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>I wish more older Americans understood how these people really work. I wish more Americans overall understood how real estate works. I see people get screwed

>I wish more older Americans understood how these people really work. I wish more Americans overall understood how real estate works. I see people get screwed all the time because of bad information. Here's an example: several times a year I will talk with a member of the public who will say something like "we want to work with the listing agent because then we won't have to pay as much commission" not understanding that in fact they are (assuming a traditional two sided commission offered by the seller) actually just giving that listing agent both sides of the deal. Or, similarly, they will say things like "we want to work with the listing agent because it's their listing so they will know the most about the property" again, not realizing that depending on your state, the rules for dual agency may not give you as a buyer the same representation as getting your own separate buyer's agent. In fact in some states, you may not actually be getting any representation at all, IE: they fill out the paperwork on your behalf but actually represent the seller. Those are just some trivial examples, but it's dumbfounding how many bad ideas the public has about real estate. So much of my job is hours of educating my clients apart from anything related to the actual transaction.

mindslight 3y ago
Listing Realtors (TM) rely on people's misunderstandings to get them to sign those lopsided agency agreements in the first place (3% of a capital asset for setting up a key box, taking mediocre pictures, and writing a description of the property!), so those less critical misunderstandings are just part and parcel of their market. You should never skimp hiring a real estate attorney, as they will actually go to bat for you. But realtors' primary motivation is volume, and they'll often "represent" your interests by encouraging you to go along with buyers' nonsense lest you lose them.
- poulsbohemian 3y ago
  I'm sorry you've had such bad experience with realtors... just some thoughts: -- My experience with real estate attorneys has been as mixed as your experiences with realtors. Some know what they are doing, many do not. Many care about billable hours just as much as the outcome. YMMV. -- Some realtors care about volume, and some care about their fiduciary responsibilities to your business. If they are actually a Realtor and following the standards set by the NAR, then volume or commission % shouldn't be their motivation. Again - just like any profession - some are good, some suck. -- Finally, regarding commission percentages - yeah, in many markets commissions shouldn't be as high as they have been. In my market(s) we are seeing commissions decline. That said - I regularly more than pay my own commission in the earnings / savings I negotiate for my clients. If I make you an extra $50K and I get $10K for that service, I've earned my money. Again - if you haven't found that with the agents you've used, I fully encourage you to report any fraudulent activity to the local real estate association and/ or state agency. In any case if you don't receive the service you expect, find a new agent.
  - jjav 3y ago
    > If I make you an extra $50K and I get $10K for that service, I've earned my money. That's totally fair on the surface. But it's also impossible to demonstrate. Nobody can know if the house would've sold for 50K less if a different (less competent) realtor sold it, or if the owner sold it on craigslist or wherever.
    - poulsbohemian 3y ago
      It's difficult, but not impossible, and here's how... I could give you at least five case studies from the past year in which specific things I did created those kinds of gains / savings for a client. It's basically standard CMA stuff - show comparable properties, where they sold, where we sold (or had our offer accepted) and demonstrate the tactics that got to that point. Do that across a group of agents and you quickly have a comparative model. Now - sometimes there are emotion-driven data outliers. For example, sometimes you will see someone overpay in cash for a property that could not have appraised at that same value. So again, using data you can account for those scenarios as well. Point being - all that sales data is available and you can pretty accurately create a model of which agents overall are having success not only selling properties, but the degree to which their clients are winning negotiations. I'd argue that even if an agent was being "overruled" by their clients - even that would be interesting, as it would show that their clients were not actually listening to the negotiating advise offered by that agent (IE: the data could actually demonstrate that there are communication / trust issues between the agent and their clients).
    - 1123581321 3y ago
      It’s a largely reputation-based business; if they’re not helpful, the “Bob was useless” comments and reviews outweigh the “Bob saved me money/found the perfect house” ones over time. While no individual knows for sure what their next best alternative was, their hunches and hindsights add up to a reliable picture in aggregate (that I’ve seen, anyway.)
  - scarface74 3y ago
    > If I make you an extra $50K and I get $10K for that service, I've earned my money. Again Studies have shown that’s not what actually happens. It was one of the chapters in the Freakonomics book. https://freakonomics.com/2008/02/real-estate-agents-revisited/ https://freakonomics.com/2008/02/real-estate-agents-revisite...
rsp1984 3y ago
Serious Q: What value do agents add? And what's wrong with buyers and sellers negotiating directly, as in pretty much any other market? As an outsider it seems that RE agents bring exactly nothing to the table except FUD around the transaction process which they then exploit for commissions so everybody, except the agents, are worse off. More than happy to be convinced otherwise.
- strix_varius 3y ago
  I've bought and sold several houses and, for the most recent one, finally decided to skip realtors. Best and easiest $21k I've ever made (saved). RE agents have some value. Maybe $1-2k? For convenience, paperwork preparation, etc. Similar to a lawyer. But I sold our house in record time, at a price that was good for both us and the buyers. No games of telephone, just meeting and sending emails directly to one another. The lawyer does the actual legal work, the agent mostly just prepares PDFs. The various PDFs took me maybe a couple of hours total to get together.
- poulsbohemian 3y ago
  I'm not really here to convince you one way or the other - up to you whether you choose to work with an agent. But - some of the things I have to know about in order to assist clients might persuade you that there's more to real estate than what you see on the surface. For example: -- Environmental issues, including water bacteria testing, well issues, oil tanks and their mitigation, radon, lead, and asbestos issues. -- Zoning, which includes a whole lot of topics. Can I build an ADU? Can I build a house on this ag-zoned property? Can I use this property as a VRBO? -- Marketing. Sure, some properties sell themselves - but some require getting the property in front of a unique buyer. Ever try to sell an equestrian property? A vineyard? A single-wide? -- Negotiating. Again, easy to think it's all about whoever brings the most money to a deal, but it's not always that simple. -- Market Analytics. Good agents know their numbers and spend significant time in their week crunching numbers to understand what's really going on and how to help their buyers and sellers maximize their positions. -- Psychology. Your buyers and sellers are from every background imaginable and you have to try to understand their familial and financial situation and help them achieve their goals. This is an art form. -- Financing. Sure you might not be the mortgage lender, but understanding all the different types of financing options so that you can advocate for your client - both with the other party as well as with lenders - puts you in the best possible position. -- Law. A real estate license is a limited license to practice law. And every year I have to not only stay up on dozens of standard state form changes, but also whatever the legislature has done and any meaningful case law that is changing how we do business. That's just kind of a smattering... it's easy to get a real estate license in most states, but to actually become a skilled agent is another matter. If you believe that in software there exist 10x developers, I assure you the same concept exists in real estate - there are agents that are worth their weight in gold for the things they can do for their clients, and then there's the great unwashed masses who can barely fill out the forms.
Marsymars 3y ago
> I wish more Americans overall understood how real estate works. There aren’t good resources for learning compared to many other fields. Compare learning about real estate to e.g. learning how Linux works. Even though the latter is far more complicated conceptually, you can go and read man pages and the Arch wiki or whatever and learn it all from whatever level of abstraction you prefer. Learning about real estate from any source feels like the equivalent of trying to learn how Linux works via ChatGPT prompts.

mindslight 3y ago

Listing Realtors (TM) rely on people's misunderstandings to get them to sign those lopsided agency agreements in the first place (3% of a capital asset for setting up a key box, taking mediocre pictures, and writing a description of the property!), so those less critical misunderstandings are just part and parcel of their market. You should never skimp hiring a real estate attorney, as they will actually go to bat for you. But realtors' primary motivation is volume, and they'll often "represent" your interests by encouraging you to go along with buyers' nonsense lest you lose them.

poulsbohemian 3y ago
I'm sorry you've had such bad experience with realtors... just some thoughts: -- My experience with real estate attorneys has been as mixed as your experiences with realtors. Some know what they are doing, many do not. Many care about billable hours just as much as the outcome. YMMV. -- Some realtors care about volume, and some care about their fiduciary responsibilities to your business. If they are actually a Realtor and following the standards set by the NAR, then volume or commission % shouldn't be their motivation. Again - just like any profession - some are good, some suck. -- Finally, regarding commission percentages - yeah, in many markets commissions shouldn't be as high as they have been. In my market(s) we are seeing commissions decline. That said - I regularly more than pay my own commission in the earnings / savings I negotiate for my clients. If I make you an extra $50K and I get $10K for that service, I've earned my money. Again - if you haven't found that with the agents you've used, I fully encourage you to report any fraudulent activity to the local real estate association and/ or state agency. In any case if you don't receive the service you expect, find a new agent.
- jjav 3y ago
  > If I make you an extra $50K and I get $10K for that service, I've earned my money. That's totally fair on the surface. But it's also impossible to demonstrate. Nobody can know if the house would've sold for 50K less if a different (less competent) realtor sold it, or if the owner sold it on craigslist or wherever.
  - poulsbohemian 3y ago
    It's difficult, but not impossible, and here's how... I could give you at least five case studies from the past year in which specific things I did created those kinds of gains / savings for a client. It's basically standard CMA stuff - show comparable properties, where they sold, where we sold (or had our offer accepted) and demonstrate the tactics that got to that point. Do that across a group of agents and you quickly have a comparative model. Now - sometimes there are emotion-driven data outliers. For example, sometimes you will see someone overpay in cash for a property that could not have appraised at that same value. So again, using data you can account for those scenarios as well. Point being - all that sales data is available and you can pretty accurately create a model of which agents overall are having success not only selling properties, but the degree to which their clients are winning negotiations. I'd argue that even if an agent was being "overruled" by their clients - even that would be interesting, as it would show that their clients were not actually listening to the negotiating advise offered by that agent (IE: the data could actually demonstrate that there are communication / trust issues between the agent and their clients).
  - 1123581321 3y ago
    It’s a largely reputation-based business; if they’re not helpful, the “Bob was useless” comments and reviews outweigh the “Bob saved me money/found the perfect house” ones over time. While no individual knows for sure what their next best alternative was, their hunches and hindsights add up to a reliable picture in aggregate (that I’ve seen, anyway.)
- scarface74 3y ago
  > If I make you an extra $50K and I get $10K for that service, I've earned my money. Again Studies have shown that’s not what actually happens. It was one of the chapters in the Freakonomics book. https://freakonomics.com/2008/02/real-estate-agents-revisited/ https://freakonomics.com/2008/02/real-estate-agents-revisite...

rsp1984 3y ago

Serious Q: What value do agents add? And what's wrong with buyers and sellers negotiating directly, as in pretty much any other market? As an outsider it seems that RE agents bring exactly nothing to the table except FUD around the transaction process which they then exploit for commissions so everybody, except the agents, are worse off. More than happy to be convinced otherwise.

strix_varius 3y ago
I've bought and sold several houses and, for the most recent one, finally decided to skip realtors. Best and easiest $21k I've ever made (saved). RE agents have some value. Maybe $1-2k? For convenience, paperwork preparation, etc. Similar to a lawyer. But I sold our house in record time, at a price that was good for both us and the buyers. No games of telephone, just meeting and sending emails directly to one another. The lawyer does the actual legal work, the agent mostly just prepares PDFs. The various PDFs took me maybe a couple of hours total to get together.
poulsbohemian 3y ago
I'm not really here to convince you one way or the other - up to you whether you choose to work with an agent. But - some of the things I have to know about in order to assist clients might persuade you that there's more to real estate than what you see on the surface. For example: -- Environmental issues, including water bacteria testing, well issues, oil tanks and their mitigation, radon, lead, and asbestos issues. -- Zoning, which includes a whole lot of topics. Can I build an ADU? Can I build a house on this ag-zoned property? Can I use this property as a VRBO? -- Marketing. Sure, some properties sell themselves - but some require getting the property in front of a unique buyer. Ever try to sell an equestrian property? A vineyard? A single-wide? -- Negotiating. Again, easy to think it's all about whoever brings the most money to a deal, but it's not always that simple. -- Market Analytics. Good agents know their numbers and spend significant time in their week crunching numbers to understand what's really going on and how to help their buyers and sellers maximize their positions. -- Psychology. Your buyers and sellers are from every background imaginable and you have to try to understand their familial and financial situation and help them achieve their goals. This is an art form. -- Financing. Sure you might not be the mortgage lender, but understanding all the different types of financing options so that you can advocate for your client - both with the other party as well as with lenders - puts you in the best possible position. -- Law. A real estate license is a limited license to practice law. And every year I have to not only stay up on dozens of standard state form changes, but also whatever the legislature has done and any meaningful case law that is changing how we do business. That's just kind of a smattering... it's easy to get a real estate license in most states, but to actually become a skilled agent is another matter. If you believe that in software there exist 10x developers, I assure you the same concept exists in real estate - there are agents that are worth their weight in gold for the things they can do for their clients, and then there's the great unwashed masses who can barely fill out the forms.

Marsymars 3y ago

> I wish more Americans overall understood how real estate works. There aren’t good resources for learning compared to many other fields. Compare learning about real estate to e.g. learning how Linux works. Even though the latter is far more complicated conceptually, you can go and read man pages and the Arch wiki or whatever and learn it all from whatever level of abstraction you prefer. Learning about real estate from any source feels like the equivalent of trying to learn how Linux works via ChatGPT prompts.