Will Realtors go the way of the DoDo bird?

[Anonymous]

The idea that real estate agents will go the way of the dodo bird is a fringe idea that really doesn't reflect reality. No matter how much you scream and stomp your feet about broken business models, the marketplace realities don't validate your view.

[Anonymous]

Just an FYI -- attorney based brokerages are popping up all over the nation. There are several in the DC metro area. I think they are pretty popular in California too. I think this is some evidence of change. If the consumer has the same info as the agent, the agent needs to provide some value to the transaction.

[Anonymous]

Anonymous wrote:Mainly, yes.

This is for a small percentage of the population...I'd say less than 10%.

However, realtors do many things for many buyers out there. They are good at walking first time or inexperience buyers or sellers through the process. They are the ones that pull comparables for a buyer or seller to evaluate the price. We recently looked at two properties that were not responding to inquiries from us and our realtor was able to find out from the managing partner of the firm listing the lots (both short sales) what the status of the units were, why they were not accepting offers, what time frame the unit was frozen, etc. We got enough information to know if we were interested, when to come back to the table (in case the existing offer was rejected by the bank). Our realtor also scheduled viewings of homes for us. Frankly, when I was a seller, I was comfortable knowing that random people only came to view the house with a realtor who had access to the lock box. I would not be comfortable letting random buyers come visit the house unescorted. And I think it is very wrong for the sellers to be in the house when buyers are previewing. Buyers have a right to talk candidly about the house they are viewing and that's much harder to with the sellers in the house (and frankly, candid comments could come back to make negotiations difficult if the buyers ended up wanting to put an offer on the house). When we listed, our agent was the one who put together advertising packages, marketing, took the photos that showed off the house, arranged for a realtor viewing, then sat there for the Open Houses, I think he worked pretty darn hard. When I was recently looking at properties, I was able to give a list of the needs and wants and the agent we were looking for was able to find three properties that fit our criteria that I had not located in my seaching on franklymls, redfin and trulia. And one was quite a good candidate. If our situation hadn't changed very abruptly, we might have put an offer in on one of the units that she found that I didn't.

Personally, I think good realtors provide a lot of work and benefits. However, poor realtors don't. If you aren't getting your money's worth out of your agent, then you probably need a new agent.

[Anonymous]

Just an FYI -- attorney based brokerages are popping up all over the nation. There are several in the DC metro area. I think they are pretty popular in California too. I think this is some evidence of change. If the consumer has the same info as the agent, the agent needs to provide some value to the transaction.

That sounds terrific. I certainly appreciated our realtor's help with some of the forms etc., but frankly, I negotiate for a living and know this area well, can pull comps off realtor.com or zillow, and felt that 10 percent was way too much to pay someone to sit at our open houses and deal with some forms. They do provide a service that has some value, but it is not in proportion to the amount that they are paid as a percentage commission.
I would say the situation would be quite different for someone moving to a completely new area. I think that in that scenario, a realtor could be very helpful in finding out what's what with the neighborhoods, where you might want to look etc.

[Anonymous]

We sold our homes ourselves. Not very difficult. You can lower the price a bit without all those fees. We hired lawyers for the contracts.

[Anonymous]

Realtors like doctors and lawyers will not go the way of the dodo bird, but what will happen is what is now happening in professions which have become more available to women: incomes go down.

[Anonymous]

Anonymous wrote:I agree that the service some realtors provide is out of proportion to their value, but comparing them to other services that people can do for themselves leaves out an important detail. People who sell their houses may not be totally comfortable opening their properties to potential buyers who are unaccompanied in the house. Since many properties for sale are vacant, and the expectation is that buyers can tour the house while it is empty, there is an issue of ensuring safety and security of both people and property during viewing. In simple terms, without a realtor, who will let you in, and who will be responsible for the property's security while you're viewing it?

+1. The real (only) value of a realtor is their access to the lockbox and the security the seller feels as a result. Without that system -- e.g., if instead there were some company of insured professionals set up solely to provide safe access to properties -- then yes, realtors would become extinct. They no longer provide any value in home searching/advertising, and a good title company matters more at closing than a good realtor.

[Anonymous]

I think having a realtor is like having insurance. If something goes wrong during the process of the sale, like with the contract or a difficult buyer, they are there for you. Most times, nothing goes wrong. And then, yes, they're overpaid. But if they have to work out some complications for you, then they're much more worth it.

[Anonymous]

I've found having a buyers agent useful. But I cant speak to the selling aide.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I agree that the service some realtors provide is out of proportion to their value, but comparing them to other services that people can do for themselves leaves out an important detail. People who sell their houses may not be totally comfortable opening their properties to potential buyers who are unaccompanied in the house. Since many properties for sale are vacant, and the expectation is that buyers can tour the house while it is empty, there is an issue of ensuring safety and security of both people and property during viewing. In simple terms, without a realtor, who will let you in, and who will be responsible for the property's security while you're viewing it?

+1. The real (only) value of a realtor is their access to the lockbox and the security the seller feels as a result. Without that system -- e.g., if instead there were some company of insured professionals set up solely to provide safe access to properties -- then yes, realtors would become extinct. They no longer provide any value in home searching/advertising, and a good title company matters more at closing than a good realtor.

Can't you just show your own house?

[Anonymous]

For single residential transactions I expect a shift from a brokerage model to a fee for service model. For larger commercial and multi-unit residential transactions the existing model still makes some sense.

[Anonymous]

Yes.

[Anonymous]

Anonymous wrote:Just an FYI -- attorney based brokerages are popping up all over the nation. There are several in the DC metro area. I think they are pretty popular in California too. I think this is some evidence of change. If the consumer has the same info as the agent, the agent needs to provide some value to the transaction.

Agree, we used the atty from the title/settlement agency we selected. Filled out the purchase agreement, negotiations, inspection and appraisal results, etc. We paid him a $1k tip.

[Anonymous]

I think having a realtor is like having insurance. If something goes wrong during the process of the sale, like with the contract or a difficult buyer, they are there for you. Most times, nothing goes wrong. And then, yes, they're overpaid. But if they have to work out some complications for you, then they're much more worth it.

Very untrue, in fact, most realtors don't handle these situations very well. You are actually better off having a real estate attorney than the realtor. We sold to strange buyers who tried to make odd ball demands a week into closing such as asking for things to convey that were clearly listed on the does not convey and other odd things. Our realtor was a goofball and we referred to their agent to our real estate attorney as if they didn't show up to closing and close within the terms of the contract then we would not be returning the money in escrow. This took care of it pretty quickly.

I think people would be better served with a real estate attorney charging a flat fee or hourly fee to handle the contract and negotiation.

[Anonymous]

A realtor that does a high volume business in a given area can provide pricing information that goes a long way towards offsetting their fee. Think of any fsbo that sold right away (leaving dollars on the table) and other fsbos that lingered forever as the owners chased the market down. If you need to sell or buy now, you will find you need a guide with current market knowledge 9 out of 10 times. Now if you're paying a realtor who is ineffective, that's a different story.