As I mentioned a few weeks ago, we put Kirk’s house on the market. We chose to use a flatlist service, where you pay a flat fee to get your house listed on the Northwest Multiple Listing Service (NWMLS), you get a “real” looking real estate sign, and a key lock box that real estate agents can use to get in and show the house. I, and several people I know, have used this kind of flat list approach in the past and have had excellent results. Kirk also sold a previous house of his without the help of an agent.
I am really good at software and graphics, and have made a beautiful flyer in PDF format, and also really nice online ads via postlets.com. The ad is everywhere we need/want it to be online. If we want to get it into any paper advertising, we could easily look up their advertising policies. But for now, we believe that the online tools are used by 99% of modern buyers, so we’re happy with the advertising outlets we are leveraging right now.
I used a digital fish-eye lens to photograph the house, so there are professional looking photos of every room. We are familiar with the Fair Housing Act laws as they apply to real estate advertising, The house is in impeccable shape– scrubbed clean, staged with nice furniture, and free of clutter. We did significant research on recent sales and keep a daily eye on new listings, so we feel confident the house is priced correctly. If we feel we need legal advice along the way, of course, we’d hire a real estate attorney, the only person who can legally give us legal advice. We have the schedule flexibility to show the house whenever needed.
So, why would we need a real estate agent to help us sell the house? I can’t think of any reasons, or anything they can offer that we don’t already have. And yet, it seems that many real estate agents still think we need them! 🙂 We are advertising the house on multiple for-sale-by-owner websites, and apparently hungry real estate agents prowl those sites, looking for potential clients. And they call– every day!
They are coy about their reason for calling at first, and get around to the bottom line slowly. And then, when Kirk tries to politely decline their sales pitch and offered services, they get combative. They engage him in an argument, trying to insist they can do something we can’t do. Sometimes they switch to insults, or probing and inappropriate questions, like wanting to know how much we owe on the house, or speculating that we must be facing foreclosure. Sometimes the conversations end unpleasantly. This, of course, is not the best sales tactic, so I’m not sure why anyone would employ it. And it’s driving Kirk crazy (it would me, too, except they have his phone number, not mine!).
I’ve modified our online ads to gently, but firmly, say “real estate agents, we’re not looking for a seller’s agent, thanks. Please don’t call unless you are scheduling an appointment for a potential buyer to view the house.” But, these hungry real estate agents don’t read very well, or they are just mighty desperate, because they are still calling!
And what are they thinking, anyway? Does this really work, cold-calling FSBO owners and saying “hey, are you looking for a real estate agent?” Doesn’t everyone already know about two dozen real estate agents and have at least two in their family? If I were looking for one, I wouldn’t have to toss a stone very far to hit one. If I felt I needed one, trust me, I know whom to call. They’re in the phone book, and on the web, they’re everywhere. So are they expecting us to respond with some sigh of relief, and a reply of “oh my gosh! It’s so lucky you called, because we NEED a real estate agent, but had no idea how to find one!” Of course if we decided to hire one, we’d hire someone we knew, someone we knew something about, and someone to whom we’d like our money to go. We don’t need to hire some stranger who cold-calls on the phone and tries to start an argument!
11 thoughts on “Real Estate Agents are Swimming Like Sharks Around Us”
They think very highly of themselves. So overrated.
this is an old post but since its still online (i found it) and people will read it, I thought a response was appropriate. First, I hope you sold your house, smoothly for what you wanted for it. Here is why anyone really should hire a real estate agent. first, because he or she isn’t emotionally attached to the house or property- they can think clearly, they won’t take things personally and that is their only focus. Think of it as outsourcing. There are a lot of things we all CAN do but sometimes it just makes sense to hire “professionals”. Here is the 2nd reason; because agents are salespeople, We sell and if we are good we do it well and that is just not something many people do that well. We know when to move towards someone, when to back off, how to gauge a person’s level of interest and how to answer their concerns. 3rd reason: We get a home to a closing through our experience and skill. We spot the buyers that are going to try and hold you over a barrel to pay more for repairs, we know whats coming in the check list of potential issues, we understand contractual issues and we steer the process. So, right now, I am selling my own house and I hired an agent. Not because I can’t do it myself but because I have enough to do to move, so that I don’t let my attachments get in the way and to take advantage of the skilled help., It just makes sense.
Cindy, thanks for your comments. Though I agree that some people may still find the services of creating advertising material or doing negotiations to be a service worth paying for, I still think that the traditional model of real estate agents, RE agencies, and very large commissions is dying. With the advent of the Internet, people no longer need agents to help them search for properties or advertise a property. Any kid in the current generation is plenty proficient in creating PDFs and editing photos, and there are software tools that help make flyers look nice, so it’s only older people who still need help with that. A real estate lawyer could be hired for a few hundred bucks to look over any contract paperwork or speak with the other party about terms (and RE agents aren’t supposed to give legal advice anyway). Anyone with an artistic eye can be paid an hour to come over and advise you to clean the junk out of your house to make it sale-able.
I think Redfin has been a clear example of someone testing the boundaries of the institution- breaking wide-open the formerly hidden database of RE data so that all can easily consume it. And, offering agent services for a slashed commission. The fact that NWMLS has tried to sue them and put them out of business, I think, shows that the institution is very intimidated by this threat. Flatlist services are also eroding the profit margin on being able to list with the MLS, breaking the service down to what it’s really worth today (though I still think they over-charge for the service they provide). As compared to the olden days, when RE agents had to paw through paper listings and drive people all over to make a sale, using their honed mapping skills (now we have GPS!); so their large commission was justified by the hours and gas mileage they had to put in, and their corner on the market of the data.
And there is still the unavoidable reality that a RE agent is always in a conflict-of-interest position: their primary motivation is to make a quick sale, and getting a good price for the seller or buyer doesn’t make enough of a difference in commission to make it worth risking the failure of the sale. Though there may be some altruistic agents in the world, I imagine they are rare, and they would not be good business people. A wise business would focus on maximizing sales volume and minimizing time investment in each client. This inherently conflicts with what the client wants, which is someone to invest as much time as is necessary to get the best deal. The scenario I wrote about illustrates it perfectly: the buyers’ agent put them in the worst possible negotiating position, she laid all their cards on the table with way more yakking than she needed to do, she was clearly only looking out for her own interests, and they paid a much higher price than they needed to for a house in this category (and I think probably didn’t end up with the house they were seeking, either). I don’t think she’s the exception, I think she’s the rule.
It’s just my opinion, but I’d never hire an agent again, at least not at 3% commission. Like many traditional careers, times change, and I think they are getting put out of business by technology. Or, at least, their financial value is winnowing down to a basic service that equates to a few hours of professional-wage work per sale. If it were my profession, I think I would be defensive and protective, and fearful of losing my livelihood; so I don’t imagine many agents are thrilled with DIY success stories like ours. But I think folks who work for companies like Redfin, who embrace change and try to roll with it, are the most likely to survive it.
Michelle, you have a valid perspective on much of what you say but perhaps your own apparently negative experience with one agent had led you to make some overarching claims regarding the whole profession and real estate brokerage dynamic. Certainly times have changed and the internet has given a lot of information to the consumer for all things- real estate included. That is a good thing. The purchase of real estate is fraught with many issues and the largest purchases individuals will generally make in their lifetimes. I believe that all that I have offered in the past to my clients has been a very earned service that has saved them stress, money and failure. I do urge everyone when they do hire professionals, whether its a CPA, a yard service or a real estate agent to clarify the service that will be performed, ask for what you want and if you don’t get it then sever the relationship. I think the industry is changing and negotiating commissions is one of those changes. There will always be people who put their own interests first and maybe there are more of them in real estate, I don’t know. Some people don’t like lawyers or doctors and think they can handle their health care or legal issues without them. I say go for it but for me I would rather, when I can, be working with a skilled and experienced professional guiding me in important matters. I think many people would agree.
Cindy, indeed, and for people who value the service and think the price tag is commensurate, then more power to them for engaging it. I should say, though, that this blog post was a story about one instance- I have actually had multiple negative experiences with multiple agents (and not one good one). I have a lot of friends and acquaintances who are agents, too, and though I respect them as friends, their portrayal of their profession has only added to my negative opinion of it. (Including their constant, desperate-for-work harassment while we were selling this house.)
Of all the people I know who do believe in using agents, I’ve never had one tell a convincing (to me) story of things the agent did which justified their incredible commission size. When I ask people specifics of “what did they actually do which warrants you paying over twenty thousand dollars?” people usually stumble, and can’t quite put their finger on it, and then pause for a moment as they think of how much money that is. Of course I know that whole chunk doesn’t go to the agents, their offices takes a big slice, etc. But it’s still pretty tough to justify paying two agents $10K+ each for the services of making a flyer, taking a few photos, writing and ad, showing a house, and faxing offer paperwork back & forth. People with non-college degree certifications typically make about $20/hour. That would imply that a single sale entailed 1,000 labor hours. That’s half a man-year! I think any agent would be stretched to claim that’s how many hours are invested in getting a house sold.
I’m not sure if it’s fair to compare someone with a RE license to an accountant, doctor or lawyer- those people go to college for a long time, and must pass very difficult and rigorous exams at the end, in order to practice. RE school is a significantly smaller investment in time and resources, there is no Bar exam at the end, and there is very little oversight of their practice once they hang out a shingle.
Michelle, i think somewhere in between our differing perspectives is a reality thats maybe closer to the truth. It doesn’t discount either of us and I am not suggesting you aren’t being truthful, just that it is easy to have a bias and see things a certain way. We often end up experiencing things they way we “thought” they would be. Here is what I agree with: brokerages commissions are high and hard to justify. However what I disagree with is that all they do is make some flyers and so forth. There is much more to it and a sophisticated agent with experience brings a lot to the table. I agree that most agents are not well educated, many are incompetent and its not really fair to compare them to doctors or lawyers who receive years of education and training. The point of entry for agents is to easy and when I was in class myself for my week of training I was appalled at the people who were my classmates. I thought if this is the club I am about to belong to I don’t want to be a member. The system needs to change. Good agents should get paid well and in actuality they do while bad agents eventually drop out but meanwhile they cause damage and make the field difficult for others. I appreciate your remarks and I think you hit the nail on the head in many ways, just not every way. I am now considering getting my own license and making some of those changes, the problem is, it has to be industry wide. For instance if I lower the commission on a listing agents won’t want to sell that house, so that means I have to take the hit and the other agent gets to walk away with the lions share. Assist to Sell tried to change that but for the most part it didn’t work out and brokerages closed during the down turn. Thanks a lot for sharing your perspective and experience.
cindy394- I have often wondered that myself, why the industry doesn’t self-police more, to keep the standards up. I always enjoyed the blog Lovely Listing, and now its successor, Loony Listing; where daily humor is made out of terrible MLS photos and listing text. And there seems to be endless fodder for their amusement. I would think that the MLS would have some rules, like, say “if you ever post a photo of a toilet, shower curtain, or cat in order to represent a house’s merits, even once, you are outta here!” 😀 Some kind of screening board that at least spot-checks listings and surveys clients, and maybe scrutinizes new agents more, to make sure they understand what’s considered acceptable.
There also doesn’t seem to be a clear system for reporting violations, if a client sees them. When I bought one property, the seller’s agent was a real pain to deal with. I eventually got the seller’s number and started dealing with him directly, and things went SO much better once we removed her from the communication loop. After I bought, the neighboring property was still for sale. The listing agent had the tax IDs and all data screwed up between the two listings, and she took a long time to take the listing for my property down- long after it was sold and I had moved in. Thus, I kept having people poke around my house and yard, and when I said “umm, I live here…” and they were all confused and embarrassed, showing me a listing with my address and tax ID on it… She also gave out my phone number to several of her potential buyers w/o my permission. Later the agent hired someone to do tractor on the neighboring property, and they ripped out a $500 gate I had recently installed. She ignored my phone calls and it never got fixed, until I fixed it, and paid for it, a year later. Grrrr. I always wished I could register a complaint with the NWMLS, but they don’t have a web presence where you can contact them. I think you are right, that people like that do a lot of damage to their peer group. One of those things where it takes dozens of positive consumer experiences to offset one very bad one.
As far as reduced-fee listing services go, as far as I’m aware, flatlist.com is still alive and well in our area. I have had four experiences with them now, and thought it worked well every time. All I really needed was a ticket into the MLS, a key box, and a sign; and that’s exactly what they provide. I still offered the 3% commission to the buyer’s agent and embedded that into the price, but advertised that the buyer was getting a discount by not having to pay for an agent on my end.
Our agent identified issues with homes we looked at that we couldn’t have on our own. He frankly was able to look at homes that we thought would run maybe 5k of ‘help’ and tell us bluntly that it would be more like 25k. He was also just as happy to see us find something on the low end of our range as something on the high end. He also recommended an inspection guy who was extremely honest and thorough and who helped us avoid a fantastically awful purchase. I was happy to pony up with the home we’re in now and would totally call that guy up again or recommend him to anyone I know personally.
He was a Redfin partner agent, though, and they have a rebate system similar to Redfin’s, though lower. Anyway, the guy was great, the end.
Mrs. Johnson- I agree, if you don’t know much about home repair or construction, then it definitely makes sense to hire someone to do an inspection for you who does. But, it could be tough to know for sure that an agent is truly qualified to give advice on carpentry, plumbing, structural engineering, electrical work, building codes, and the like. There could be a risk of getting bad information from an over-confident agent who isn’t truly an expert in all of these things. That’s supposed to be the role of the inspector, as you point out, they theoretically should have training and expertise in all of these areas, at least enough to steer you clear of a really bad deal. And they are insured and bonded, so if they screw up and miss something, you are automatically covered. I don’t believe that would be true if an agent gave you inaccurate advice. Interestingly the inspector makes less money, and yet, he’s the guy that’s gotta crawl under the house and in the roof and stuff, and has to have strong knowledge of the building trades.
As far as your agent being happy to see you find something on the low end or the high end- yes, that’s the issue. Whether you get a house for $10K cheaper than what it’s worth, or over-pay by $10K, it only makes a $300 difference in their commission (and only $150 in Redfin’s case). So any agent good at math does not care much about the price their client is getting. The more hours they have to spend with you, the more their hourly pay rate drops. So, that’s my point, inherent in “the system” is an inverse motivator that’s never advantageous to the buyer. Wise agents may be good at making us think they are infinitely patient with our whims and dilly dallying over sale decisions, but in reality, they are pushing us as hard as they can to just close a deal, any deal, so they can move on to the next deal.
That said, I’m glad you liked your agent and inspector and that it was a good experience for you!
It clearly is an easier argument to use a licensed agent for a buyer given the seller pays any commission. Its generally a free service for buyers, so why wouldn’t they use an agent? the real issue is the high cost to the seller to get her/his house sold. I get it. I did check out Redfin and they don’t have an office in my area but I like their approach. To be paid the agents have to earn it and get a high rating. Having to pay thousands of dollars for an agent who you feel hasn’t earned it will only breed resentment against the profession. I get that too. This has been a great dialogue and I really do appreciate the others perspectives.
Cindy, but, the buyer is the only person bringing money to the closing table. 🙂 So, the buyer is the one who absorbs all the cost of both agents, it’s embedded in the price. Sellers know what they want/need to get for the house, and they just add 6% to that, plus whatever the excise tax is (at least if they are any good at math).
I do love that aspect about Redfin, that agents are rated, and their ratings are publicly displayed. It drives good behavior and is very transparent. And this is really happening with every service industry nowadays, almost nobody is spared from angieslist, yelp, etc reviews. It has its downsides, but this phenomenon many end up driving a massive cleanup of industries where poor performance was often hidden from public view.
Thanks for your comments, it’s interesting to hear the point of view of an agent.