Really good article in the L.A. Times on Realtor viability

[david_mcmanus]

I'm glad to see a lot of these questions finally in an old school newspaper. I doubt the Seattle Times will ever print an article like this.

http://www.latimes.com/business/la-fi-r ... ory?page=1

[ira s]

There are quite a few real estate agents locally who have become inactive or are doing other things for a living. The situation has resulted in Bellevue Community College closing their Real Estate department, which is a shame since it was my favorite place to take continuing ed classes.

[jillayne]

david_mcmanus,

I'm pretty sure that when Redfin entered the market, there were several articles about them in the Time or PI.

Ira,

I should do a quick blog post about BCC. I'm teaching their last four real estate classes this summer. They shut down their continuing ed real estate program due to lack of enrollment but real estate agents were not their biggest set of students.

I think that BCC's program could be viable with a variation on marketing and curriculum.

[david_mcmanus]

[davidlosh@davidlosh.com]

There have always been discount brokerages.

For me it was the going to Congress to make a publicity stunt that put me off. The second thing is the rebate system.

Sears wanted the rebate system when it bought Coldwell Banker and had Discover Card. They wanted to rebate house hold goods through the card services or some such nonsense.

The Real Estate industry at that time feared the huge corporate structure that could dominate a market by giving away free stuff to get more business.

Next it was that rydfen was bringing us an open MLS search site when we had zillow and John L Scott already working on it. Microsoft, if I remember correctly was working with Lennox Scott to get interactive consumer searches going.

Last, but foremost is that the system of do it yourself Real Estate is risky. Houses have personalities for lack of a better word. Having an agent or attorney write an offer for you on a property they have never seen leaves a lot of doors open.

There again taking a listing you have never seen leaves a lot of responsibility with the buyer,

I've seen a lot of rubfan nonsense since they started. It's always nonsense. They carry around a chip on the shoulder over nothing. There have always been discount brokers. They have a particularly reprehensible reputation for claiming everybody is against them.

It's the constant whining from them, coupled with these well place press releases that bothers me.

[ira s]

I should do a quick blog post about BCC. I'm teaching their last four real estate classes this summer.

I took some classes at North Seattle as well, but BCC was just great!
I particularly loved Gene Smith, who encouraged debate and made boring things come to life.

[jillayne]

david_mcmanus,
I taught a class last week and had a lively role-playing session with me acting as a buyer and the audience acting as the real estate agent.

I asked the audience to explain to me how they talk about their commission. Many said, "Real estate agents do lots of research"

I asked if they would lower their commission for me if I did the research. They said "No, because real estate agents spend lots of time previewing property in advance."

I asked them if I did the research in advance would they lower their commisison. They said "No, because...."

and here's where the conversation went downhill. Someone tried the old "would you pilot a plane by yourself" script.

I explained how lawyers work. How they tell their clients up front their hourly rate and then estimate the number of hours it will take and ask for a retainer. Then attorneys give their clients a monthly or weekly update on how the attorney is spending the client's money.

Only one agent after class said she was going to start implementing that system (of giving home buyers and sellers a detailed recap sheet of how their money is being spent.)

Part of the problem is that there are brokers who need commissions to stay high so they can earn their profit, and there are agents who want flexibility to work at the lower rate.

I think it will take at least another decade to rebuild the system, and it will likely be rebuilt from people who are outside of the industry because those inside have too much at stake in keeping the system as is.

[jillayne]

Ira, here's that blog post I promised on Bellevue Community College:

http://www.raincityguide.com/2009/05/31 ... ding-down/

[ira s]

Thanks, Jillayne.
I hadn't been to school in 20 something years when I started taking RE classes at BCC, and it was the only time outside of history classes in college that I eagerly looked forward to the next class.

[WestSideBilly]

[ROFLCatDown]

You know, last time I sold a house I found the realtor's input to basically be non-existent. Honest guiding information on pricing, where we were market-wise, and actually having her show up for her scheduled open houses was a problem.

Eventually we just took the whole thing on ourselves, listed with a flat fee broker and did our own open houses every week until the damn thing sold... And I do mean damn thing. It took two years.

Now I'm looking to buy again, and I've found our current agent to be extremely helpful, knowledgeable, frank, and honest about whole process what he thought of the home prices of what we were looking at, and issues we could expect to encounter for varying property types (Inland vs island vs well vs septic vs waterfront) and who we should call for each type of inspection in each area. My wife and I are perfectly capable of flipping through Redfin or Zillow or any other MLS system on a daily basis to see what changed, what's new, what sold, and make detailed lists of what we want to see, what we don't want to see, and why to coach our agent to make recommendations based upon that.

At this point I feel we've run him so ragged looking at places, asking questions, and simply pestering him about various things we need advice on that even after we close on a house we'll likely end up tipping him when we're done.

People work for a living, and somehow we have it in our heads now that it's a bad thing to pay people to do good quality work, let alone tip them when they come through above and beyond what you expect.

If you want to do the work yourself up front, then do the work up front. If paying the 7% holdback for the agents hurts your ability to buy that much, you probably shouldn't be buying that much house to begin with.