“Estate” in legal terms just means property that can be passed on to heirs in a will. Any type of property–jewelry,cash bank accounts,stock certificates, intellectual property, payments from royalties,etc
“REAL” estate means property that is immovable*–i.e. land. It’s “real”—tangible, physical, and can’t be picked up and taken away.
There are times when it’s nice to have a knowledgeable person to do thing for you, and times when a bit of do-it-yourself will save you ten thousand dollars or more. Whatever cranks your motor.
Obviously, this DIY spirit is important - comfree.com alone claims to have sold over 100,000 properties. Local TV and radio ads “why you need a real estate agent” were pretty common last summer.
Can’t complain, I used an agent to sell my last house because it was worth the hassle and the fee was not too high.
But - that’s the issue that many people seem to object to - the going rate seems to be more set by cartel than by competition. Real estate agency associations seemed to flat-out refuse to allow price-cutting. (IIRC one issue in Ontario reached the courts because an agency offered FSBO to list on MLS via them for a flat fee, and the MLS blocked it.) If it was necessary to enforce extremely high standards maybe. But I have heard of almost as many RE agent disasters as I have of extremely professional type fdoing a good job.
(Part of the problem, is you only use an agent once in a decade or so… the only feedback to assure good service is rewarded, would be word of mouth from other recent customers…)
So a house made “presentable” for sale by an agent is just the same disaster as the other house, but cleaned up for viewing. The same old crap will come out of the closets, same mess on the kitchen counter between offer and moving out time. Wouldn’t you rather be warned exactly WHAT the previous owner was up to?
It may seem that way, but in the US, any attempt to collude on rates will bring the immediate wrath of the Anti-Trust Busters upon thee. We have been made aware that there are fed tricksters who attempt to get us to violate that.
Which is why I cannot say something like “we all charge X%”. I can tell you my company’s rates, but if you want to know how they compare, you will have to contact other companies. I suppose there is nothing stopping a non-agent from phoning all companies in an area and posting what they find publicly.
It is up to company policy, often driven from the top, as to what rates to charge and when to adjust them, if at all. It is not (in my state, at least) written into law. Most of the company owners I know feel that rates should not be discounted, and they have their reasons, whether reasonable or not.
As the buyer sure, but the agent making the house presentable is working for the seller, not the buyer. If as a buyer, I want to see a house that an agent hasn’t made presentable, I’ll be restricted to FSBO listings and even then many of the houses will be cleaned up.
You have some unique and intriguing ideas about marketing real estate. You should get a license (the barriers to entry are low) and put these novel ideas into practice. I think 2% commissions and showing houses in messy “as is” condition instead of tidying up for open houses and client showings could be your road to fortune.
The MLS (Multiple Listing Service) is not a new internet related service, it has been around since the late 1800’s in the USA and Canada.
Its one of the reasons Realtors feel it is so unfair to potentially legislate access to it, by those who have not contributed to it.
The MLS has been built by Realtors for Realtors for over 100 years, that’s one hell of a lot of time and capital invested that could just be “stolen” by government legislation.
I am retired Canadian Realtor.
Not sure how Canada works but almost all the MLS online listing systems in the US are fully open for viewing by the public. They would be crazy not to allow this. There are agent comment sections on the listings that are only viewable by registered users of the MLS. These usually have to do with showing arrangements. security access codes, or commission arrangements. Some MLS systems will allow the public (ie for sale by owner users) to list on them for a fee.
Bear in mind MLS membership in most US MLS systems is usually $ 500 - 2000+ a year per agent and/or per assistant (they generally require individual memberships -no sharing) depending on the system. In some areas where number of county or state borders come together an agent needs to belong to 3 or more MLS to cover their territory. If you have a small team you can easily spend $20,000 (or more) annually on MLS and national board fees.
The above are just local and regional MLS systems you also have to pay approx $1000 - $2000 annually (per person) if you want your properties nationally advertised on systems like Loopnet or other super regional systems.
Slight hijack: the French word for real estate is immobilier, and, you are right, the word literally means stuff that can’t be moved. Property that you own that can be moved around are meubles (or more rarely mobilier), although in this day and age, it usually just means furniture. A real estate agent, just to finish up, is an agent immobilier, and such a person works at an agence immobilière.
One of my uncles tried to sell their first home, in the town with the highest demand in Spain, unsuccessfully for five years. Five years during which they were paying two mortgages. Five years during which they refused to pull out the nails, plug up the holes and give those walls a coat of white paint. One wall had been covered in half-postcard sized pictures, so there were perhaps a hundred nails in it alone. Once they bothered do that it took weeks to find a buyer.
I find this line of reasoning odd, in that so many people are in favor of progressively greater taxation of the wealthy.
In other words, if one’s school of thought is “you should pay more because you can afford to”, then doesn’t that apply to somebody selling a $1.5 million house?
<edit - I just realized I’m in GQ and that was probably a GD teaser. Anyone who wants to respond should probably open up a new thread in GD.>
No matter how you clean it up, it’s the same house. If all it took was a day’s work to fix it up, the logical thing would be for the buyer to put in a low offer, save themselves a few thousand for a day’s work… Or do a repaint and recarpet, like some buyers do, while the house is empty.
If someone won’t sell at a lower price and won’t “pretty things up”, well, 5 years of interest payments vs. half a day’s work? Decisions, decisions.
All I’m saying is that sellers need to be realistic on what attracts buyers, but buyers need to realize that a house with clutter is the same as the same house without clutter once the occupant leaves. The big question is not how fresh the paint is, it’s whether the roof or basement leak…
Just out of curiosity, since this thread seems to have attracted real real estate agents (?) what proportion of buyers do you think do significant maintenance to the house before moving in? (I.e. paint at least one room or recarpet/rfloor at least one room?)
I’m thinking decor, even paint colour, is a very personal decision. All the advice I saw was to keep everything neutral.
An attractive house gets offers. Once the negotiation begins, the condition of the roof or basement (which may not be obvious at first, but learned thru inspections) may require an adjustment of price or a repair. Offer first (that means they want it), price second (how badly do they want it?).
You are counting on buyers being rational. They are very often not. Numerous times my Mom would tell me about some client not wanting to buy a condo only because they didn’t like the carpet, or the color scheme, or the appliances in the kitchen. All a matter of a few $K. On $600K-$1M condo.
If a seller is not realistic, it will cost the seller big $. If a buyer is not realistic, it may be a lost opportunity for him but no money out of his pocket.
You are correct on this. We bought a house with no heat. No offers were being made on this house because of noheating system. We figured it would cost about $5000 to install forced air heating. We made an offer for $50,000 less than asking. It was accepted. And after the inspections we got the seller to install a heating system.
A clean fixed up place will sell faster than a not cleaned up place for less money.
I often see “For Sale by Owner” signs and occasionally “No realtors please” or something to that effect. What happens when a buyer who has engaged an agent wants to consider that house?
Oh well. You can lead a horse to water, but you can’t beat any common sense into him no matter how big the 2x4.
IIRC, Trump once mentioned that he made a killing on the original Trump tower by doing the condo interiors with the cheapest crap available. He knew that people who spend millions on a luxury apartment, the first thing they would do is rip out all the fixtures, maybe even a few walls, all the doors, floors and everything else. Why spend huge money installing something for appearance that is just going to be junked?
So like every other endeavour, rational thinking and realistic expectations of cost and effort can help you come out ahead.
Think of a real estate agent as like an editor for magazines and books, a record producer signing music talent, or google for the internet. They can help cut through the crap and sort out what should be the best choices, or you can go it alone an do your own search to find what you want. The difference, google is free and RE agents are not.
The buyer already has a Buyer Agency Agreement with the agent, and is ultimately responsible for a commission according to the terms of the Agreement.
I interpret the “no Realtors” sign (which is rare in my area) as meaning the sellers don’t want to list with an agent (or don’t want to pay one), not that they won’t accept a showing or offer from a buyer.
There has been a huge change in buyer attitudes in the last few years. When we were looking at our first house, and I know for my peers it was the same, we would look at a house to consider the size, room layout and general condition. Anything that we weren’t crazy about we would think 'It’s fine for now, when we have more money and time later we can change it". The buyers now need everything perfect right this very minute. No matter how small or easy it is to take care of they will dismiss a house if it is not the exact replica of their imaginary dream house.
I see houses dismissed as being “dated” if they have the wrong paint colors. I’ve seen houses that are perfectly fine, have the same cabinets and trim that builders still routinely use, good floor plans, plenty of bathrooms, don’t need new flooring, and buyers will say “it would take too much money to make it liveable”. Seriously? People are living here now. An unliveable house used to be a junky foreclosure full of racoons and bats not a gently used, very good condition, 30 yr old house.
And yes, it has to be spotless and perfectly maintained because if the owner forgot to wipe off a light switch plate what else did they not bother to do, the house must be about to fall apart from neglect.
I’ve bought and sold a few homes and found no value at all in using realtors (I’m not capitalizing something that isn’t a proper noun.)
I mean, I guess they deliver value, but I have difficulty understand how the value is worth 3-5% of the rpice of my home for stuff my ex-wife and I did just as well with a fairly modest investment of effort and an Internet connection. Finding out how to price our home took an afternoon of effort, if that. Finding out how to clean and stage it is common sense and is something you should know by virtue of having looked for a house yourself. Getting a home inspector takes an Internet search, an hour of research, and enough intelligence to know how to find someone who’s officially certified to do it, not “my uncle Ted.” For the contract and stuff you can engage with a discount realtor for $500-$1000, tops, and the legalities are handled by the lawyer. Holding an open house is, again, not rocket science.
I’m not precisely sure why we needed a full blown realtor, and in fact the rampant dishonesty… er, different incentives that the realtor has as opposed to the seller are a problem (it’s in the realtor’s interest to make you cut your price to make a quick sale.) The last house I sold we were instantly bombarded by realtors who insisted on representing us, all insisting our price was too high; we had four offers in the first week, all within one percent of the full asking price, since of course it was the correct price, based on comparable homes and what they sold for plus a small markup to see if we’d get it, which we did.
The traditional real estate agent business model is doomed. It’s absolutely flat-out doomed; I would not bet dimes to dollars that it will exist in twenty years. There will still be niche markets and higher end needs and the need for people to help you out if you’re moving to a new city, but just swopping in and collecting $20,000 for about three days of effort that any educated person could have done themselves isn’t going to survive the Internet age.
I would take that to mean “No Realtors contacting me about listing my house.”. Around here 99.9% of the time the FSBO sellers are more than happy to have a buyers agent approach them. Then they can get the agent to do the majority of the work involved with getting a sale closed and they only have to pay 1/2 the amount of a normal real estate company listing. (In reality the buyer always pays the real estate fees with a higher home price though on paper it’s the seller who pays. )
I’ve only ever heard of one time that a seller wouldn’t work with a realtor at all and in that case the buyer paid his realtor some money for his work.