker myself. However, I am thinking it deeper as I am seeing signs of
"For Sale By Owner"
more and more. It is not just FSBO. People are just selling by
themselves by putting up a sign.
Steve
your property. There was no way to sell your house yourself, other than
putting a small ad in the paper. Today brokers do very little that you
can't do for a lot less, even if you hire someone to do it. It was a
completely different matter when a house was $60K.
Also, the concept that brokers become 10-15% more valuable each year as
RE rises is beyond ridiculous. It takes no more effort or expense to
market a higher prices property (much like why do waiters get more
"tip" to open a $100 bottle of wine than a $25 bottle?).
Investing aside, if I'm looking for a condo in Lauderdale, I know which
buildings I'm interested in. If I'm looking to rent I call the building
and ask whats available. There's no reason you can't do the same thing
with sales. If the building management was smart, they'd list the
availabilities in the building themselves for a small fee. Wouldn't
cost them a dime. But then they'd piss off the realtors of course.
Selling mediocre houses is an entirely other matter. But if you have a
30th floor unit in a prime building you have to be a complete moron to
pay a broker 60K or more to show it for you. The thing will sell
itself.
Steve
threat to the RE business in general, because its too loosely marketed
and not presented very well. The problem is that there are too many
sites like FSBO. The advantage that brokers have is that they have a
single listing network. If you have a mediocre property it could take
forever to sell it on FSBO.
AspiringBroker
with you as I am an aspiring broker myself. When you say "single
listing network", I guess you are talking about MLS. FSBO put my house
on MLS for $300 and my total cost was $350. That is the biggest
problem.
Tyrone
"Ken Ward" <kwar...@charter.net> wrote in message
news:0cOve.7098$B_3....@fe05.lga...
Hey, that deserves a blue ribbon. It sounds like the same hot air that
NAR publishes in their ads in an attempt to convince both buyers and
sellers that it's a really tough job. I especially like that part
about:
1. financing knowledge. Yup, pick up the phone and call your mortgage
broker friend and dump it in his lap.
2. accounting skills. Yup, you gotta know if your commission check
was written for the right amount.
3. closing coordination. Yup, just find a reliable title company and
they will take care of all of that for you.
4. risk reduction ability. I guess that means to just lay low till
the title agent closes the deal, so you reduce the risk of screwing
things up and losing your commission check.
Donkeydode
DA
> In today's market with public access to real estate information via the
> internet, agents no longer control information. However, the complex
> and
> detailed nature of a modern transaction demands a much higher standard
> of
> client representation.
Not to beat a dead horse, but I'd like to ask for some clarification on
the public access to real estate information you are referring to.
When it was my turn to buy a house, I was going by the listings my agent
was fishing out of his proprietary online system ( he was with Re Max,
too, so you should know what I'm talking about). I would like to poke
around that system now that a year passed and I want to catch up on the
latest prices in my area (would love to re-finance and get rid of PMI).
The system won't let just anybody access it via Internet, so I don't think
it's as public as it seems to you. I mean, being a part of this system you
probably got used to it to the point that you don't realize it's a
closed/members-only system, but as a part of that *public* I can assure
you: access to listings outside the FSBO domain is NOT PUBLIC.
This is, of course, unless I'm missing something here. If someone has an
idea on how to use the same listings system my agent was using, I would
sincerely appreciate any pointers.
Cheers!
D.
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Steve Horrillo
On 27-Jun-2005, "Jeff Strickland" <spamc...@yahoo.net> wrote:
> The
> vast majority of people decide to move from one area to another, and they
> know very little about the new area. They are faced with the prospect of
> driving from home to the new place where they are interested in living,
> and
> they have to scour the various sources for homes. The trouble is, they
> don't
> know where all of the homes are, and just because a home is in the local
> newspaper doesn't mean that it is in a desirable part of town. You enlist
> the assistance of a buyer's agent to have them search for properties for
> you. The idea is that they know the neighborhoods, and if you want a
> particular neighborhood feature, your agent should know that the feature
> exists in one neighborhood or another.
I still wouldn't trust the whole process to an Agent. These days you can
check on sites like realtor.com to make sure that certain properties aren't
slipping through the cracks. The errors I see in the MLS never cease to
amaze me. We have a complex here called Hawaiian Gardens. I've seen Hawaii
misspelled about six different ways. I've been training realtors how to use
the MLS for the past year full time. Most know how to search for a correctly
entered listing but very few know how to make the search forgiving enough to
find an incorrectly entered one. And those are the best deals usually. Being
that the Realtor has probably been telling them the house isn't selling
because it's priced too high. Little do they know that they're not getting
showings because no one can find it!
--
Warmest regards,
Steve Horrillo, Realtor / CEO / C.Ht.
http://BrokerAgentTraining.com (Advanced Training for Real Estate
Professionals)
http://over100percent.com (See How to Earn Over 100 Percent at EXIT Realty)
http::/HipFSBO.com (Find a FSBO Friendly Real Estate Professional)
http://eLOWn.com ("Got a heartbeat?" Get a loan! Credit Repair Library)
Steve Horrillo
On 27-Jun-2005, "Don" <dwz...@telus.net> wrote:
> > The listing agent should already have a contract with the seller for 6%.
> >
> > Why
> > would the Agent settle for half? Keep in mind it's the buyer's agent
> > that
> > does most of the work leading up to the closing. Unless the house was
> > grossly over priced and they weren't getting any action. Chances are you
> >
> > WAY
> > overpaid for that house.
>
> I guess I didn't make it clear what happened. No agents were involved. I
> priced the house about what I believed it would realistically bring, lets
> say $175,000. Then I said to the potential buyer: "If I sold this house
> through an agent, you would have to pay $175,000, and I would end up with
> $165,000 after paying a $10,000 commission. I will sell it to you for
> $170,000." So the buyer and I each ended up with $5000 more than we would
> have otherwise.
How many buyers did you show your house to before you sold it? If your home
is shown to, say 3 qualified people in a month versus 30, don't you think
you could have gotten someone to pay you a lot more than you did? If you
were getting showings with minimal advertising at 175k, I guarantee you
could have gotten at least 199-225k if you had Global exposure.
How many potential buyers walked through your home before you sold? Out of
that number how many did you feel were serious and had the capacity to buy?
How could you tell? Did you ask for a Source of Funds / Pre-qualification
Letter? What length of time did you have it "on the market?"
--
Warmest regards,
Steve Horrillo, Realtor / CEO / C.Ht.
Steve
keeping realtors from being totally useless. Its like a big union using
its clout to keep useless workers on the payroll. What would a RE
broker be without the MLS? Just an uneducated old lady with a nice car
(covers head).
The public thinks of RE agents the way they think of Credit Card
companies. A friend of mine tried to start an FSBO-type biz before
there was such a thing, and even though he was offering free listings
until he got started, people just hung up on him when he called. People
are so paranoid of scams and rip-offs that they'd rather pay the Re-max
guys because at least they know they're legit. They have worldwide
stupidity going for them.
Jeff Strickland
Most people use RE agents because this is what it takes to sell a house.
Most FSBOs become listings after 60 or 90 days, then they sell on an average
of 35 days after that. This means that if the house had been listed in the
first place, the seller would have sold before the FSBO contract ran out. Of
course, he wouldn't have a FSBO contract if he had listed in the first
place, but I think you get the point. My limited experience in this field is
that For Sale By Owner and Help-U-Sell are functional equivelents, but the
Help-U-Sell has a contract. I am not sure what the contract will get you,
maybe a picture in the newspaper.
People hang up on telephone solicitors because they are not interested in
selling their house.
Steve
paper. Its not like you're going to cold-call random people. But they
get so many calls from rabid RE agents looking for the listing they get
numb.
I think I've made the point that the reason FSBOs don't sell well is
because its crappy marketing. Most people are idiots, so they need
help. If you're not an idiot then you don't need a broker. If people
can find a broker, they can find your house. Brokers put their phantom
listings in the paper to draw buyers into their office. You can do just
as well advertising your property in the same medium.
Jeff Strickland
have a longer time on market, not always but generally. Buyers can't find
them because buyers agents don't show them, so buyers have to find them by
driving randomly around the neighborhood and scouring the classifieds.
I agree that most people need help, but I reject the notion that they are
idiots. Sure, a fair number of them are just like you, idiots, but most are
simply not very knowledgeable about the most important purchase they are
likely to make in their entire life.
I bought a house without benefit of an agent, and slod the same house
without an agent, but my experience is not considered normal by any of the
data sources that measure such things. I probably sold low, and if I had an
agent, I could have gotten around $10,000 more on my sales price, but I
would have had to fork it over to the listing agent, so I probably came out
about the same in the end. I see no point in crying over what happened 20
years ago, but I think that the vast majority of FSBO listings do not do as
well as agent listings. Certainly, having an agent (a good agent) scour the
MLS for you is better than driving randomly around the neighborhood looking
for a house, which is what we were talking about when this discussion
started. The reason to not have a selling agent has nothing at all to do
with why one would not have a buyers agent.
"Steve" <tm4...@aol.com> wrote in message
news:1120167637.1...@g47g2000cwa.googlegroups.com...
Don
news:DKidnYcRbaw...@ez2.net...
> Buyers can't find them because buyers agents don't show them, so buyers
> have to find them by driving randomly around the neighborhood and scouring
> the classifieds.
If that is true, and I suspect it is, then so-called "buyer's agents" do not
really represent the best interests of buyers. It seems to me they are more
like friendly sales people, who are willing to show you around a store and
help you find a few good products, but are not willing to show you
everything that meets your needs, certainly not the products in the discount
store across the street.
Jeff Strickland
with, in neighborhoods where you have no idea what's going on. When you tire
of driving around aimlessly week after week, let us know.
"Don" <dwz...@telus.net> wrote in message
news:fmixe.102443$9A2.96265@edtnps89...
Don
> Fine. Set out on your own to buy a house in a city you are not familiar
> with, in neighborhoods where you have no idea what's going on. When you
> tire of driving around aimlessly week after week, let us know.
Yes, I agree; someone who sets out to buy a house in a strange city, either
with or without the help of an agent, is in a very weak position and prone
to financial loss. For someone relocating to another city, I think a lot is
to be said to renting for the first year while becoming more familiar with
the neighborhoods, house prices, etc. But for the vast majority of people
who are house-hunting in their own familiar city, I would suggest exactly
what you say: Drive around a lot, not aimlessly but systematically, and look
at what is available.
Steve Horrillo
On 1-Jul-2005, "Don" <dwz...@telus.net> wrote:
> > Buyers can't find them because buyers agents don't show them, so buyers
> > have to find them by driving randomly around the neighborhood and
> > scouring
> > the classifieds.
>
> If that is true, and I suspect it is, then so-called "buyer's agents" do
> not
> really represent the best interests of buyers. It seems to me they are
> more
> like friendly sales people, who are willing to show you around a store and
>
> help you find a few good products, but are not willing to show you
> everything that meets your needs, certainly not the products in the
> discount
> store across the street.
Jeff is loosly using the term Buyer's Agent. In my state you need to have a
contract signed with the buyer to be THEIR Agent. Then no maatter where you
take the the buyer will pay the full commission. If you're unwilling to make
a committment in writing then the Agent is working for the one who IS under
contract. The seller. No finance no romance. It's your choice.
--
Warmest regards,
Steve Horrillo, Realtor / Trainer / C.Ht.
http://BrokerAgentTraining.com (Advanced Training for Real Estate
Professionals)
http://over100percent.com (See How tRealtors Earn Over 100 Percent at EXIT
Realty)
http:/HipFSBO.com (Object to Paying Commission? Find a FSBO Friendly Real
Estate Professional)
Steve Horrillo
On 1-Jul-2005, "Don" <dwz...@telus.net> wrote:
Or HIRE an agent. If I asked you to drive me around every day to learn the
market and pick your brains, but told you I might decide to buy from someone
else, would you give your all to me? I bet you wouldn't. Yet amazingly
enough many agents will. For the buyer it's a no-lose situation if you look
on your own too.
Steve
distinguish from your "reports" FSBOs that are well-marketed and those
that just put a sign on their lawn and pray someone sees it.
The "data sources" that measure such things are not useful in this
case. Its the equivalent of saying "don't start your own business,
because 70% go out of business in the first year". The stats don't
consider stupid people or ill conceived ideas, so its not a statistic
that applies to anyone in particular. Your chances of succeeding have
nothing to do with the statistics.
The bottom line is that, other than someone randomly walking into a RE
agents office, a broker has no advantage that you don't have yourself.
My opinion is that you have a significant advantage marketing it
yourself, because the RE broker only cares about the body. They don't
care which property you buy, as long as you use them to buy it. They
use their menu of listings to attract certain kinds of buyers, and then
try to sell them SOMETHING. When you do it yourself, you're only trying
to attract those that want to buy your property.
Steve
about every building in a selling area, and a few days visit to learn
the rest. I wouldn't believe a RE agent anyway, so you still have to
research it yourself.. I don't care if its a buyer's agent or not (or
a relative for that matter). ALL RE agents will push you toward higher
priced properties, because thats how they make their money. If a
salesman makes more commission on product A than product B he will
always recommend product A. Which is precisely why you can't rely on
anyone in RE to work in your best interests.
I've bought in several diverse markets, and I've found the RE community
in SoFL to be almost completely worthless. Brokers don't even want to
show you anything under $1M. And if they have a listing in a building
they don't want to show you other units that aren't their listings.
They have negative value. A piece of paper on the outside of the
building with a list of the available units would be 10 times more
effective.
eddiec
Uh, not to butt in, but there may be some relevance to this thread.
I have sold my own homes FSBO 4 times over the years. None took longer
than two months, all were priced at the same price as CMAs I had done.
All closings were without a hitch.
Marketing was simple: newspaper ads and a front yard sign. I might try
a website next time. I tried ForSalebyOwner.com but that produced only
agent inquiries. Twice agents blew sales because their clients found
the house on their own and the agents convinced the buyers that it's
too dangerous to buy FSBO. The buyers were too dumb to see the obvious
conflict of interest.
3 out of the 4 sales were from drive-bys seeing the sign.
It only takes one buyer. Title companies take care of everything, just
like they do for agents.
Will I try FSBO again? What do you think?
Ed
Steve
I'm curious as to how that works. From the buyers view (say
realtor.com), I've never seen an MLS listing where you could contact
the seller directly. Does the "sponsor" agent get the contact info? If
buyers can't contact you directly, then the value is substantially
diminished. Heck, the sponsor agent should pay the fee for you.
Steve Horrillo
On 3-Jul-2005, "Steve" <tm4...@aol.com> wrote:
> I'm curious as to how that works. From the buyers view (say
> realtor.com), I've never seen an MLS listing where you could contact
> the seller directly. Does the "sponsor" agent get the contact info? If
> buyers can't contact you directly, then the value is substantially
> diminished. Heck, the sponsor agent should pay the fee for you.
All a savvy seller needs to know is the address or owner's name. From that
they can go to the tax rolls or one of the many online directories and get
the owner's phone number or simply knock on the door..
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
http://BrokerAgentTraining.com (MLXchange & Computer Training for Real
Estate Professionals)
http://over100percent.com (Realtors Earn Over 100 Percent at EXIT Realty)
Tyrone
"Steve Horrillo" <use...@stephenhorrillo.com> wrote in message
news:2mXxe.22044$Tt.2...@bignews3.bellsouth.net...
>
> On 3-Jul-2005, "Steve" <tm4...@aol.com> wrote:
>
>> I'm curious as to how that works. From the buyers view (say
>> realtor.com), I've never seen an MLS listing where you could contact
>> the seller directly. Does the "sponsor" agent get the contact info?
>> If
>> buyers can't contact you directly, then the value is substantially
>> diminished. Heck, the sponsor agent should pay the fee for you.
>
> All a savvy seller needs to know is the address or owner's name. From
> that
> they can go to the tax rolls or one of the many online directories and
> get
> the owner's phone number or simply knock on the door..
>
Talk about confusing posts, you've done it again. One must assume, you
were referring to the buyer instead of the seller in your response
above. I would hate for a real estate transaction of mine, to depend on
your sloppy attention to detail.
Jeff Strickland
A Buyer's Agent that is worth a shit can do the driving for you, and he is
paid by the seller. I think it is a rare buyer that can actually find a home
on his own. You can do it, and I managed to do it once, but when I bought my
second home, I bought a new house where a buyer's agent isn't very helpful.
Buying a new house and buying a used house are completely different
transactions.
Don
news:U-adnb_-oPZ...@ez2.net...
>
> A Buyer's Agent that is worth a shit can do the driving for you, and he is
> paid by the seller.
Unless I am missing some new legal twist, a "buyer's agent" who is paid by a
seller owes allegiance to that seller. I have dealt with a couple of agents
who called themselves "buyer's agents," but in fact were anything but. The
main problem my wife and I encountered was that they did not show us all the
available properties that met our needs. We found what we were looking by
driving around ourselves, with a little help from internet searches.
Steve Horrillo
On 5-Jul-2005, "Don" <dwz...@telus.net> wrote:
> The
> main problem my wife and I encountered was that they did not show us all
> the
> available properties that met our needs. We found what we were looking by
> driving around ourselves, with a little help from internet searches.
The reason you weren't being shown all the properties is the one's you
weren't shown were probably listed though a discount broker and paid a very
low commission, were FSBO, or it's getting to where there's many buyer's
agents that won't show a house if it is listed with no photos. The idea is
if you don't want to truly hire a buyer's agent and sign a contract with
them. At least to go on realtor.com and insist on them showing you the
properties you're interested in. If they drag their feet, call the listing
agent direct. The listing agent will even pick you up and drive you there
with bells on being that they'll be getting the full commission.
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
http://BrokerAgentTraining.com http://over100percent.com http:/HipFSBO.com
http://eLOWn.com
Don
> The reason you weren't being shown all the properties is the one's you
> weren't shown were probably listed though a discount broker and paid a
> very
> low commission, were FSBO, or it's getting to where there's many buyer's
> agents that won't show a house if it is listed with no photos. The idea is
> if you don't want to truly hire a buyer's agent and sign a contract with
> them. At least to go on realtor.com and insist on them showing you the
> properties you're interested in. If they drag their feet, call the listing
> agent direct. The listing agent will even pick you up and drive you there
> with bells on being that they'll be getting the full commission.
That is exactly what we eventually did. The listing agent was just as
friendly and informative as the buyer's agent had been, if not more so, and
we were under no illusions as to who that listing agent represented.
Steve Horrillo
On 27-Jun-2005, "Ken Ward" <kwar...@charter.net> wrote:
> On average 82% of FSBOs fail to sell. If the FSBO gets into escrow, they
> take about three times longer to do so, they are four times less likely to
>
> close and six times more likely to suffer litigation. Of those who close
> escrow, their net proceeds will average 5 to 12% less and about 90% would
> not do it again.
Where exactly did you get those statistics?
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
http://BrokerAgentTraining.com http://over100percent.com http://hipFSBO.com
http://eLOWn.com
Jeff Strickland
>
> On 27-Jun-2005, "Ken Ward" <kwar...@charter.net> wrote:
>
> > On average 82% of FSBOs fail to sell. If the FSBO gets into escrow, they
> > take about three times longer to do so, they are four times less likely
to
> >
> > close and six times more likely to suffer litigation. Of those who close
> > escrow, their net proceeds will average 5 to 12% less and about 90%
would
> > not do it again.
>
> Where exactly did you get those statistics?
>
Steve, I think these are national numbers, I don't think they hold true, or
quite so true, in California where you and I are. I can't support them, but
I have seen them, or numbers like these, before.
As you are well aware, the decision to go it alone with a FSBO is highly
dependent on the market for success. Here in California, I think that FSBOs
have greater success than many other places, a large part of that is because
escrow does more here than in other states. I know that I had to do more on
my purchase and my sale because I went it alone, but I was able to work well
with escrow on both transactions. The escrows in both said that I was among
the better customers they worked with, most people simply are not well
suited to deal with this sort of stuff. Certainly many are, but there is no
denying that many aren't.
This discussion started off as a look at using a Buyer's Agent, the fact
that we are discussing the pitfalls of selling shows how much confusion
there can be.
Steve Horrillo
I'm in South Florida not CA. But the situations seem to be similar. From
what I've seen, there's no way I'd wouldn't use the MLS to sell my home. My
best friend, a Realtor of 20 years sold her home with a yard sign and was so
proud she got her asking price in two weeks. Fact is, she asked too low.
Within two weeks after she sold an identical townhouse sold on the MLS for
20k higher! When I worked for Buy Owner I would sign up at least two
Realtors per month. It amazes me that even Realtors succumb to the ego trip
and greed factor of thinking they can do better selling it themselves.
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
http://BrokerAgentTraining.com http://over100percent.com http://HipFSBO.com
http://eLOWn.com
Jeff Strickland
Sorry, I thought you were in California. But, like you say, I think the
markets are similar. I am not dissing FSBOs, I'm just a realist, and I think
that most of these don't go as well as the seller might like. Many go
without a hitch, and everybody involved walks away happy, but the reports I
read seem to suggest that these are not the norm.
Steve Horrillo
On 27-Jun-2005, "AspiringBroker" <mfa...@yahoo.com> wrote:
> Steve, your statement "FSBO is not worth anything" is simply not true.
> I sold through FSBO
> and I am glad that I paid $350 instead of $4200 for an agent. I am
> thinking of becoming a
> broker myself. However, I am thinking it deeper as I am seeing signs of
> "For Sale By Owner"
> more and more. It is not just FSBO. People are just selling by
> themselves by putting up a sign.
It's just common sense. If the minimal exposure from a sign gets you "X"
dollars. More exposure will get you more $. Step back from your personal
prejudices and motives and think about it rationally. Or become a broker and
you'll get to experience for youself what I'm telling you. I've been there
myself.
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
http://BrokerAgentTraining.com http://over100percent.com http://hipFSBO.com
http://eLOWn.com
Steve Horrillo
On 27-Jun-2005, "Steve" <tm4...@aol.com> wrote:
> I didn't really mean that FSBO was "useless". I meant that its no
> threat to the RE business in general, because its too loosely marketed
> and not presented very well. The problem is that there are too many
> sites like FSBO. The advantage that brokers have is that they have a
> single listing network. If you have a mediocre property it could take
> forever to sell it on FSBO.
Good point about the MLS being tightly knitted. If someone was willing to
put megabucks into a major FSBO site, there might be a chance. But in
practice all these discount business models all have an ulterior motive. To
wear you down and ultimately get you listed in the MLS with a full service
listing. The rouge web sites are just taking advantage of most people's
ignorance of how the Internet works.
Steve Horrillo
On 27-Jun-2005, "AspiringBroker" <mfa...@yahoo.com> wrote:
> Steve, I don't know if you are a broker or not but I wish I could agree
> with you as I am an aspiring broker myself. When you say "single
> listing network", I guess you are talking about MLS. FSBO put my house
> on MLS for $300 and my total cost was $350. That is the biggest
> problem.
No. If you use a flat rate broker your total cost is $350 plus the buyer's
agent's 3% commission. If you pay $350 to be on some obscure website you are
truly a sucker or uninformed of how many website's the are out there that
you're not on. Unless you're willing to give your home away, don't even
bother listing it in the MLS unless you're willing to give the buyer's
agents their full 3% commission.
True that getting on the MLS will get you on Realtor.com/Yahoo etc., but if
you don't offer the listing agent anything beyond the flat $350 fee, don't
expect them to even answer the phone, much less cart buyers to you when they
can send the buyer to a property that can get them 3-6%.
Steve Horrillo
On 28-Jun-2005, "Tyrone" <Tyr...@innercity.net> wrote:
> Hey, that deserves a blue ribbon. It sounds like the same hot air that
> NAR publishes in their ads in an attempt to convince both buyers and
> sellers that it's a really tough job. I especially like that part
> about:
>
> 1. financing knowledge. Yup, pick up the phone and call your mortgage
> broker friend and dump it in his lap.
>
> 2. accounting skills. Yup, you gotta know if your commission check
> was written for the right amount.
>
> 3. closing coordination. Yup, just find a reliable title company and
> they will take care of all of that for you.
>
> 4. risk reduction ability. I guess that means to just lay low till
> the title agent closes the deal, so you reduce the risk of screwing
> things up and losing your commission check.
Of course that's nonsnse in most cases. There will always be a professional
who wants to get paid. But that's not why you should not hire an agent.
Steve Horrillo
On 29-Jun-2005, rcdd_at_teledat...@foo.com (DA) wrote:
> The system won't let just anybody access it via Internet, so I don't think
> it's as public as it seems to you. I mean, being a part of this system you
> probably got used to it to the point that you don't realize it's a
> closed/members-only system, but as a part of that *public* I can assure
> you: access to listings outside the FSBO domain is NOT PUBLIC.
Of course you can. Go to www.realtor.com and you'll see all the listings a
Realtor sees.
Steve Horrillo
On 29-Jun-2005, "Steve" <tm4...@aol.com> wrote:
> Of course it is. The NAR is very protective and is the only thing
> keeping realtors from being totally useless. Its like a big union using
> its clout to keep useless workers on the payroll. What would a RE
> broker be without the MLS? Just an uneducated old lady with a nice car
> (covers head).
NAR lists every property publicly on http://www.realtor.com. Where have you
been?
Steve Horrillo
On 29-Jun-2005, "Steve" <tm4...@aol.com> wrote:
> People
> are so paranoid of scams and rip-offs that they'd rather pay the Re-max
> guys because at least they know they're legit.
Legit? In practice FEE/MAX is one of the worst because they stay out of the
Broker's business as long as they pay the franchise fee. And the Broker
stays out of the Agent's way as long as they pay for their office space.
You don't have a clue. Do you?
Steve Horrillo
On 30-Jun-2005, "Steve" <tm4...@aol.com> wrote:
> Brokers put their phantom
> listings in the paper to draw buyers into their office. You can do just
> as well advertising your property in the same medium.
The ad Brokers put in the paper rarely finds a buyer for the home that's
mentioned in the ad. *Nor will your FSBO ad.* But at least a Broker can
steer them to another property. When some calls a private seller and the
property doesn't suit them, you're dead in the water. Unless of course you
chipped in with a friend's who also wants to sell their home. I hope you're
pulling my leg or playing the "Devil's Advocate." You can't be that
clueless.
Steve Horrillo
On 1-Jul-2005, "Don" <dwz...@telus.net> wrote:
> > Buyers can't find them because buyers agents don't show them, so buyers
> > have to find them by driving randomly around the neighborhood and
> > scouring
> > the classifieds.
>
> If that is true, and I suspect it is, then so-called "buyer's agents" do
> not
> really represent the best interests of buyers.
Did you sign anything? If you signed a disclosure you should have read it.
If you didn't common sense should tell you that if you don't have a contract
you don't have commitment. Or would you have the commitment be one sided?
Did you just fall off the turnip truck or something?
Don
> Did you sign anything? If you signed a disclosure you should have read it.
> If you didn't common sense should tell you that if you don't have a
> contract
> you don't have commitment. Or would you have the commitment be one sided?
> Did you just fall off the turnip truck or something?
Some so-called "buyer's agents" try to give the impression they are
representing a buyer when no contract exists. All those Sunday supplements
in the newspapers that describe the real estate scene and new developments
need to publish more columns explaining the legalities of the relationship
between home buyers and the various agents with which they deal.
Steve Horrillo
On 9-Jul-2005, "Don" <dwz...@telus.net> wrote:
> > Did you sign anything? If you signed a disclosure you should have read
> > it.
> > If you didn't common sense should tell you that if you don't have a
> > contract
> > you don't have commitment. Or would you have the commitment be one
> > sided?
> > Did you just fall off the turnip truck or something?
>
> Some so-called "buyer's agents" try to give the impression they are
> representing a buyer when no contract exists. All those Sunday supplements
>
> in the newspapers that describe the real estate scene and new developments
>
> need to publish more columns explaining the legalities of the relationship
>
> between home buyers and the various agents with which they deal.
It's just human nature that person you know is the one you feel a loyalty
to. Most buyer's agents never even meet the seller. In practice the buyer's
agent will feel morally obligated to the buyer even though they are legally
obligated to the seller. I'm very suspicious of anyone who complains that
their agent wasn't on their side. You can rest assured you're not getting
the whole story.
--
Warmest regards,
Steve Horrillo, Realtor / C.Ht.
http://BrokerAgentTraining.com http://over100percent.com http://HipFSBO.com
http://eLOWn.com
Don
In practice the buyer's
> agent will feel morally obligated to the buyer even though they are
> legally
> obligated to the seller.
If this is true, it is certainly unlike any business relationship I have
encountered. If it is true, how do you suppose the seller feels about it?
Car salesman to customer in sales room: Sir, I am morally obligated to you,
even though I am legally obligated to my boss.
Steve Horrillo
On 10-Jul-2005, "Don" <dwz...@telus.net> wrote:
> In practice the buyer's
> > agent will feel morally obligated to the buyer even though they are
> > legally
> > obligated to the seller.
>
> If this is true, it is certainly unlike any business relationship I have
> encountered. If it is true, how do you suppose the seller feels about it?
>
> Car salesman to customer in sales room: Sir, I am morally obligated to
> you,
> even though I am legally obligated to my boss.
Don, you can't compare buying a home to buying a car. When an agent takes on
a buyer, no matter what type of agency is involved, the agent becomes the
"procuring cause" of the potential transaction. If it weren't for the buyer
choosing them, the agent would have no claim on their cut of the commission.
With that comes a psychological sense of obligation. "You picked ME over a
thousand other agents." What makes it all so confusing is that lawmakers try
to legislate morality, they try to scientifically reduce the potential for
abuse. Some people follow G-d's law, other's follow man's law. They
sometimes come into conflict. That's why Realtors and almost every
professional is taught that, "when in doubt follow the Golden Rule." "Do
unto other's as you would have them do unto to you."
To put it in a blunt way, if the seller is an opportunistic prick with a
prick for listing agent, you need to protect the buyer. If the buyer is
looking for an unfair edge you try to protect the seller. It's not something
that can be defined in a written law. I know in my heart who's the predator
and who's the prey. Usually both parties are neither. But when I do see an
imbalance I will subtly try even up the odds. Sue me. Fire me. Take away my
license. Whatever turns you on. But I'll follow the Golden Rule no matter
what the consequences. I don't work for money, my broker, the buyer, the
seller, the Government etc. I work for G-d. Because I have to live with
myself, that's Who I ultimately must answer to. If you're an atheist then
answer to your conscience. FTW.