The slowing down of the real estate market has gotten some people's dander up toward real estate agents. Here is a quote and my response from one of the discussion forums of the local rag.
I was wondering why we pay by commission. I mean is it more work to sell a more expensive house.When my house goes up in price why do you get a raise????
I think agents and brokers serve a purpose, but this commission thing kinda bothers me. Especially when the price they tell you they can sell it for[appraisal] is just the price someone has already paid in your neighborhood. Not too difficult. I think most people know what the number is before they call.
Being a RE agent is like a 40 hr course and real simple. I took it and passed with flying colors as did most people who took the course with me.
My response:
I agree and disagree.
I agree that it is far, far too easy to get licensed. We have experienced 5+ years of amateurs entering and often botching up deals in the hot market. Problem is, efforts to make it harder or more expensive have been considered discriminatory. Catch-22.
I edited your quote and know that you aren't objecting that brokers get paid, but more about the ostensibly large numbers by percentage. Here is the deal I make with sellers if they want to pay me a modest fee for my guidance and expertise instead of a % commission: I'll do that in a heartbeat. Just don't ask me to advertise the house, because $400 NY Times ads are not in the budget. And those glossy 3 page color brochures you want in ample supply? No can do. Besides, the house down the road just sold and everyone must therefore know all about your house by osmosis, especially after the guy that sold it lied about his price at a cocktail party. You want me to recommend someone to help you remove 20 years of cat piss from your carpets? Here's a phone book. What's that? The variance hearing for your illegal shed is next Thursday? Good luck! You want to know why I didn't get you an update at 8:30 am Friday after we spoke for 45 minutes 9:30pm Thursday? Here's the update: Everyone went to bed and woke up.
I could go on, but if you just bought or sold, look at your HUD-1 and look who got paid what just because they showed up besides the broker who held your hand through every piece of arcane minutiae for 6 months. I'd be more concerned with the attorney/government money grab, with Albany skimming 1% off the top for the NYS transfer tax, the attorney who collected 1000-1500 for taking a week to return your phone calls, the title insurance company charging you multiple thousands for a service that actuarial charts mandate a few hundred (just what are the odds that the Algonquins will come back to claim your 70 year old subdivision land?), and the town and county making you pay 3, 5, or 10k in taxes in advance. The lawyer/government/banker cabal often equals or exceeds commissions. Some states don't even use attorneys for real estate, but every state uses agents. Go figure.
I don't sympathize with people who tell me "but my agent stunk. They didn't do anything for their paycheck." Those people often should have known better than to entrust a $600,000 transaction to their cousin Mel or sister in law who just got licensed and learned the ropes on their backs. People who do their homework and get a good agent never complain about commissions.
I could go on, but I am off to work.
To be fair, you guys do this kind of stuff to your loan officers all the time...I feel a mini rant here, enjoy:
"I set the closing date in the contract, why isn't it ready?" Well, you gave us 15 days to close this loan but our client didn't bother to get the document of X we told him we had to have. The underwriter stipped me prior to funds for a 4th comparable. Also, the title company your client just had to have cannot seem to get the mortgagee clause correct in spite of the fact that I have emailed and faxed it 3 times... and now there is a lein from an above ground pool to clear?
"You said they were approved?" Yeah but the doofus went out and bought a brand new car and now the DTI is 88%, deal is off. OR: We tried to verify his employment and he quit/got fired/got arrested.
"What do you mean structural damage?" Sorry, it sounds stupid to me too but torn vinyl is structural to a lender. I don't make the rules, I'm just stuck trying to make the borrower and property fit in a way that makes everyone happy.
You've been there. You know it happens. Are there good realtors out there? Heck yes. I happen to know that in my state 90% of the realtors do not renew their license each year. That should be a disturbing figure.
Are there bad Loan Officers? Heck yes. The worst ones steal the business and then jack the hud at closing way beyond the real numbers I quote up front. My personal favorite: "This was always an ARM, I never said fixed..."
It is by and large a frustrating and infuriating business blended with the absolute thrill of the closing after the pursuit. It's addictive. We get paid a lot to take this crap.
It's also amazing to me how many people are totally ignorant of their rights and the process. Keep your chin up. Your referrals will always outlast the idiots that you compete against.
That and you can always blame everything on the Loan Officer. We are used to taking it.
Posted by: dave | August 16, 2006 at 11:08 PM