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Real estate agent here...While there are many agents that hold themselves to the standard that the National Association of Realtors has documented in their code

Real estate agent here...While there are many agents that hold themselves to the standard that the National Association of Realtors has documented in their code, one of the root problems is that state agencies are negligent in enforcing rules and investigating fraud. For example, I know a fellow agent who had documented proof of another agent committing a fraud that did approx $400K in damage to a client - and the state didn't even bother to investigate. For that matter, local Realtor associations are often complicit as well - mostly out of laziness rather than deliberate ill-intent. My best advise is to treat a real estate agent the same way you might your accountant / lawyer / financial planner / private banker: don't just pick one off Zillow or at random, but carefully cultivate a relationship before you need their services and take steps to discern for yourself whether they are acting as a fiduciary. I agree completely - there are a lot of bad actors in this space, but over the next decade I expect market forces to drive a lot of people out of the business and improve the professional standard.

gnicholas 3y ago
What is it you anticipate happening that will trigger the change you describe in coming years? We were grossed out by our agent a decade ago, and when we went with a different agent (who came highly recommended by a neighbor whose house she sold) in a more recent transaction we were met with even more dishonesty than before.
- conductr 3y ago
  Less volume will push the underperformers/hobbyists out of the RE agent business. Word of mouth is not a great way to hire, there a lot of incompetent but charismatic people in this industry. I interview a handful of them and then I basically do all the negotiating myself. In my opinion, they’re just there to unlock the door so I can view the home/or put my listing on the MLS. Once an offer is being made, they just care about the transaction closing. For this reason, never take their recommendation on inspector either. Find people that work for you and are not concerned with a ruining a relationship with your agent (their referral source). Also, never sign a buyer representation contract. It’s unnecessary and no agent worth their salt cares about locking you in (if you’re a serious and capable buyer). Never engage with an agent at an open house, this is usually agents without much work trying to drum up business.
  - poulsbohemian 3y ago
    >Also, never sign a buyer representation contract. FWIW: In one of the states where I do business, it is about to become law that we have to have these with clients. I expect it to be a total clusterfuck.
    - conductr 3y ago
      Required to sale or show? I should clarify that I’ve usually signed and amended it during pend stage so agent gets commission and has documentation that I’ve agreed to all the terms within. I also limit it to just the property in question so if things fall apart it does too. Requiring it to show, seems like a mess that will slow things down or people will just ignore it/backdate it like they do so much already to beautify things for underwriters and such.
      - poulsbohemian 3y ago
        We're kinda waiting to see what form it will take, but there seems to be a belief we are headed toward a required to show type scenario. I think it was one of your earlier comments that said something I completely agree with - clients should always have the ability to walk away from an agent they no longer want to work with, and should not feel pressured into signing an agreement that might create a binding relationship they don't want. Already we're strongly encouraged by our state legal advisor and MLS best practices to use buyer agency agreements - but I (mostly) don't for exactly the reasons you stated - if a client wants to work with me, they will, and if they don't, a piece of paper shouldn't force them. The general public is scared / distrustful enough of Realtors, and now we're supposed to put this legal document in their face the moment we meet them? Sounds like a good way to further create distrust and alienation.
        conductr 3y ago
        I suppose once it becomes norm, everyone will see it as norm and go along. I do agree with you on being turned off by initial interaction being a rep form. They're pretty easy to void. The various RE lobbyists are pretty strong and continually pushes for laws like your discussing to essentially force people into utilizing agents. I have to get creative to get the commission into my pocket when I don't use agents. First, the other side usually does have an agent and explaining to them that I want the commission and it's already a sunk cost is usually a nightmare. I do it at the end, because otherwise it impacts negotiations "but your keeping the commissions already". (No I'm talking to you, doing the work of an agent, so I should get paid just like you are; it doesn't cost your seller anything more than the transaction costs they were already planning - in reality, I know it's because the sell side hears no agent and thinks "I get to keep it all"). In my state, it says only licensed RE brokers and attorneys can collect commissions. I'm neither. But we also have a clause in the law that allows commission rebates. So, I typically just pay an attorney a small flat fee to collect the commission and rebate it back to me. It can be a pain but then I realized I don't have to tell the sell side anything, I now have a standing agreement with my attorney who will collect the buy side commission and subtract out the flat fee part and rebate the rest to me. I just put his info on the offer as my agent and give him a heads up a few days before close. It works pretty well.
- poulsbohemian 3y ago
  Yeah, I think conductr and I are on the same page here... basically I see real estate ripe for the same kind of transformation as financial services has experienced... once upon a time if you wanted to buy and sell stocks or other assets, you went to a stockbroker / financial advisor. Today, sure there is still a need for those professionals, but many more people trade on Schwab / Fidelity (as examples) and the standard of practice for the remaining financial advisors has improved as expectations have increased. Essentially - I expect some combination of technology / low-cost brokerages to take over a lot of the business, while some demographics of buyers / sellers or types of properties will continue to rely on the services of brokers who will be forced to up their game in order to compete. I fully expect a bloodbath among some of the larger national / international brokerages, as many of them have abusive, unsustainable business models.
- poulsbohemian 3y ago
  >(who came highly recommended by a neighbor whose house she sold) I had a neighbor once tell me how much they loved their agent, and before I could stop myself I blurted out "I can't believe they stayed sober long enough to get your deal done!" It's a sad reality that while agents get to know who is trustworthy / skilled, because we deal with each other every day, the public seldom really gets the whole picture. I think it's worse in large metro areas because there are thousands of agents - so doing your research is hard. I assure you - national brands have very little to do with quality either. If I'm being really crass - I find a lot of people pick their agents like it is a beauty contest. They pick based on age, looks, they go to the same church we do, our kids are at the same school, etc. And for a lot of people, whether they feel good about the agent has more to do with if they are now "friends" then if there was actually a successful business outcome.
conductr 3y ago
Also would add, RE just isn’t that complex. It’s mostly standardized contracts in use. The contract to rent an apartment is usually more complex than the average RE sales contract. Read them ahead. Study the market to form your own opinions. Learn about what’s actually happening (agent can be helpful here) and what negotiating techniques you can deploy in the process. For most people, it’s worth your time.
- poulsbohemian 3y ago
  I'd agree in general... that said, those standardized contracts change regularly, often because someone sued someone else leading to updating those contracts. So a real estate agent who stays up-to-date on contract issues can make a difference. As you point out - where an agent will really shine is market information and negotiating. I saved a client a ton of money last night because I out-negotiated the other side. That's why I'm worth the money - because what I saved them is more than I will make on the deal. Agreed too that my office lease is about the same number of pages as a typical residential contract, but far more dense. My landlord added some of the most ridiculous clauses I've ever seen in any contract - and prior to real estate, I regularly wrote business contracts from scratch.
  - conductr 3y ago
    > I saved a client a ton of money last night because I out-negotiated the other side You’re in the business so this might seen brash but it’s not meant to be. I’m just a pretty experienced buyer/seller. The assumption I have to make is 1) buyer couldn’t have negotiated that themselves (I happen to be a good negotiator) and 2) further negotiated to keep the buyer’s agent portion of the commission (it’s a standard seller’s cost they’ve already agreed to pay so doesn’t matter if it goes to me or to an agent, net to seller is the same). I’ve done both, regularly. It’s not for everyone for sure, negotiating skills are the hardest to screen for when I have used agents but people not knowing how to negotiate should definitely focus on trying to find that skillset. But saving more than you cost someone is good, but not guaranteed and it’s always possible to pocket the fee you do charge; so you still have a cost and I usually have to decide if “you’re” worth it for something I can do over a handful of calls/emails. Also I’m a landlord and those contracts like you said are much more dense. Where I am, the standard sales contracts change annually but not significantly in the last 15 years anyway. For example, I’ve noticed they’ve recently done away with the X days after in favor of precise dates. The math involved in X days and then finding later it lands on a Sunday or something was always sloppy IMO so I welcomed this change. But anyway, the fact it’s focused on a sale makes it so much easier to read than a lease which specifies so much more about condition, use, pets, roommates, etc.

gnicholas 3y ago

What is it you anticipate happening that will trigger the change you describe in coming years? We were grossed out by our agent a decade ago, and when we went with a different agent (who came highly recommended by a neighbor whose house she sold) in a more recent transaction we were met with even more dishonesty than before.

conductr 3y ago
Less volume will push the underperformers/hobbyists out of the RE agent business. Word of mouth is not a great way to hire, there a lot of incompetent but charismatic people in this industry. I interview a handful of them and then I basically do all the negotiating myself. In my opinion, they’re just there to unlock the door so I can view the home/or put my listing on the MLS. Once an offer is being made, they just care about the transaction closing. For this reason, never take their recommendation on inspector either. Find people that work for you and are not concerned with a ruining a relationship with your agent (their referral source). Also, never sign a buyer representation contract. It’s unnecessary and no agent worth their salt cares about locking you in (if you’re a serious and capable buyer). Never engage with an agent at an open house, this is usually agents without much work trying to drum up business.
- poulsbohemian 3y ago
  >Also, never sign a buyer representation contract. FWIW: In one of the states where I do business, it is about to become law that we have to have these with clients. I expect it to be a total clusterfuck.
  - conductr 3y ago
    Required to sale or show? I should clarify that I’ve usually signed and amended it during pend stage so agent gets commission and has documentation that I’ve agreed to all the terms within. I also limit it to just the property in question so if things fall apart it does too. Requiring it to show, seems like a mess that will slow things down or people will just ignore it/backdate it like they do so much already to beautify things for underwriters and such.
    - poulsbohemian 3y ago
      We're kinda waiting to see what form it will take, but there seems to be a belief we are headed toward a required to show type scenario. I think it was one of your earlier comments that said something I completely agree with - clients should always have the ability to walk away from an agent they no longer want to work with, and should not feel pressured into signing an agreement that might create a binding relationship they don't want. Already we're strongly encouraged by our state legal advisor and MLS best practices to use buyer agency agreements - but I (mostly) don't for exactly the reasons you stated - if a client wants to work with me, they will, and if they don't, a piece of paper shouldn't force them. The general public is scared / distrustful enough of Realtors, and now we're supposed to put this legal document in their face the moment we meet them? Sounds like a good way to further create distrust and alienation.
      - conductr 3y ago
        I suppose once it becomes norm, everyone will see it as norm and go along. I do agree with you on being turned off by initial interaction being a rep form. They're pretty easy to void. The various RE lobbyists are pretty strong and continually pushes for laws like your discussing to essentially force people into utilizing agents. I have to get creative to get the commission into my pocket when I don't use agents. First, the other side usually does have an agent and explaining to them that I want the commission and it's already a sunk cost is usually a nightmare. I do it at the end, because otherwise it impacts negotiations "but your keeping the commissions already". (No I'm talking to you, doing the work of an agent, so I should get paid just like you are; it doesn't cost your seller anything more than the transaction costs they were already planning - in reality, I know it's because the sell side hears no agent and thinks "I get to keep it all"). In my state, it says only licensed RE brokers and attorneys can collect commissions. I'm neither. But we also have a clause in the law that allows commission rebates. So, I typically just pay an attorney a small flat fee to collect the commission and rebate it back to me. It can be a pain but then I realized I don't have to tell the sell side anything, I now have a standing agreement with my attorney who will collect the buy side commission and subtract out the flat fee part and rebate the rest to me. I just put his info on the offer as my agent and give him a heads up a few days before close. It works pretty well.
poulsbohemian 3y ago
Yeah, I think conductr and I are on the same page here... basically I see real estate ripe for the same kind of transformation as financial services has experienced... once upon a time if you wanted to buy and sell stocks or other assets, you went to a stockbroker / financial advisor. Today, sure there is still a need for those professionals, but many more people trade on Schwab / Fidelity (as examples) and the standard of practice for the remaining financial advisors has improved as expectations have increased. Essentially - I expect some combination of technology / low-cost brokerages to take over a lot of the business, while some demographics of buyers / sellers or types of properties will continue to rely on the services of brokers who will be forced to up their game in order to compete. I fully expect a bloodbath among some of the larger national / international brokerages, as many of them have abusive, unsustainable business models.
poulsbohemian 3y ago
>(who came highly recommended by a neighbor whose house she sold) I had a neighbor once tell me how much they loved their agent, and before I could stop myself I blurted out "I can't believe they stayed sober long enough to get your deal done!" It's a sad reality that while agents get to know who is trustworthy / skilled, because we deal with each other every day, the public seldom really gets the whole picture. I think it's worse in large metro areas because there are thousands of agents - so doing your research is hard. I assure you - national brands have very little to do with quality either. If I'm being really crass - I find a lot of people pick their agents like it is a beauty contest. They pick based on age, looks, they go to the same church we do, our kids are at the same school, etc. And for a lot of people, whether they feel good about the agent has more to do with if they are now "friends" then if there was actually a successful business outcome.

conductr 3y ago

Also would add, RE just isn’t that complex. It’s mostly standardized contracts in use. The contract to rent an apartment is usually more complex than the average RE sales contract. Read them ahead. Study the market to form your own opinions. Learn about what’s actually happening (agent can be helpful here) and what negotiating techniques you can deploy in the process. For most people, it’s worth your time.

poulsbohemian 3y ago
I'd agree in general... that said, those standardized contracts change regularly, often because someone sued someone else leading to updating those contracts. So a real estate agent who stays up-to-date on contract issues can make a difference. As you point out - where an agent will really shine is market information and negotiating. I saved a client a ton of money last night because I out-negotiated the other side. That's why I'm worth the money - because what I saved them is more than I will make on the deal. Agreed too that my office lease is about the same number of pages as a typical residential contract, but far more dense. My landlord added some of the most ridiculous clauses I've ever seen in any contract - and prior to real estate, I regularly wrote business contracts from scratch.
- conductr 3y ago
  > I saved a client a ton of money last night because I out-negotiated the other side You’re in the business so this might seen brash but it’s not meant to be. I’m just a pretty experienced buyer/seller. The assumption I have to make is 1) buyer couldn’t have negotiated that themselves (I happen to be a good negotiator) and 2) further negotiated to keep the buyer’s agent portion of the commission (it’s a standard seller’s cost they’ve already agreed to pay so doesn’t matter if it goes to me or to an agent, net to seller is the same). I’ve done both, regularly. It’s not for everyone for sure, negotiating skills are the hardest to screen for when I have used agents but people not knowing how to negotiate should definitely focus on trying to find that skillset. But saving more than you cost someone is good, but not guaranteed and it’s always possible to pocket the fee you do charge; so you still have a cost and I usually have to decide if “you’re” worth it for something I can do over a handful of calls/emails. Also I’m a landlord and those contracts like you said are much more dense. Where I am, the standard sales contracts change annually but not significantly in the last 15 years anyway. For example, I’ve noticed they’ve recently done away with the X days after in favor of precise dates. The math involved in X days and then finding later it lands on a Sunday or something was always sloppy IMO so I welcomed this change. But anyway, the fact it’s focused on a sale makes it so much easier to read than a lease which specifies so much more about condition, use, pets, roommates, etc.