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> I've been trying for a long time to alter the common perception that Realtors add value; they don't. I've heard this before, but when we bought a house, our

> I've been trying for a long time to alter the common perception that Realtors add value; they don't. I've heard this before, but when we bought a house, our realtor added a ton of value. She went out and found houses that we wouldn't have found; sure, most of them came from MLS, but there were a few she found just by driving by or by asking fellow agents. She even triaged a couple for us (by going to look at them without us once she had gotten a sense for what our common feedback patterns were, and only making us come along when she thought it was worthwhile). She pointed out things we would have never noticed, like windows that had condensation around the edges, which indicated the seals were bad and that when the seals on one window were going out, it was likely they were all on their way out. She'd point out cracks that we didn't notice or water stains (acknowledging she's not an inspector, but it certainly gave us things to ask the inspector about). She noticed when parts of the yard looked worrisome in how it was eroded or angled toward the house. And she could usually estimate for us off the top of her head what things would cost to fix, replace, remodel, or update (or she had someone she could call to ask for an estimate if she didn't know). EDIT: She also put pressure on the lender when they were delaying the mortgage approval, did all the negotiation on our part with the selling agent, followed up with the sellers to make sure they did all the fixes our inspector found and were put into our contingencies. She also figured out what to do when she reviewed the contractor receipts and found out they had lied about fixing one of the things in the contingencies on the morning of the closing to make sure the deal didn't fall through, as well as how to resolve the issue that the sellers had left a giant moving pod blocking the driveway/garage and went on vacation the day we took possession of the house. I suppose I could imagine buying a house without her if you had the experience, but there's no way we even came close to matching her years of experience. Of course, most of the people I talk to have said their experience was nothing like ours. But it makes me think that the problem isn't that realtors bring no value to the table, but rather that maybe there just aren't very many good realtors.

danvasquez29 10y ago
all of that you either could have done yourself, or your inspector would have done for you. I don't begrudge anyone who wants to pay someone else to take a task off their hands, I do it all the time with various things like my lawn service, housekeeper, etc. But was the time they saved you worth the commission they made? When you're making 7% of the selling price, the answer to that seems likely to be no in many cases. There's a price point where it's no longer worth it to outsource the work, and I suspect many home buyers run over it without realizing it or considering they have a choice.
- JangoSteve 10y ago
  Where I'm at it's 6% of the selling price, but either way, I guess my answer would be, absolutely it was worth it. Even if you disagree (and the answer would be different for everyone I imagine), it still doesn't indicate that the realtor brought _no_ value to the table, which was the statement I was responding to. EDIT: Also, I should clarify, where I'm at it's 6% _total_, split 3% each between the buying and selling agent. So, on the other hand, was it worth it to the sellers to pay 3% to their selling agent, who screwed up pretty much every part of the process and didn't seem to do much from what we saw? Probably not. EDIT 2: I'd probably realistically downgrade my "absolutely it was worth it" answer to, "eh, it was definitely worth something". If I had to put a value on what they brought to the table, it'd be hard to say, but maybe they were overpaid by ~30-50%. Again though, saying they didn't add _any_ value certainly wasn't the case for us.
- kbenson 10y ago
  I think the problem here is not that they don't add value, but that since the value is tied to a percentage of cost, and cost has gone way up as a percentage of income, it no longer appears to be worth the value in many cases. For a $100k home, it's fairly easy for the value added to surpass the amount paid. For a $500k home, the value added needs to be much higher. Then again, if you think of it as less value added and more like insurance (although unfortunately without a specific set of coverage), then what you're paying for is their ability to identify and prevent problems before they happen. Having a realtor notice items before calling in an inspector is useful. Having a realtor apply their knowledge of the market, and what people are generally looking for on both the buying and selling end when making suggestions for how to change the deal (such as requesting fixes prior to sale, or money back for the fixes) is useful. Does that usefulness surpass the cost they get in their fees? It probably depends on the specific deal, the cost of the houses being looked at, and the experience of the realtor. I doubt it's as black and white as being useless though.
  - JangoSteve 10y ago
    I think this is spot-on.
  - 10y ago
gknoy 10y ago
My house-buying experiences were similar. Our realtor did a LOT of things that we might not have thought to do, or known to look for, or at least not in the time frame we had. Lots of sanity-hand-holding, too.
flamedoge 10y ago
how much of that did you take at face value? why give realtors such credit without qualifying data... unqualified "advice" should be looked at...
- JangoSteve 10y ago
  I don't understand the question. Are you asking, how much of of the advice did I do further research for and make sure she was giving good advice? All of it.
walshemj 10y ago
doesn't the USA have the concept of a survey which is done for a fixed fee by a separate surveyor that looks at the property and lists any defects found,
- erichurkman 10y ago
  Yes, but that doesn't include things like "are the homes next door foreclosures" or "are the schools terrible" or "are the nearby parks full of used needles".
  - walshemj 10y ago
    ah that's when you ask the Postman what the areas are like or use any of the websites that have this info.
- tropo 10y ago
  Yes, and it is strange. First there is an inspection for the potential buyer, paid for by the buyer and thus owned by the potential buyer. This tells you if the house itself has problems like cracks and rot. Second there is an appraisal to establish the home's value. Strangely, this person might not even enter the home. (they mostly look at sale prices of similar homes) To avoid corruption, the government randomly selects an appraiser. The appraisal is paid for by the potential buyer, then given to both the buyer and the intended loan provider. Third, there is an actual survey. This measures the land and maps out the positions of buildings and fences and pavement and pools. I think the seller pays for this. I first heard of it as a buyer when I got a copy as I signed the final paperwork, which is pretty terrible actually. If the sale is cancelled, the inspection and appraisal become worthless. The seller doesn't own them and isn't supposed to have a copy due to copyright. The next potential buyer will probably start with nothing.

danvasquez29 10y ago

all of that you either could have done yourself, or your inspector would have done for you. I don't begrudge anyone who wants to pay someone else to take a task off their hands, I do it all the time with various things like my lawn service, housekeeper, etc. But was the time they saved you worth the commission they made? When you're making 7% of the selling price, the answer to that seems likely to be no in many cases. There's a price point where it's no longer worth it to outsource the work, and I suspect many home buyers run over it without realizing it or considering they have a choice.

JangoSteve 10y ago
Where I'm at it's 6% of the selling price, but either way, I guess my answer would be, absolutely it was worth it. Even if you disagree (and the answer would be different for everyone I imagine), it still doesn't indicate that the realtor brought _no_ value to the table, which was the statement I was responding to. EDIT: Also, I should clarify, where I'm at it's 6% _total_, split 3% each between the buying and selling agent. So, on the other hand, was it worth it to the sellers to pay 3% to their selling agent, who screwed up pretty much every part of the process and didn't seem to do much from what we saw? Probably not. EDIT 2: I'd probably realistically downgrade my "absolutely it was worth it" answer to, "eh, it was definitely worth something". If I had to put a value on what they brought to the table, it'd be hard to say, but maybe they were overpaid by ~30-50%. Again though, saying they didn't add _any_ value certainly wasn't the case for us.
kbenson 10y ago
I think the problem here is not that they don't add value, but that since the value is tied to a percentage of cost, and cost has gone way up as a percentage of income, it no longer appears to be worth the value in many cases. For a $100k home, it's fairly easy for the value added to surpass the amount paid. For a $500k home, the value added needs to be much higher. Then again, if you think of it as less value added and more like insurance (although unfortunately without a specific set of coverage), then what you're paying for is their ability to identify and prevent problems before they happen. Having a realtor notice items before calling in an inspector is useful. Having a realtor apply their knowledge of the market, and what people are generally looking for on both the buying and selling end when making suggestions for how to change the deal (such as requesting fixes prior to sale, or money back for the fixes) is useful. Does that usefulness surpass the cost they get in their fees? It probably depends on the specific deal, the cost of the houses being looked at, and the experience of the realtor. I doubt it's as black and white as being useless though.
- JangoSteve 10y ago
  I think this is spot-on.
- 10y ago

gknoy 10y ago

My house-buying experiences were similar. Our realtor did a LOT of things that we might not have thought to do, or known to look for, or at least not in the time frame we had. Lots of sanity-hand-holding, too.

flamedoge 10y ago

how much of that did you take at face value? why give realtors such credit without qualifying data... unqualified "advice" should be looked at...

JangoSteve 10y ago
I don't understand the question. Are you asking, how much of of the advice did I do further research for and make sure she was giving good advice? All of it.

walshemj 10y ago

doesn't the USA have the concept of a survey which is done for a fixed fee by a separate surveyor that looks at the property and lists any defects found,

erichurkman 10y ago
Yes, but that doesn't include things like "are the homes next door foreclosures" or "are the schools terrible" or "are the nearby parks full of used needles".
- walshemj 10y ago
  ah that's when you ask the Postman what the areas are like or use any of the websites that have this info.
tropo 10y ago
Yes, and it is strange. First there is an inspection for the potential buyer, paid for by the buyer and thus owned by the potential buyer. This tells you if the house itself has problems like cracks and rot. Second there is an appraisal to establish the home's value. Strangely, this person might not even enter the home. (they mostly look at sale prices of similar homes) To avoid corruption, the government randomly selects an appraiser. The appraisal is paid for by the potential buyer, then given to both the buyer and the intended loan provider. Third, there is an actual survey. This measures the land and maps out the positions of buildings and fences and pavement and pools. I think the seller pays for this. I first heard of it as a buyer when I got a copy as I signed the final paperwork, which is pretty terrible actually. If the sale is cancelled, the inspection and appraisal become worthless. The seller doesn't own them and isn't supposed to have a copy due to copyright. The next potential buyer will probably start with nothing.