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  #1  
Old 09-02-2004, 04:53 AM
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brucec32 brucec32 is offline
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Real Estate Agents

There are frequent threads where we discuss the pros/cons of working for real estate agents. I had a recent experience unrelated to lawncare that I think aptly illustrates the type of ethics these people have and why you should always be careful when dealing with them.

I recently inquired with the agent who sold me my house about listing it with him for sale. We dont' like the area and want to move on. Home prices have thankfully skyrocketed and it's worth quite a bit more than we paid for it. I have independently established a reasonable price range via comps and other methods, with a high degree of confidence. This agent was nice, friendly, seemed sincere. And since we knew him already, we thought of him first.

He mentions during the interview that he might already have someone who would love our home. Good. Then a day or two later he calls back with the listing price they have determined for my home. It's about $50,000 below even a very conservative market price! I quiz him on how he came up with this low price, but get a lot of vague answers. I also noted that many inferior homes listed by his brokerage were priced higher than even my estimate of its value. I was mystified. Why so high on other homes they listed but so low on mine?

Explaining this to my brother and father, both in the home building business, my brother jokes "maybe the broker's nephew needs a house". Well guess what? Turns out this agent's potential buyer was his FRIEND! Looks like he was gonna list it, have his buddy buy it at way under market price, collect the full 6% commission quickly, rather than risk splitting it with a co-operating agent with another buyer, and basically totally rip me off. His buddy gets a cheap house, he gets a bigger comission than he'd probably get if it was priced properly and took a while to sell, and I lose a year's pay in a day. He just assumed we'd be thrilled to make a profit on the house so soon anyway and wouldn't independently research the home's value.

It was only after I read about this "trick" in a book I bought on home selling did I realize that this is apparently common enough to be one of the things the author warns sellers about. My suspicions were confirmed totally when the home next door went on the market this week for exactly what I wanted to price my home at. His brokerage was the listing one! (he said all prices have to be signed off on by his broker too. More BS, apparently)

This guy was the most sincere, honest, down to earth sounding guy I'd met in a long time. Which just goes to show you, they're better at this than we are. So be careful when doing business with them.
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  #2  
Old 09-02-2004, 06:10 AM
bobbygedd bobbygedd is offline
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my wife happens to be one. she works for an agency that prides itself on 100% honesty. as a result, she makes less sales, and money, then agents who work for these "less ethical" agencies. the trick they tried to pull on you was bad, glad you didn't get burned. here's how my wife gets burned out of alot of sales: a person wants to sell thier home. they call my wife. my wife goes over, and gives a market analysis. she sticks to her 6%, won't budge. she gives a very honest, and true analysis. say it's $300,000. the homeowner says thank you, and we'll call you. the homeowner shops around. the next agent comes by, bad mouths my wife saying he suggests they list it at $340,000. then says he will do it at 5% commision. the homeowner bites on the extra $40,000( even though it's an unrealistic figure) and lists with this agancy. after xxx amount of time, the house don't sell. the agent suggests they start lowering the price to get the house to sell. the homeowner wants to sell, and is locked into a contract with this agency saying they can't list with anyone else for a year. by the time it sells, the house goes for $290,000. i actually suggested she go to work for one of the other agencies. she would get far more sales
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  #3  
Old 09-02-2004, 09:01 AM
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PMLAWN PMLAWN is offline
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Good reason to get 3 agents to come out and give you an idea of what it is worth. Or hire your own appraiser ($250-350).
Selling homes is a lot like lawn service. If you are concerened about your customer it will show and you will prosper. Sales is a art and a good sales person will always produce a win win result and his business will grow. Ask around family and friends and see who they like and than bring him or her over to talk to you.

Bobby don't make you wife move as the life of a butthead agent is not a good one. Your customer is always mad at you and the end result will be less money and an unhappy wife in your home. And we know you don't want that.

300000x 6%= 18000
290000x 5%= 14500 so in the end butthead made less and has a mad customer. Educate the customer of what an overpriced listing will do to "on the market" time and they may come into your fold easiler. Just as educating about cut height and proper soil care can make for a happy relationship with your landscape customer.
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Last edited by PMLAWN; 09-02-2004 at 09:08 AM.
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  #4  
Old 09-02-2004, 09:51 AM
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ztoro ztoro is offline
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Quote:
Originally posted by bobbygedd
suggests they list it at $340,000. then says he will do it at 5% commision. the homeowner bites on the extra $40,000( even though it's an unrealistic figure) and lists with this agancy. after xxx amount of time, the house don't sell. the agent suggests they start lowering the price to get the house to sell. the homeowner wants to sell, and is locked into a contract with this agency saying they can't list with anyone else for a year. by the time it sells, the house goes for $290,000. i actually suggested she go to work for one of the other agencies. she would get far more sales
They still saved 2,900............. If your wife sold it for 290,000 they would have to pay her 6% I would rather save 1% with the other realtor.

www.forsalebyowner.com gets your house on the MLS system for about 500 beans. We have sold all of our houses on our own. I would rather pay myself the commission. It can be a pain in the a$$ but you are getting paid to do it..
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Old 09-02-2004, 10:05 AM
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harryhomeowner harryhomeowner is offline
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I happen to have my Real Estate License and do approx. 8 transactions a year, Part-time.

It is a proven fact that For-Sale-By-Owner properties sell for less than other properties. Additionally, as an agent I'll help my client by a FSBO all day as I can take advantage of these people very easily. REMEMBER I am working for my client and I want to earn my commission and do the right thing by them!!

About realtor commissions, I shouldn't say this but....When you come to the commission discussion, tell the agent that if they sell the house themselves, you'd like a 1% recuction on the commission. I do it all the time and it's the right thing to do.

Additionally, brokers couldn't care less on the selling price which you've established.

I agree with the three agent rule to establish prices and percentages. Additionally, If I sell you a house I cut you a break on the listing commission.
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  #6  
Old 09-02-2004, 11:35 AM
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ztoro ztoro is offline
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Quote:
Originally posted by harryhomeowner

It is a proven fact that For-Sale-By-Owner properties sell for less than other properties. Additionally, as an agent I'll help my client by a FSBO all day as I can take advantage of these people very easily. REMEMBER I am working for my client and I want to earn my commission and do the right thing by them!!
I wouldnt argue this fact. But I personally have still made more money in my pocket by not having to pay a 6(or 5) percent commission fee..
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  #7  
Old 09-02-2004, 12:06 PM
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harryhomeowner harryhomeowner is offline
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An article from Realty Times:

A 1992 study showed that agents can get 9 1/2% more for a similar home in the same neighborhood than a For Sale by Owner. At 5-7% commission that is still 2 1/2 percent higher than they would have obtained on their own, and at a fraction of the time, trouble and expense.

You may think you saved some money but, did you really?

Quick personal profile: Was a full time realtor for 3 years. Went to part-time because the nights and weekends away from my 2 & 3 year old children & wife were too extensive. Now work 9-5 m-f and work with referrals 2-3 days month. Much better one-on-one relationship that way.
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Old 09-02-2004, 01:09 PM
dkeisala dkeisala is offline
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Quote:
Originally posted by harryhomeowner
An article from Realty Times:

A 1992 study showed that agents can get 9 1/2% more for a similar home in the same neighborhood than a For Sale by Owner. At 5-7% commission that is still 2 1/2 percent higher than they would have obtained on their own, and at a fraction of the time, trouble and expense.

You may think you saved some money but, did you really?

Quick personal profile: Was a full time realtor for 3 years. Went to part-time because the nights and weekends away from my 2 & 3 year old children & wife were too extensive. Now work 9-5 m-f and work with referrals 2-3 days month. Much better one-on-one relationship that way.
Realty Times? Could the article have been slightly biased? I was in Real Estate, what a crappy business to be in. Half the agents you work with are incompetent, the other half shysters.

Yeah, FSBO's don't sell as fast as a property listed with an agent and they might not sell for as much. However, I don't think agents do much for the market as they (and yes, their money hungry clients) often times list properties for far more than they are worth which aids in artificially driving up the price of real estate. The main reason for this is the COMMISSION.

I've said for years that the agency realtionship that exists in the real estate market should be abolished. It simply breeds dishonesty and makes it difficult to trade pertainent information about a property back and forth. Got a buried oil tank on the property? Keep your mouth shut until asked. If agents were merely consultants to a sale, it would be far easier to buy/sell and a much more pleasant process.
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  #9  
Old 09-02-2004, 01:43 PM
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ztoro ztoro is offline
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Quote:
Originally posted by harryhomeowner
An article from Realty Times:



You may think you saved some money but, did you really?

Well I always waste realtors time and have them come and give me what they think I could get for the house.

Considering they are always inflated I do some research on my own as well looking at some comps. Considering most of my houses have sold for what comps have sold for or more I will let you do the math. If I paid 500 to list on the MLS 30 bucs for some signs some of my own free time and didnt pay a 6% commission on a 700K home when it was sold, did I save money?

Like I noted above this is my own personal experience I am sure there are some homeowners that could tell you differently.

I refuse to pay some shlep money for something I am capable of... and this relates to everything not just real estate.....
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  #10  
Old 09-02-2004, 02:10 PM
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harryhomeowner harryhomeowner is offline
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dkeisala -
It's very obvious that the realtor world follows the 80/20 rule and I agree that any bonehead could become a realtor.

As far as artificially inflating the price of a home, a house for sells what it's worth. If you're willing to pay $500K for an outhouse, guess what, that outhouse is worth $500K.

ZToro -
I don't hold begrudge anyone for doing a FSBO and if you're getting 3 agents to complete and do all the research for you AND you feel comforable with the final details and negotiations then you are 100% correct in that an agent would not be needed.

Again, this is a part-time job for me now, I only work by referral w/ serious buyers. Now, because these buyers are prequalified to purchase and have done some homework I can usually help them buy a home in 1 or 2 days. If this is the case I will show them a rebate on the purchase commission and definitely show them a deep discount on the listing commission.

The goal is to earn what you think you're worth per hour. Last year, I missed my goal of $100/hr with $85/hr.
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