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REAL ESTATE agents are shadier than used car salesman
- Thread starter spaceman
- Start date
spaceman
Lifer
maybe its the area i'm in, i looked at some land yesterday.the description said "deeded rights to water" the selling agents couldnt tell me if that meant deeded rights to a shared well,deed rights to city water via someone elses property.She didnt know off hand:roll: I imagine the 1st question someone asks when buying a residential plot is water related.
George P Burdell
Lifer
next time you go to a bookstore, pick up Freakonomics and read a few pages into the introduction... you'll get a very interesting insight into real estate agents.
http://www.amazon.com/exec/obidos/ASIN/006073132X
http://www.amazon.com/exec/obidos/ASIN/006073132X
The Freakonomics of Race and IQ
- Like Adam Smith, but unlike many economists who are doctrinaire free marketeers, Levitt trusts capitalism more than capitalists.
For example, he points out that you shouldn't rely upon the real estate salesperson you hire to sell your home for the best price. Realtors make more money by churning through sales quickly, so they consistently underprice their clients' homes and badger their clients into selling too early.
Levitt studied 100,000 home sales in Chicago and found that when selling their own homes, real estate agents held out on average for ten days more than their clients did and, all else being equal in terms of the quality of the house, got over three percent more for it, or $10,000 on a $300,000 home.
This is a useful but not terribly astounding finding. Indeed, the only thing remarkable about his realtor research is that, apparently, no economist ever published a study of this obvious phenomenon before Levitt.
In contrast, my wife, who majored in economics but is not a professional economist, pointed this out to me many years ago. It was why she decided to sell our condo herself. She obtained significantly more than our naive neighbors got for their identical units?even before they handed a three percent commission over to their realtors.
- ... many people do not know that real estate agents do not have a significant economic incentive to keep a sellers house on the market all that long because the additional commission is simply not worth the effort -- even when that means the seller loses out on a significant amount of money in the final sales price. It is equally worthwhile to know that real estate agents themselves engage in dramatically different tactics to get higher asking prices for their houses, to know of the buzzwords that are used in real estate advertisements to subtly encourage potential buyers to either bid high or low on the price and to know the many different methods -- some subtle and some not -- that real estate agents use to encourage their clients to act in accord with the agents own economic interests and sometimes less in accord with the interests of the clients themselves.
- For example, when one sells a home for $300,000, and the price is increased to $310,000, the homeowner would get an additional $9,400 while the Realtor is getting the relatively low additional incentive of $600 (based on a six-percent $18,000 commission.) When selling their own homes, Realtors get the whole enchilada, which means they are highly incentified to keep prices higher on their own homes, while the relative payoff on a client's home is so meager that it isn't worth marketing longer and for more money.
From that, Levitt concludes that Realtors don't have incentive when selling homes on commission to price homes higher, says Yun. They prefer to price low to reduce their time on the market and therefore, their marketing costs.
Explained Levitt to Realty Times, "People respond to incentives. In the current set-up, agents have an incentive to behave differently when selling their own home."
That's because as sellers they are responding to a wholly different set of incentives, insists the National Association of Realtors. Although statistics don't exist whether or not the Realtors' homes are primary residences or investments, the NAR counters that Realtors are likely selling investment homes that don't meet Levitt's idea of investment real estate - homes that are flipped more than once within a three-year period.
Investors don't flip, suggests the NAR, and are more likely to hold their properties longer than three years, so Levitt's model doesn't eliminate investors as effectively as he might believe.
FrustratedUser
Lifer
I hate real estate agents too. In fact I hate the whole real estate market including the sludge that's just driving up the prices by flipping houses left and right.
Don;t worry. Ever time the intrest rates go up just a little is putting more hurt on those people and those that bought a house they should not be able to afford. That and several markets have already seen around a 5% drop in prices.
If looking to buy a house, just wait a little longer. You might find some really good deals on foreclosed or "must sell quick" houses.
I'd like to go beyond FSBO.coms and what not. I'd like to see a Federal database of property currently for sale, and sold. Contact info could be added to the database by the owners as they wish. I'm pretty damn tired of the current MLS, and see absolutlely no reason why this couldn't be free information made available from public records.
Hell, Google or Yahoo could even be pressed into action for this valuable service. Listings could automatically be pulled as soon as a record of transfer is added to the local database. Imagine having your desire to sell your property be instantly available across the country for free!
Vic
Elite Member
:roll:
Would you prefer that they had no vested interest in closing your deal?
I hate this "they work on commission" slam. You want to see what salaried salespeople look like? Go to Best Buy.
Heh. As a long-time loan officer though, I do have to agree that most real estate agents are incompetent scum. It's true. A function of the 80-20 rule. The trick is to find the right one to work with because, as always in sales, the scum are the losers who couldn't close a bathroom door while the real high-volume stars are the best ones to work with.
Ornery, pushing home values up forever is not a good thing. It's not appreciation, it's inflation. And we're about ready to see the ugly side of that.
...pushing home values up forever is not a good thing.
Not sure what that has to do with a free MLS, but the only thing I see dropping in price is electronics. Seems to me that the 7% commision added to each sale is adding to rising prices, and not a lick to "values".
As far as I'm concerned, whatever "service" real estate agents perform, could be done on an hourly basis for a hell of a lot less than a 3.5% nick in the cost of a $150,000.00 sale! Good God, how many hours do they actually put into the effort anyway? :roll:
Not sure what that has to do with a free MLS, but the only thing I see dropping in price is electronics. Seems to me that the 7% commision added to each sale is adding to rising prices, and not a lick to "values".
As far as I'm concerned, whatever "service" real estate agents perform, could be done on an hourly basis for a hell of a lot less than a 3.5% nick in the cost of a $150,000.00 sale! Good God, how many hours do they actually put into the effort anyway? :roll:
HomeAppraiser
Platinum Member
REAL ESTATE agents are shadier than used car salesman
It's true. I have done both. I took a summer job at a Toyota dealership right after college. Most of the guys there were the stereotypical salesmen from the movie The 40 Year Old Virgin. The real bastards in the dealership are the sales team managers and the general sales manager. They would screw with customers by waiting till nine at night before saying yes to a deal that they would have agreed to three hours earlier just so they could hit the mark with some backdoor finance charges in hopes that they would be to tired to notice.
I tried Real Estate sales a year later. Made a ton of money in the summer and starved in the winter. Almost all agents from all offices were just awful. Because the commissions were high, to win or lose an extra sale per month was a make or break proposition for most. That mentality is what brings out the worst in people. The retirees were nice because they could sit on their pensions while holding countless open houses and not go broke. The down side was that even though they only made one or two sales a year that took away from the one or two sales a month I needed to survive.
I have found that the natural born sellers often don?t know squat about what they are selling. This lady at the car dealership once described a Lincoln as being ?double wishbone carbureted? and I did a walk through with a local top selling Realtor, over 15 years experience who did not know that water heaters needed pressure release valves.
I could always price a house correctly, but felt uncomfortable pressuring people to sign the deal. Some agents over-price a home to win a listing contract. The sellers think ABC Realty said I could get $20,000 more that XYZ Realty so I will go with them. Others, like Freakonomics states, under-price properties in order to get a quick sale. All agents hold their commission above your interest. Remember the commission may be 6% but the selling agent has to give half to the listing office, then the selling agent has to split that 3% with the broker/owner of the office who then subtracts all office supplies, phone calls and other crap out of what is left. The Realtor then has to pay taxes, social security, health insurance and live on that less that one and a half percent commission. You?d have to be an @sshole to want to stay at that kind of job!
It's true. I have done both. I took a summer job at a Toyota dealership right after college. Most of the guys there were the stereotypical salesmen from the movie The 40 Year Old Virgin. The real bastards in the dealership are the sales team managers and the general sales manager. They would screw with customers by waiting till nine at night before saying yes to a deal that they would have agreed to three hours earlier just so they could hit the mark with some backdoor finance charges in hopes that they would be to tired to notice.
I tried Real Estate sales a year later. Made a ton of money in the summer and starved in the winter. Almost all agents from all offices were just awful. Because the commissions were high, to win or lose an extra sale per month was a make or break proposition for most. That mentality is what brings out the worst in people. The retirees were nice because they could sit on their pensions while holding countless open houses and not go broke. The down side was that even though they only made one or two sales a year that took away from the one or two sales a month I needed to survive.
I have found that the natural born sellers often don?t know squat about what they are selling. This lady at the car dealership once described a Lincoln as being ?double wishbone carbureted? and I did a walk through with a local top selling Realtor, over 15 years experience who did not know that water heaters needed pressure release valves.
I could always price a house correctly, but felt uncomfortable pressuring people to sign the deal. Some agents over-price a home to win a listing contract. The sellers think ABC Realty said I could get $20,000 more that XYZ Realty so I will go with them. Others, like Freakonomics states, under-price properties in order to get a quick sale. All agents hold their commission above your interest. Remember the commission may be 6% but the selling agent has to give half to the listing office, then the selling agent has to split that 3% with the broker/owner of the office who then subtracts all office supplies, phone calls and other crap out of what is left. The Realtor then has to pay taxes, social security, health insurance and live on that less that one and a half percent commission. You?d have to be an @sshole to want to stay at that kind of job!
Could you guys knock off the stereotypical BS? Nobody that works for a living would have jobs, if it were not for sales of products. Be thankful someone is willing to sell products. You can find people with slimy morals and ethics in any occupation, but for you to judge all RE sales agents and car salesmen in the same negative light, shows some very narrow mindedness. :|
HomeAppraiser
Platinum Member
I am just drawing from personal experience. The main point that I think the OP is trying to make is that a commission based work environment breeds unhealthy competition where only the most ruthless scum rise to the top.
I blame the National Association of Realtors itself. Supporting the statutory classification of agents as independent contractors instead of employees allows the broker/owners at the top of the food chain to hire droves of agents without having to pay them any benefits or social security tax. This provides extra dues payers to the NAR so they are all for it.
Having been in their shoes, I treat sales people based on how they treat me. If I get a high pressure person or encounter a turn & flip store I walk out. If I am treated with respect I?ll take the salespersons card and ask for them if I come back to buy. I am not making generalizations, reread my last post.
I blame the National Association of Realtors itself. Supporting the statutory classification of agents as independent contractors instead of employees allows the broker/owners at the top of the food chain to hire droves of agents without having to pay them any benefits or social security tax. This provides extra dues payers to the NAR so they are all for it.
Having been in their shoes, I treat sales people based on how they treat me. If I get a high pressure person or encounter a turn & flip store I walk out. If I am treated with respect I?ll take the salespersons card and ask for them if I come back to buy. I am not making generalizations, reread my last post.
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