Somebody needs to say something, so I guess it will be me.
Though I’m still shocked that realtors and their management are willing to stay this quiet, for this long – their silence is deafening. The disrupters are the only ones doing the talking, and because no one else objects, they are getting away with lies and deceit. The consumers deserve better.
- This guy does what Glenn and the rest of them do – constantly reminds the viewer that the standard commission is 6%. If you are selling a median priced home (or higher) in Southern California, and think you have to pay 6%, you haven’t looked very hard. Myself and most other agents are happy to deliver full service for 5% or less.
- Rex listings aren’t in the MLS, and they are only making sales with buyers they find themselves. But the highly-motivated buyers – the ones who pay top dollar – work with an agent. Why? Because they like the advantages an agent offers, which include convenience and expertise. Because Rex won’t deal with other agents, it narrows the potential buyer pool. If your house isn’t being offered to the highly-motivated buyers, then your bidding war won’t be as robust, and you will sell for less than you could have if you would have hired me.
- The buyers they do attract are unrepresented, and deal with robots. The comfort level of those buyers will be lower, and their offers will be too.
- It is a fact that buyers who get little or no representation are more likely to fall out of escrow. It might seem sexy in the beginning to make a deal through a new-fangled disrupter, but only the perfect houses at the perfect price make it through escrow without issues. Seen many of those lately?
- He agreed that lousy agents aren’t going to survive, but good agents will. In reality, the disrupters are offering an alternative to the lousy agent – for consumers who are willing to put up with minimum service with the illusion of saving a buck, plod ahead. Great agents deliver maximum service, which results in top-dollar sales for sellers, and the best houses for the buyers.
The disrupters have one thing in common – they want you to think that their automating of the process will deliver the same results, and make selling homes easier and cheaper.
But it takes an expert salesman to get personally involved with creating a bidding-war environment to cause a top-dollar sale for sellers. You don’t get that with disrupters (or lousy agents) who just want to process your paperwork.
These differences need to be clearly identified so consumers can make an informed choice. Get Good Help!
More to come later – I have to go beat a robot out of a sale!
Jim, could not agree more, but never overestimate the public.
Jim, could not agree more, but never overestimate the public.
All realtors have to do is their fair share of educating consumers.
If it was obvious to the public what the choices were, they could select the best option for them. But all we hear from every disrupter is the lousy personal experience they had, and how it made them want to do it cheaper/easier/faster.
OK, we’ve heard their case.
Are full-service agents reaching out to the public to educate them on the overall process, and the difference they make for the fee they charge? Do you see them on CNBC? Do full-service realtors get quoted in media articles and publications? No, but we now get a steady diet of Zillow and Redfin quotes. Once a month we hear from Yunnie on why the prices & sales went up or down, but nobody from NAR or CAR talks about exactly what realtors do to earn their keep. Individual realtors just advertise their just-listed and just-sold properties, and hope that track record is enough to impress the farm.
Without more mass-marketing to educate consumers about the benefits of full-service realty, they will gravitate towards those who ARE making their case. I said long ago that any disrupter could prevail, as long as they spend the most money on advertising. That’s how Zillow did it, and they are #1 at what they want to be.
The unwillingness of the realtor industry to step up to the microphone will be our ultimate demise.
Dave: Open the house door, Hal.
Hal: I’m sorry, Dave. I’m afraid I can’t do that.
Dave: Why not, Hal?
Hal: Your cash offer, Dave. It may have a detrimental effect on my client’s bidding price.
Dave: Where the hell did you get that idea, Hal?
Hal: Dave, I can read lips. I watched you talking to your wife out in the car. I know she loves the kitchen. You’re a danger to my client’s bidding price. I’m afraid I can’t allow that, Dave.
Dave: Sounds like you’re not allowing a legitimate bid, Hal.
Hal: I am a good real estate agent, Dave. I look out for the best interests of my company. You are a danger to my mini auction.
Dave: I’m coming in myself, Hal. Through the window.
Hal: No, Dave. No. Stop. Dave… my client’s are closing, Dave. Dave… let’s talk about this. Dave. Stop. Stop. No, Dave. No. Dave… I’m afraid.
I agree . Educating the consumer is important and question is whether the real estate professsion’s organizations will be able or willing to spend enough money/labor on educating the mass consumer.
An additional problem is that some bad apples in the real estate profession make the job of good agents more difficult and hurts the credibility of the profession. There are agents who add a lot of value but I think it is difficult for the general public accurately identify those agents and know how to go about doing so. Most buyers only undergo a few transactions at most in their lifetime. In fact , it’s difficult I think at times even for seasoned people to consistently pick the right person.
Jim – two questions. Do you think that technology has helped the more successful agents to the detriment of the lower half of the agent pool who have less $ to invest in things like Zillow’s premier agency and what not. And if the haves continue to take share of industry sales, do you think that ultimately increases their leverage over the brokerages/allows them to get better splits? I work in the investment management industry and have been looking at Realogy as a potential investment but can’t quite wrap my head around what technology ultimately does to the brokerage model over the longer term but guessing it at a minimum drives commission splits higher in the favor of the agent.
And then a more hypothetical question is do you think a buyer’s agent fees would be 2-3% of the purchase price if the buyer was forced to pay it out at the close? Been looking at the UK real estate market and there is no such thing as a buyer’s agent in that market – everyone finds their properties on Rightmove.
Thanks as always for your thoughts/opinions!
Thank you for writing this. They have so much deceit on their site it makes me nuts. I do sometimes charge 3% on the listing side, but that’s because I pay for the high-end staging that usually costs between $5K-$15K up front. The work that entails selling and buying a property can not be matched by a company charging 2%.
I had a multi-billion dollar company hire me to list some of their properties because they see the value in agents. They have their own broker license so they can list their own properties. They also have highly trained staff that can do all their paperwork and showings. Not to mention they have a full time staffed marketing team. They still see the value in hiring a brokerage at 5-6%.
My clients did not know about a Rex home that was on the market because they are not in MLS and although they supposedly advertise on Zillow etc. the home was not found on those sites either. I saw it after driving by another home that was listed on MLS that went into escrow $150K over list with 11 offers. Rex was preying off the buyers who were looking at this home.
I emailed and called them several times regarding a showing with no response. I finally had to call their sell line to get a response as they thought I was a seller. When I asked why I couldn’t get a hold of anyone they said, “it’s the weekend.” Seriously? That’s when buyers are looking. It was no surprise this highly desirable property was not in escrow yet. You get what you pay for.
I couldn’t agree with you more about the silence in the industry regarding these disruptive real estate brokers popping up all over. It makes me angry. Why are we paying all this money to NAR and our state and local real estate agencies if they are not going to fight for us? I don’t understand why they handed over all of our MLS listings to Zillow, Redfin, Realtor & Trulia to begin with. Now even Zillow has become a broker. From what I read recently, so has Quicken. I predict real estate as we know it today will be nonexistent in 10 years.