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Spoken like a man who gets most of his income from realtors...If you have
access to MLS in your area, tell me what exactly a realtor can provide that
I couldn't find already? I've only used a realtor 1 time in 5 real estate
transactions. I can say that it was not difficult at all, the title and
escrow company took care of any issues that arose, which were very minor. I
have always thought that realtors were one of the biggest rackets going
right now. On the other hand if all mortgage agents were guaranteed 3% on
each loan I'd protected it like a "wolverine".
"Jeff Strickland" <spamcatcher@yahoo.net> wrote in message
news:sPadnRRCQsXibyzfRVn-rw@ez2.net...
>
> "Grover C. McCoury III" <gcmccoury@yahoo.com> wrote in message
> news:RJ6dnYVNRdn6cCzfRVn-vw@adelphia.com...
>> Realty Bites
>> Why do you still need an agent to buy a home?
>
>
> You need a realtor because a realtor is going to ask you what you want in
> a
> house, how much you want to pay, what neighborhood you want to live in,
> those sorts of things. Then, he (or she) is going to find a house that
> fits
> what you said you are looking for, check it out to see if it is a dump or
> a
> nice place, then take you by so you can look at it. Without a realtor, or
> even just a real estate agent -- a Realtor is, by definition, a member of
> the National Association of Real Estate Agents, some agents are NOT
> realtors -- you will spend countless hours over several weekends driving
> all
> over the region looking for a house you like. Once you find the house,
> your
> realtor handles many aspects of the sales transaction that can drive a
> stable person to drink.
>
> Sure, there are lots of transactions that can be done on your own, but
> when
> the Buyer's Agent is paid by the seller during the transaction, why not
> take
> advantage of the services that are available?
>
> The author of this article grossly over simplifies the role of the real
> estate agent in the transaction.
>
> </ top post>
>
>
>
>
>> By Douglas Gantenbein
>>
>>
>>
>> "The first thing we do, let's kill all the lawyers," a character in a
>> Shakespeare play famously remarks.
>>
>> I've a different suggestion: Make it realtors.
>>
>> Here's why: Americans will spend about $1.14 trillion buying 6 million
> homes
>> this year-both records. Yet the flat commissions paid to the realtors who
>> handle the vast majority of those sales, averaging 5.1 percent, act as an
>> enormous tax on the transaction process, taking wealth from both buyers
> and
>> sellers in what for both is often the biggest financial transaction of
> their
>> lives. It's true that selling a house is a complex task. But so is
>> writing
> a
>> will, and an attorney doesn't ask for 5 percent or 6 percent of your net
>> worth as compensation.
>>
>> And what do Americans receive in exchange for that commission, which can
>> total up to $24,000 on a $400,000 home? In many cases, not much. A
> realtor's
>> license can be had after as little as 50 or 60 hours of training (the
> person
>> who cuts your hair probably has 1,000 hours or more). I have dealt with a
>> half-dozen realtors during the past seven years, while selling two homes
> and
>> buying three others. Last year, for instance, we sold a home in the
> $500,000
>> price range in the town of Newcastle, east of Seattle. It wasn't a
>> perfect
>> home-a typical suburban place with too much garage, not enough yard-but a
>> very nice one, including a full theater room and a fantastic home office.
> We
>> wanted to sell to make a move to Port Townsend, a little town in the
>> northwest corner of Washington. One realtor we used to sell it was
>> utterly
>> incapable of articulating how our house differed from nearby, newer ones
>> that basically were thrown up overnight and had cheap interior
>> finishings.
>> Another was clueless as to how to market a house in our price range,
>> printing a cheap single-sheet black-and-white information flyer. (Our
>> experiences were generally better on the buy side, except for one
>> seller's
>> agent who sought to discredit a skilled building inspector we hired who
>> found that the foundation of a circa-1880 home was a rat's nest of
>> rotting
>> wood, faulty concrete, falling insulation and, well, rats' nests.)
>>
>> But the real knock on realtors is a bit of simple economics that many
> people
>> do not understand. Whether you're buying or selling, they rarely work in
> your
>> interest. For the buyer, a realtor may seem like a dream-a "free"
>> home-finding chauffeur, who then negotiates the best possible price. But
> the
>> service is not free-the sellers have likely factored the buyer's agent's
> 2.5
>> percent or 3 percent of the take into their price. Moreover, it's in the
>> buyer's agent's interest to have you pay the most that you're willing to
>> pay. After all, the higher the price, the larger their commission.
>>
>> What about the sellers? They know only too well the service is not
>> free-they're stuck paying the commission for their own agent plus the
>> buyer's. But "their" agent really is not interested in seeing the seller
> get
>> the best possible price. Instead, that agent's incentives favor a quick
>> sell, at any price. Look at it this way: Let's say you've listed your
>> home
>> for $290,000, and you owe $150,000 of that to the bank, leaving you with
>> $140,000 in equity. The home may well sell for that $290,000-in a few
>> months. But if the agent can persuade you to sell it for $270,000 in a
>> few
>> weeks, he is better off having forgone only $500 or $600 in commission
> while
>> saving a great deal of time, energy, and uncertainty. That deal, though,
>> will cost you $20,000 in equity. When we sold the Newcastle house, in
> fact,
>> "our" agent actively worked against us in the final stages of the
>> transaction, doing more than the buyer's agent to knock down our price.
>>
>> All of this was supposed to change with the Internet, which essentially
> put
>> travel agents out of business and stood stock brokerages on their heads.
> And
>> it's true that nearly everyone with Web access does at least some
>> shopping
>> via the Internet when looking for a home. But the basic real-estate
>> transaction model remains utterly unchanged from what it was 50 years
>> ago:
>> Homes are listed on a regional Multiple Listing Service, largely
> controlled
>> by local realtors. Virtually all of those homes have a listing agent, and
>> when buyers finally get around to shopping they'll almost inevitably have
> an
>> agent drive them around. And in the end, the seller will lose as much as
>> 7
>> percent of their selling price in commission. True, as I mentioned, the
>> average commission today is 5.1 percent, which is down from the 5.5
> percent
>> average of a few years ago. But since 2000 home prices also have risen by
> 20
>> to 30 percent nearly everywhere in the nation-in California, by that much
>> just in the past year-and agents' commissions have of course risen, too.
>> Moreover, the Web seems to have done next to nothing to make the
> real-estate
>> industry more efficient. The average realtor today sells about six homes
>> a
>> year-a figure unchanged from a decade ago. About 1 million homes are sold
> by
>> their owners each year, a figure that is inching up with help from the
> Web.
>>
>> Why the fossilization? Mostly, it's because of the power of the National
>> Association of Realtors, which protects its members' turf like a crazed
>> wolverine defends its offspring. The organization has defeated efforts by
>> some of the nation's biggest banks and even Microsoft to start their own
>> real-estate listings, and have largely protected the sanctity of the
>> Multiple Listing Service, enabling regular folks to scan bare-bones
> listing
>> on the Web, but keeping most of the good info for themselves. Overall,
>> the
>> NAR has ensured that nearly all residential real-estate transactions
>> still
>> are conducted between two agents in cahoots. And they're largely
> responsible
>> for keeping commissions close to that 6 percent level when any normal law
> of
>> competition would suggest they'd be lower.
>>
>> Now the NAR is taking aim at what many realtors see as a genuine threat:
> the
>> growing numbers of "discount" brokerages. One of the most prominent is
>> ZipRealty Inc., which was founded in 1999 and currently is planning an
> IPO.
>> ZipRealty lists homes on its own site as well as the Multiple Listing
>> Service, offering sellers a 25 percent discount on commissions while
>> still
>> paying buyer's agents their full commission. It also extends rebates of
>> 20
>> percent of the commission to buyers who come directly to ZipRealty. This
>> knocks the total commission into the 3 percent range and attempts to
>> completely unwind buyers from their agents.
>>
>> But ZipRealty's efforts to drive down commissions and even eliminate the
>> buyer's agent have drawn the NAR's ire. Early next year the NAR plans to
>> implement new rules that would allow local brokerages to bar their
> listings
>> on ZipRealty's site, a move that strikes directly at ZipRealty's model.
> The
>> NAR also wants to prevent online brokerage sites from funneling customers
> to
>> agents in exchange for a fee. That targets upstarts such as LendingTree,
>> which uses the Web to match customers and agents, then rebates to
> customers
>> part of the fee it collects from brokers. The NAR's moves have gained the
>> attention of the Department of Justice's antitrust folks, and have been
>> delayed twice already.
>>
>> I would like to see a strictly FSBO (For Sale by Owner) world. After all,
> escrow
>> companies and home inspectors already do much of the heavy lifting in a
>> real-estate transaction and add more value than most realtors while
> working
>> for a flat fee. The Internet, meanwhile, provides a perfect forum for
> buyers
>> and sellers to meet, just as eBay has transformed the marketplace for
>> everything from lace doilies to Ford F250s. I understand that is not going
> to
>> happen anytime soon. Selling a home is indeed a hassle, and realtors at
>> least offer the promise of one-stop shopping. And there's the issue of
>> showing homes-realtors perform the legitimate service of vetting buyers
> and
>> safeguarding a seller's property. Out-of-towners can benefit from a local
>> realtor's expertise. And I have heard from sellers who have had agents who
>> really "got" how to market a home, probably earning their commission and
>> more.
>>
>> Still, I am hoping that upstarts such as ZipRealty, LendingTree, Foxtons
>> (a
>> discount broker in the Northeast), and Catalist (a California discounter)
>> will soon blow away the traditional realty transaction model like they're
>> Puerto Rico playing the U.S. men's basketball team, dropping total
>> commissions on a house sale to 3 percent, or even 2, while still offering
>> the services people seem to desire from a realtor. Certainly, most people
>> realize that a 6 percent commission-or even 5 percent-is nuts, given that
>> e-mail alerts, Web-based home tours, and other services can easily give
>> buyers and sellers as much information as their realtors. It will be a
>> painful change for the 1 million real-estate agents out there-alas, a
> number
>> that is growing rapidly. But a little Darwinism is needed to thin out the
>> herd, and when it happens it won't give me much grief.
>>
>> Douglas Gantenbein is the Seattle correspondent for the Economist
>>
>>
>
>
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Re: Why do you still need an agent to buy a home?
