Originally posted by: JulesMaximus
Originally posted by: jbourne77
Originally posted by: JulesMaximus
Originally posted by: FrustratedUser
Originally posted by: JulesMaximus
Originally posted by: FrustratedUser
It can't be hard.
Customer: ' I need a house'
Agent: 'Here is one within your price range.'
Customer: 'Cool, I'll make an offer...'
Agent: 'Good news, they accepted.'
Customer: 'Yay!!!'
* Agent collect 3% *
:roll:
Hahaha
It's obviously a joke dude.
What other skills are needed?
I know, that's why I didn't bother writing a scathing response.
Oooh... will you write one for me?
But in all seriousness, I don't have anything against real estate agents personally... their jobs naturally create enormous conflicts of interest and there's nothing they can do about that if they want to stay in business.
How does their job "create enormous conficts of interest?"
Suppose I hire John Doe to sell my home and find me a new one. So as to not lose a lot of money in advertising, John will want to sell my home ASAP. No problem with me, except that to do so, he will try to talk me into listing it slightly under market value. Furthermore, he will do everything in his power to convince me to take the first offer that rolls in, regardless of how rediculous it might be. Yes, he makes a commission based on the selling price, but the selling price of my home has much less of an impact on his commission than it does on my bottom line.
Now I go to buy a home. We find a home that we like but comps reveal that similar homes in the area are selling for 5% less than this particular listing. When I tell Joe to make an offer for 5% - another 2% (for wiggle room), he tries to tell me that I'll be insulting the seller and they won't deal with us.
In neither case is Joe really working with my best interests in mind. In both cases Joe is functioning to close the deal as quickly as possible with the least amount of work necessary. Again, I don't fault Joe for this, because the agents that don't play this game ultimately sink.
My grandfather was a RE and I have a friend who is a RE, and I've seen this with my own eyes, experienced it first hand, and heard admissions straight from the horses mouth.
For example, the last home my wife and I sold we listed for $139,900. It was our first home back in 2000 and we paid about $129,900 for it as a new build. After doing comps for the area, we discovered that 3 other homes with the exact same ammenities and yard space sold for $137,000 (+/- a thou) in the past six months. When we first asked our agent to list it at $140k, she reeled back in amazement as if we just held up Children's Hospital. She told us there was no way the home would sell for that blah blah blah. We did our homework and had plenty advice from the "inside", so we stuck to our guns.
Our home sold for $138,000. She wanted to LIST it at $134,900 with a GOAL of selling it for $132,000.
When we went to purchase the home we're in now, it was listed for $199,900. Comps showed that similar homes in the area were selling for far below that... $185,000 to be exact. I told her to place an offer of $185,000 and to explain the logic of the offer to the seller (who was a FSBO, by the way). She "high recommended" we rethink the offer. I insisted and we made the offer. The seller declined without countering and I requested that, since he didn't have an agent, that I speak with him directly and show him how I arrived at my offer. He accepted the invitation and after talking for about 30 minutes, we agreed on $188,000. You see, our agent didn't want anything to stand in the way of a sale. Most buying agents will swear that the list price is as fair as it gets and that it's perfectly reasonable. But when selling your home, they'll be working just as hard at getting you to come down in price (before you've even spoken to a prospectful buyer).
Why? Because there's a conflict of interest. It's not really a problem if you're aware that it exists. My wife's father is a probate attorney who has pretty close ties with the real estate community. One gentleman in particular is very well respected in the community and I've had the chance to speak with him a few times. He gave me some great advice once:
Never rely on your agent to arrive at a buying or selling price. That's YOUR job as the client. Use your agent to determine a ballpark, but in the end, YOU need to make the decision because your agent's goals aren't completely aligned with yours.
Best advice I ever got from a real estate agent
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[edit]
PS - Regarding the home we sold for 137k, the first offer we got from the buy was a lowball of 125k. Our agent told us to take it and my wife damn near bit her head off. We countered with the 138k, which the buyer took. They were just taking a stab at us originally
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