We sold our house last year — priced it reasonably, and at our first open house (Thanksgiving weekend!), got a reasonable bid. We ended up selling the house to that couple.
Whenever you hear talk of a Real Estate bubble, remember that it matters much less if you own (versus rent). In effect, we rolled out of one over-priced property and into the next over-priced property. When you are a homeowner, actual prices matter less than the spread between properties.
We closed yesterday.
In the process, we dealt with a lot of different agents on our buy and the sell. Some were terrific (who we would not hesitate to recommend and/or use again), a few were jackals, and one or two were deeply disturbed psychopaths who were obviously off their meds, likely violating a condition of their parole.
Along the way, we developed some Do’s and Don’ts. (I’m sure readers have their own suggestions; use comments and let fly!)
This is a free lesson for the smarter, blog reading agents out there. Its a tough residential housing market, and if you want to earn your living selling real estate, pay attention and heed this advice:
DONTs
1. Don’t waste our time.
I know some people do not know what they want, and you should feel free to schlep those poor bastards all over creation, burning valuable weekend time in the process.
However, when someone gives you a very specific list of attributes and a broad price range, don’t drag them around town(s) showing them everything but.
This is rule #1 for a reason: If you waste my time, I won’t do business with you PERIOD. If I tell you I DO NOT want a house with X and Y characteristics, and you drag me to 3 X & Y houses in a row, you are toast. Next agent, please.
2. Don’t lie to us
In nearly every real estate transaction, the truth will eventually reveal itself. If a prior deal fell thru due to an engineer’s report, I will find that out. If the prior owner paid 1/10 of the selling price 25 years ago, that will be discovered also (not that it matters).
Some of the lies were so transparent as to be laughable. Others were more skillfully concealed. If I ask you a direct question, and you lie directly back, and I discover this lie via an expensive engineer’s report (which would have been unnecessary had you told the truth when asked), I will present the bill to you — and your corporate HQ. (Then collect in small claims court on a theory of fraudulent misrepresentation).
Stop bullshitting, start adding value, and you might get a sales commission out of it.
3. Don’t tell us what is right before our eyes.
This is one of those nervous R/E habits: chattering on and on about the obvious. If you want to point out small details we might miss — for example, the kitchen drawers pull out all-the-way, or there is a built-in water filter in the kitchen sink, that’s fine. Even telling me the floors under the wall to wall are all hardwood adds something.
But seriously, I have two good eyes and so does my wife. I can see that THIS IS A BATHROOM; I can tell that THIS IS A WALK IN CLOSET. We actually had one agent solemnly intone: THIS IS THE KITCHEN. Really, how can you tell? Were the fridge, stove and dishwasher clues?
Its not helpful and is actually very annoying. STF up occasionally.
>>
(continued below)
4. Don’t tell me how much a neighbor is “asking.”
All it does is tell me how much inventory is around. One agent told me the owner of the shitbox across the street was “Asking $1.2m.” I replied “Well, I’ve been asking Anna Kournikova to sleep with me — and that will happen sooner then they will get $1.2m.” (Right in front of the missus . . . And bless her heart, she laughs out loud every time).
On the other hand, comparables in the neighborhood that have already sold are valuable info. Show us that (I have a sneaking suspicion why some agents weren’t passing that around).
5. Don’t show me architectural plans
This seems to be the latest in RE agent nonsense. There will be spread out on the Dining Room table pages and pages of architectural blueprints. I guess they think they are showing the potential of the plot, but in reality all it does is point out the shortcomings of the existing dwelling at present on the property.
Its totally idiotic to show prospective buyers what spending another $350k on the same parcel will get them; Lets just look at $X + $350k houses instead.
Whenever confronted with this annoyance, I always yell “Where is the Heliport? I must have a Heliport!” That ends the blueprint discussion quickly.
6. Don’t upsell us way beyond our price range
We’ve done the math already. We are in contract on our Sale, and we know what that will net us. We are pre-approved for a mortgage, we have our down payment together — we know exactly what we are comfortable spending each month. (This is our 3rd buy, and we demonstrably know what we are doing).
We went over this in explicit detail with you.
If you take my wife to a house (without me) that is a $500,000 more than I told you I am willing to spend — and she falls in love with it — then you best get your personal affairs in order. In my garage are several large bags of lime and a shovel; I doubt you will be missed.
7. Don’t make up phony competitive bids
We’ve had agents blow all sorts of smoke up our arses. We heard all too many times “There’s another bidder! Get your offer in quickly!” Even in in 2005, when things were very hot, that was mostly nonsense.
Whenever an agent said that, my response was without fail: “Too bad — we REALLY liked this house, but we don’t want to get into a bidding war. Let’s not make an offer on this house. Take us to the next one.”
Somehow, the other bid never materialized, and we always got a follow up call on the house. (“Gee, they didn’t want it; I wonder what’s wrong with it? No thanks!”)
If you want to fabricate fake bids, go to eBay; that’s what its there for . . .
DOs
1. Ask intelligent questions.
Inquire as to what we are looking for in terms of style, size, age, location, lot size, taxes, details. How many bedrooms do we want? Fireplace? How important is proximity to the water, school district, train station, shopping, marina?
You’d be surprised how few agents actually ask these things.
2. Tell us what we may not know.
New school superintendent? Property Tax relief program? Local museums? Prize winning concert series in the local park? These are the sorts of things a casual home shopper is likely to be unaware of. Providing this information is value added. Tell me more of this.
3. Show us things we cannot find on our own
We had one agent drag us around to four open house listings we had already seen online. We can do that w/o you, and minus the 2nd agent’s fee leaves more room for negotiation the price down.
Instead, take us to things we couldn’t find without you. New listings (that aren’t online), contracts that recently fell through, off the beaten path homes. Now you are adding value.
4. Give us insight into the history of the listing
Is this a newer listing? Is it on the market for a while? Is the seller flexible, firm, or unreasonable? I’m not asking you to breach any confidences (if you are a sellers agent), but I would appreciate some insight into how the negotiation process might go, and where to begin my bidding.
5. Help out the negotiation process
You have a good feel for what your client might accept, would reject outright, or might consider. This information is helpful to anyone debating making an offer on a given house. Again, we are not asking for confidences to be breached; rather, are looking for your informed advice. If you KNOW FOR A FACT that offering 15% below ask will be rejected outright, let us know.
6. Shut the f$%# up occasionally.
If I am interested in a house, your verbal diarrhea is often no help at all; its frequently a negative distraction. If I want to speak with my wife for a minute, leave us alone and wait patiently in the other room.
Thats a baker’s dozen suggestions. I’m sure you guys have more — feel free to share.
I want any of the agents who are here to also share there own horror stories they may have about buyers and sellers.
The thread’s open:
All of that is wonderful advice for the agents in the process however the old adage of price it correctly and it will sell is still true even in a buyer’s market. The problem now is pricing, sellers are unwilling to take a hit and will not lower the price. When the bills start adding up they will be forced to drop it below the price that was reasonable for the market conditions….or the bank will short sale it. All about expectations and the sellers expectations are out of touch with reality.
MS
2b. Lies of omission are still lies. If the airport is closed for runway repairs that day, don’t show us the house then.
If listing information was publicly available (even for a fee), as it should be, then none of this would be necessary. ZipRealty contains days on market, price reductions, comps and Zillow info, but once the house is relisted usder a different MLS number, it’s all reset and goes into the MLS dungeon where only agents can see it. This in itself should be illegal, but if you’re paying attention to your local market, the games are obvious.
smokin’ BR!!!
Thanks – this ought to be a poster in every real estate office in the country. In fact in every sales office. If you look at relationship-based value-selling, e.g. Critical Path Strategies, being honest with the client is central. But realities are more honored in the breech.
My agent in this house (bought ’01) toured me thru, mentioned the l.t. roof problem but walked me right by the fireplace. Which after buying the house turned out to be a hole in the living room not an insert. And it was so out of code with literally life-threatening safety violations that it would have cost $30K to replace the insert/stove and put in new piping. PLUS re-building the whole footing, wall, etc. for another chunk. I love the house but would have apprecite that being brought to my attention since we were looking at a cost that was an appreciable % of the total house value. Granted I walked right by it but it looked life a fireplace on quick look. That’s one agent and agency I’ll never use again.
Rules for Buyers:
DONTs: do not speak with or make eye contact with a listing agent.
DOs: do your own homework.
BR your so doom and gloom about the housing market but both a house?
RTFA, he traded houses.
When I went to look, I had one rule:
* Don’t be afraid to lose.
Given my price range, I had more tolerance for certain things. I didn’t want to be in the situation where I had to have that house. If the offer was accepted, it was accepted. If not, it wasn’t. If it took a year to find a place, then it took a year.
Turns out, we found a place in 3 months, first bid was accepted. I almost wanted a scenario to play out where the house I wanted was taken by someone else so I could know with experience that I would be able to find something else.
dblwyo – Did you hire an engineer to perform a thorough inspection before you bought this house? My guess is that a realtor probably doesn’t have the engineering background to determine whether a fireplace is up to code or not. If he/she did know and didn’t tell you, he/she can be found liable. If they didn’t know, and you didn’t hire an engineer to do an inspection, I hardly think the realtor is to blame.
LLike I said, I swapped out of one overpriced home and into another.
The proportional spread from 5 years ago is about the same — just 100% higher.
I went through a corporate transfer several years ago. I jumped through all the hoops to consider and specify desired home value, market, school specifications, size, # rooms, etc. My information was routed to a central (national) realtor office; I then received phone calls from perky & attentive handlers and all appeared to be in order. When the day came to actually meeting my agent, I was fobbed off to some poor schmuck at the last minute who wasn’t given any of the material I provided. Being of a gentle nature, back then, I wasted 3 hours touring homes I wasn’t interested in (I was new to the area so at least I learned some geography along the way). Then fired him and found my own agent. This second agent, who I also used to sell my house a few years later, was professional and didn’t try to be my friend or psychopath.
My only interaction with agents these days is shooing them from my doorstep (they darken it regularly) and using one to represent “market interests” in the design of a new custom house. They have a place but I’ll definitely keep some bags of lime handy.
Rule #x:
I have all the power in the transaction, as long as I can say “NO” and walk away without too much trouble.
“…your verbal diarrhea…”
Love it. I’m gonna borrow that quote the next time someone is chewing my ear off over at the GHR.
JP – good points. To clarify did indeed do a housing inspection. Required in my state. HOwever – and again partly my fault – the ‘fireplace’ was literally a tin insert in the central (cathedral ceiling) wall sitting on top of the plywood underneath. Rather than walking me by and saying there was a fireplace it should have been mentioned that a new one was required. But hard to prove and caveat emptor. Certainly omission by silence if not direct, and therefore culpable. And any agent who’d looked at the house should have noticed a missing fireplace but she was very careful to not mention or push it. Oh yeah, the selling agent was in her office. Live and learn.
I’ve bought two houses. Realtor 1 was a friend and knew what we wanted. Realtor 2– we just told her where to take us, based on our own research and pumped her for interesting properties that hadn’t been listed in the papers or realtor.com just yet. we kept control of the process.
Great post, BTW. I hate “salesmen”. I bought my last two Hondas using CASH from a no-nonsense Russian guy who knew we would walk away from the table before we would even listen to sales BS.
Greenspan Says He Expects Subprime-Mortgage Fallout to Spread
http://www.bloomberg.com/apps/news?pid=20601087&sid=aMNo.k9C9eP8&refer=home
“If prices go down, we will have problems — problems in the sense of spillover to other areas,” Greenspan said in remarks to the Futures Industry Association meeting in Boca Raton, Florida today. While he hasn’t seen such spreading yet, “I expect to.”
BR Says….
——————————————-
Like I said, I swapped out of one overpriced home and into another.
The proportional spread from 5 years ago is about the same — just 100% higher.
——————————————–
If you were fortunate enough to own grossly overpriced stock would you sell it and take the proceeds – and then some – and buy another grossly overpriced and soon to depreciate stock? And how is this different in a real-estate transaction?
BR, awesome list of do’s and dont’s! When we look at properties on weekends, it’s noticeable to us that the more experienced agents talk less yet say more.
So did you get a feel for the real estate market, however localized, and care to share with us your thoughts?!
Bluzer: “If you were fortunate enough to own grossly overpriced stock would you sell it and take the proceeds – and then some – and buy another grossly overpriced and soon to depreciate stock? And how is this different in a real-estate transaction?”
I hear you, but there are important and distinct differences between overpriced stocks and overpriced houses, not the least of which is that they are fundamentally different asset-classes. Just because a house is overpriced doesn’t mean it is equivalent to an internet stock in the Year 2000 that had no profits and no prospects of having profits in the foreseeable future. Most houses have land/structure components that are much more tangible and readily quantifiable than an overpriced stock. For example, a granite countertop, hardwood floors, central air, stl st applicances all have objective, measurable value. Some of the other differences between stocks and houses include numerous tax implications, intrinsic value, ability to live in the asset, etc. Having said all that, obviously an overpriced house will likely come down in value – just not in the same manner/degree of an overpriced stock.
Oh this is easy. You can’t live in the overpriced security.
People need homes and I’ll bet Mrs. Big Picture (and probably Mr. Big Picture) aren’t renters. Maybe hard to find rentals in their neighborhood too.
BR spends his money any way he wants –good for him.
Most people with that attitude, however, are putting in their equity gain & also a much bigger mortgage to make the purchase. They stretch & asume, if the payments turn out to be beyond their means, they can always just flip it for a quick gain.
The latest Silicon Valley example of this may be found here:
http://www.viewfromsiliconvalley.com/id312.html
This kind of thinking may be the ultimate downfall of the housing market.
I wanted to make an offer on a house that was 25% below the asking price. I was told that this offer would “insult” the buyer. Since I don’t like to insult people, I didn’t make any offer. Three weeks later the agent called and asked if I was still interested in the house. After a little back and forth I made an offer 20% below the asking price. I told the agent,”take this offer to the owner. They can accept it or reject it, but not counter it. They accepted that day.
BR – did you consider renting? If so, how did the arithmetic work out in your locale?
Always looking for OER anecdotes.
BrianK – how long ago was this?
Thx.
it’s just like Paulson et al whining about US losing ground vs London, the rest of the developed world: all based on price. our investment bankers, salesman etc want > 5% of every transaction, which is wildly overpriced compared to terms business can get elsewhere. same w real estate. look forward to the day when inspections, legal advice etc all on line like Zip and buyers & sellers can cut out the middle-man, or at least reduce rates to 2-3%
Rules for buyers and sellers:
1. Do it yourself. It’s not that tough and you’ll save tens of thousands.
2. Do it yourself. A weekend seminar does not make an agent/realtor a financial analyst, economist, accountant or banker.
3. Do it yourself. Trusting hundreds of thousands of your hard-earned dollars and your home to a stranger whose total interest is in a ridiculous commission is imprudent.
Stephen,
May I prudentially disagee? Having an agent offers you legal protections that you don’t enjoy on your own. (Someone else can offer a lawyer PSA for real estate transactions as well.) On the seller side, I’ve known people who offered their own properties. The first thing a FSBO does is violate BR’s unlisted rule:
* – I don’t want to see the seller when I’m looking at a house.
Stephen said Rules for buyers and sellers:
1. Do it yourself
That’s possibly the worst advice. Will you save money? Compared to giving a commission to an agent, yes. But, eh, let’s keep in mind the selling of a home includes the selling price of the home not just the commission.
…that, and a hundred other reasons not to do a FSBO.
Some very good pointers Barry… I think that, as in every business transaction, one must be dilignet 100% of the time.
I work in the business here in Palm Beach, FL and my clients are all high end players, many from Wall Street. They have similar expectations from me as they have from other professionals, employees, attorneys, accountants etc. etc. On more than one occassion, I have advised clients to walk away from purchasing a house only to be rewarded with referrals for my diligience and prudent advice. I am pleased that I have earned the loyalty of my clients and it has been rewarding in more ways than I can mention.
By the way, as a semi-retired professional trader on the street, I know the meaning of DD.
Best regards,
Econolicious
God bless you for posting this!
Disintermediation rules.
Would anyone here buy a car using a system in any way remotely resembling the current real estate process?
Just remember that you have to use “Slaked Lime”,not “Quicklime”.
In my previous house my wife had built her mother a full in-law apartment. When it came time to sell we pointedly suggested our realtor advertise the in-law and actively look for someone interested in one. After months and months of being on the market and hearing prospective buyers walk in and say “oh, it’s got two kitchens (frown)” I told my wife if I heard that one more time I was going to go the shovel-lime route.
New realtor hired to keep me out of jail. First person brought in by new realtor was bringing his father along….Ding, Ding…Ding. Perfect fit. SOLD!!
Barringo, what a real sweetheart you are, but you’re a pollyanna if you think you’re savin’ anybody from a failure to observe those rules.
You might as well go down to some red light district and try to convince the johns to observe appropriate hygiene in the ordinary course of their endeavors.
After all, they’re payin’ for a trip to Mother Hubbard’s, so why don’t you just let ’em enjoy the temporary illusion?
Here’s the relative amount of significant change in the behavior of: NY/Long Island/adjoining metro/nationwide/specific by state/world-wide/inter-planetary/inter-stellar realtors that you’ll precipitate with your “Gee Mr. Science” realto-econo-master course today:- – “0” – –
—
And Robert Cote:
“Would anyone here buy a car using a system in any way remotely resembling the current real estate process?”…end quote.
—
Every day, Robert… every day, by the thousands upon thousands upon thousands of thousands.
It is pretty common ( I live in Orange County) for real estate agents to take you to a couple of houses that either don’t meet your search criteria or they are of a lower quality than what is generally available. Generally, it prime’s the buyer to fork over even more cash when they finally ‘find’ the ‘right’ property. Understandably, if you are in the upper echelons of the market, this would be a mistake, but I think you would be surprised at how many people have fallen for this old trick hook, line and sinker…Glad to hear that you didn’t!
Also, FSBO is neither inherently good or bad, better or worse. If you have the time and inclination, it can work to your advantage. Different strata in the real estate market require different strategies. Typically, this is a good option for the sub seven figure market. Outside of 1 million or more, and your a moron to do FSBO.
DO: (for buyers agents) Instead of introducing only MLS listings your clients can get for themselves on numerous internet sites, take an afternoon or two driving around the neighborhoods and noting the FSBO’s. No, not so you can beg for a listing…so that you can show them to your buyer clients and actually add value. Here’s an even better idea, get the pricing info and make your own private directory with a few digital snapshots.
Treat realtors as you would any other commission-grubbing salesperson.
If you go into a used car dealer, and put your trust into the salesman, you’re a sucker. Same applies to realtors. You’re a walking commission check, nothing more.
If using a Realtor (yep – I’m a Realtor) wasn’t a sound ECONOMIC decision…those not using Realtors wouldn’t be a small minority of the transactions. But they are.
Realtors have been involved in the majority of transactions from more or less the time of The San Francisco Earthquake, for one good reason – because it’s a good economic decision to use one. If it wasn’t – you wouldn’t see many of us. There will always be unrepresented sellers. But it’s not always a sound economic decision. I could prepare my own taxes too, but it’s gonna cost me a fortune…
I make it a point never to argue with people determined to be unrepresented sellers, actually. People can, and indeed do, sell thier own homes. Every day. But to suggest “it’s simple, do it yourself” is just to vastly oversimplify.
And thanks for the softball about buying a car. I’d be absolutely delighted to buy a car from somebody who had access to all the data about EVERY car in the country for sale and who would take on FIDUCIARY DUTY to ME for assisting me. Somebody who would pretty much insist on spending a couple of hours in an office (without a car in sight) explaining to me the ins and outs of the process and explaining consumer protection laws (the laws of agency in my state) and listening to me and taking notes. Are you kidding me? An MLS for cars, and skilled, vexperienced Automotive Buyer Brokers licensed by the State, with spotless resumes, recomended to me by satisfied buyer friends? I’d do a friggin back flip for joy!
That’s how I conduct buyer agency for my buyer clients in VT. And it typically costs them LESS money to use me than to do it themselves, particularly if their time is worth anything at all – because in VT, I’m able to be paid out of the proceeds of the sale, even while representing the buyer as a client.
Thanks,
David Beckett
I have a dear friend who is a very successful realtor. Her secret? She listens to buyers, and takes them where they want to go. They find wha they like, and buy. Then, as a stickler for detail, she makes sure nothing goes wrong at closing.
Just Google “Luella Bressler” if you are in the Baltimore/DC corridor. Nice lady too.
Summed:
Usher me not into the flock possed by a mania, but lead me to road less traveled, unpopular yet wise…
RE: (my earlier comment to Robert Cote):
I was implying, as a response to Robert, that car sales were conducted everyday like real estate sales are. It’s just that car sales are a compressed version of the same type of buying and selling experience as in real estate.
But, I didn’t mean to imply that it was necessarily because real estate salespeople are corrupt or that car salespeople are either. Most are honest and hardworking people trying to make a living like anyone else.
Sure, there are plenty of bad apples, but that’s true in all of life.
The great majority of real estate shoppers need to see the reflection of their pleasurable shopping experience in the eyes and demeanor of the salesperson that’s showing them the property. The salesperson sees them enjoying that reflection and he or she will proceed until the joy no longer shows in their eyes.
Barry has suggestions that real estate agents would do well to heed and adapt, were they to at some time in the future show real estate to Barringo (or to me, Eclectic), but the average sales experience for the buyer is typically governed by the average salesperson’s experience with buyers in general, and that’s mostly to provide the fluff and inconsequential banter that just makes people seem more personable. They’re playing the odds and they’ll continue to do so, because those odds don’t change.
Here’s a picture for you of that two-way experience:
Salesperson (SP): “Here we are Mr. and Mrs. Customer, so let’s go in: now to the den, now to the kitchen, now to the blah, blah, blah…”
Shoppers (in the meantime as they walk with the SP, we hear the “Oh Honeys.”): “Oh Honey, look we could put little Bondie’s dresser there!… Oh Honey, I like it!… Oh Honey, this kitchen is so clean, I could carve whole buffalo over there, and I could put my NASA experiments on that counter with the mixer and, Oh Honey the breakfast nook is so nice, and Oh Honey I could sit on the phone for hours talking to Madge right there…. and….”
–meanwhile, continuously…
SP: “…and now to the basement, and now to the garage, and now to the yard… and… now to somedamnwhereelse… and now it’s time to go for the close… cause now I’ve heard enough Oh Honeys… and now I’ll move to the close… and…”
–meanwhile, continuously…
Shoppers: “ButtHoney this… butthoney solemn look… butthoney I don’t think so… butthoney let’s come back later… butthoney let’s look again down the street or in Afghanistan or Topeka or on the planet Zenon…”
–meantime, continuously…
SP: “… and now to the (Oh, shit!, lost the Oh Honeys and the butthoneys suck!)…and now to get the F out of here cause I’m wastin’ time… and now dumb bitch Oh Honey and suck-ass butthoney can kiss my mofo suckhoney ass… and now long long long minutes that seem to turn into hours and days and even lifetimes of listenin’ to Oh Honey and butthoney tell me everything about all their worthless children, inlaws, golf games, vacations, political leanings, opinions on everything from daylight savings to new types of nautical navigation, and WORST of ALL, the 14,000 reasons, in detail, why the house we’ve just looked at isn’t what they want, but that they’d like to look at all 14,000 of these again as a comparison with the next 9 houses they want me to find for them to see as well.”
—
Disclosure: I (Eclectic) am not in real estate sales and have never been involved in real estate sales or the real estate industry in any professional way. The sum total of my real estate experience is in the form of having bought exactly two houses and one lot of undeveloped land in my entire life.
I have no illusions that any agents will follow this advice — but the process was so annoying, I had to blow off some steam . . .
That’s okay Barringo… like I’ve said… everything is okay when you get a cookie and a nap.
That’s what you have Mrs. Big Pic for.
I haven’t owned a place in many years. I often run through the numbers but can’t make an economic case for not renting… My monthly rent is around 1/300 to 1/400 of what it would cost me to buy my current place.
On top of the huge cost of capital, I consider that my landlord has to pay condominium fees, property taxes, insurance, maintenance, etc. Then I consider the transaction costs of getting in and out of a place (realtors, fees, etc) and the lack of liquidity and it makes it even harder to justify.
I could afford to buy, but am unable to make a case for it… Am I missing something? Is it a (speculative) bet on the expected appreciation of the asset, or is it just the pleasure of owning your own place?
steven leavitt systematically studied how well realtors represent their “fiduciary” clients compared to how well they do for themselves in freakonomics. to sum it up: realtors make better deals for themselves (on average they take a little longer to strike a deal and buy lower and sell higher.)
realtors earn a living through their commission, so they want to perform the maximum number of deals at the maximum price. nothing sinister here. barry points out that some (probably many) don’t really know that much about the merchandise so they just babble (this is the kitchen…), nervously, in the hopes that you will buy.
this doesn’t seem much different from stock brokers. as the buyer or seller of either stocks or real estate, however, you should do the homework as it is your investment dollars at risk, not the sales person’s.
Spot-on… what I find unusual about your purely real estate article is the lack of participation by real estate bloggers in commenting. I author a real estate blog and I don’t recognize any names of my colleagues. It’s evidence of blogging’s reader segregation.
As a practicing Realtor for almost 29 years now I see not only some of my former clients in here but sadly, too many of my fellow Realtors as well.
In the past 5 years there has been about a 70% increase in the number of real estate licensees in the United States. There has not been a 70% increase in the number of real estate transactions; you do the math.
I see far too many new licensees running around out there with little to no training in how to even perform simple disclosures and filling out preprinted contracts, let alone the complex and difficult job or representing and being an advocate for their clients.
I was thinking the same thing Pat. (up two comments) Though admittedly I hadn’t discovered this blog until today. It’s getting impossible to try and follow all the RE blogs AND seek out new ones for most of us I think.
20,000 people on Active Rain now too. Heck if they all post just once a week it’s physically impossible to read 10% of that output.
All in all though a very good post. Consider sumbitting to the Carnival of Real Estate this week.
Pat brings up a good point and without leaning to heavily on it, blogging seems to be VERY segregated by “circles of influence”.
I know you, Pat, and I know you know me, but to many of the folks here, we’re the outsiders.
It’s strange when you consider how tightly knit the RE blogging community seems to be, and then you realize that its just this little speck in the blogging universe.
Gee, why do you think I reach out to bloggers in the industries related to mortgages and home financing? I’d rather spread my circle of influence.
But, to get back on track, this post is terrific. I am listing my home for sale and have started blogging on the process. I probably won’t get as in-your-face as Barry, but hopefully, there’ll be some good info to glean.
http://www.2502nsheffield.com
Thanks for the tips, Barry. As a consumer, I (am) feel(ing) your pain.
I am a real estate agent and I thought this was a great post. I did post a response on one of my blogs (Blue Collar Agents) but apparantly “trackbacks” don’t show up here.
Yep, there a good realtors and bad ones. The problem is that you don’t need a college degree to become a realtor. It’s important as a realtor to read the personalities of the buyer. Believe it or not, there are some people who actually enjoy the verbal diarrhea. Have you ever spent some time with an 80 year old widowed woman? Taken her out to show her townhomes? That just happens to be the personality type. Others just want the facts and just the cold hard facts. It’s imperative to “read” the personalities of your buyers and sellers.
There is absolutely no justification for lying. It’s a shame that there are so many realtors who are far too hungry to throw integrity out the window. It gives us all a bad name and compels people to write posts such as this one. It also is a liability for the brokerage.
BTW, thank you for the feedback.
Priceless post!
Barry – Though I’m on the investment side of real estate brokerage, much of your advice still holds.
Answering question your clients simply don’t know to ask is consistently one of highest rated attributes coveted by clients.
I’d add one thing to your ‘Do’s’ list: Do everything on purpose, with a plan. In the end, things turn out better that way for all involved.
Glad to find a new site worth reading.
I think a very astute but maybe overlooked point in this post is the one that actual prices matter less than the spread between properties. Almost every buyer I deal with asks me what I think of the market and whether now is a good time to buy. Most of these buyers are either first time buyers or are relocating their primary homes, so each time I am asked I make this same point. Don’t be overly concerend with actual prices. Unless you are a market timing genius and are going to jump back and forth between owning and renting than the money you invest in a primary home is going to stay invested in the real estate market until you die. Insteat pay attention to the spreads. If you expect to upgrade to a bigger home in a few years than a market downtun won’t hurt. In fact the price difference between the home you buy now and the home you intend to buy in the future will actually shrink.
With respect to the comment Posted by: Robert Coté | Mar 15, 2007 10:49:49 AM
I don’t understand where he is coming from? What makes him think that stealing something that belongs to somebody else is justified? Doesn’t he understand that the multiple listing services are PRIVATE databases that are populated with data compiled by MEMBERS who have to PAY for membership? It is absurd to say, as Mr. Coté does that, “This in itself should be illegal…” What should be illegal — the compiling of private databases? Now I can understand that he would like free access — wouldn’t everybody — but just because he would LIKE to have free access does not mean that he should have the RIGHT to free access. I would like to have access to all kinds of databases, but because they DON’T BELONG TO ME it would be absurd for me to think that it was wrong to deny me access. May God protect us against the invasion of private property rights that Mr. Coté apparently sanctions.
I’m a Realtor. I have a philosophy:
Listen to people. Do as they ask (within reason). Treat them with genuine respect and expect to be treated with equal respect.
Maybe I’m over simplifying, but I do very well.
Thank you for a bird’s eye view of the real estate buying process. It was a real eye opener for me as I didn’t have that much exposure to the real estate buying process before I got my license (lived in the same home for 20 years).
Okay, from my perspective as a real estate agent (three years experience, short time, I know, but I’ve closed over $11 million in volume), here’s my reaction…
1. Don’t waste our time.
Agree. I thought this was interesting as my buyer clients and I research the listings together or sometimes they come to me with a list of properties they’ve researched on the Internet and want to see. It’s a partnership in which we decide what listings to see. Every once in a while I’ll ask someone to indulge me to look at a listing outside their criteria, but only after I get to know them and feel there is something intangible about the home that they would like.
2. Don’t lie to us
Agree. “In nearly every real estate transaction, the truth will eventually reveal itself.” This is so true, and the truth will reveal itself at the worst time, after the contract is signed and before the closing!
3. Don’t tell us what is right before our eyes.
Agree. My job is to point out specific features (central air has a HEPA air cleaning filter and three zones) and pitfalls (there is a office park that will be constructed next door where you now see trees and construction is expected to take five years) that may not be obvious. I do my research ahead of time and read from my notes as we walk through the house.
4. Don’t tell me how much a neighbor is “asking.”
Agree. Recent solds provide the best information and while that information is available to the public on some real estate websites using the neighborhood mapping function, e.g http://www.raveis.com, the real estate agent should provide this to their client.
5. Don’t show me architectural plans
Disagree. I haven’t seen this too often in my area, but architectural plans that have been approved have value to some buyers. The seller has gone through the trouble of getting the zoning approvals and variances (if needed). If you don’t want to see architectural plans, just say no.
6. Don’t upsell us way beyond our price range
Agree. Some of my clients have a lot of money, but they don’t choose to spend it on a home. We are real estate “agents”, which means we are there to help our clients find what they want, not what we want.
7. Dont make up phony competitive bids
Agree. Sometimes I have to tell my clients about a multiple bid situation, because it’s information they need to know, but the skepticism is there, because that line has been used so often. My clients realize it’s true when the house sells and they didn’t get it. The next time, they believe me.
DOs
1. Ask intelligent questions.
Agree. I have a checklist of criteria I use and then I try to search for the intangibles that go beyond the checklist. For some people it isn’t the style of house or the number of bedrooms, they are looking for a certain quality of life and can’t really describe it. You find this out as you begin showing them homes and you listen to their reactions as they look at properties.
2. Tell us what we may not know.
Agree. Tell clients when the property tax reassessment is scheduled. I know of one neighbor who bought a home and her agent didn’t tell her there was a huge tax increase about to go through. Make sure your buyer agent stays on top of zoning issues. Do they attend P&Z and Zoning Board of Appeals meetings on a regular basis?
3. Show us things we cannot find on our own
Disagree. Have to disagree with you here in terms of not showing homes that you can find through Open Houses…”We can do that w/o you, and minus the 2nd agent’s fee leaves more room for negotiation the price down.” Why should an agent spend their time and energy on a client who isn’t loyal to them? If you are going to use a buyer’s agent, be loyal to them. I personally don’t work with clients who don’t sign a contract to work with me exclusively. Loyalty goes both ways. I’m beginning to see why you got such bad service.
4. Give us insight into the history of the listing
Agree. Remember though I only do this for my clients (and my clients have signed a contract to work with me exclusively). I always print out the history and analyze the listing for the date improvements were made, whether it was rented out, etc., but again, I wouldn’t do this for a buyer if I didn’t have an exclusive arrangement with them.
5. Help out the negotiation process
Agree with your general statement, but disagree with the following statement…”If you KNOW FOR A FACT that offering 15% below ask will be rejected outright, let us know.” This is impossible to know, Sellers’ circumstances change and an offer they might have rejected two months ago would be one they accept today. There are very few facts in negotiating, but lots of judgment calls.
6. Shut the f$%# up occasionally.
Agree. It is important to walk away and give the buyers time to discuss the property privately at certain times during the showing, but to be available to answer questions.
Agents are just that — agents. We are not sales people like used car salemen, we have a responsibility under real estate laws of agency to represent our buyers and sellers and if we are REALTORS we also have a Code of Ethics to follow.
I wish all agents acted professionally, but you need to do due diligence on your agent before you have them represent you just as you would when hiring an attorney or an accountant.
Not all real estate agents are the same — look for the REALTOR designation, additional designations that show the agent is interested in learning more about their profession, e.g. ABR, GRI, e-PRO, make sure they work full-time at real estate and find out how many properties they have sold, where, and how much, and talk to others who have used the agent.
Finally, once you find the right agent, use that agent exclusively. If you aren’t loyal to the agent, why should your agent be loyal to you?
You made some very valuable observations.
Some real estate agents try too hard to make the sale. In which case, their mouths may runneth over and they hear less of what the consumer is trying to communicate.
Obviously BS stinks. Some buyers can “smell” fear(?) in a real estate agent that is stumbling with facts and Buyers tend to get bored with agents anxiously pushing useless information to try and seal the deal.
I play the game of Concentration when it comes to real estate. Matching the buyer with their ideal home. I never think of “my commission check” until the property “closes”. I know my bills will get paid if I think only of what my customer wants.
Buyers and Sellers Advice to Real Estate Agents
This is perhaps the absolute best advice I have ever seen posted for real estate agents and it comes directly from a seller/buyer. The Big Picture’s Rules for Real Estate Agentsis a MUST READ for ALL Real Estate professionals and…
On listening. You obliviosly really knew what you were looking for. But here is another side of a story on search for the perfect hm for a buyer. Buyers say to me. “We just sold our 2500′, 5 ac. OLD home, kids gone” “We want 1400′, NEW, 3/2 and <.25 ac." in new development town. They didn't like what was out there, bought a home from a FSBO, deal fell through and we started all over again. I get a call: "WE found it!" I go and meet them wondering where I missed in listenng to them. I get there. It is a 900', OLD hm in old tract, 3/1 on 1 ac. And, this isn't the only buyer who had me goin' in a totally different direction then they told me to go. Not to say that your Realtor didn't listen (believe I know) but sometimes the buyer thinks one thing and then does an 180 on you. And yes, I do ask why the hm's we saw doesn't meet their needs, always.
When agents behave badly, usually it’s because there’s some fear: of losing the sale, the client, their time. Great agents don’t have this fear. They don’t care if something doesn’t work out because it was a bad deal to begin with. It seems to me that one important factor in choosing any kind of advisor is how willing they are to let go of the outcome in the transaction. The Tai Chi approach makes great business sense — instead of fighting to try and keep the process going, why not let it go and let it die, if necessary? One thing I have learned the hard way: I cannot care more about the transaction than my client. When I did, we both lost. Now, I simply trust my clients completely, regardless of the outcome, and offer the most aggressive strategies and creative advice to support their agendas. It’s great fun, and I don’t have to worry about making money– it’s a lovely side-effect to helping people buy and sell homes.
I cannot agree more with Phil Bolin.
There is ^agents^ and Agents.
Can anyone advise on what legal recourse I may have as a seller regarding misguided advice from my agent; my primary buyer can’t get financing after 2 months of trying, and the secondary buyer has already purchased another home. There have been several instances of my agent not being honest and forthright. Among other things, I was not advised at the time that I had several outs along the way due to the primary buyer’s financing problems. I had already quit my job and moved my belongings to another city because I was led to think this was a done deal.
Thank you for a great article. I have been an agent for 13 years and have built a very successful business through treating all buyers and sellers as though they are experienced and intelligent homeowners/buyers (even though this may not be the case). Although I am considered a salesperson, I do not care for most salespeople because of the points discussed in your blog. My point is… their ARE professional real estate agents out there who are interested in a long term relationship. If you cannot find a good one – avoid any commitments until you do. You will spend a minimum of 30 days with your agent – and you might as well like, trust, and respect him/her. My best advice? Do not buy a home with the listing agent of the property you are interested in; they will 1) Get paid twice as much for “representing” both buyer and seller and this inevitably produces a conflict of interest (this situation is called “Dual Agency” or 2) Will be resentful for having their commision negotiated down as your article suggest if the agent is on both sides of the deal and therefore may only represent your interest half-heartedly. Good luck with your real estate endeavors!
Great post – I’m saving it for future reference. I am a realtor and my goal is to provide my customers with exactly what they need or want.
I agree with so much of the nonsense – you do not have to announce that it’s the kitchen – but I don’t think any agent who says it really thinks you don’t KNOW it’s the kitchen. They’re just making small talk, much like when someone says “nice day, huh?” Obviously it is or you wouldn’t have said it… (unless you were being sarcastic, which would also be obvious.)
Perhaps it is best for agents to tone down the chattiness, but some buyers like it. The key is to read what type of people you’re dealing with and respond appropriately.
If I know something is wrong with a place, I will disclose it. I don’t look at it as pointing out flaws and losing a sale, I see it as an opportunity to build trust and show you that I really do have your best interest at heart. Seriously – how can it help me if I lie and sell you a piece of crap house? Are you going to refer me, send me any more business? Heck no!
You’re going to tell everyone about your experience. I want what people say about me to be positive.
Real estate agents have a very interesting job. But of course there also many duties. It is wonderful that you have written all those tips. A nice post
The best thing the Real Estate industry can for its customer is to put the full MLS information on the internet. Hiding condo maintenance and assessment costs, days on market, age of appliances and restriction makes the buying process extremely tedious. The problem is the agents are subcontractors to the agencies are therefore the agencies incur limit fixed cost. The agents only publish teaser information to get calls – most to get the missing information.
Wow, I just waisted five minutes reading something that anyone with sense would already know. And by a smartass too. Lovely.
I am a real estate agent in GA. The law requires me to have something in writing saying if i bring a buyer and seller my broker and i will earn a commission. (5) Land owners, will not sign anything. (12) buyers that I know are looking for land like the sellers. The buyers are serious and sellers want to cut me out. Is there anything as an agent I can do to protect myself. Or could I be doing charity work? Any suggestions would help thank you TOM
I am a real estate agent in GA. The law requires me to have something in writing saying if i bring a buyer and seller my broker and i will earn a commission. (5) Land owners, will not sign anything. (12) buyers that I know are looking for land like the sellers. The buyers are serious and sellers want to cut me out. Is there anything as an agent I can do to protect myself. Or could I be doing charity work? Any suggestions would help thank you TOM
fuck you men (or women)
Some of your advice is good and interesting to know. But for the most part it sounds like you have dealt with lots of real estate agents. Or let me rephrase that, you sure have wasted lots of agents time just tire kicking. Sign a exclusive contract next time…until then you are only a customer not a client or principal…I suggest you learn the difference. Also…buying from the listing agent…and “saving your money by cutting the commission” BAD idea…dual agency is always tricky…unless its designated dual agency…at any rate as the BUYER you dont generally pay the sales commission…and most likely that one agency will take the full thing regardless of there not being another agent…AND both the seller and the buyer will get less than loyalty as soon as that dual agency contract is signed…its just fair and balanced from then on out…no advice to you but not the other…always have your own agent…and remember just because an agent helps you submit an offer doesn’t mean they actually represent you.
Real estate agents are unethical…period. You have to sift your way through all of them to find the one who is least unethical. But bear in mind, that even that agent is a crook. Let me explain…
The commission isn’t enough anymore for these greedy folk. They became agents for one reason AND ONE REASON ONLY: To make money buying and selling properties. Notice that I didn’t say they want to help “others” buy real estate or sell it. That’s secondary. Their main goal is to keep the 3-6% commissions by making their own deals…by being the seller…by being the owner. That’s right! People who go for the real estate license are primarily interested in brokering their own deals.
This is unethical if you really think about it. What you see on MLS or other major real estate listing websites are shit properties that none of the agents want. These are the properties that have no positive cash flow for the purchaser. And agents are hoping for ignorant, unaware nonagents to call them about these listings. Try calling them sometime. The first thing they will ask is: “Are you an agent?” If you are, they won’t be very happy or enthusiastic. But if you aren’t, get ready for the flood of bullshit and lies and sales (hard and and soft) tactics!
I really do feel sorry for the nonagent public out there because they truly are not being protected nor represented by most agents out there. If they simply did their duty and served as agents, and would be content with a negotiated commission, then they would earn my respect. But chances are great that most are greedy and you won’t get their help nor cooperation.
“Real estate agents are unethical…period”???
I resent that.
I’m still only a kid student but I have always wanted to be a real estate agent. I’ll admit that yeah I enjoy making sales and that I would like to live comfortably, but MY primary reason for it is that I actually want to help people.
I’ve always dreamed of owning my own house, I can’t wait for it! And so i always loved the prospect of being able to help other people find their own little spot of happiness. It’s the idea of helping someone find not only something that they need (being shelter as a necessity), but combining that with fulfilling their desires (in finding their dream home)!
Maybe I’m the only one, but when I’m a real estate agent one day when I grow up, I hope that I’m not viewed in the way that most of you view agents now.
I just read your blog and you had some good points. However some of your points tend to show the crux of the problem buyers and sellers sometimes create for themselves.
The first mistake that a buyer will make is not understanding agency relationships.
This is clear from your comment about how the agent you are working with closely knows the other client. That would make the agent a dual agent in Washington State. An educated and informed buyer might not agree to dual agency since some of the agency relationship responsibilities are waived if a consumer is willing to accept a dual agency. For a buyer or seller with so many rules, perhaps this is the fundamental rule to think about “don’t accept a dual agent”.
Another problem a buyer has is not completely trusting the agent they are working with. Surely you would want to be very careful in selecting an agent you can trust in, when working on the acquisition of something that is as expensive as a home. The more information you pass off to agents and anyone for that matter can come back to haunt you. You could easily be out negotiated and in our area certainly out competed because you have your information all over town. It is absolutely the duty of an honest agent to present the full spectrum of competition and activity that a property is receiving so you can proceed in what-ever way you wish.
Imagine a property that has been deliberately put on the market to attract bids and even with the bids is a fabulous deal for a host of reasons.
How would you feel if your agent did not bother to mention that there are currently 5 written offers and your lowball offer was rejected immediately when in fact you would be willing to pay the highest number and again because of the situation at hand.
On the agent side there is nothing that requires more patience then a fussy buyer with little to no information regarding the complexities of real estate in a fierce and competitve market with little supply and much demand. It is the foolish consumer who will not find and stay with a talented honest agent and the more the buyer prances around the more they shoot themselves in there own foot.
The more information you provide to your agent, the smoother the trasaction is, and it’s likely you stay in the same page. The problem with buyers are they don’t like to tell exactly what they want and like to hide their financial situation. Just be clear and don’t be afraid to tell what you want and don’t feel guilty if you are making them work. That’s our job. The only thing we don’t like is if you work with different agent and and lie about it. Be honest when you shop up to open houses that you are already working with an agent; we will leave you alone.
Interesting fact: This has been due to the sub prime crisis in the United States, increasing volatility in the share and financial markets and investors such as fund managers requiring higher returns. Nice Site by the way.