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Opinion Editorials

Realtor Hating

The Problem:

Anyone in the real estate industry feels the squeeze of anti-Realtor sentiment and although haters are as uncommon as UFO conspiracy theorists, their megaphone is loud and infectious to non-believers. Here is a perfect example of a Realtor Hater, found in comments here just yesterday (emphasis is mine, not theirs):

“I hate Realtors.

All of you are just worthless middlemen in the way giving house tours and collecting your outrageous commissions.

You are all SALES PEOPLE. You DO NOT work in the buyers “best interests” at all. Anyone who believes this for one second is a FOOL. All Realtors need to hurry up and go extinct.

I cannot stand dealing with you people. You are all ARROGANT ARROGANT ARROGANT! Lets do a quick Reality check here. Your not a doctor. Your not a lawyer. Your a damn Realtor! ANYONE can get thier [sic] RE license. You dont [sic] even need a GED. You can pump gas, dig ditches, or work at the circle K. THESE Are the kind of people flooding into your industry and then “honing thier [sic] acts”.

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You all claim to offer your “services” to help buyers find there dream homes. Yet 99% of you cant even answer more detailed questions about the houses we are interested in. Uhhh Ummm hold on I have to ask the owner. So you can parrot the information from the MLS which I am already looking at. Gah! SO WHAT IS THE POINT of forcing me to deal with you people!?

A history lesson is in order here:

Once upon a time we NEEDED REALTORS. They were the only link from the sellers to the buyers and naturally it made sense for several hundreds or thousands sellers to deal with one broker in order to sell a house. Otherwise you were could put a sign in your front yard or pay for one inch classified newspaper ads.

That was then. This is now. And today everything has changed.

These days we have the Internet. And THAT is all we need.

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Zillow.com. FSBO and even legal zoom.com for real estate forms and questions. With the way things have/are going, I ask every Realtor viewing this:

Why do we even need Realtors anymore?

Answer: We dont [sic]!”

The Solution:

Vicki Moore said it back in 2007 in her article, “Commission Bashing” better than I’ve heard almost anyone else defend the profession and you should commit yourself to wrapping your mind around this:

“I’m so sick of hearing it. Where there’s high risk, there’s high pay.

Every morning, I wake up unemployed. I have to figure out where my next paycheck is coming from.

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When I list a property for sale, I take the risk. I pay for all of the upfront expenses. I recoup those expenses when and if the house sells. The seller signs the contract, the home may not actually be available for purchase for months while the house is prepared for sale. Then it goes on the market. I pay for the advertising, marketing, the sign, the flyers, the virtual tour, the website, etc. An offer comes in. I negotiate it. I fight for my client’s price. I fax. I copy. I drive back and forth. The house goes into contract. I manage the process. The buyer hires an inspector. The inspector finds something negative with the property. The negotiation starts again. Maybe the buyer and seller come to an agreement, maybe they don’t. Maybe I get paid, maybe I don’t.

It’s the same scenario when working with a buyer.

I’m not saying these things for empathy. I love my job and can’t imagine doing anything else. However, the risk I expend with my time and money is high; and therefore, so should the reward.

Are all Realtors good? Of course not. Is everyone at your place of employment good? No.

The lower the commission goes, the less interested professionals will be to engage in the work. Then most will be standing behind a Starbucks counter saying, “I can sell your house.”

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Be a responsible consumer. Interview the agent you’re hiring. Go with your gut.”

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

16 Comments

16 Comments

  1. Vicki Moore

    February 25, 2009 at 11:48 am

    I’m a butcher, a baker, a candlestick maker. I smell a post.

  2. Danilo Bogdanovic

    February 25, 2009 at 12:45 pm

    I dislike some mechanics because some mechanics tend to find things “wrong” with your car that aren’t really wrong. But I still need a mechanic to fix my car because I don’t know how to fix most things myself.

    And even if I did know how to fix them myself, I don’t want to do buy a lift, all the tools, build a pit in my garage, etc., nor do it myself.

    I searched around for an honest and good shop and tech and have been going there for years now. If the tech leaves to go to another shop, I and my business will follow him.

    The same principles seems to apply to real estate agents.

  3. bryanslist

    February 25, 2009 at 1:21 pm

    Cool post Lani.

    I got the points both of your quotes were trying to make.

    While I could understand the frustration of the first, as I was reading, I was thinking the exact same thing as the second, if that makes sense.

    The fact of the matter is that the industry is changing, with the NAR hiring Todd as today’s proof in the pudding, and the exact people that the angry commenter was citing are going to be weeded out, they have already started to be…

  4. David Tapper

    February 25, 2009 at 6:51 pm

    I feel sorry for you haters who used a real estate professional and didn’t have a good experience. Or did you even have a real estate transaction buying or selling a home???

    The difference between a good agent and a great agent is quite simply their knowledge and experience, so you don’t make a huge financial mistake.

    You might want to start by asking true actual buyers and sellers who have had a bad experience if they wished they had a better agent. The difference could be tens of thousands of dollars!

    I guess you think Zillow is accurate, huh? Why don’t you call and ask them, ask them how many homes have they sold.

    Yes, it’s true that we are not Doctor’s and don’t need college digrees, we never said we were. But, there are many Dr’s that make crucial mistakes, mistakes that cost lives.

    Many Dr’s and Dentist have ethic problems, wanting to sell medicine that is not needed, or to help promote a certain drug company.

    I’m not sure we need to have our teeth cleaned 4 times a year, usually two is sufficient. Did I really have a cavity that needed filling? I don’t know.

    If you are so upset about real estate professionals and how much money they make, then why don’t you get give it a try? Your not working, and like you said, everyone can do it. Try it, see how much it cost to run a real estate business even if it’s just for yourself.

    Yes, there a horrow stories about our industry, but the good agents will stick around and earn their money and the respect of their clients.

    While your sitting around doing nothing, why don’t you go to school and take some classes. One class you might want to take is Real Estate Principals.

    See how easy it is.

    Dave Tap Tapper
    http://www.DavidTapper.com

  5. David Tapper

    February 25, 2009 at 6:55 pm

    Ok, before you bash me, I admit I did’t spell check, so maybe we can all go to school together.:)

  6. Ken Brand

    February 25, 2009 at 7:35 pm

    Here’s the deal, IMHO, people in general are stressed to the max, people are sad, hurt, angry, frustrated and just plain pissed. People handle stress differently, some rant, blame and spit flames. I try, sometimes unsuccessfully, to keep in mind that over the top behavior is a sad sign that someone is in big time pain and a very bad place. As you’ve shared in Vicki’s perfect post, she’s confident in her abilities and her value. She holds her high with a smile and rocks on. Shake those hatters and rock on.

  7. Alan Pinstein

    February 26, 2009 at 9:12 am

    Both of the quoted articles make some good points. However, there is a problem with the Agent’s defense of their role:

    > “I’m so sick of hearing it. Where there’s high risk, there’s high pay.
    >
    > Every morning, I wake up unemployed. I have to figure out where my next paycheck is coming from.

    This is true for the agent the way the market works today, but that’s the problem. The fact that real estate sells on 100% commission is a horrible pricing system for delivering the services of a real estate agent. It puts the agent in a position of having to accept more risk than they should, and causes the buyers and sellers to pay more in commissions than they should.

    People that are hating on agents aren’t stupid; they realize the above points. Agents simply defend their high commissions by pointing to the risk they take. But it’s the industry status quo that forces real estate consumers to use this system.

    Just because agents take the risk of whether or not a property will sell today doesn’t mean it’s the best way the market should work.

    In my opinion, it’s an inevitability that the pricing structure for real estate commissions will change to reflect reality in the next 3-5 years. There will start to be fixed fees for “handling” a listing — these fees will cover the agent’s expertise in dealing with the paperwork, doing marketing, preparing the house for sale, etc. This fee-for-service model will likely be a la carte, so that consumers can buy pricing services from the person that best understands the market; staging services from the person that best understands the psychology of selling, etc.

    Also, in the current structure, the various parties interests are not aligned. Most sellers want to maximize sales price; agents are incentivized to sell as quickly as possible. The more an agent invests in marketing the house, the worse this incentive mis-alignment becomes, because the agent wants to recoup their risk before the listing contract expires.

    It is a wonder to me why no agents have “buyback” clauses in their listing contracts. Instead of a listing contract lasting for a certain amount of time, why not make it the LIFE of the listing, unless the homeowner BUYS OUT the contract for say $1500, the value of the initial marketing services. A structure like this would nearly eliminate the risk for the agent and more closely align their incentives. This would result in more stable incomes for agents, cheaper commissions for sellers, and less wasted money in the system. The agent would be more interested in waiting out the market for the best offer they could get for their client.

    Just some thoughts…

    Alan

  8. MoneyForNothing

    February 26, 2009 at 3:29 pm

    Danilo Bogdanovic makes a great point!

    For example, I needed some work done on my car last year.

    Instead of buying all the necessary tools and equipment, learning the technical knowledge required, and spending my own time and effort fixing it, I just paid a mechanic a fair price to do all of those things.

    The only problem is, when we apply this logic to REALTORS, many don’t have any unique tools or equipment, appear to have absolutely no financial training or expertise beyond that of the average person, and so on the whole their “clients” would be much better served if they simply ran their own real estate errands and skipped out on paying the hefty 6% fee for the agent’s “services”.

    I mean, if REALTORS were so highly skilled, you would think at least a few businesses would be willing to hire them on salary, so the businesses and their customers could benefit from the realtors’ extensive expertise.

    Hmmm.

    Maybe that is why virtually no businesses are ever willing to pay salaries or wages to REALTORS?

    I mean, in an efficient labor market, surely some shrewd companies would hire the best realtors on salary or for wages, if their expertise was indeed so valuable.

    But since this virtually never happens, this means the labor market values the “expertise” of “real estate professionals” somewhere near $0/hour. 🙂

  9. fred

    February 26, 2009 at 6:59 pm

    @Alan – you hit the nail right on the head. The problem is the outdated “traditional” percentage business model. It’s simply time for a change. The big problem is that many Realtors don’t want to change, but over the next 5 years they will have to or they might be out of business.

    Full service, limited service, or flat fee, consumers want choices that make sense. A-la-cart makes perfect sense. There is no reason to pay $18,000 to sell a $300,000 home! It’s just outrageous.

  10. Missy Caulk

    February 28, 2009 at 10:39 pm

    We had our GMM meeting in Sept. A Google employee spoke, and said he and his wife, looked on their own, looked at houses, drove by houses, used Google Earth, etc…

    Then they hired a Realtor, they realized they could not do it on their own.

  11. teresa boardman

    March 2, 2009 at 5:46 am

    I get why people hate Realtors there are some that I don’t like either. That is why I started a blog 3.5 years ago so that people can meet me and decide if I am worth the comission that they will pay.

  12. Katie Minkus, R(B)

    March 2, 2009 at 2:06 pm

    It amazes me that anyone would even consider selling a house on their own, given the litigiousness of today’s society. Given that well over 95% of the lawsuits in real estate are brought by Buyers against Sellers, and the vast majority of lawsuits are about disclosure and every time I represent a Seller I have to pound into their heads the need to disclose EVERYTHING so they don’t get sued… seems to me professionals are needed just to protect the non-professional!!1!

    On the buy side of things, I cannot speak for other areas of the country, but I’d really like to see a Buyer try to navigate through a 12 page contract, an additional 6 page Buyer’s addendum, other addendum and then try to figure out what they need to know about “Agricultural” (and other types of) zoning, cesspools, lava ratings and flood zones on their own here in Hawaii – not to mention reading a title report, or knowing what to do if there is an encroachment or cloud on title… meanwhile the Seller’s representative is telling the buyer all sorts of lies and manipulating the situation in their Seller’s favor… my, my, my, my it’s an interesting world that we live in. I wouldn’t fix my own car, operate on myself or represent myself in court, I hire people to clean my house, watch my kids and do my dry cleaning… so what’s the big beef with Realtors??? I realize that $18k to sell a $300k house seems like a lot, but when you actually calculate the dollar per hour, figure that most transactions take about 300-400 hours of an agent’s time, we’re talking about $45-60 net, and THEN we have to pay 20% to our Broker for the privilege of doing business… that’s less money than I pay my cleaning lady. So… just my 2cents from the Beautiful Big Island of Hawaii….

    I do love the idea of taking a listing for life with a buyout clause… that’s great!

  13. fred

    March 2, 2009 at 2:11 pm

    300-400 hours of time??? Are you kidding me? For one transaction? That’s completely unbelievable… sorry no way!

    Does anyone else here spend that many hours with one transaction?

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