ABC?? That’s how I’ve always heard it.
I’d like to punch those people in the teeth.
Had he just finished watching Glengarry Glen Ross?
By “those people”, I mean people who are always closing. I’m in the real estate business, and I’ve found that a good realtor is invaluable.
Well it’s irritating, Ms. REALTOR. It means that if I want to buy the house next door, the value is now artificially inflated by 15K because of your brand new comp, so thanks for that. Your county tax assessor also uses that sale figure, so your not doing your property tax bill any favors, either. These incentives and cash back at closing deals should be illegal, IMO.
Wow what a coincidence… I used to sell properties in developments named Glengarry and Glen Ross… there was a sales contest even, and I won second prize which was a very nice set of steak knives. The guy in third place was fired 
I tell ya, it takes brass balls to sell real estate.
Me too. The all-caps thing makes me laugh.
I’ve been selling commercial real estate for over 20 years, and have never done residential. My commercial group, a group a 6 commercial only agents + their assistants) worked for 15 years as a sort of sub-office within a larger regional residential office. This worked OK for some time, but the residential firm was largely clueless about commercial, and really didn’t know what to do with us, and didn’t really provide us with much real world support or marketing tools relative to the dollars we generated. The biggest asset to being there was that we were largely left alone to do our own thing.
After awhile, however, we saw that we needed to move on in order to step up our game if we were going to remain the big dogs in the region so we changed affiliations last year to a large national firm which is strictly commercial -investment real estate. All of us are CCIMs, and by necessity Realtors in order to be affiliated with the local board and use the MLS as agents. In practical terms, with the exception of Board-MLS access, the “Realtor” designation is largely meaningless to us professionally. Having said this, when I was with the larger residential firm I was friends with many of the residential agents, and watched many deals progress.
A few observations re the relative real world ethical and moral postures of buyers, sellers and agents.
Buyers are sellers can be great people or they can be idiots and thieving cheats. Agents can be great people or they can be idiots and misrepresenting hucksters.
Nominally adult buyers and sellers in the middle of large financial transactions can act like huge babies, and will make all kids of excuses for doing so. Otherwise ethical people will lie like rugs when buying and selling real estate, and will lie to the agent about the condition of the property, omit critical details, misrepresent their credit status etc., etc., etc. If they think they can get away with it they’ll try.
People are stupid and lazy, and often don’t read the contracts they sign. Agents will sometimes have to read it to them line by line. Buyers and sellers will often commit to a contract, get everyone moving, get past due diligence, and then simply panic and change their mind, and will pull ever string and make every excuse they can to weasel out of the deal. Usually they try to pin this on the agent to save face. In the middle of deals residential buyers and sellers often lose track of the fact that there is a negotiation going on, and start to get emotionally involved. Once this happens and they don’t get what they wanted the agent bears the brunt of the client’s displeasure.
Residential agents often go through fairly exhaustive training post license at the larger firms. No broker wants an incompetent or unethical agent working for them as the legal and financial risks are simply too great. The main reason residential real estate contracts and listing packets are so huge these days vs years past, is that many of those clauses, warnings, notices, etc. are there because there was some lawsuit filed where common sense and fair play got a beat down.
The operating assumption at this point on the part of many state legislatures and real estate commissions is that buyers and sellers are effectively children who should be signing contracts with crayons, and they are not far off in many cases. Buyers and sellers often don’t understand they legal and state code requirements and constraints a residential agent has to operate under, and make ignorant assumptions about things like expectations that the agent should be doing things like holding deposit checks on ratified contract for any length of time which is strictly illegal, or telling them if a neighborhood is “good” or " bad" relative to racial demographics etc. which violates fair housing and is a huge no no.
Sophisticated buyers and sellers, if they got along, and the deal was straightforward, and the property had few issues to wrangle over, and they were willing to put the time and legwork into hunting down properties, drafting an offer, hiring an attorney or title company, contracting and paying for advertising, hiring and coordinating with an inspector and an appraiser, working around a prospective purchaser’s schedule to show the house, and getting the necessary paperwork done, could probably do the deal themselves without involving an agent. The problem is that these scenarios are relatively few and far between, and most agents do a lot of work in listing, marketing, searching, showing, assisting negotiating etc.
At some point it’s possible technology can make real estate transactions go eBay style buyer-seller direct, but given the complexity in marketing and managing a real estate transaction I don’t think any experienced agents are losing much sleep over this possibly being the predominant sales model for some time to come. As long as selling real estate is involved many people are going to need assistance, and agents effectively work for free until they produce a sale.
Per a few of the more arrogant attitudes expressed in this thread about the general level of ability required to sell real estate, I’ve seen many engineers, upper level managers, etc. try to start a real estate sales career after they retire to make some for some extra cash. After all how hard can it be? They get their license, and then fairly shortly crash and burn (some quite impressively with nervous breakdowns) because they have no idea of the work involved in selling real estate, and dealing with clients, and are abject buffoons when it comes to managing negotiations and relationships between two parties. They usually go whimpering out the business within a year or so with their tail between their legs.
Having said all this, for a relationship to work the client and the agent have to respect one another and work in good faith. Good agents know their market, listen to clients, and work diligently. Bad agents are lazy, take shortcuts and usually do not last as they cannot make a living in anything other than a superheated market. In the end there are good and bad agents, and good and bad clients, and sometimes there are simply agents and clients who are decent people, but just bad matches for each other. It’s a hard business for lazy people, but can be rewarding if you are willing to work hard.
Thank for your post Astro, I think that you have highlighted the issue that most people face with real estate agents. It isn’t a hard career to get into but it is difficult to do well and in a real estate boom, it seems that the usual chaff weren’t skimmed off quickly enough.
Our agent earned her commission. We spent several months looking at properties, made several offers and got outbid several times. I estimate that we looked at approximately 100 properties over that period of time and spent a month wrangling with various parties until we got to closing. She also had about twelve years experience as a buyer’s agent so she was familiar with the process.
Hi, Trunk!
My college educated mother who regularly puts in 70 hour work weeks while maintaining an active social life and raising two children by herself kindly requests you go fuck yourself, bless your heart.
Same for my grandmother, who puts in the same hours and raised her child alone.
makes notes to come here for advice and bitching when she buys a house
To get a sale in this market they have to.
In name only, evidently.
Still not seeing it. Your buying at $450k and paying closing costs at $15k is still the same as buying at $465k and having the seller pick up the closing costs at $15k. Unless…
In your OP:
You meant that everything included the closing costs? I didn’t even consider that this got discussed with an agent. I’ve never worked that into the cost that I’ve given an agent; I always estimated the cost and subtracted that from my budget to get a range to give to an agent. I figured that that was going to come out of my pocket at the closing, and didn’t figure into my negotiations with the seller because it was a cost levied by the lender.
I will say, however, whether it is real estate or a car or stereo equipment or what-have-you: When a salesperson asks you for a range of what you can spend, you can usually bet the paycheck that they are going to use your upper range as their base and go up from there.
Yeah, maybe I wasn’t as clear as I could have been. When I said $455K was our absolute ceiling, for everything, the realtor understood this. When we were talking with the realtor, that’s what we told her. We didn’t want the entire transaction costing us more than $455K. Since closing costs are inescapable, we included them in the cost of the house.
The way she explained made it seem like it was us paying $465K LESS closing costs as if they were included in the $465K. That’s not the case. The price of the house was $465K, period. Add the closing costs onto it, and you have $478.5K. In other words, that is what we’d if we were paying closing costs. Because the seller is paying them, we’re STILL paying $465K, which was $10K over our ceiling.
I think we’re looking at closing costs differently. Since they’re inevitable, I consider them to be as much of the negotiating process as the cost of the home.
How to spot a good agent: They will meet you at their office, ask what exactly you are looking for, show you printouts of listings and eliminate any one you don’t want to see, won’t pressure you into signing a contract, will explain the contract to you, will present your offer in a timely manner and come back with the counteroffer, will refer you to home inspectors, mortgage reps and attorneys, will help you every step of the way, and will set up a walk-though the day of the closing. This is what my company does.
A bad agent will meet you at the house, show you a few, pressure you into a contract and show up at closing to get a commission check.
The 6% is misleading. It’s usually split 50/50 between the listing and the selling companies. The agent gets about 75% - $50 of the total commission.
The Board of Realtors has the right to fine bad agents and bad brokers. The Real Estate Commission can suspend and revoke licenses. Every company has been contacted by the two of them. My company keeps copies and makes sure that all transactions are done correctly.
To get an agent’s license a person must attend classes, pass the school test, pass the state test and submit to a criminal history check. A Broker must be a licensed agent for at least five years, take more classes and more tests, and pass inspection by the state licensing board. The agent will lose a license. The broker will lose a company if things go bad.
We had a list of agents and companies that we will not work with. The list changes often as bad agents and companies are forced out of business. It’s not just real estate–we have lists of attorneys, mortgage companies and home inspectors that are not the used. When one of our buyers changed attorneys mid-stream to one on the DO NOT USE list, I thought my broker was going to have a heart attack. Fortunately the deal closed okay.
Bolding mine.
You mean “a bad salesperson”
If i give a salesperson an upper limit on my spending, and s/he takes the upper limit as a base and goes up, then s/he has not listened to my needs, and is not doing the job properly.
Also, i personally think that salespeople who ask you what your spending limit is first are bad salespeople. The first thing they should ask you is what you want and need the product for, and what features are more and less important to you.
The thing is, it seems that most people (like myself) who ask for help on closing costs do it because we are willing to accept a higher monthly payment over the long term, but are cash poor for the downpayment. Your way of calculating things seems odd to me, unless you are in the position of paying for the whole place in cash. It seems more logical to tell a realtor that you can afford $x a month on an ongoing basis, and have $y available for a downpayment.
Then of course you get the current situation where prices are falling, so monthly payments are dropping, but required downpayments are rising. That keeps a lot of people out of the market too…
Reputation; referrals are the life-blood of an agent. Sure, a fuckmutt can make a living during a housing boom, but they aren’t going to last now that the bottom has dropped out. A smart-consumer that is looking for an agent will get referrals, look for someone that has been in business for a while, and interview several agents.
This isn’t any different than most other service professions. You could replace ‘REALTOR’ with ‘contractor’ and the thread would be just as valid. The same applies for car dealer, accountant, maybe even lawyer. The fact that a house is a huge purchase just means the consumer has to do their homework thoroughly.
Also, never trust anyone that you aren’t directly paying. If your agent is getting 3 of the 6 percent, it is coming from the seller. They don’t really work for you and are only bound by the law and their own values.