FSBO Jane

Someone asked me the other day what exactly a real estate agent offers that you can’t do yourself. My answer is always the same: not a lot.

Using an agent is for people who don’t want to work at selling their home and are willing to pay the 6% to pay someone else to. It’s that simple.

Using a company like Buy Owner is a smart alternative, allowing you to combine your own personal knowledge with the professional advertising and assistance of a nationwide company. Think of the things a typical real estate agent provides, and look at what Buy Owner does. A sign in the front yard? Check. Marketing materials? Check. Helpful real estate information? Check. Buy Owner clients actually receive more than that: nationwide advertising, professional photographs, property descriptions written by an in-house writing staff, customer service… Plus, there’s the added benefit of all the advertising linking back to the seller directly.

That’s something you won’t find with an agent.

Over at Housing Panic, there’s an interesting discussion going on, all centered on one question: Would you use a realtor if they worked for an hourly wage, versus trying to steal your money by taking a percentage of the sale? If so, how much per hour do you think their work is worth? (you know, unlocking those lock boxes, printing things off the internet, pointing out the granite countertops…)

Take a look at the post here, where you can read all the comments. Among my favorites:

“I say we go flat rate at $150/sale. A friend of a friend was a realtor’s assistant, meaning she did all of the “work” while the realtor did nothing (probably at home all day snorting coke) and that’s what she got paid.I think that’s a fair price.
Hourly is a bad idea since realtors are shysters and will bill you 5 hours for each hour of actual work just like a crooked lawyer.”

AND

“What do administrative assistants earn per hour?
This will blow your mind: a friend found a virtual admin. job that was all RE work. In other words, some lazy real estate office is outsourcing the what little actual “work” they have! My friend found a real job, btw.”

Have you read Freakonomics? Are you familiar with the chapter that shows a parallel between the tactics of clans like the KKK with the practice of today’s real estate agents?

Consider this interesting clip, about a real friend of the author’s:

“K. wanted to buy a house that was listed at $469,000. He was prepared to offer $450,000 but he first called the seller’s agent and asked her to name the lowest price that she thought the homeowner might accept. The agent promptly scolded K. ‘You ought to be ashamed of yourself,’ she said. ‘That is clearly a violation of real-estate ethics.’

K. apologized. The conversation turned to other, more mundane things. After ten minutes, as the conversation was ending, the agent told K., ‘Let me say one last thing. My client is willing to sell the house for a lot less than you think.’

Based on this conversation, K. then offered $425,000 for the house instead of the $450,000 he had planned to offer. In the end, the seller accepted $430,000. Thanks to his own agent’s intervention, the seller lost at least $20,000. The agent, meanwhile, only lost $300–a small price to pay to ensure that she would quickly and easily lock up the sale, which netted her a commission of $6,450.

So a big part of the real-estate agent’s job, it would seem, is to persuade the homeowner to sell for less than he would like while at the same time letting the homeowner know that a house can be bought for less than its listing price.”

Some desperate sellers (builders, homeowners) are resorting to new strategies for getting their properties to sell-strategies that appeal to the buyer’s real estate agent more than the buyer.

From MarketWatch.com:

“One builder, for example, recently offered a $5,000 American Express gift card to agents in exchange for a buyer who signed a contract on a Long Island City, N.Y., condominium, Freedman said. During the last year, the agent who brought in a buyer for a penthouse in a financial district building in New York City was promised a fully paid lease on a BMW for a set period of time, he added.”

Consider what this is saying: large financial incentives are being offered not to the eventual buyer of a property, but to that buyer’s agent.

Does this seem wrong to anyone else?

If there’s an incentive to be given-whether it’s a chunk of money or a gift car or a free car-by all means, give it to me, the buyer! Don’t give it to an agent who is already making a commission for a small amount of work.

Who saw this coming? Maybe those of us who’ve been crying out about the disappearing need for real estate agents and the growing popularity of the internet!?

From the article:
“GMAC Real Estate is on to something. They are closing 15 offices in Massachusetts and New Hampshire.

Why you ask? Well, they announced that buyers are starting their searches on the internet and do not need to visit offices as often. By using the internet, buyers do not need to have an office nearby to view listings and have close contact with the real estate agents.”

It’s yet another proof that agents don’t offer all that you thought they did.