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Have real estate companies out-lived their usefulness?

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Have real estate companies out-lived their usefulness?

Old 03-11-2009, 12:13 PM
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Default Have real estate companies out-lived their usefulness?

This is a take-off of another thread, where the poster has been less than over whelmed by the lack of work exhibited by realtors, that stand to make a sizable commission. I didn't want to derail that posters thread, but it got me to thinking about realtors in todays world. Have they out-lived their uselfulness? Or, has access to information, diminished their worth?

I know that most work hard. But, with prospective customers having access to nearly as much information as they do, should they still command 6% commissions? I realize they have to show the houses, guide them through loan procurement, guide them through inspection, negotiations, and closing.

How many contracts are being written for less than 6%? How much less? Can you provide the same level of service, with income being reduced? It just seems that the ability to match up seller info with buyer info, is rapidly approaching the point where the listing agent, may see their role diminish. And could the selling agent be replaced with a flat rate outfit, that shows the home, and has staff to handle the closing process?

I don't know, but it just seems that the real estate companies are in a period of transition. Maybe it's a moot point, since nothings selling. That may be the more pressing issue for them now.

I admire the wealth of knowledge of the people on this site, and was just curious as to your thoughts on thsi subject.
Old 03-11-2009, 12:22 PM
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I expect to get fair market value for my house. That being said if there are alot of offers coming in under then I would meet with the broker and discuss them making up the difference in what they make as a comission, we mostly agree on some sort of a reduction to move the property.
Old 03-11-2009, 12:27 PM
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Interesting point

I realize they have to show the houses, guide them through loan procurement, guide them through inspection, negotiations, and closing.
But you are forgetting all the cost that is involved in running the business.

Office rent
Taxes
Insurance
Advertising
Phone
Web site
Mailings
Copying
Electric
Vehicle Maintenance
Gas
Etc
Old 03-11-2009, 12:27 PM
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I have sold 2 houses using flat fee brokers. Mostly because I was not sure where to price my house (comps). With the advent of Trulia and Zillow, etc., I am not sure I would use a broker at all the next time I sell.

I have a background in sales, so I was comfortable showing the house myself.

I think many people though, don't want to deal with the headache of listing, marketing, open houses, contracts, etc. so there will be a need for brokers
Old 03-11-2009, 12:38 PM
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One of the most important things a good agent can do is be able set a good selling price based on real market conditions and market knowledge.
Old 03-11-2009, 12:51 PM
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Originally Posted by tgotch View Post
I have sold 2 houses using flat fee brokers. Mostly because I was not sure where to price my house (comps). With the advent of Trulia and Zillow, etc., I am not sure I would use a broker at all the next time I sell.

I have a background in sales, so I was comfortable showing the house myself.

I think many people though, don't want to deal with the headache of listing, marketing, open houses, contracts, etc. so there will be a need for brokers
That is some great points. If you are in an area with cookie cutter homes Truilia & Zillow are great resources.
I agree 100% with your comment about selling it yourself. If you have the time, knowledge,resources, etc then by all means sell it yourself. I have told quite a few customers to do just that. Not sure about your state, but in GA we can do what is called a exclusive agency listing. It give the right for the owner to sell it themselves with out a realtor and a commission.
Old 03-11-2009, 12:51 PM
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Originally Posted by Seacat FL View Post
One of the most important things a good agent can do is be able set a good selling price based on real market conditions and market knowledge.
But with the advent of trulia.com and zillow.com anyone can easily get selling prices of local houses...
Old 03-11-2009, 12:53 PM
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Originally Posted by tgotch View Post
But with the advent of trulia.com and zillow.com anyone can easily get selling prices of local houses...
Not true, only works in an area with cookie cutter homes.
Old 03-11-2009, 01:08 PM
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I sold my first house with an ad in the paper....$60 for the ad, and I had a contract on the house in 4 days at $3k below asking price.
I used a realtor for the next one, and paid $18k in commission, had a contract on the house in 45 days, and sold at $5k below asking price....Only reason I used a realtor and the only way I would do so again is to move out of state (for a job) faster than the house could sell.
That said, I used a realtor to find and negotiate my house in NC-for a BUYER they provide a valuable service.
Old 03-11-2009, 01:08 PM
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I purchased a home when the market was going crazy back in 04 and we were looking without an agent. A good friend of mine was working on the side selling homes and we agreed that if we or he found a listed home we would use him as the selling agent. As he knew we were also looking on our own and found a nice home which was for sale by owner and this guy had no clue of what was going on in the market. We looked at the home and gave them a deposit on the spot pending an inspection (which me and a buddy did) financing, and they had to pay $4,500 of cost associated cost with closing (thats much better then saying closing cost). My buddy who helped me inspect the home happened to also be the guy who got the job from the bank to appraise the home. He told me he could have appraised the home for around $100,000 more then the purchase price but said there was no need to rube it in the sellers face as to what the home was actually worth. This guy was a doctor and he had no business trying to sell his home and probably cost himself around $110,000 so in his case yeas a realtor would have been a good idea. The funny thing was his wife's sister worked for a closing Aty. and when she saw the deal she about fell on the floor and tried hard to break the deal until I had my lawyer give her a call. For my buddy showing us a few homes he refused to take any money so we did take him out for a very nice dinner.
Old 03-11-2009, 01:09 PM
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A good RE Agent can make a huge difference in your transaction. The good ones have contacts for all the services you would traditionally use(Financing, inspections, tax counciling**, attornies, and the benfit of experience). This alone can save you valuable time(an extra mortgage payment) and precious monies(financing fees/loan ratios/unforeseen structural-physical issues/taxes/etc). The commission is always negotiable. You will really appreciate the Agent when there is a problem in the transaction(wrong numbers on the HUD 1 statement, leins on the property, bank's attorneys get involved, and many many other pre-closing hicups). The advertising/showing and actual closing are usually a cake walk. The devil's in the details. That being said there are a bunch of very bad agents out there. In todays market place you should not accept anything but the best.
Old 03-11-2009, 01:15 PM
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Originally Posted by tgotch View Post
But with the advent of trulia.com and zillow.com anyone can easily get selling prices of local houses...
you can also leave 5,000-40,000 on the table, (maybe more) by not understanding the market and relying in internet sites to try and sell your own house. So you save the commission but lose money one the sale.
I agree that alot more info is avaiable to the consumer now and mayeb we;ll see more of the fixed fee type sales but I stil think most need the advice and experience of someone in the business
Old 03-11-2009, 01:31 PM
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Originally Posted by big george 11 View Post

... but it got me to thinking about realtors in todays world. Have they out-lived their uselfulness? Or, has access to information, diminished their worth?

Yes and no. The 'value' of real estate agents has declined as more and more useful information from well established, credible sources on how to save money selling/buying real estate has come online.

More than anything, I think folks are realizing where the fluff is in real estate transactions and they are taking it upon themselves to reduce costs by reducing the fluff. Folks understand they do not need to agree to a 6-mon contract with the selling agent that does not perform. They realize they do not have to agree to std commission fees. There will always be folks that want nothing to do with selling/buying and will rely entirely on RE agents. But more and more folks are taking the whole transaction into their own hands, saving the cost of commissions, and walking away feeling a whole lot better about the whole selling/buying thing.

There are a lot of sources that allow you FREE access to MSL real estate. Look to individual income tax preparers. They will often print out listings for you, free. For a flat fee they will help you with comps in the area you are selling your house. No better or worse than what a real estate agent will do.

If you want to know the realistic value for your home, you need to go with a FULL appraisal from an experienced appraser, NOT a real estate agent. Now you know the real world value of your home if you put it up for sale, not some wishful thinking or a price based on less than comprable comps -- something real estate agents are notrious for.
Old 03-11-2009, 01:50 PM
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We have sold 100s of homes most without a realtor, just like any other job there are good realtors and bad ones. A good realtor has lots of connections, knows the laws, will work with buyer/seller in negotiations, will work with other realtors and will take cuts in commission if full asking price isn't recieved. The connections come in handy when getting a chance to bid or make an offer on a home maybe even before it hits the market. A good realtor knows everything that is going on in the area. This type of realtor will always be worth it. Another positive thing about realtors is multiple listings, if you sell the home yourself you will not get nearly the amount of exposure that a realtor will allow you to have.
Old 03-11-2009, 02:05 PM
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Originally Posted by 35donzi View Post
We have sold 100s of homes most without a realtor, just like any other job there are good realtors and bad ones. A good realtor has lots of connections, knows the laws, will work with buyer/seller in negotiations, will work with other realtors and will take cuts in commission if full asking price isn't recieved. The connections come in handy when getting a chance to bid or make an offer on a home maybe even before it hits the market. A good realtor knows everything that is going on in the area. This type of realtor will always be worth it. Another positive thing about realtors is multiple listings, if you sell the home yourself you will not get nearly the amount of exposure that a realtor will allow you to have.

I agree with you except for that last part -- MLS (multiple listing service) is available via many different venues. As I mentioned above, a lot of individual income tax preparers are also real estate agents in the off season. They have access to MLS -- will get you lists for free, or list your home form a very very low flat fee.
Old 03-11-2009, 02:23 PM
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Can the same be said for Accountants? Everyone has access to tax software?
How about lawyers? There's Legal Zoom!

As in any profession, there's good and bad! They're good when they save your ass, but bad if they don't get you the best deal!
Old 03-11-2009, 02:37 PM
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Originally Posted by sea nymph View Post
Can the same be said for Accountants? Everyone has access to tax software?
How about lawyers? There's Legal Zoom!

In a nutshell - yeah, mostly. Simple tax returns are DIY, with or without software. And lots of legal stuff you can do yourself or with the help of a less expensive paralegal. It's when you venture outside the realm of "normal" that you need the professionals, be it accounting services, legal services, or real estate services. But if you are within the realm of "normal" you can save money DIY -- just like fixing your boat yourself. There are times when you need the pros, and times when you don't.
Old 03-12-2009, 06:08 AM
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One thing that RE agents do is take a lot of the emotion out of the sale. Many owners are attached to their home in ways that make the transaction difficult or sometimes impossible. RE agents can look at it as a house that's on the market, not a part of a families life that's for sale.

Some people can detach themselves from their property and some can't. I was looking at a FSBO about 10 years ago. The owner built the house in the early 70's and it showed. When I mentioned that I was considering giving him an offer but that I wanted to bring my contractor friend by to price out some remodel work you would have thought that I slapped him in the face. It went from "can I get you a drink" to "can I show you the door" in about 5 seconds. We never did make a deal.
Old 03-12-2009, 06:55 AM
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I find there are very few realtors worth their commission. There is too much BS in the profession. I find it humorous how a realtor will say, "I have three interested parties, sign up with me and I will sell your property." This is classic BS at it finest. My reply is, bring me the buyer, sell my property and you will receive your commission. They do nothing at that point. Spare me the rebuttal argument because it is weak when a realtor is soliciting me to sell my property, not me soliciting them to sell my property. My father was a successful Broker and developer and often said a realtor was nothing more than a used car salesman maybe wearing better shoes. No offense intended here. With resources becoming more available to the general public, real estate agents position is becoming weaker all the time. Anyone can pay to list their property on MLS. A knowledgeable, motivated and hard working realtor is becoming a commodity.

I find Zillow to be almost worthless. Zillow does NOT update information and is NOT a reliable source of information. I have a house listed on Zillow where their valuation estimate for the property is almost the amount of money spent on remodeling and improvements. Even after notifying them of the misinformation they have done nothing to correct it. In this particular case, their estimate is off by about 60%. I think Zillow is OK for late model neighborhoods with considerable sales history, otherwise they pretty much suck. They are using a picture of a particular neighborhood that is many years old and is not accurate today. If resources like Zillow become accurate in real time then realtors are likely going to suffer.
Old 03-12-2009, 09:03 AM
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Originally Posted by tgotch View Post
But with the advent of trulia.com and zillow.com anyone can easily get selling prices of local houses...

A good agent will know a lot more that you will find out from trulia or zillow.

Good agents are in the market full time every day with years of experience. No way will you get that from a website.

On the other hand a bad agent is worse than no agent. It all depends.

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