Before reading this blog, please refer to this article….
From time to time I like to troll the internet for news articles. My boyfriend’s daughter calls it ‘creeping.’ When I do this, though, I set myself up for a lot of disappointment and sometimes frustration.
To avoid much of the trash out there, I try to focus on sites that one would expect to be reputable. So when my boyfriend sent me an article he found on the Forbes website, I was intrigued.
This article was written by a man who promotes himself as a writer and contributor to Forbes and is the author of a book called How to Self Promote without Being a Jerk. So it amazed me that this person’s article was fraught with false data and was completely misleading. It was evident to me that this person did NO research before pumping out this article and it does nothing to make me want to read his book either.
So let me explain…
First, for full disclosure, I am not a Realtor. However, my boyfriend is, along with a few of my friends. So maybe I took this article a little too personally. Still, I think his logic is flawed. So here is my take on it.
The author, a Mr. Bruce Kasanoff, asks us to consider industries that should consider reinventing themselves or face obsolescence. His focus in this article is on Real Estate Brokers.
His first argument is thus:
”Last night, I spent an hour looking at properties in another state. To do this, I used Realtor.com, Trulia, Google’s search engine and Street View, Zillow, local tax assessors’ databases, and numerous web sites maintained by a wide range of brokers.
In 95% of the cases, the brokers’ sites had the same information or less than the 3rd party sites”
Where…exactly…does Mr. Kasanoff think sites such as Realtor.com, Trulia and Zillow get their information? Ummm…Realtor’s maybe? These sites do nothing more than sites such as Indeed do for jobs. They troll the web and pull the data together. They don’t go out and find sellers. Additionally, let’s look at the first part of his sentence…”I spent an hour looking at properties…” Couldn’t you spend that hour doing something more productive? Wouldn’t it be easier to give your requirements to a Realtor and let them scour the MLS listings for hours and then send the ones that are still available and meet your parameters? Think of all the time you could save. All the data from these real estate sites, local tax assessors, etc. are all rolled up into one in the MLS listings.
Plus, it is the Realtors who have to pay to gain access to the MLS listing site and upload the data that is then shared with the rest of the World Wide Web. We’ll get to the other things Realtors pay on your behalf in a moment.
So, when Mr. Kasanoff states, “In the event that one listing catches my eye and I call “my” broker, he will likely email me a link to the listing for that property, which I have already seen online.” Who does he think put it online in the first place? Then consider that if you contact a Realtor about a property, he/she not only sends you a copy of the listing, but also other pertinent information like the disclosure form that tells you how old the furnace or roof is, has there been any flooding in the basement, is it located in a flood zone, etc. It also comes with a disclosure for lead paint and meth lab use. Was Mr. Kasanoff able to find that information on the web?
He then goes on to state, “In my experience, negotiating through brokers is the most inefficient and frustrating experience imaginable. By far, our best real estate experience was when we bought a house directly from the sellers.” While I won’t disagree that it can be a frustrating experience, let’s face it, you are going through your Realtor who goes to the other Realtor who goes to the other buyer/seller…yeah, it can be aggravating. But it takes the emotion out of the negotiations, too. Who isn’t attached to their home? What seller doesn’t think their home isn’t worth more than it really is? What buyer isn’t willing to give their first born to buy what they conceive is the perfect home?
Realtors provide comps. They assess the market and provide a fair market analysis. They are paid on commission, so they will help buyers get the most for their homes and as buyer agents help you understand when you are just plain overpaying for a house.
And to be totally honest, I can’t see my Aunt Sally trying to negotiate the ins and outs of a seller’s contract, home inspection, etc. Perhaps the people who read Forbes magazine are intelligent enough to buy or sell a house on their own, but there are many more people out there who are not.
What really determined for me that this writer didn’t have a clue was this statement, “It would be great if they (the seller) knew that up to a certain price point I can be a cash buyer, and that the absolute most I can pay is X.” Really? So, if Mr. and Mrs. Jones are selling their home for $250,000 and they know you can pay $250,000 you have just lost any negotiating power you had. Why would the sellers negotiate if they know you can afford to pay full price? A good Realtor will negotiate on your behalf and work to get you the lowest price. (Yes, they work on commission, but they are ethically bound to work in the best interest of the clients…sort of like lawyers. And, yes, like lawyers, there is a board that monitors the ethics of Realtors. That’s why they have to be licensed.)
So that brings me to this statement, “The fact is that one thing keeps the broker’s role alive today: the regulations that govern the real estate industry. Once upon a time they might have been designed to protect consumers, but today they mainly protect Realtors.”
So is his suggestion to do away with the governing body and regulations of the real estate industry? Any person can market their home. But they are not ethically bound to tell you the truth. (What ant infestation?) Is that home really 2000 square feet? Does that third room they call a bedroom have a closet?
As the seller are you going to pay the fees to list your house on the MLS site? What about in real estate guides or the newspaper? The Realtor pays these fees out of pocket to get access to these and other marketing sites. It is their job as your agent to get you the most exposure, and therefore the most offers, on your property. It’s time consuming and costly. And once a potential buyer is found, there are a myriad of other steps that must be followed…home inspection, (who is obligated to pay for what?), buyer financing, (has this buyer secured financing?), property assessment (is the house really worth what you’re selling it for?), title research (does Mrs Smith really own the home she is selling?).
I’m not saying that an intelligent person who has been through the process before couldn’t sell or buy property without an agent. It happens all the time. But it is a lot of work and it’s not for everyone. Is old Mrs. Smith down the road really going to open her doors to strangers and let them ramble through her home? I don’t think so. And who has the time to sift through hundreds of potential listings? Not me…
Mr. Kasanoff may be correct in that industries today do need to look long term to see where they are headed. Take for example by boyfriends former employer the text book publishing company that refused to look into digital options for their text books because “they were never going to have to worry about that.” They are now in the process of closing their second office. You have to understand the trends and you need to stay ahead of the curve. It’s no different in real estate.
It is so easy to stand on the outside of an industry and say, “that looks easy, I can do that.” But when you dig down into the specifics it’s not as cut and dry as you might think. Mr. Kasanoff stated he was looking into real estate. Perhaps he needs to take a deeper dive and truly understand what they do before he goes and suggests their job can be made obsolete.