I've noticed that where I live there are very few "professional" real estate agents (however there are very few that are). Many are very corny, others are really shady, and some just seem sloppy.
Here are my questions;
-Why do most seem so unprofessional?
-Are they in "Real Estate" or really just in "sales"?
-How come a lot seem very uneducated? (I just assume represent myself)
Thank you.
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It's a sales job, they are essentially used cars salesman, there are a few reasons for this. One is that there are very few who are good enough to work full time and have this be their sole source of income. Those folks who are full time tend to be professional. Secondly there are a lot of part timers and they tend to be shittier. They aren't as good generally. Ultimately their job is to get you to buy, the good ones understand that the best way to do this is to provide value, almost like ER, by providing color on the market, in addition to understanding a client's needs.
This is pretty much on. Good RE agents are rarely part-time. You're also not likely to find a good one on a website. Referral-only is the best way to find a competent RE agent. Also, avoid using friends or family. Been there done that...
Answers:
(1) I took a three credit real estate finance class in college and they told me I was now qualified and prepared to sit for the RE exam.
(2) Sales, except they really aren't selling. More like chauffeurs who either drive you places or just follow you to where they tell you to go.
(3) See number 1.
2 is correct until you get into negotiations. There is a lot of nuance and state legal aspects that you really need a RE agent for. I've worked on sooo many real estate projects that I think I've seen it all, and I often see an unrepresented buyer approach a seller with representation. In almost every case, the seller's agent has to walk the buyer through the process because the unrepresented buyer has no idea what he's doing. Imagine a society where neither buyer nor seller had competent representation.
I'm a lawyer, and legalzoom could handle this process.
I think residential brokerage is going to die off, and yes, most of them are shady. The Commercial guys I deal with are all professionals, with a few exceptions.
Residential brokerage makes no sense to me in the age of the internet and digital cameras. You can take pictures of your property and post it on a listing site. MLS has to go. How hard is it to give a potential buyer a tour of your house? A lawyer will handle the few technical closing aspects. People are fucking lazy and stupid. Where is the value-add from a broker? If you have a house worth $500,000, you're going to pay a person $30,000 for something that you can do in your pajamas? Are you kidding me? /rant
Well, your rant is stupid, so let's start there. The founder of the website ForSaleByOwner.com used a real estate agent to list and sell his own home*. The irony isn't lost.
There are low barriers to entry so there are a lot of really medicore real estate agents. But the good ones definitely add value. Selling a house without a real estate agent is a terrible idea. FSBO sellers are people who are penny wise and pound foolish--they rarely get top dollar for their property. They are completely incompetent at drawing up LEGAL state contracts and they aren't using a real estate agent because they are cheap. Why would a buyer's real estate agent want to deal with a seller who probably doesn't know how to represent himself, who probably doesn't know how or where to find good comparables to price his house, and who is probably not interested in negotiating in good faith since he has to take a 3% hit by paying the buyer's agent? The obvious answer is that they don't want to deal with them and they don't even try. Since the vast majority of buyers use real estate agents, the FSBO seller has lost out on at least 80% of the market as buyers' agents stear their clients away from FSBO listings.
The internet is replete with easy to find listings because the MLS allows those websites to pull their information. The MLS allows this because the real estate agents are paying $800/year for access to the MLS. If you're a seller, why would you drastically reduce the number of buyers who know about your house? If you do that you will definitely not get top dollar for your house--how could you when you've eliminated virtually all internet presence outside of some cheesy FSBO website?
Finally, a skilled real estate agent who is a decent-to-top producer is a decent-to-top producer because they know how to negotiate sales contracts to optimize value, which is how they get referrals and stay in business! A real estate contract has a lot of nuance in it and a good real estate agent can balance his/her knowledge of the present market conditions with the many intricacies of the state approved real estate contract. If you're a man-on-the-street FSBO seller and you get 3 contracts for approximately the same price, how do you determine which contract to accept? Well, an experienced real estate agent will look at the mortgage approval and proposed loan product and the terms and condition of the contract. For example, the uniform sales contract is pretty huge and difficult to understand--if there is an appraisal contingency in a declining market, how would FSBO seller even know that it's not in his best interest to accept a contract with an appraisal contingency?
And there are a LOT more reasons, mostly having to do with contracts and contingencies and state law compliance.
*http://www.dailymail.co.uk/news/article-2022112/For-Sale-By-Owner-found…
Well, your rant is stupid, so let's start there. The founder of the website ForSaleByOwner.com used a real estate agent to list and sell his own home*. The irony isn't lost.
There are low barriers to entry so there are a lot of really medicore real estate agents. But the good ones definitely add value. Selling a house without a real estate agent is a terrible idea. FSBO sellers are people who are penny wise and pound foolish--they rarely get top dollar for their property. They are completely incompetent at drawing up LEGAL state contracts and they aren't using a real estate agent because they are cheap. Why would a buyer's real estate agent want to deal with a seller who probably doesn't know how to represent himself, who probably doesn't know how or where to find good comparables to price his house, and who is probably not interested in negotiating in good faith since he has to take a 3% hit by paying the buyer's agent? The obvious answer is that they don't want to deal with them and they don't even try. Since the vast majority of buyers use real estate agents, the FSBO seller has lost out on at least 80% of the market as buyers' agents stear their clients away from FSBO listings.
The internet is replete with easy to find listings because the MLS allows those websites to pull their information. The MLS allows this because the real estate agents are paying $800/year for access to the MLS. If you're a seller, why would you drastically reduce the number of buyers who know about your house? If you do that you will definitely not get top dollar for your house--how could you when you've eliminated virtually all internet presence outside of some cheesy FSBO website?
Finally, a skilled real estate agent who is a decent-to-top producer is a decent-to-top producer because they know how to negotiate sales contracts to optimize value, which is how they get referrals and stay in business! A real estate contract has a lot of nuance in it and a good real estate agent can balance his/her knowledge of the present market conditions with the many intricacies of the state approved real estate contract. If you're a man-on-the-street FSBO seller and you get 3 contracts for approximately the same price, how do you determine which contract to accept? Well, an experienced real estate agent will look at the mortgage approval and proposed loan product and the terms and condition of the contract. For example, the uniform sales contract is pretty huge and difficult to understand--if there is an appraisal contingency in a declining market, how would FSBO seller even know that it's not in his best interest to accept a contract with an appraisal contingency?
And there are a LOT more reasons, mostly having to do with contracts and contingencies and state law compliance.
*http://www.dailymail.co.uk/news/article-2022112/For-Sale-By-Owner-found…]
Yawn. Solid DailyMail source. I did not say that it has reached the point where a seller will be able to obtain the maximum value for the property, just that it is heading in that direction. If you do not agree, then you are in denial.
Residential valuation is no longer obscure, now there are easily accessible sources like Zillow that can provide some transparent pricing. The age of 'Big Data' will only distill this information further.
MLS only exists because of the cartel like mindset of the NAR. If you would like to see an example of lobbying gone wrong - look no further. NAR is full of people who love to justify their existence, and are constantly doing so because the guys at the top see the writing on the wall.
Can RE brokers add value? Sure. Is it enough to warrant 6 percentage points? Hell no.
I'll defer to Steven Dubner and Stephen Levitt of Freakonomics fame. Very simple. Bad incentives.
http://www.youtube.com/embed/17jO_w6f8Ck
Sometimes residential brokerage is still useful: - for first time buyer and seller; - for off-MLS transactions, e.g. condo assignment; - if the broker can provide other value-added services like tax/insurance planning, etc.
But I do think generally residential brokers are overpaid.
Zero barriers to entry. I feel like 80% of my friends went and get real estate licenses with grand delusions of selling houses on the side. Fools.
Let me ask this;
In sectors such as Real Estate such as Development and Regeneration or Recovery and Restructuring would a Real Estate Brokers License be of value? Perhaps along with an MBA?
EDIT: Just realized this is from 2013. Didn't realize someone bumped this from so long ago but I'll leave this in case it is applicable to anyone.
Probably not. A license is really only applicable if you are selling/leasing. If you aren't doing that consistently it is likely not worth the investment of time/energy/money. If you do get licensed make sure your state doesn't have any strange laws or requirements that apply to licensed brokers. Some states will hold you to a different standard in certain cases since you hold a license, others will require you to disclose that you are licensed if you are purchasing or selling even if you are a principal. You also have to be licensed under a brokerage firm in most states and the specific requirements vary. Not a big deal but certainly worth while to understand if you go that route.
Loved the video. I'm a fan of killing the commission and going with flat rate representation. The only way to o this would be to raise the state license requirements for licensure to a BBA in business with 2years dedicated to core real estate and land economic curriculum. Kind of like a lw firm (who charges a retainer) just for your house instead. This would bring greater barrier to market long with higher accountability and responsibility on part of the broker. This is just my opinion.
I'll also point out to DBCooper that the Zillow that you praise for its information gets/steals its information from the MLS*. It's a complete joke to claim that Zillow and others will supplant the MLS and real estate agents when their information is pirated from the MLS and real estate agents.
http://www.ultimateidx.com/blog/realtors-push-back-against-zillow-and-m…
DCD,
I didn't know that you were a residential broker, and I don't want to insult your profession. There is no need to turn this into a flame war. I made my points, and I'll leave it at that. Time will tell.
I'm not a residential broker. I don't have a real estate license. I own and operate a branch of a bank, I have a finance degree, and am a trained licensed commercial real estate appraiser, and a licensed DE underwriter trained at Freddie Mac.
There's a reason that EVERYONE who works in real estate works with real estate agents, in both residential and commerial real estate.
Wait, you own a bank? That's badass. Care to explain a bit?
Also, the best real estate agents I've noticed are very niche and tend to be on the high end as opposed to being in the high volume side. I know people love Zillow, but those numbers don't tend to jive with reality especially in areas with lighter sales case in point being I've seen appraised values/sales for some properties being substantially off from the price they stated.
That said the commission is definitely high, where I am in Miami Beach, 3 or 4 average (500K) condos sold in good buildings in a year equal a middle class income. However, you'd have to be stupid to sell down here without one. We bought a few years ago and our agent showed us a great property and we got it for a great price, however she was very niche, high-end condos mostly to out-of-towners getting second homes and LatAms buying investment and vacation properties. That is where they are true value adds, for someone selling a suburban 3 bed, 1.5 ba raised ranch for 150k in a market with decent volume the value add is less.
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