Real Estate Agents: Advocates, or Deadweight?

Rain City Guide, once a strong source of interesting locally-relevant real estate discussions, has been a lot less locally-focused since the housing bubble began to deflate, but lately things have been heating up a bit over there with some firely discussions about the value (or lack thereof) provided by real estate agents.

Way back in 2009, Craig Blackmon (of WaLaw Realty, a Seattle Bubble advertiser) ran a four part series (Part 1, 2, 3, 4), laying out his argument for why lawyers provide better representation than real estate agents. Since then he has dropped in with some regularity to hammer home his point that real estate agents typically are not providing real value to consumers.

In his most recent volley (Representation by RE Agents: Is That an Oxymoron?), Craig used a real life example of what he describes in the comments as a “trap” laid by agents in the way the MLS rules are set up:

The listing agent indicated that s/he was busy but that s/he would send another agent to provide access. My clients assumed this was an associate of the listing agent, and the listing agent was taking steps to provide access as part of the job of selling the home. The clients were interested in two homes listed by the same agent, and the “associate” provided access to both, only one of which was suitable for my clients. Total time: Approximately one hour. At the end of the tour my clients informed the showing agent that they intended to use my services if they wanted to move forward. The showing agent did not mention that she was totally unrelated to the listing agent and would have a potential claim on the SOC [Selling Office Commission] if the clients purchased either home.

The “associate” was actually another agent working under a different broker in a different firm. The listing agent frequently refers new business to this “showing” agent. Because I cannot rebate a commission to which some other agent has a claim, I asked the showing agent if s/he was going to assert a claim on the commission (as the “procuring cause”). The answer? Yes I am! But as a compromise s/he offered to accept 30% of the commission, a typical referral fee. With a sale price of about $700k, s/he wanted $6k for the hour of work.

In the ensuing comment thread, Ardell seems to be taking the position that this opaque practice is perfectly fair, and it’s the buyer’s own fault if they aren’t familiar with the rules (or something like that).

Apparently in response to Craig’s posts, Ardell put up a post arguing the opposite point: Why Agents Are Better than Lawyers.

People don’t know what we do. because it is PERSONAL. What we do for our clients is never known until someone who thinks this business is EASY walks a mile in our shoes. THIS is what I do BEFORE I even START! The Listing won’t even be in the MLS until Wednesday.

[listing before and after photos]

Even staging the Linen Closet, the kitchen cabinets, the patio set out on the deck…you name it. Closets… anything a buyer will open and look inside.

And oh…

BTW…

I didn’t see any LAWYERS in Joann Fabrics on 4th of July Weekend.

I’d like to place the question out there to the Seattle Bubble readership: Whose argument do you find more convincing? Craig or Ardell?

I know we’ve got a handful of other real estate professionals that frequently comment here, and while I appreciate your contributions, I’m more interested in the average Joe consumer’s opinion on this one (especially since most of the regular professionals have already weighed in over at RCG).

So what say you, is it a good idea to hire a real estate agent to represent you in today’s market, or does it make more sense to go with a lawyer or some other alternative model?

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

251 comments:

  1. 1
    ChrisM says:

    Seems to me Craig is discussing from a buyer’s standpoint and Ardell from a seller’s.

    All the properties I’ve ever bought have been repo’s – thus vacant. No staging necessary.

    As a buyer, it seemed to me Craig raised a very valid point about buyers getting sucked into an agreement by viewing the house, even though they had no intention of being represented by the agent showing the house. No one really seemed to address his point in the comments.

  2. 2
    Pegasus says:

    It appears you are trying to provoke another cat fight here. Both are always correct(in their own minds) as they ply their trade.

  3. 3
    StillRenting says:

    We used a realtor to sell our house back east when we moved to this area last year. We had a fairly inexpensive townhouse, so the total commission wasn’t as high as it can be for much more expensive homes, but I still thought it was too much. Other than hire a professional photographer and enter the info into the MLS, our realtor didn’t do much more than what a lawyer would do. She certainly didn’t do any of that staging stuff Ardell talks about (unless you count telling us to put out vanilla scented candles “staging”). There were also a number of things I thought she didn’t do very well. When we are ready to buy here it would be nice to use a lawyer instead, but how do you get access to view homes listed in the MLS and avoid the situation you described above? What did you do, Tim, when you were looking?

  4. 4

    I commented on Craig’s article earlier, and to me it seemed like both the other agent (not Craig) and the buyer were at fault. As I recall, the buyer didn’t disclose the existence of Craig until after the showing, and the agent that showed the property didn’t disclose they had no affiliation with the listing agent and were intending to be a buyer’s agent. I think it just goes to show what happens when you aren’t open about your intentions.

    If I do a courtesy showing of one of my listings, I will almost always start off by explaining that I represent the seller, and that while I could write up an offer for them, that I would still only represent the seller. I then also mention using other brokers and that rebate brokers exist. The goal is to sell the client’s house, not to get an increased commission.

    The whole issue of attorney vs. agent is a side issue. The real issue is should people be upset when they don’t disclose what they are intending?

    Finally, I think Craig is the real party harmed here. About all an agent can do is make it clear to buyer clients the possibility of this happening, and that they should expressly mention that they have another agent whenever they contact a listing agent.

  5. 5

    I would add that Craig needs to look up the meaning of oxymoron. :-D

  6. 6
    The Tim says:

    By Pegasus @ 2:

    It appears you are trying to provoke another cat fight here.

    Not sure why you’d think that, since I explicitly requested comments from non-professionals on this post. The cat fights are entertaining, but I’m more interested in what the regular real estate consumers think about the subject, and none of them ever bother commenting on RCG anymore.

  7. 7
    Jamie says:

    If you know that you want to buy or sell your home I really really like the approach of Craig and Marc at WALaw. Gross generalizations coming: The real estate agents that I have dealt with in the past always felt like they were trying to sell me something as opposed to trying to represent me. It gave me a somewhat slimy used car salesman vibe. It seemed to me that they don’t want me to look behind the curtain for fear of me finding out exactly what they are getting paid and what they are getting paid for. There is a lack of transparency I find disturbing.

    I knew that I wanted to buy a home, I used WALaw, and it has been a very positive experience for me. If there is a better option for the self motivated buyer, I am not aware of it. Apparently neither is Tim, because if I recall correctly he used WALaw in his recent home purchase.

    I am a WALaw customer, but had no connection to the company, Craig, or Marc before becoming a customer.

  8. 8
    Pegasus says:

    RE: Kary L. Krismer @ 4 – Perhaps Craig should have given his clients more guidance on how the game is played especially if he was the one to first contact the listing agent for the buyers to view the property. Maybe he was naive but he really should not be if he is charging a fee. It sounds like his buyers were naive and were not properly informed prior to being shown the listing. Perhaps Craig was remiss in performing his duties and got caught taking a short cut? Sometimes those rules just get in the way of doing business but you don’t get to throw them out just because you are a lawyer. He is taking the place of a real estate agent and yet he doesn’t want to play by the rules of the game. Me thinks he is just sore at having to fork over that $6000. He sounds like a crybaby who can’t let it go so he writes a blog about the mean real estate agent that made him play by the rules. Boo hoo! Too bad for the buyers. Hopefully next time they will know better. By the way can anyone explain why Ardell was searching for lawyers in Joann Fabrics on 4th of July Weekend?

  9. 9
    Drone says:

    Ok, I’m an “average Joe” consumer, ideally looking to purchase within the 6-18 month timeframe (though I suspect it will be at the end of that time).

    For a purchase, I don’t think an agent adds much value FOR ME. I know what I want, I’ve done years of research, looked at tons of houses, and have a fairly easy time visualizing what a place “could be” with the appropriate upgrades. An agent provides what I already have.

    For my parents, an agent was necessary. They moved into a new city with no idea of what the inventory looked like, or what they even wanted. Having a professional to interpret their vague feelings and narrow down the list of options was extremely valuable.

    As a seller, I think that an agent COULD BE useful. If you find a full-service agent who really brings experience to critique, stage, and perfectly show a house then that’s probably worth the extra money. An agent who does nothing more than unlock the door is NOT worth it. If I were selling a house today, I think I’d consider being my own subcontractor and hire my own stager, photographer, etc, but that’s because I’m a bit of a DIY guy. I would not expect everyone to fall into this bucket.

    So yes, GOOD agents are worth it, but only if you need their services. And at the moment, I don’t.

  10. 10

    By Pegasus @ 8:

    RE: Kary L. Krismer @ 4 – Perhaps Craig should have given his clients more guidance on how the game is played especially if he was the one to first contact the listing agent for the buyers to view the property.

    I read his piece as indicating the clients made the first contact with the listing agent, but I haven’t made it through all the comments, and have no plan to do so.

    If Craig were in fact the first to contact the listing agent, and made arrangements for it to be shown as a courtesy, that would be entirely different.

  11. 11
    softwarengineer says:

    There is No Bad Choice Insurance on Home Buying

    Neither professionals did what you the buyer did….signed your name in ink.

    Soooooo….would I hire a RE attorney to buy a home? Perhaps, but like any decision you make, you have to way the risks mitigated to the costs paid and in most cases, IMO, Lord Only Knows, until after its too late.

  12. 12
    jeanette says:

    i am definitely an “average joe” consumer.. my husband and i bought our first home just over a year ago. we were very lucky to have a real estate agent recommended to us that did a fantastic job for us. he definitely advocated for us, held our hands through the process from start to finish since we were newbies, followed up after we closed & has kept in touch since. i would happily work with him again in the future if he’s still in the business when we want to sell our current home. at the root of it… RE agent or lawyer? i guess i don’t really care so long as it’s someone that i’ve established a good, honest relationship with, and is someone i can work & communicate well with.

  13. 13
    bingo says:

    RE: Drone @ 9

    I’m mostly with Drone. If I was selling a home I would hire the best listing agent I could find.

    If I was buying a home, I would contact a listing agent directly (via Redfin) to arrange a showing. If I was interested in the home I would negotiate w. the Listing Agent. I would tell them I will either go get a buyers agent or I will work thru you and pay you $500 at closing. I would pay to have the home inspected. I would also suggest all P&S documents need to be MLS approved documents, or I will hire an attorney to review. The attorney’s fee will be deducted from the $500. On a $500,000 home the buyers agent is in line for 3%, $15,000. With the money I saved I would throw a huge bash at “The Tim’s” new home.

    But that’s just me.

  14. 14

    By bingo @ 13:

    If I was buying a home, I would contact a listing agent directly (via Redfin) to arrange a showing. If I was interested in the home I would negotiate w. the Listing Agent. I would tell them I will either go get a buyers agent or I will work thru you and pay you $500 at closing. I would pay to have the home inspected. I would also suggest all P&S documents need to be MLS approved documents, or I will hire an attorney to review. The attorney’s fee will be deducted from the $500. .

    There’s a lot of stuff wrong with your scenario. First, contacting the agent directly is different than contacting them through Redfin. Second, if you actually did contact the agent directly, and got to the point of negotiating, you’re well past the point that the agent could claim a new agent was not the procuring cause of the sale. Third, the sale documents prepared by an agent will almost always be NWMLS approved documents, with the exception of REOs, where you’ll have zero chance of getting anyone to pay for your attorney fees.

  15. 15
    bingo says:

    RE: Kary L. Krismer @ 14

    Are you kidding me? How about this scenario. Redfin posts when there is an open house. I go to the open house and talk to the listing agent.

    If all forms are NWMLS approved, I don’t need an attorney.

    Why do I need a buyers agent? Seems like I save a lot of money.

  16. 16

    By bingo @ 15:

    RE: Kary L. Krismer @ 14 – Are you kidding me? How about this scenario. Redfin posts when there is an open house. I go to the open house and talk to the listing agent.

    I wouldn’t consider doing that to be going through Redfin, but yes that would be a direct contact. And I doubt the agent could make a procuring cause argument just based on your attending an open house (maybe Craig could comment on that). Your scenario though went beyond that, to where you were negotiating with the agent over the purchase of the property.

    BTW, there were other things wrong with your scenario. You’re basically interfering with the contract the seller has with the agent in trying to change the terms of the commission. To the extent an listing agent wants to reduce the commission because there is no buyer’s agent, that’s between them and the seller (and subject also to some rules regarding variable commissions). Also, for $500 almost any agent would prefer that you do go to your own agent, because having an unrepresented buyer is not exactly a good thing from an agent’s point of view. That’s an additional reason why when I do a courtesy showing I tell the buyer about using other agents and rebate brokers. It’s much better for the listing agent to have a buyer’s agent on the other side.

  17. 17
    Scotsman says:

    Finally, a thread to bring Kary and Ardell together. . . again. Sweet!

    Over the last 35 years I’ve worked in banking, worked as a mortgage broker, worked with business associates and family buying and selling properties. I have yet to meet the traditional realtor who brings $30,000 worth of value to the table on an average $500K home purchase or sale. And the more recent the experience, the less value they have contributed. I fully expect the 6% model to die. It may take 20 more years, but it will die.

    Traditional broker’s value lies in their control of and access to information, and they are lossing control of the data. I think WA. Law or other discount models will become increasingly dominant with a few specialty services- staging, valuation, research packages, etc. being offered up ala cart.

    As a seller in this market I’d rather take a discount listing service and cut price, maintaining my net while offering buyers more incentive to see and purchase my property. As a buyer I want to make sure my interests, and only my interests, are represented, at minimum cost, with full freedom to negotiate as I see fit. So contracting with a lawyer wins.

    Any field has a few stand-outs, those who bring real value to those they represent. Real estate is no different, except that the 6% model takes a big chunk, a price that a small minority of agents can justify.

  18. 18

    By Scotsman @ 17:

    Finally, a thread to bring Kary and Ardell together. . . again. Sweet!.

    Don’t undersell this. Remember, I like Craig’s business model. I think it makes more sense than Redfin’s.

    I just think his complaint is more with the law of procuring cause than it is about agent vs. attorney. He’d have had the exact same issue if he’d only have been an agent.

  19. 19
    Scotsman says:

    Off topic, but while I’m here:

    “Zillow: Seattle’s one of the worst markets to invest in”

    http://www.seattlepi.com/local/article/Zillow-Seattle-s-one-of-the-worst-markets-to-951353.php?source=rss

  20. 20

    RE: Scotsman @ 19 – That’s probably almost as good of news for our market as it was bad news when Cramer said Seattle was the only place to buy. :-)

  21. 21
    bingo says:

    RE: Kary L. Krismer @ 16

    Good points Kary. However, in my scenario the listing agent wasn’t taking a haircut. They got their full 3% listing commission + $500. If I had a buyers agent, the selling agent wouldn’t even see the additional $500. The buyers agent gets the other 3%. The net to the Seller is no different whether they pay the Brokers, or if by cutting the price the essentially pass the savings on to the buyer.

    I guess this is why “The Tim” was looking for non-agent responses.

  22. 22
    Ben says:

    Average Joe here. I’ve been less than impressed by the agents I’ve worked with over the years. When buying, I want to have control over the negotiations and feel that agents can manipulate the information flow for the sake of getting a deal done quickly. Not all agents are this way, but many are… In fact, one agent I worked with provided negative value, IMO.

    I’m intrigued by a flat fee, hourly or discount model and will be looking to buy in 3 or so years.

  23. 23
    bingo says:

    RE: Scotsman @ 17

    I, too, am stunned by the resilience of the agents commission model.

    If you are booking a vacation do you call a travel agent or access Expedia or Kayak?

    I was a stockbroker in the 80’s and clients had to call me to get current prices. Now I can utilize Scottrade or Etrade to get current prices in real time and commissions are a fraction of what they were.

    The home buying decision is often the most expensive investment people make, so having someone walk them thru the process is worth paying for,… but 6%? With the wealth of real estate information available via the internet I don’t see how the 6% model survives.

    But that’s just me.

  24. 24

    By bingo @ 21:

    RE: Kary L. Krismer @ 16

    Good points Kary. However, in my scenario the listing agent wasn’t taking a haircut. They got their full 3% listing commission + $500. If I had a buyers agent, the selling agent wouldn’t even see the additional $500. The buyers agent gets the other 3%. The net to the Seller is no different whether they pay the Brokers, or if by cutting the price the essentially pass the savings on to the buyer.

    I guess this is why “The Tim” was looking for non-agent responses.

    The agent would be getting a 3% less $500 haircut. The commission is for 6%, and if there is another agent they get half (on a 3/3 commission schedule which we seem to be using as the hypothetical). In any case, between getting 3% to only represent the seller, or 3% plus $500 to represent the seller and have an unrepresented buyer, almost every agent would pick the former due to liability concerns (not to mention the extra work required).

  25. 25

    Lawyer is one of the few occupations that a whole series of jokes about them. How can you tell when a lawyer is lying? His lips are moving.
    Real Estate agents have the reputation of being smarmy, slimy liars who’d sell their grandmother to get a commission.
    Helluva choice.

  26. 26

    RE: Ira Sacharoff @ 25 – Why choose, when you can have both? :-D

  27. 27
    bingo says:

    RE: Kary L. Krismer @ 24

    I apparently haven’t made myself clear. The listing agent gets full commission (3%) plus $500. There is no other agent (that’s where the savings to the buyer comes in). If the listing agent has a buyer that is willing and able (qualified) to buy the home, why wouldn’t they do the deal?

    In your opinion, what is the dollar amount that the listing agent needs to get to provide enough incentive to do a deal without a buyers agent. It has got to be less than $15,000 (3% of the theoretical listing price of $500,000), does it not? Most agents have E&O insurance. How much liability do they have?

    I’m not trying to needle you Kary, I’m just trying to understand.

  28. 28
    Ross says:

    I think the whole concept of an implicit contract between an agent and possible buyer from showing a single home is broken. In my mind, contracts should be explicit – whether written (preferably) or oral. 1 hr of time spent opening the door and walking around should not make the buyer forced to pay the “showing agent”) (unless those are the explicit terms agreed upon between them). In my mind, this concept is an abuse by the MLS system that seems unethical.

    If I got caught in this situation, I’d would do my best to not complete the sale period, perhaps after wasting as much of the showing agent’s time as possible.

  29. 29
    krs says:

    When I was selling my last condo, the real estate agent was worth her weight in gold. She staged the property with her own furniture, etc., and hired a professional photographer. She had a great eye for detail and marketed the place well. She really hustled and I was happy I worked with her. But of the condos/houses I’ve sold over the years, she is the only realtor I felt really earned her commission. I recently recommended her to a couple of first time buyers. Before everything was online, I had two realtors when I was buying that I felt earned their commissions. They kept on top of the listings and I toured over 30 homes with each one before making a purchase. (I also once bought a condo from a friend without either a relator or lawyer by working with a really great mortgage broker). Now that I can do all of my research online, I’ll be using redfin. They may cost more than a lawyer, but I’ve used their website everyday for four years. The least I can do is give them my business when I’m ready to buy again.

  30. 30

    By bingo @ 27:

    RE: Kary L. Krismer @ 24

    I apparently haven’t made myself clear. The listing agent gets full commission (3%) plus $500. There is no other agent (that’s where the savings to the buyer comes in).
    I’m not trying to needle you Kary, I’m just trying to understand.

    Ditto on the last comment.

    On the hypothetical commission deal we’re discussing, where it’s a 3/3 split between listing agent and selling agent, if there is no other agent, the listing agent is both the listing agent and the selling agent, but not the buyer’s agent. So the agent would get 6% if you walk into an open house and ask them to write up an offer to present to the seller.

    That’s the reason for the confusing term “selling agent.” Sometimes the selling agent is the buyer’s agent and sometimes they are the seller’s agent.

  31. 31
    bingo says:

    RE: Kary L. Krismer @ 30

    Fair enough. I should have been referring to the Listing Agent.

  32. 32
    Scotsman says:

    Times change, and so our needs as buyers and sellers. When an alternative to the MLS finally arrives the 6% model will die, as controlled access to that data base is really the only thing that keeps them going in the face of cheaper and/or more competent alternatives. The days of the housewife/divorcee part time realtor are gone- only the more professional full timers remain. They will dwindle to those who serve the high end while the masses flock to cheaper alternatives out of neccessity. But I still predict that eventually the model dies.

  33. 33
    Marc says:

    RE: bingo @ 27

    Bingo,

    In #30 above Kary hit on the primary flaw you will face with your hypothetical. With the standard NWMLS listing agreement signed by the overwhelming majority of sellers, the listing agent gets all the commission (typically 5 to 6%) if there’s no agent on the buyer’s side and that’s true whether the seller’s agent only represents the seller or agrees to act as a dual agent and represent both sides.

    It was this reality that led me to think up WaLaw Realty in the first place. From 2005 through the early part of 2009 when we represented buyers we were only their attorneys and we had to negotiate for the buyer-side commission. That is to say, neither we nor our client had any legal right to it. Listing agents hated us for even suggesting that the buyer get the “selling office commission” (technical term for the buyer’s side commission). Sellers didn’t like it much better because they mistakenly assumed they’d get to keep it if there was no buyer’s agent.

    I got very good at negotiating this and I speculate my success rate over the last couple years might have been north of 90% but that was the problem, it wasn’t 100%. Not to mention it was a major distraction to the most important negotiating point: PRICE. Eventually, I figured out if we had our own brokerage and joined the NWMLS we would be contractually entitled to the commission and what we did with it was not something that we need to negotiate (i.e., we’re free to rebate it to the buyer). Thus, we could focus on the really important terms.

  34. 34
    AddyLaddy says:

    Coming from the other side of the pond I find this whole business model of Realtors very odd and expensive. I sold my home last year and that was done via an Estate Agent. They have a small office in each city/town/village which display properties in the window. They take the photos, print the leaflets, advertise in the local papers and on the internet. They advise on presenting it well and give guided tours to interest parties. They negotiate with the buyer and do everything possible to make the sale happen. For this they charge 1 to 1.5% of the sale price.
    I then employed a lawyer (solicitor) to do all the legal and financial work (contracts, payments, escrow, land registry etc) for that he charged a fixed fee which was 0.2% of the sale price.

    When buying there are no buyers agents; we find the property in the paper, shop window or internet and then go direct to the seller’s estate agent and again employ a lawyer to do the financial/legal stuff. Mortgages are arranged directly too via the internet or bank branch.

    Now the whole thought of having to pay 6% + 2% + 1% or whatever it costs to sell over here really puts me off buying, as that is an expensive exit penalty for this ‘investment’.

  35. 35

    RE: Marc @ 33 – Marc, I’m not certain, but I think the changes in licensing law a year or two ago would perhaps even prevent you from negotiating that as an attorney. As I recall one of the changes was that you couldn’t give a referral fee based on a transaction closing, which is essentially what you’d be asking the listing agent to do. Again, not 100% certain of that, and not inclined to look it up right now.

  36. 36
    bingo says:

    RE: Marc @ 33

    Marc, I have nothing but respect for you. You have created a business model that works.

    However, as you know, everything is negotiable. The listing agreement can have addenda. If that doesn’t work, what a lot of buyers ended up doing during the boom was to call their “brother-in-law”, “college roommate”, etc., whomever had a real estate license and negotiate a lower commission rate on the buy side (obviously with permission of their Broker). That led to a lot of new homebuilders instituting registration policies trying to preserve the full commission for unrepresented buyers.

    Seems like many commentators are advocating towards the realtor’s point of view. In other words, the commission is fixed, the only issue is which agent gets paid how much. Since the NWMLS has rules to guide the conduct of realtors, buyers need to follow them. I guess I’m asking why buyers need to follow the agents rules?

    Marc, is it legal to negotiate commission rates with a buyer’s agent?

  37. 37

    RE: bingo @ 36 – You can negotiate the rebate. That’s what both Redfin and Marc offer is rebates.

  38. 38
    crazykopp@hotmail.com says:

    I find this topic very pertinent to my current situation. My fiancée and I have been looking at houses in North Seattle for years. We feel we know the market and really have no need for an agent. I have gone through the home buying process once before and don’t feel the agent did anything to earn his wage. Recently we found a home we liked. We went to the open house and talked with the selling agent. We had planned to call the agent I used in the past (more out of habit), but before we did that the listing agent called me and asked if I would like another showing. We agreed and looked at the home again. In this process we talked at length with the owner and the listing agent together. The owner and the agent seemed to be honest and straight forward. At this point there has been no price talks, no forms signed and no verbal agreements with anyone. My future wife and I have more or less come up with our best price offer (pending inspection). We were thinking of simply using the listing agent or at least asking him what he thought of that idea. I don’t mind if he has more incentive to close the deal. It seems to me that works in my favor. If I called up the agent I used last time all he would do put our offer in writing. I am still going to have a real estate attorney look over anything I sign and make sure everything is on the up and up. So in summation for DIY people like us I don’t see what a agent brings to buying process. However, I do think there is more incentive for the listing agent (acting dual agent) when they can get 6% or if negotiations are tough they can forfeit some of their commission to make the deal go through. What am I missing? Do you guys agree?

  39. 39
    Scotsman says:

    RE: crazykopp@hotmail.com @ 38 –

    How about thinking of it in terms of what the agents take from the table?

    In a $500K transaction there’s $30K sitting on the table. It isn’t going to end up in the seller’s pocket no matter what happens, but close to half of it could end up in your pocket depending on how you approach the purchase. And if the seller was smart, and open to new ideas, some of it could end up in their pockets too.

    How hard or long do most people buying the average Seattle home work to make $12-15K net- 200 or 300 hours, a couple of months? Isn’t that significant enough to cause folks to at least look at alternatives? It should be, especially as it becomes increasingly apparent that the days of easy money are behinfd us.

  40. 40
    ARDELL says:

    May I ask a question?

    I get a lot of calls from people trying to hire me in the middle of a transaction. Some have an agent they want me to replace. Most used the Listing Agent or the Builder direct and then wanted to hire me halfway in when they decided they needed an agent after the fact.

    Craig’s situation did not warrant “a payoff”. He noted he only had to do that because of his biz model and promise to the buyer. It is not likely those agents would have gotten anything had they pursued it.

    But what if the buyer wants to switch agents right before the home inspection or sometime in the middle of the process? Lee over on my post said “they were fine until one day they looked like they had been sniffing glue and were a total tool”.

    What should happen if your agent turns into a total tool when you are past an accepted contract?

  41. 41
    RT21 says:

    RE: Pegasus @ 8

    Keyword…..”game”. That is why I would rather have a lawyer than an agent……

  42. 42
    Tim says:

    Average Joe here. We bought our first (and only) home without an agent and just used an attorney. We saw absolutely zero value in using an agent for a purchase since we had been looking for over a year and knew the market better than some agents. We made several offers before we finally closed on a house and for each offer we made it clear to the seller and the sellers agent that since there was no buyers agent we expected the sellers agent to cut the commission by 50%. Thus we would offer a lower gross price but the net to the seller was higher by the reduction in the commission. We paid our own attorney fees which were around $1,500 or so.

    We are now looking for a vacation home and plan on handling it the same way. The agents we deal with overall are pushy and basically trying to talk you into buying something regardless of whether it is priced right, my general impression on agents is they have one goal – to close a deal, period. Overall, for an agent, it doesn’t matter if a buyer overpays or not, just close the deal. I have yet to meet an agent that I believed was truly looking out for me as a buyer.

  43. 43
    ray pepper says:

    RE: Scotsman @ 32

    BINGO BINGO !!! WINNER WINNER!!!! High Light THAT POST!

  44. 44
    Hugh Dominic says:

    On topic. An agent’s priorities and training is on marketing (to get client commissions) and how to avoid getting his broker sued. Brokers forbid them from giving anything that resembles advice that could get them sued. For example, they are not supposed to tell you what school district the house is in, because if they are wrong they could get sued. Do you want to know the implications of that easement? Don’t ask your agent. Agents are just supposed to send you calendars and fill in the pre-made forms, and do everything they can NOT to provide legal advice.

    Sound good? No. I’d want the legal advice, not a smiling door-opener.

    The other thing to think about is just how much money is wasted by bringing an agent into a deal. The IRS is going to get probably 25% of the commission, liability insurance, mls and similar professional fees, the brokers take up to half of the agent’s cut, you are paying for the agents advertising to find you, etc. Meaning, a lot of the money you spend on your agent winds up in third party pockets that offer no value to you, and are simply the cost to operate the racket.

  45. 45
    Polly says:

    If we were using a pay-by-hour service, we wouldn’t be able to afford a house now. We have looked at over 100 homes–no lie–over the past 18 months. We’ve made offers on 4–all overpriced, but we figured we’d try. Our agent is willing to show us a house at the drop of a hat. She hangs out at the houses during inspections and bids. After about house #87 we started feeling some pressure from her, but it quickly disappeared and she is on a mission to find us a house that works for us that we love. If/when we do find that perfect house for us, we will use her to sell our current house, as well.

  46. 46
    ray pepper says:

    Here is the simple facts:

    Both are equally useless if you have competence, a working laptop, patience, and have bought or sold before.

    **SELLERS**Never pay more then 500 to LIST your residential property! Its a WASTE OF MONEY! Pass your 3% savings onto your BUYERS! They need it NOW more then EVER!…

    **Buyers**Do your homework! Seattle Bubble is a GREAT Place to start! Realize its YOUR MONEY funding the transaction NEVER the SELLERS! Find an Agent that will pay YOU to assist them in finding YOUR HOME! 1000’s will give you 50% back!! JUST ASK!

    Lastly, when you choose to BUY and not RENT its ALWAYS an investment!!! Never let ANYONE tell you different!! If for some unplanned reason you must sell before you wanted to, the 10% it costs you in this State to sell will become TOXIC to your investment. This combined with our trendline down down down in housing prices YOU HAVE NOW become a BAGHOLDER. Thus its very important to limit your losses in every way possible. Even the best intentions of long term residency change in this mobile society that we live in due to divorce, illness, family, job, etc….

    Attorneys and Agents who is more dead weight??? Ones that seek to EXTRACT more from your investment then add!

  47. 47
    Azucar says:

    I’ve been reading this… and the linked post and discussion at RCG, with interest, and I have a question.

    I’ve been kind of casually looking for property in the Seattle area for a while (which is why I have been lurking here off and on for about a year) – I don’t currently live in the area, but I have before and want to someday again, and there’s a chance that I’ll be moving there in the medium term (say 5 years, plus or minus a couple) future. I have some money that I wouldn’t mind investing into real estate – a rental house maybe… and one that maybe I’d eventually move into if I moved to Seattle – if/when the price becomes right. Following the market, it seems to be getting closer to “right”, or at least a lot closer than it was a couple of years ago.

    Anyway, say I have a friend in the area who lives in a house and also has a rental house, and they’re thinking of selling the rental house. I guess once they list it with a selling agent, they are committed to paying the commission to them no matter how the buyer is found if it’s sold when it is still listed, correct? If they sold it to me (without my having spoken to any real estate agent at all, including their listing agent or anyone else), would the agent who listed it still get the full commission? Or would they only get the “listing agent’s” half since I made an offer directly to the owners and acted without a “buyer’s agent” or “selling office”… thus the Selling Office Commission is not applicable?

    If the listing agent still gets the full commission if they sell when it’s being listed, at what point could I buy it from them without us having to pay the commission?

    Say they list it for six months, then decide that they won’t sell it now and continue to rent it for another year instead and de-list it. Then say after that year, they and I were to work out a deal directly with me purchasing the house directly from them without engaging an agent or listing the house on mls? Would the agent who listed it now still have claim to the commission? How about if they just decided to stop listing it at the six month point, and I bought it directly from them at the seven month point?

  48. 48
    TylerG says:

    RE: Scotsman @ 32

    Any industry that spends as much money on commercials as realtors do, has lots of fat to be trimmed.

    Whenever I speak to a Realtor in person and discuss commissions, they almost always cite the 50% cut their brokerage gets.

    With all of the advances in technology, and a healthy amount of 3rd party real estate companies that make the info available, what is the value that the brokerages provide???

  49. 49
    TylerG says:

    RE: Scotsman @ 19

    No wonder it is a bad place to invest, it is a war zone! I kid you not, this is the image they currently have running with that story.

    Here is a screenshot because it will probably be changed.
    http://imgur.com/6dBav.jpg

  50. 50
    ray pepper says:

    RE: TylerG @ 47

    “With all of the advances in technology, and a healthy amount of 3rd party real estate companies that make the info available, what is the value that the brokerages provide??? ”

    Some brick and mortars serve excellent cookies in the lobby. Sometimes I can smell the Otis Spunkmeyer cookies being heated in their little oven as I walk in/out of client appointments. You do NOT have to BUY or SELL from them. Just need to be at the right place and time when the cookies are brought out.

  51. 51
    One Eyed Man says:

    As many of you may realize, I’m not a fan of the MLS or the structure of the residential real estate brokerage industry. I could write a merde load of crap about it that would bore everyone into unconsiousness. But I’d first like to make sure people recognize that there are things that the brokerage industry does very well that they don’t get credit for. Some of those things like finding properties can now be done by internet savy individuals, but not all of them. But rather than go on at length about what’s wrong with the brokerage industry the only thing I’m going to say that’s negative is that if you really want to understand what’s wrong with the brokerage industry, you probably first need to know the history of the brokerage industry (how it got to its current screwed up state where the seller pays the commission to the buyers agent – doesn’t that sound like a system whose very foundation is based in conflict of interest?) and the common law of agency which concerns the duties and obligations of principals and agents and how the common law of agency differs from the statutory law concerning real estate brokerage in Washington. If that sounds like a 3 credit law school elective course or perhaps the starting point for another legislative subcommitee to once again redraft the law of real estate agency, you’re starting to get the picture.

    As I mentioned above, there are several things that the brokerage industry doesn’t get enough credit for that might be lost if the MLS is displaced by another system and I want to make sure those things are considered in the discussion. First, the MLS through its attorneys, has developed a very good set of standardized forms that are constantly updated to take into consideration changes in the law. Even though those forms are often slanted to protect the interests of the brokerage community, there is substantial value provided to the clients of the brokerage industry by those standardized documents and that “value” probably wouldn’t exist but for the MLS.

    Second, although the vast majority of real estate agents are clueless toads who spend more time mailing refrigerator magnets than working for clients, most lawyers who practice real estate law don’t actually do much work in the area of residential real estate and therefore don’t keep up with the nicities of residential real estate that a truly good real estate broker is often more familiar with. A lawyer whose practice is concentrated in the area of residential real estate (and there are very few of those) will know a lot more about residential real estate law, how to document the transaction, what the contract actually means, and the various related steps in the transaction like title, title insurance, the escrow process, financing, etc. But most real estate lawyers don’t really do much residential real estate and they probably aren’t as familiar with the MLS forms (or other residential real estate issues like short sales and related programs, etc) as a good real estate broker who has a practice in that area. And most attorneys are not in touch with the market place and can’t really advise a client very well on how to negotiate price, at least without the help of a broker because they don’t have immediate access to the data to do a comparative market analysis even if the client wanted to pay them their hourly rate of perhaps $200/hr to do it.

    In the end, if you want to bring the brokerage industry into the 21st century (and make the market place for brokerage services more efficient), you probably need a system where the commission for the buyers agent is directly controlled by the buyer AND ALWAYS DISCLOSED TO THE BUYER IN ADVANCE OF SERVICES. If Craig’s door opening nemisis had at the very least been require to disclose to the buyer that they expected to be paid a commission, rather than just to be entitled to an undisclosed claim against the seller paid SOC (“selling office commission”), many of those problems could be eliminated. But more importantly, the direct negotiation of the buyer’s broke’rs commission with the buyer would hopefully make for a more transparent and efficient market place for brokerage services.

  52. 52
    Scotsman says:

    RE: TylerG @ 47

    “what is the value that the brokerages provide??? ”

    That’s a great question, especially when one looks at the differences between companies like John L. Scott and Remax. The Remax folks are much closer to business owners while JLS takes a big bite for essentially hand holding, the agents and the customers.

    I see the entire industry and the way it’s structured as an artifact of times past. Thirty years ago, pre-internet, a lot more business was done on a relational basis- face to face, at a slower pace, maybe over the phone during regular business hours. Pretty clearly the trend is away from that, toward a much more transactional basis where personalities aren’t as important as cost, timeliness, and flexibility in getting and assessing the required information.

    We’ve gone from dressing up and driving to the realtor’s to hitting the internet at midnight or 6:00 a.m. to get the deal done. Just email me the basics, gotta have pictures, I’ll have my lawyer review. A few still fall into the “hold my hand” camp but more and more are discovering that with modern tools they can do much of the work themselves and reap even greater rewards.

    In a tightening economy cost is the primary driver for the majority

  53. 53
    Scotsman says:

    RE: One Eyed Man @ 50RE: One Eyed Man @ 50

    Fair enough, but now that we’ve evolved, I have a one click solution. Try it:

    http://www.legalzoom.com/

  54. 54
    RokiTBoy says:

    i love it when tim lights a fuse they makes me want to drink a six pack of beer and rant!

    rhonda porter thinks us first time home buyers should get lawyers to explain it to us!

    https://seattlebubble.com/blog/2011/06/16/dori-monson-tackles-walking-away-from-your-mortgage/

    not sure if she’s defending real estate agents or defending all the krusty loans she wrote and profited from (for all those sorry suckas who lost or are now losing their homes). of course we all know she really doesn’t mean it, that would cut into her bottom line… because less people would have signed for loans from her.

    i’ll tell you, i’ve crafted my own bonus contract for my future buyers agent (to motivate them to help me). the next step is to have it reviewed by a lawyer before i actually try and use it.

    poor designs that allow and even motivate others to take advantage of people, will do just that.

    i’m a dumb first time newb and i smell stank at ever turn i take when actually find the patience to explore the current real estate system.

    the bottom line is the current system needs overhaul. laywers are welcome, new laws are welcome, and anything that requires all the suckas that are taking my money to actually earn it, is welcome!

  55. 55
    ARDELL says:

    RE: One Eyed Man @ 50

    I have tried a few modifications that address some of your suggestions. The “system” doesn’t really have to change…just the way we operate within it.

    When I list a house I make it clear to the seller that if the Buyer doesn’t have an agent, the seller does NOT get the money we reserved FOR that Buyer’s Agent, nor do I. I don’t think anyone should be enriched by the fact that a buyer was shortchanged as to equal and separate representation in the home buying process. As a matter of ethics, I won’t take it. If the buyer and seller request that I be a Dual Agent for some reason, it has happened, then I work it out. But that is not the norm.

    The “system” doesn’t have to change. It’s as simple as just doing that. The Buyer gets the money to go buy an agent with. Any Listing Agent can do that. I do think a seller can require that the buyer go buy someone with at least part of it who will handle the buyer’s side of the equation. The seller doesn’t have to “share” their agent representation, and as long as they give the money to the buyer to go buy themselves an agent of their choosing, I think that’s fair.

    I have seen some Agents in other mls systems try offering $1 so that the buyer has no money to go get an agent with. That hasn’t worked out well. The buyer just gets confused and doesn’t have the money to buy an agent. Not a good solution to “strip out” the buyer side commission.

    I do discuss buyer agent fees with a buyer, usually at first contact, but buyers don’t call me to “see a house”. They call to hire me. So I don’t really have that problem. If they call me to see one of my listings, I do that for the seller. But that’s just part of my policy not to take money from someone for “no” representation. If I represent the seller…I won’t represent the buyer OR take the money for NOT representing the buyer.

    The system doesn’t have to change at all. All good things CAN happen within the system that we have now.

    The real nemesis and problem are REFERRAL fees. That’s really what happened in Craig’s situation. Listing Agent “referred” to another agent. The historic system (not mls system, this is just common agent practice) is for an agent to get 25% of the commission if they refer a “lead” to another agent. I believe lawyers and other professionals have a similar referral to one another informal system of exchanging “leads” they can’t handle.

    That is what happened in Craig’s situation. The buyer turned into a “sold lead”. Referral fees should be abolished including referral fees of up to 45% to 50% of the Commission paid to the Relocation Companies of large employers. That really screws the buyers and sellers. Those moneys disappear out of the commission without a client knowing it. In fact I’m pretty sure Microsoft via Cartus has an agent sign a written agreement that they will not disclose that 45% referral fee to the employee/client. Telling someone to lie to their client really should not be in this day and age.

    There really is nothing wrong with the mls system.

    Those agents likely would not have gotten a dime from Craig…in fact, if he hadn’t called them and asked them what they wanted to “go away”. Nothing at all may have happened if he hadn’t called them. It’s Craig’s business model that encouraged him to “pay off” any hint of risk. But honestly…the risk was slim to none on that one. I don’t think you can promise to give someone money that isn’t your money. That is where the business model has “issues”, not the mls system in the instant case.

    No mls told Craig to pay someone. He called and asked them what they wanted to “disappear”. Seriously…if someone called you and asked you how much you wanted to do nothing…wouldn’t you take it as an offer to pay you something?

    Not to put words in Craig’s mouth, this is what he said:

    “I am contractually obligated to rebate the SOC to my client at closing. My income per transaction is no where near large enough to take the risk of rebating the SOC only to have to “disgorge” it thereafter. So I need to identify and resolve any SOC claim before closing when possible. Yes Ardell asking somebody whether they will assert a procuring cause claim on the SOC is tantamount to asking for it, but I see no alternative if I’m going to rebate at closing.”

    By Craig’s own admission it was his business model that created his need to ask them what they wanted. If someone asked me what I wanted, generally speaking, I would probably think of something to want.

  56. 56
    Jody Epstein says:

    RE: ChrisM @ 1 – Buyer’s cannot be “sucked in” and tied to an agent with no disclosure and no contract. Craig knows better!

    [Business links only allowed in the name field. Read the rules.]

  57. 57
    Jody Epstein says:

    RE: StillRenting @ 3
    A broker is on staff at WaLaw. They are great if you do all your own research and know the market inside and out!

  58. 58
    Sweet Pea says:

    By TylerG @ 49:

    RE: Scotsman @ 19

    No wonder it is a bad place to invest, it is a war zone! I kid you not, this is the image they currently have running with that story.

    Here is a screenshot because it will probably be changed.
    http://imgur.com/6dBav.jpg

    So glad I’m not the only one who saw that. Either it’s an error, in which case it is amazing, or it was intentional, in which case, it’s also amazing, especially considering the caption. Instant classic.

  59. 59
    RokiTBoy says:

    ardell, the current model is f’d and t’d and w’d in so many ways.

    the only way the current model works (for a buyer or seller) is if a wicked smart person (buyer or seller) puts buyers agents, sellers agents, loan originators and any other people involved, in CHECK at every step of the way. for newbs, that means hiring a lawyer or getting in bed with a family member who won’t screw you (because if they do, you’re father will kick them in the ass and disown them from the family).

    the current system works great for a market on the way up. it fails miserably for a market on the way down.

    i am your left ventricle. i pump the blood through the system and give oxygen to the body (i pay the bills, yeah me). step back and absorb what you’re clientele have to say about this system. instead of trying to sell us on why it just fine and simply needs to be better understood.

    today, is light years different from ten years ago. yet many buyers and sellers agents still try and hustle the same ways in this horribly outdated system (some are adapting).

    i’m repeatedly reminded that i’m not represented every time i stick my nose into the steaming pile. i’ve learned so much from tim and friends that have been screwed and no one will ever convince me that the current design is remotely salvageable.

    honestly,

    -m

  60. 60
    Spherical says:

    So, I thought I’d just drop my two cents in here, since I’m not an agent or a lawyer (well, I am an appraiser, but at least I’m not involved in the sales side of things), and I just bought and sold in the area.

    I sold a house in the Lynnwood area in the mid-$200s, and moved closer to Seattle. Although I agree that the 6% model is an atrociously high fee for median priced and higher Seattle houses, for the price range I was selling in, I actually thought it was fairly reasonable compared to what I would have paid piecemeal for photos, staging, listing, etc., at least once my own time was factored in. That said, I looked at a lot of agents, and most appeared to be essentially worthless. In the price range I was in, the vast majority of listings appeared to have been barely or not at all staged, were listed with photos that appeared to have been taken with point and shoot cameras, and generally exhibited an overall lack of professionalism (for such a large percentage, you’d think agents could at least use spellcheck and verify that their driving directions are correct). Of the agents I eventually chose to contact, only about half even returned my call in a timely manner– some not at all. I only bothered interviewing two in person. The agent I ended up choosing provided professional photography, full staging down to the details, a professional looking and competent listing, a separate website, a well explained written explanation of his pricing recommendation and local market analysis (unnecessary but nice to see), two open houses in three weeks (which is how long it took to sell), mailed flyers, a moving truck, and was essentially responsive and available 24/7. Now, even in my low price bracket, I’m fairly sure I paid a bit of a premium over a DIY strategy, but I think it was worth it (and I didn’t have the time to DIY, anyway). On the other hand, if my house had been in the 300s, I’d think twice, and in the 400s or above, I probably would forgo the agent. I’m also painfully aware that prior to the crash, I would never have gotten anything like the service I got for the price range I was in. When business is scarce, agents have to work a little harder for their money– even on the smaller commissions. (I bought my first house at the end of 2003, and every agent I dealt with back then gave me the impression that they thought they just inherently deserved my money).

    I’ve also got to say, that despite the professionalism of that agent, it bothers me that I can never be sure any agent (even the one that I thought did such a good job) is really on my side. They’re salespeople, and above all they want to make a sale (I know the feeling– I used to be in sales, although it wasn’t real estate). If they push for a price concession, I have to wonder if they’re just trying to make a quick sale at my expense. If they push for not lowering a possibly high listing price, I have to wonder if they’re hoping to inflate their commission even if it risks not selling. And if they keep their mouth shut and let me decide about pricing and concessions– probably because they don’t want me to think either of those last two things– I wonder why on earth I’m paying them if they can’t even advise me on negotiation and pricing strategy. In other words– no matter how good they are, and even if they’re supposedly playing for my team, I know they’re salespeople, and I don’t trust them.

    As far as buying a house– well, that’s much simpler. I don’t need to pay anyone 3% just to surf real estate listings for me. Besides, my wife and I are very particular, we’d been looking at new houses for a couple of years, and we knew what we wanted and where. I gave some consideration to making an offer on my own that simply asked the listing agent to rebate the 3% normally due the selling agent– but I was fairly certain that would not go over well… (As a post on this blog noted a few weeks before, despite fairly high inventories in lots of places, a minority of houses are still garnering multiple offers– and those are essentially the houses we were interested in, generally houses that were turn-key or remodeled, architecturally interesting, and aggressively priced. Of the three houses we got serious about, all of them received multiple offers within the first week. The house we eventually bought actually had four offers in the first 48 hours…. so being unrepresented while asking for an atypical commission reduction actually did seem to have the potential of being a big negative in trying to get an offer accepted, or at least a big headache.)

    So, we ended up going with Redfin as buyers to at least minimize the fee on our end. Even still, given that more or less all Redfin did was unlock the door and provide forms to sign (although they were quite responsive and professional), I’m not entirely happy with even their reduced fee. WaLaw sounds interesting, and I didn’t know it existed until I read this thread, so that’ll definitely be on the radar next time I buy, as will any other discount service willing to act as a buyer’s agent.

  61. 61
    Azucar says:

    RE: ARDELL @ 55

    “By Craig’s own admission it was his business model that created his need to ask them what they wanted.”

    That’s what is wrong with the current mls system. The “buyer’s agent” may be (I guess) automatically entitled to some of the commission, even if the buyer isn’t aware that the person is “their agent”. In a transparent system, there should have been some kind of agreement signed by the buyer before it came to the point where “their agent” became entitled to anything. If I’m buying a house with someone’s assistance, I have no argument with signing something that says the person has a right to a certain percentage of what they help me end up buying. I do have a problem with them being entitled to the money for “acting on my behalf” without my being aware that I’ve asked them to.

  62. 62
    ARDELL says:

    RE: Azucar @ 58

    The system is complex as the seller has to promise the money to agents “who show his home and sell it” when he lists it for sale. Otherwise it can’t go in the mls inviting agents to “show it”. You can’t “invite” people to work without providing for them to be paid. What good is a house on market with no means for agents to show the property? The seller is not paying for the buyer to be represented well…in fact he probably likes it better when the buyer is NOT represented well.

    The money comes from the seller’s Listing Contract. It CAN be converted to a Buyer Agent Fee by a buyer, but it is not called a Buyer Agent Fee at the time the Seller contracts to pay it. It is called a Selling Office Commission. The Buyer has to be savvy enough to “work the conversion” from Selling Office Commission to Buyer Agent Fee by hiring someone to represent them before going to see houses. If you just “wander around the store…any old salesman paid by the seller of the goods, will service you.”

    Washington is very progressive and requires that ANY agent who does not represent the seller (the listing agent) must “represent” any buyer they come in contact with. So the buyer doesn’t “choose” to BE “represented” by that door opener. The mls doesn’t require that the door opener “represent” the buyer. The Agency Law in WA requires that they represent the buyer. It’s a Law…we really have no choice, nor do you really. You can chose WHO…but if you don’t…the one you is with is IT. Sorry – Reminds me of the Neil Young Song “Love the one you’re with, when you’re down and confused and you don’t remember who you’re talking to.” Real estate can be like that. LOL!

    A buyer can “choose” whom they want to represent them, and even negotiate the fee for service. BUT if they DON’T hire an agent BEFORE looking at houses…the law and system provide one for them. Kind of like Court when you can’t afford an attorney. One is supplied for you.

    It’s supposed to be a good thing in theory. As long as you don’t see the house you actually want to buy before hiring an agent of your choosing, it’s fine. The agent is due nothing usually if the houses you see with them while deciding who to pick are not the houses you end up buying. So you can see some houses you know you don’t want with an agent to “test drive” them. Just don’t be too good at picking the right house…before you pick the right agent.

  63. 63
    ARDELL says:

    RE: RokiTBoy @ 57

    I can’t disagree with you, as that seems to be the experience of many. I just don’t know people who choose bad agents personally, and so can’t speak on that. My clients always call me back…the one I’m doing now is my third for the same people. So I don’t think they agree with you. But I can’t say that others don’t have the experience of which you speak.

    But now tell me why that is? Why do people hire agents they don’t trust or who can’t be trusted? That makes ZERO sense to me. A lot of my clients are referred to me by former clients. I have a whole string of friends of one another and each time another one needs to buy a house, they call me. It really is that simple.

    Why can’t people find a good agent? Is it really that hard, or do they just think it doesn’t matter…any old body will do, and then bitch and moan about it for the rest of their life? I really do not “get it”. With so very many agents to choose from…why pick a loser?

    Mainly I think people don’t think a good agent is worth the effort of finding. Otherwise there wouldn’t be so many using terrible ones. New models are great…seriously they are. They just don’t have enough people with a lot of real estate knowledge because they are newer companies. They have nice and sincere people, yes. But they often don’t know 50 year warranty HardiePlank siding from a faked up paint job on an LP Class Action suit product.

    I’m not “nice”. I don’t know how to “sugar-coat”. I give my clients a freaking headache forcing them to see everything they should be considering. Many people pick the nice, happy agent who doesn’t know shit. Whose fault is that?

  64. 64
    ella says:

    Oh yeah, I always hire people before they tell me what their service costs. Perhaps a complaint to DOL and any other regulator you can think of would put a stop to secret deals.

  65. 65

    By Hugh Dominic @ 44:

    On topic. An agent’s priorities and training is on marketing (to get client commissions) and how to avoid getting his broker sued. Brokers forbid them from giving anything that resembles advice that could get them sued. For example, they are not supposed to tell you what school district the house is in, because if they are wrong they could get sued. Do you want to know the implications of that easement? Don’t ask your agent. Agents are just supposed to send you calendars and fill in the pre-made forms, and do everything they can NOT to provide legal advice.

    You’re missing a big part of the equation, which is defects in the property which might get the broker sued. Despite all the claims here that “I bought before and I know what I’m doing,” I find most people don’t have a lot of knowledge about different elements of a house (roofing, siding, crawl-spaces, septic, drainage issues, etc.). I’ve commented here in the past about walking into an REO that had two separate class action lawsuits involved with the products it was made of (in that case LP siding and a Pabco roof). How many of these people who bought a house before and know everything would have even recognized one of them? How many would recognize a Sylvania breaker panel as an issue?

    You mention easements as an issue. First, as I often state, agents are not legally authorized to give legal advice. Sufficient violations of that rule will not only get them sued, it will get the Department of Licensing after them. That was a claim against Hellicksons because they allegedly advised short-sellers to stop making mortgage payments. In addition, I wrote a piece on easements which demonstrated why agents should not offer advice about such things.

    http://blog.seattlepi.com/realestate/2010/01/12/so-you-have-an-easement-whats-that-mean/

  66. 66

    RE: Azucar @ 47 – It would depend on the terms of the listing agreement, but most listings are “exclusive” listings so your seller would owe a commission if you bought it. The listings also have clauses that extend the right to a commission for six months after expiration in certain circumstances. That might not apply to your situation. Your friend would need to consult an attorney to review the listing agreement they signed.

    As a practical matter though, the idea of your buying a house from someone you know just doesn’t sound like a good idea. There are probably houses out there that better suit your needs, but of course it is possible a friend has that special house. It’s just unlikely.

  67. 67

    By TylerG @ 48:

    RE: Scotsman @ 32 – Any industry that spends as much money on commercials as realtors do, has lots of fat to be trimmed.

    Okay, I’ve had a DVR since before most people knew what they were, so I don’t know what you’re talking about. What commercials? The only company I can think of that advertises on TV is the one with the balloon. NAR and WR sometimes advertise too, but the latter at least are typically issue ads (e.g. don’t raise taxes).

    My newspaper also is through my Kindle, so I’m not sure what the current state of newspaper advertising is, but many companies don’t do that either.

    Beyond that though, I think you’re making a common mistake fueled by newspaper reports, that believes that advertising increases the cost to consumers. Back when I worked for United Parcel Service they were still run by their founder, and UPS did not advertise. Now they do. The extra volume generated by the advertising probably allows them to offer their services for less, not more. Also, Redfin did not pay for the advertising they obtained from 60 Minutes, but for that advertising though it’s possible they wouldn’t exist today.

  68. 68

    By One Eyed Man @ 51:

    Second, although the vast majority of real estate agents are clueless toads who spend more time mailing refrigerator magnets than working for clients, most lawyers who practice real estate law don’t actually do much work in the area of residential real estate and therefore don’t keep up with the nicities of residential real estate that a truly good real estate broker is often more familiar with. A lawyer whose practice is concentrated in the area of residential real estate (and there are very few of those) will know a lot more about residential real estate law, how to document the transaction, what the contract actually means, and the various related steps in the transaction like title, title insurance, the escrow process, financing, etc. But most real estate lawyers don’t really do much residential real estate and they probably aren’t as familiar with the MLS forms (or other residential real estate issues like short sales and related programs, etc) as a good real estate broker who has a practice in that area.

    I’m not sure I would agree with that 100%, but you do hit on an important issue. Getting a good real estate attorney can be just as hard as getting a good real estate agent.

    As to our agency law issues you raised, I agree our system has problems, but it’s a lot better than the old system where the showing agent typically represented the seller. That was nuts!

  69. 69

    By Scotsman @ 53:

    RE: One Eyed Man @ 50RE: One Eyed Man @ 50

    Fair enough, but now that we’ve evolved, I have a one click solution. Try it:

    http://www.legalzoom.com/

    ROTFLMAO. You can’t be serious. You know what they say about the person who represents their self as a lawyer, right?

    I’m not familiar with Legalzoom, but I have seen the more specialized DIY will product put out by Intuit. Between paying $60 for that or $600 to an attorney to draft a will, IMHO you’d be better off with the attorney.

  70. 70

    RE: Kary L. Krismer @ 5 – Really, Kary? Per Websters online, “Oxymoron: a combination of contradictory or incongruous words (as cruel kindness); broadly : something (as a concept) that is made up of contradictory or incongruous elements.” “Representation by an RE agent” — PARTICULARLY for buyers — is an oxymoron.

  71. 71

    RE: Kary L. Krismer @ 68 – No, it wasn’t nuts at all. Heck, the seller STILL pays both agents, right? Why is it “nuts” for the legal duties to follow the source of money? In fact, I’d argue that the CURRENT system is “nuts” because it grafts a new and in many ways contradictory set of legal duties on top of the prior system. Its like tearing down an old house but not bothering to fix the foundation for the new structure. That ends up being one rickety old house….

  72. 72

    RE: Spherical @ 60 – Acting as a “buyer’s AGENT” doesn’t get you nearly as much as you — or most consumers — believe. If you want true, loyal representation, and IF you are unable to rely on some personal relationship to provide that representation (i.e. your brother or cousin for best friend), then you should hire a lawyer. Or Ardell, of course.

  73. 73
    ChrisM says:

    RE: ARDELL @ 63 – I suppose you hit on part of the problem: “I just don’t know people who choose bad agents personally, and so can’t speak on that. ”

    For us average homebuyers (esp first time homebuyers), how are we to evaluate a real estate agent?

    My personal experience has been extremely negative, thus my desire this time around to find an alternative to the traditional real estate agent.

  74. 74
    LocalYokel says:

    Heh. When “steaks in the frig” are involved, the kitty claws come out.

  75. 75

    RE: Craig Blackmon @ 72 – That’s really over the top Craig. Are you really trying to say that no real estate agents, including myself, are loyal to their clients. Are you really trying to say that all attorneys are loyal to their clients? And seriously, a brother or cousin?

    You’ve now pulled a Ray Pepper.

  76. 76

    By Craig Blackmon @ 71:

    RE: Kary L. Krismer @ 68 – No, it wasn’t nuts at all. Heck, the seller STILL pays both agents, right? Why is it “nuts” for the legal duties to follow the source of money?

    The idea of following the money is absurd. Where do you think the money comes from? You can just as easily argue it comes from the buyer as the seller. Basing relationships on how you view the flow of money is absurd.

    The prior system was nuts because it had an agent represent someone they had probably never met or had any contact with, and not be an agent for those that they had a lot of contact with. Maybe you think Agent Representation is an oxymoron because you don’t understand what an agent is! ;-)

  77. 77
    Toad37 says:

    Condo question to the pros here- Is it normal for the homeowners to not own the common area lobby, parking garage, gym and lounge amenity area? Haven’t confirmed yet, but a high rise condo in Bellevue seems to have this situation. Seems very odd to me.

  78. 78

    By ChrisM @ 73:

    For us average homebuyers (esp first time homebuyers), how are we to evaluate a real estate agent?

    My personal experience has been extremely negative, thus my desire this time around to find an alternative to the traditional real estate agent.

    It is tough. I would say one good test is if you see three houses with the agent, and they don’t point out any negatives about any of the houses, you don’t have a good agent, unless maybe they previewed 100 houses before showing you the three. ;-)

  79. 79
    Scotsman says:

    RE: Kary L. Krismer @ 69

    “ROTFLMAO. You can’t be serious.”

    “I’m not familiar with Legalzoom”

    Atta boy, Kary- shoot first then ask questions- or admit you’re clueless.

    Time to get a new day job.

  80. 80
    Scotsman says:

    RE: Toad37 @ 77

    Oh stop it. The only place to look at condos as an investment is Florida, where you can buy in a decent building for cash.

  81. 81

    RE: Scotsman @ 79 – Real estate is very local, with some forms being required at the county level. Beyond that, a buyer using Legalzooom would make a seller and seller’s agent very concerned. So unless Legalzoom has licensed the statewide forms, which I really doubt, then yes, ROTFLMAO. Even ignoring the issues typical with consumer legal form services, that’s an extremely naive and ignorant suggestion.

  82. 82
    Scotsman says:

    RE: Kary L. Krismer @ 81

    “that’s an extremely naive and ignorant suggestion”

    No, it’s not. How can you say anything after admitting you don’t know? They’re forms, Kary, not rocket science. If a housewife/realtor can find them and fill them out. . . .

    End of discussion.

  83. 83

    By Craig Blackmon @ 72:

    RE: Spherical @ 60 – Acting as a “buyer’s AGENT” doesn’t get you nearly as much as you — or most consumers — believe. If you want true, loyal representation, and IF you are unable to rely on some personal relationship to provide that representation (i.e. your brother or cousin for best friend), then you should hire a lawyer. Or Ardell, of course.

    This is an argument that can go on forever. Lawyers are supposed to act in the best interests of their clients. But not all of them do. We’ve all heard of unscrupulous attorneys, unethical attorneys,ambulance chasers, etc.
    Real estate agents are supposed to act in the best interests of their clients. But not all of them do. We’ve all heard of unscrupulous real estate agents, unethical real estate agents, slimy used car salesman types, etc.
    What’s most telling here is the pure self interest.
    Ardell, a real estate agent, is guaranteed to advise using an agent instead of an attorney.
    Craig, an attorney, is guaranteed to advise using an attorney instead of a real estate agent.
    I’m a real estate agent. But for most of my adult life I’ve thought of both attorneys and real estate agents as untrustworthy liars, and still kinda do. Ardell and Craig being the exceptions, of course.

  84. 84
    Dirty_Renter says:

    RE: AddyLaddy @ 34
    Addy – Did your solicitor wear one of those white wigs like Rumpole of the bailey?

  85. 85
    ARDELL says:

    RE: ChrisM @ 73

    Your question reminded me of something one of my clients wrote.

    http://raincityguide.com/2006/08/21/perhaps-a-buyer%E2%80%99s-perspective/

    I didn’t write the post, Dustin took the comment and turned it into a post. It basically says if you can’t get a decent agent then you might as well use a Discount Broker and take the money. She hired me. But if she hadn’t sought me out and found me (or someone like me) she would have used Redfin…today maybe Craig.

    How did she find a good agent? She emailed me and asked if I knew another agent like me that she could hire. For some reason many people think because I’m a good agent, I can’t help them. Just had a new client take a bad agent and not contact me because in his words he just didn’t think I would be available to him.

    So it seems like even when people CAN “find” a good agent, sometimes they still work with a bad one. The new client sent me a list of properties he saw with his Pink Pony Agent and asked if I would please give him my thoughts on those. I did, but I also asked why he wouldn’t just hire me. He was elated that that was an option.

    So even when people KNOW and find a “good” agent, they sometimes still work with a bad one. He’s my client now. I don’t have to pay people off like Craig does because that is about his biz model and not the mls system.

    So back to I don’t “get” why people use bad agents. Even when they know a good one, they are reluctant to contact that good one for some unknown reason. Maybe you can tell me why that is.

    Even Craig says I’m a good agent. :) Seriously, if there’s a good agent in the room, you KNOW it. So if you’re not sure…keep looking. It’s a pretty good sign you are not in the presence of a good agent if you are not sure whether or not they are one.

  86. 86

    RE: Scotsman @ 82 – I already explained in my last answer.

    I have a past client who is a past client in part because he wanted to use his own forms. They were terrible (to put it mildly), but in any event they made buyer’s agents very nervous, which is not a good thing when you’re trying to put a deal together. So again, your suggestion is naive and ignorant, unless they have licensed the state wide forms.

    But to supplement the answer, one of my main complaints about agents in the past, before so many were weeded out, was that they didn’t know how to complete the statewide forms. Form are forms and need to be filled out, and if you fill them out wrong you can get into trouble.

    But go ahead and join the “fools” who think they can be their own attorney. It will be your problem, not mine.

  87. 87

    By Ira Sacharoff @ 83:

    What’s most telling here is the pure self interest.

    I’ve never seen the word “telling” be used as a synonym for “disgusting.”

    Seriously, different people need different solutions, and choice is good (except perhaps when it comes to self-help legal forms).

  88. 88
    ARDELL says:

    RE: Azucar @ 47

    When your friends list the house they need to Reserve the right to sell it to you separate from the contract terms. It’s an addendum to the listing contract noting the exclusion. Pretty simple stuff. Have them call me if they need help with that.

  89. 89
    Dirty_Renter says:

    I hate to say this, but since I am newish to the PNW, there are many things about local real estate I have not yet learned. Therefore, if I found a RE agent I could trust, I would use one. For instance, I see a lot of roofs with a huge layer of moss on them…is that natural…is is okay?

  90. 90

    By ARDELL @ 85:

    Seriously, if there’s a good agent in the room, you KNOW it.

    No you won’t. My often repeated story is of the client who thought her divorce attorney was great and her husband’s an idiot. When I got to see them in court, and talk to her’s on the phone I discovered it was exactly the opposite.

    Also, on the forms topic, I’ve often mentioned buyers who lost out to another buyer on a property they really wanted because their agent didn’t know how to fill out forms.

  91. 91

    By Dirty_Renter @ 89:

    For instance, I see a lot of roofs with a huge layer of moss on them…is that natural…is is okay?

    It’s natural, but not okay. :-D

    I’ll assume you’re talking about a composition roof. What moss can do is get under the shingles and cause them to lose their adhesive contact, causing them to curl and be more susceptible to wind damage. Some are less susceptible to this effect than others, so you won’t necessarily know until the roof is cleaned.

    Treatment to prevent the moss is best.

  92. 92
    ARDELL says:

    RE: Toad37 @ 77

    Sounds like you are talking about a newer mixed use building where the owners never get full control and the Developer retained an ownership interest and income stream. What building is it?

  93. 93
    One Eyed Man says:

    RE: Kary L. Krismer @ 81

    I don’t think that Legalzoom even has a Residential Real Estate Purchase and Sale Agreement, but who the flock cares. Thats a small wad of smegma in the giant clusterflock known as the real estate brokerage industry. I brought up the MLS forms only to point out that the brokerage industry actually has some reasonably good components that could be lost in a wholesale restructuring of the industry. There may be some unforeseen costs to wholesale reforms. But despite that, I still think the industry will eventually be reformed perhaps in part to further clarify duties of brokers but probably to a larger degree because a more efficient market maker than the MLS will reach critical mass and displace the MLS.

    The MLS historically came about as a means for competing brokerages to insure that they could get paid when they cooperated to sell each others listings. That provided increased efficiency in the market by increasing the exposure of properties. Now, much of that increased exposure can probably be accomplished through internet technology at what is most likely a cost below what the buyer currently pays as part of the MLS listing, the obligation to pay the undisclosed an unnegotiated SOC. The commitment of buyers to pay an unnegotiated SOC is a cost of the MLS built in to the market place as part of the purchase price.

    From the standpoint of providing for the efficient use of brokerage services and an efficient market place for negotiating the price of those services, the whole idea of an SOC is an absurdity. Most of the time the buyer doesn’t even know what they’ve implicitly and indirectly agreed to pay their own broker. And even if they realize it, they ignore it as a transaction cost they don’t see and don’t directly control.

    The SOC payment system is an historical anachronism that originally allowed buyers to be brought into the system without making them aware that they were committing to pay a hidden and unnegotiated transaction cost that’s buried in the purchase price and paid as part of the sellers cost. When the transaction lacks transparency to that extent, you can’t have an efficient market for buyer’s brokerage services.

  94. 94
    ARDELL says:

    RE: Kary L. Krismer @ 90

    But as you can see from the “complaints” Kary, people KNOW the agent they hired is not good. They hired them anyway for some unknown reason.

    One of my clients from the Ukraine said it this way. He took his hand and put it up at his forehead and said, “Ardell you are this good” and then he put his hand at his knee and said “Every agent I met before you was this good”.

    It really is as simple as that, Kary. If they don’t get that kind of immediate ah-ha moment…they haven’t found a good one yet.

  95. 95
    toad37 says:

    RE: ARDELL @ 92 – Hi Ardell, It’s Washington Square Towers. I guess the spaces as currently in operation was owned by WSOP and the association has access to those through the easement granted by WSOP to the Towers association.

    Stating that, in the language of the easement, the association has the right to manage and maintain those areas.

  96. 96

    By ARDELL @ 94:

    RE: Kary L. Krismer @ 90 – But as you can see from the “complaints” Kary, people KNOW the agent they hired is not good. They hired them anyway for some unknown reason..

    They may have a reason to not like their agent (or attorney), but they may think and agent (or attorney) is good when they are in fact bad.

    Thinking you have a good agent (or attorney) doesn’t mean you have a good agent (or attorney).

  97. 97

    RE: toad37 @ 95 – Easements are being used more an more, and while I don’t see a problem with that particular easement system, easements in general will be a problem in the future. The problem is most of them don’t terminate and many of them are poorly written.

  98. 98
    toad37 says:

    RE: Kary L. Krismer @ 97 – Thanks Kary. This is new to me, so appreciate the input.

  99. 99

    RE: ChrisM @ 73 – Nicely stated, and my point exactly. Tagging onto some other comments above: No, Kary, I’m not suggesting that YOU fail to honor your minimal legal obligations to represent your client. Please don’t fall into the “Ardell Trap” — my comments are NEVER about one particular agent or another. My comments are about the inconsistencies in the system that undermine the very role the agent is supposed to play, particularly on the buyer’s side. And as ChrisM notes, you can’t trust the system — as illustrated by my post on RCG — to provide competent and loyal representation. There are certainly bad lawyers who don’t honor their obligations, just like there are great agents who go way beyond what is legally required or allowed. But when hiring a lawyer, at least you know that the lawyer HAS a whole set of very stringent duties to the client. There is no such assurance with an agent, and indeed the system in which agents operate undermines the very principles of representation.

  100. 100
    Scotsman says:

    RE: One Eyed Man @ 93

    ” an historical anachronism that originally allowed buyers to be brought into the system without making them aware that they were committing to pay a hidden and unnegotiated transaction cost that’s buried in the purchase price and paid as part of the sellers cost. When the transaction lacks transparency to that extent, you can’t have an efficient market for buyer’s brokerage services. ”

    Trtansparency? No thank you- it would weaken the existing effective monopoly.

  101. 101

    RE: ARDELL @ 94 – Really, Ardell? That’s the answer? Just keep looking until you find one that gives you a good vibe? Talk about naive!! Heck, you’ve proven yourself to be a FANTASTIC salesperson with your last post on RCG. Telling consumers to interview salespeople to find one who gives them a good vibe is setting themselves up for failure.

  102. 102

    RE: Craig Blackmon @ 1 – I think most people got a good vibe from Bernie Madoff. :-D

  103. 103

    RE: Craig Blackmon @ 99 – You’re confusing the system they work in with the person.

    I could make a lot of disparaging comments about the X County Superior Court, but that wouldn’t mean that the attorneys that practice in that court don’t represent their clients well.

  104. 104
    ARDELL says:

    RE: One Eyed Man @ 93

    Since you have a strong background and working knowledge of the system, let me share this with you. The day before Buyer Agency first came into play, here is how we (we at the time was Coldwell Banker Corporate office – not Bain) were planning to revamp the system from the ground up. Going back almost 20 years when Buyer’s acquired “rights”.

    It was envisioned that agents would have to choose their specialty as “Represents Sellers” or “Represents Buyers”. One or the other ALWAYS and not both. As long as agents represent a seller in the morning and a buyer in the afternoon, they just won’t be able to dance without tripping over their own feet.

    We had the plans in hand and ready. We were going to have two separate buildings for each “office” with a locked door “bridge” for some staff members or negotiation meetings. One building for Buyer’s Agents and One building for Seller’s Agents. That way there was no risk of an agent revealing their Buyer Client info and confidences to Seller agents and vice versa.

    A Seller would go into the Seller Office to talk about selling his home, but into the Buyer Office to talk about buying his next home. Two BRANDED hard and fast separate offices specializing in Buyer Representation OR Seller Representation. One or the other. No picking one or the other 4 times each day! as it is now. All Agent Training would be ONLY for the specialty, so seller things would be removed from the agent brain on one side, and buyer things would be removed from the agent brain on the other side.

    No constant “who the hell am I representing during THIS phone call”. No wonder agents are confused! Most cannot “get” if you represent the seller the answer is no, but if you represent the buyer the answer is yes. They just can’t be trained to jump back and forth like that, so only the quickest of brains are “good” vs all agents who specialize in one OR the other.

    As to the mls and its system, we had forms at the ready. The Buyer Agent would “Legally REFUSE” the Sellers “SOC-Co-Op” fee to find the seller a ready, willing and able buyer and at the same time replace it with an “INVOICE” to replace that “procure a buyer for seller” fee with the Buyer Agent Fee of the same amount.

    Simple stuff. We even had new buyer oriented contract offer forms at the ready. All the new forms were on the shelf the day Buyer Agency was enacted. We had attorneys train the agents on the new forms. No more ambiguity. We even had a form that the buyer client signed to ASK FOR representation, and a notice was left in the seller’s home at time of showing declaring “I represent the BUYER not YOU” from the minute we stepped into that Seller’s home.

    No Buyer would be “fooled”. No Seller would be thinking we were “selling their home” vs “representing the buyer of their home:”

    If a Buyer chose not to hire a Buyer Agent, they walked in the Seller Agent Office as a “customer” with NO rights to “representation”, clearly recognizing they chose the “Represents Seller (not YOU) Office and not the one intended for the Buyer’s use. No claims of “oh, I didn’t know.” They would have to sign a form before seeing an agent that said “I understand I am in the Agent for the Seller Office and not in an Office where ANYONE in the building represents me, the Buyer. I didn’t enter here by mistake, and that is my choice.”

    All that money on forms and training and guess what. It lasted ONE FREAKING WEEK!!! We had to throw all the forms in the trash. The buildings never got built. The system went back to “same old, same old”.

    WHY?

    Because all the buyers wanted to go in the seller door…because that’s where the pretty pictures of houses were. LOL! They didn’t want “an agent”. They wanted “a house”. Go figure. LOL!

    We tried…we really did…buyers still call “to see a house” NOT to hire an agent. Sellers call to “hire an agent”. Buyers call to “see a house”.

    Real Estate is THIS simple: Buyers want a house; Sellers want a Buyer. THAT is why buyers get “roped in”. Because that is what they CHOOSE.

  105. 105

    By ARDELL @ 104:

    It was envisioned that agents would have to choose their specialty as “Represents Sellers” or “Represents Buyers”. One or the other ALWAYS and not both. As long as agents represent a seller in the morning and a buyer in the afternoon, they just won’t be able to dance without tripping over their own feet.

    That’s a crazy assumption. You learn things by doing both sides that you wouldn’t learn by only doing one side.

  106. 106
    ARDELL says:

    RE: Craig Blackmon @ 1

    Craig,

    You know I like and respect you…but you really don’t know much about real estate when it comes to buyers and sellers. You don’t meet buyers IN houses!

    When a buyer is IN a house WITH an agent…they KNOW! I’ve been doing this for 21 years and they KNOW. They are not as stupid as you make them out to be.

    If the Agent is saying “here’s the living room, isn’t it pretty? Oh…you can take that old wallpaper down in a jiffy. That stain on the ceiling. Not likely a problem. The owner probably fixed that YEARS ago…you can just paint it in about five minutes”.

    vs.

    “The house is $30,000 over-priced, but lets see if we can find that $30,000 some where. Nope…kitchen needs a remodel…baths are atrocious…roof is 18 years old…” “Ardell, how do you know the roof is 18 years old?” “Cause it sure as hell isn’t NEW and the house is 18 years old. That means it is the original roof.

    People KNOW Craig…and they will never know by “interviewing an agent” in an office! This is not the practice of law in a suit and tie! This is jumping into the crawl space, moving the furniture to figure out where the hell the owner put the freaking heat vents. (that one the owner removed the heater because he was never cold, LOL)

    You want to PUSH “representation” as the be all end all of “real estate:. Bad agents want to push “negaotiation” as the be all end all, because it sounds good and is a good sales tactic.

    Real Estate is about HOUSES…knowing lots and lots and lots of stuff about PROPERTY…and negotiation and contracts and reading body language of the other side of the table and knowing how to get a seller to say yes when he wants to say no and getting a buyer to understand that they are NOT ready to buy because they are buying a house in the wrong freaking WHERE for Crissakes because no one laid out ALL the options for them before they “chose” THAT house, laying out all the pros and cons and BETTER choice options. Being able to SEE the easement or the encroachment and showing it to the buyer AT the property vs some mountain of freaking paper that on page 48 line 6 says “oh…there’s a possible encroachment” and OH, by the way…there’s ABESTOS in that ceiling ove the baby’s crib and over that pot on the stove with your family’s dinner in it, even though the inspector WILL NOT AND DID NOT TELL YOU that because “technically” you can’T “see” asbestos…but trust me…it is THERE! …and don’t let the baby stand at that window, because he’s going to bite on that window sill when he’s teething and it has LEAD in the paint.

    People NEED “good agents” who know property! Because the system does NOT provide for a buyer knowing where the lead paint IS or where the asbestos IS. The system does not talk about the home weakness to the degree needed for a buyer to be buying with “informed consent”.

    People KNOW Craig. They know when they are in a house with an agent. Not on the phone…not in a pretty office being offered a cup of coffee. If you go IN a house with me Craig…you will know the difference. It ain’t rocket science. I have never in 21 years had a client who did not “get it” the minute we stepped into a house. It’s THAT obvious.

  107. 107
    WaterView says:

    Interesting discussion. As a first time home buyer with no experience with the system and a job that limits my free time, I found a real estate agent to be a valuable asset. My partner and I looked at a good number of homes, some we picked out and others that our agent suggested. In the end it was a home our agent found that ended up being the perfect fit for us. In addition I found many aspects of home buying to be stressful and annoying, it was nice to have someone explain why things happened the way they happened. My free time is very valuable to me as I have so little, and I found our agent to be honest and hard working. It was worth the fee to me, and I got a rebate back.

  108. 108

    RE: ARDELL @ 6 – And when people met Bernie Madoff in person, they were always blown away by his intelligence and obvious financial genius. They KNEW he was a good investment.

    People don’t KNOW, and a system based on them KNOWING — whatever the heck that means in all caps — is inherently flawed.

    Thanks for the analogy Kary.

    I’m officially out of this thread — real work beckons.

  109. 109

    By ARDELL @ 106:

    “Ardell, how do you know the roof is 18 years old?” “Cause it sure as hell isn’t NEW and the house is 18 years old. That means it is the original roof.

    My mom has a cheap second home in Mesa where it had a new roof within the first or second year (microburst). And she told me she was replacing it again, but I have no idea why. It’s less than 18 years old.

  110. 110
    ARDELL says:

    Before I have to run off to finish up that house in my post and get it IN the mls…let’s talk about Commissions for a minute.

    Buyers MUST be FREE to find out in the process with a good Buyer’s Agent that they SHOULD NOT BE BUYING A HOUSE AT ALL! The system provides for that option. Sellers MUST be FREE to say NO…I changed my mind. I’m not selling my house after all.

    Craig’s fee is less, because it does not allow for that. You have to pay Craig the same amount whether you buy a house or not. (not sure what his listing model says-he doesn’t talk about that as often.)

    Even lawyers understand the difference between “fee for service must be paid at time of service” and “contingency fee-only get paid if there is a good result”. Even lawyers have HIGHER fees for Contingency Work vs PAID for SERVICE. Work.

    His fee is not less for no good reason. Other “Alternative Model” FSBO in the MLS Company fees are not less. Those low fees ARE appropriate for the service offered and must be paid whether you sell your home or not. They don’t have to care if you sell your home or buy a home…the fee is the same either way.

    That guy up there who wants to buy his friend’s house doesn’t need to hire “on contingency” and can pay less to ANY agent. ALL agents charge less with no contingency. All lawyers charge less with no contingency. All sellers sell their homes for less with no contingency.

    Contingency COSTS MORE…always…in every industry…in every service and sale. Contingency costs more. You don’t have to go FIND a cheaper commission. They are ALL priced or potentially priced with negotiation, for the service you are getting. That’s Life in the Big City. Dem’s da facts. No one is cheaper without a good reason.

    I am Cheaper on Tuesday than Thursday…because Tuesday’s client needs a $2,000 service and Thursday’s client needs a $20,000 service.

    You can’t pay for a filling if you need a root canal…if you do you are throwing your money in the trash…because they are going to REMOVE that filling to eventually give you the root canal. If you agree to pay someone whether you buy a house or not…you may later have to pay a different person to actually DO what you want to do later. If you pay someone $1,000 bucks to put your house in the mls…and later hire an agent to actually sell it…you still have to pay the first guy for no successful result. AND the agent, both! Talk about “getting roped in” and “disclosure”.

    “You get what you pay for” does NOT mean that high priced agent is “worth it”. It does mean if you are getting 70% OFF…the business model strips something out to offer that price. Every Agent can strip out the same stuff and give you the lower price. You are NOT getting the same service for the low price. The only reason they call it “FULL service for LESS…is because they don’t know what FULL SERVICE means.

    EVERY agent has the ability to give you less than full service for less, and we know what we are stripping out, because the guy behind you is buying the whole package.

    ANY service that does NOT offer the Full Package AND the Lesser Package…does not, can not, understand what that “full” package is. It is not in their Inventory of Products.

    You want to hand me FOUR GRAND whether you buy a house or not? Most people do not want to do that. They want a “contingency” fee that is higher so they have the option open to NOT buy a house at all. That is what buyer’s CHOOSE.

    The system represents what buyers and sellers WANT…not by what they “say they want” but what they CHOOSE in their actions. Sellers want agents to show their homes to buyers…so THEY want “an mls system” that brings tons of agents with buyers to their homes. Buyers want to NOT pay someone if they DON’T buy a house. They pay a “contingency rate”.

    It’s a free market system and we HAVE offered Buyers and Sellers different options over the last ONE HUNDRED YEARS. They CHOOSE what we have…and that is why we have it.

  111. 111

    By ARDELL @ 110:

    Sellers MUST be FREE to say NO…I changed my mind. I’m not selling my house after all..

    IMHO they can, up to the time they receive a non-contingent full price offer or get into contract.

    I’m not sure of the legalities of a seller pulling out of an active listing prior to expiration (assuming no non-contingent full price offer or being in contract), in part because I can’t imagine forcing a client to continue to list through me if they no longer like my services or simply change their mind on selling for some reason. I think most agents feel the same way.

  112. 112

    By toad37 @ 98:

    RE: Kary L. Krismer @ 97 – Thanks Kary. This is new to me, so appreciate the input.

    I missed this response earlier. You’re welcome.

    Just to be clear though, I don’t see any reason why an easement system could work just as well as ownership if properly drafted. Their might even be some minor advantages. I would assume the tax to the HOA would be less, and depending on how the easement is drafted, the maintenance issues might be less. The biggest disadvantage I can see initially would be simply a poorly drafted easement which might somehow lead to unintended consequences in certain future situations. As Ardell noted, there’s probably retail space in most such buildings that the developer doesn’t give up. I’m pretty sure that’s the case at the one you mention. I’m a bit surprised about the gym and meeting areas though. Not sure what the reasoning there would be.

  113. 113
    toad37 says:

    RE: Kary L. Krismer @ 112 – Thanks Kary. Yes, it does seem odd about the gym and lobby, etc… appreciate your thoughts on it.

  114. 114
    ARDELL says:

    Another point for Buyers vs Sellers. One reason agents don’t “get” REPRESENT a buyer is because they don’t want to. Here’s ONE of the reasons why.

    When I represent a buyer I will NOT take on another client who wants the same thing in the same place at the same price.

    In this market I am darned lucky if we can find ONE decent house at a good price and it OFTEN takes 3 months to a year to do that. How could I possibly have 2 or 3 or 4 “buyers” in the cue for whom that house would be “best”.

    Most agents do not limit the clients they will “take” based on objective of the Buyer Clients.

    Most agents will “show” the same house to 5 (excuse me while I laugh) Buyer “Clients” and hope one of them will buy it. That is NOT “representing” a buyer.

    If I take on a Buyer Client who wants a house for $450,000 to $500,000 near Microsoft, that spot is CLOSED.

    I can take another Buyer Client who wants to buy a home for under $400,000 in the same area or over $600,000 in the same area (have to watch for conflict of any overlay if a client changes their price parameter). I can take on another client who wants to live in Queen Anne or Green Lake at any price, if my other clients are all Eastside Clients.

    I only take 8 people in the cue at once as the upper limit, that includes BOTH buyers AND sellers. So if one “project” takes a year (more true for buyers than sellers for me) then that SPOT is CLOSED for a YEAR.

    I will not take on 2 Sellers who need to sell their home in the same 10 day period. Most sellers wait for me to be able to take them, if needed. I can not FOCUS on getting two homes ready for and on market (usually a 10 day process) at the same time without them both being disadvantaged in some way. Getting a home ready for market and doing that well and best takes an EXCLUSIVE 10 day period (plus two Sundays in a row).

    Once that home is “set” I can list another. I can have 2 to 4 listings and 2 to 4 buyers in the cue as long as:

    1) No seller in the same 10 day period going on market
    2) No buyers who want the same thing in the same place at the same time.

    I cannot have 8 buyer clients in the cue, even though the cue holds 8 “people”. I could have 8 sellers in the cue and no buyers…but never 8 buyers and no sellers.

    The max Buyer cue is 4. Sometimes more if I have a couple of flat fee “do it yourself” buyers with no fee for “assistance with product selection”, kind of like Redfin or Craig’s service. With no responsibility for product selection, I can take on more of those…just like Craig and Redfin.

    But most buyer’s do not hire me to that purpose. They WANT me to tell them when they are making a bad choice as to product given the overall considerations and not merely the particulars of that house. I OFTEN tell people they are looking in “the wrong where for them” and why, and they change to looking for homes someplace else and sometimes a different type of property altogether.

    Most of my clients do not know anyone who can help them with “property things”. They are from other Countries (Usually Europe – Romanian, Russian, Ukraine or India – Turkey, Pakistan) and have NO family members who have ever owned property in the U.S. They usually have only been living in this Country for 5 years or less. That describes about 80% of my Buyer vs Seller Clients. Those are the people that need a “Full Service Buyer’s Agent” that they trust A LOT!

    Sellers – different and no distinction as to where they are from originally or how long they have lived in the U.S. Sellers all need the same thing pretty much. Buyers, not so.

    What should you ask a Buyer’s Agent before hiring them to help you find the one and only best house priced between $450,000 and $500,000 within 2 miles of Microsoft, even if that takes a year?

    Ask if they would take on another buyer client in a year’s time who also wants “that”.

    What should you ask a Buyer’s Agent who you do not want to tell you what or where to buy?

    Ask how low will they go as to price? Ask what are the Rules of the mls of the 196 mls rules that THEY need to not break to get their “rebate”?

    I have had people hire me for $3,000 to negotiate a contract on a $1.1 million dollar property in Clyde Hill.

    I have had people hire me for $2,700 to do BOTH sides (.5% each) to help them buy and sell a property between two people who already knew one another. They needed an immense amount of help with the buyer’s loan due to particulars of that property. Otherwise…not much assistance, but it took about 4 months because of the loan issues.

    I have had people pay me $20,000 to make sure they were buying in the right where (they were not looking in the right where for them, but didn’t know that when I met them) and to negotiate $400,000 off the price when we found the right house in the right where. $20,000 is my CAP rate, so that was my max commission.

    Usually when someone is buying for $350,000 Full Service, that is my fee. Roughly $10,000 flat…or whatever the seller happens to be paying.

    I’ve done a lot of different experiments and flat fees work best, even when that fee is close to the % the seller is “offering”, as it removes all conflict of commission based on home price. It’s better to set a $10,000 Full Service fee for a $400,000 to $450,000 buyer than a % so my fee is not based on price.

    I love the $20,000 cap, as anyone buying for over $665,000 or so has one set fee. Then I am free to say “this $1.1M is better than that $1.8M house, with no danger of internal conflict. I AM “human”. I am ethical…but I am human. I have to erase a HUGE potential variance in commission to be able to know, beyond a reasonable doubt, that I am not pushing toward a higher priced home because I make 20% to 100% more by doing so.

    Having really good “Cue SPOTS” that remove all conflict and give every client exactly what they are paying for is the only way to do this business well.

    I am the only one I know who is willing to turn people away because I already have someone in that “cue SPOT”. That doesn’t mean I am the only one who does it. But most agents I know…and I have met MANY given I am pretty much a “national figure”, will show the same house to as many buyer “clients” as it takes…to make “a sale”.

    “The Industry” will warn you about the conflict of “Dual Agency” because they want two agents hired and paid for every house. The Industry makes more money that way. BUT the reality is…for a buyer of a home…the bigger conflict is another buyer who also wants THAT house.

  115. 115
    ARDELL says:

    RE: Kary L. Krismer @ 109

    Kary…I have a mother who will NEVER put a new roof on and will die in that house with the same roof on it.

    What’s your point?

    Go play “I once knew a man in France who was bald” with someone else. Go play with Craig. I’m too busy for your nonsense.

  116. 116

    By ARDELL @ 115:

    RE: Kary L. Krismer @ 109

    Kary…I have a mother who will NEVER put a new roof on and will die in that house with the same roof on it.

    What’s your point?.

    The point was that you can’t tell how old a roof is from the age of the house, which is what you claimed. The point should have been obvious.

    What I find funny about this is several years ago you claimed it was impossible to determine the condition of a roof by looking at it. I guess that’s still the case since you think you can only tell by looking at the construction date of the house! ;-)

    What’s not funny is your stupid insults.

  117. 117

    By Kary L. Krismer @ 9:

    By ARDELL @ 106:

    “Ardell, how do you know the roof is 18 years old?” “Cause it sure as hell isn’t NEW and the house is 18 years old. That means it is the original roof.

    My mom has a cheap second home in Mesa where it had a new roof within the first or second year (microburst). And she told me she was replacing it again, but I have no idea why. It’s less than 18 years old.

    Ardell, seriously, you couldn’t understand the point of this? No wonder you can’t understand the terms of many of the NWMLS forms.

  118. 118
    ARDELL says:

    RE: Kary L. Krismer @ 116

    Kary…you may think you remember what I said 5 years ago…but the truth is every roof is different, and you know it. A tile roof is different than a wood shake and a wood shake is different that a composition roof and a composition roof is different with insufficient pitch than one with sufficient pitch.

    Go read what I said again, Kary. I was in A house with A person and THAT house had an 18 year old roof. That does not mean ALL 18 year old houses have an 18 year old roof.

    If the house is 55 years old you can’t tell as much about the roof as you can for an 18 year old house. The inspector and I put our heads together and figure it out. BUT 95% of the time I figure out the roof BEFORE I write the offer…because I need to estimate the likely inspection result $$$ cumulatively before I can write a “good” offer that serves my buyer client’s needs. Each client is different in that regard, depending on their cash position after closing.

    Every time you are losing an argument you go look for something I might haves said 5 years ago that you didn’t understand then, and you don’t understand now. It’s like a pissed off husband who says “Yeah, but remember that time you didn’t help me rake the leaves back in 1993!?”

    We are not married, Kary. Go pester your wife.

  119. 119
    ARDELL says:

    Kary

    I hear they are doing a remake of The Bickersons for TV.

    http://en.wikipedia.org/wiki/The_Bickersons

    You may want to audition for the role. :)

  120. 120

    RE: ARDELL @ 118 – Ardell, you simply have a lot of situations where you are wrong. I can’t help it if I have a good memory.

    Kary L. Krismer
    May 24, 2008 at 11:18 am

    Ardell, we’ll just have to disagree. But it’s not a dispute over contractual language, it’s an ethical dispute.

    I agree they can ask for patent items as a matter of contract law. I’m saying it’s not ethical for a buyer to request a 20 year roof be replaced if it was obvious the roof was not in good shape and that should have been accounted for in their original offer price.

    To put this in a different context, it would be like buying a car subject to a mechanic’s inspection, and then coming back and saying you want $2,000 to get it repainted. That’s not typically going to fly.
    Reply
    #318344,

    ARDELL
    May 24, 2008 at 11:21 am

    You are wrong, wrong and double wrong Kary. I say this for your own good and for the good of agents reading this exchange.

    Trust me…we ALL “used to” feel that way, but it is totally inappropriate for a buyer agent to lean that way. It is my soapbox that agents lean that way, and not a personal attack.

    Buyer Agency should be BETTER than that. It needs to GET better than that. Any agent who isn’t on the buyer’s side of the fence and has a foot in the seller’s side needs to hand over their clients to Marc and Craig.

    NO BUYER SHOULD HAVE TO SUCK UP A BAD ROOF CAUSE IT WAS BAD WHEN THEY GOT THERE

    Had to shout that one.

    http://raincityguide.com/2008/05/23/what-are-negotiating-rights-after-inspection-of-house/

  121. 121
    GreenAcres says:

    FYI for ARDELL @114- I think you mean queue, not cue.

    Definition of QUEUE:
    2 : a waiting line especially of persons or vehicles

    Definition of CUE:
    1 a: a signal (as a word, phrase, or bit of stage business) to a performer to begin a specific speech or action b: something serving a comparable purpose : hint
    2 : a feature indicating the nature of something perceived
    3 archaic: the part one has to perform in or as if in a play

  122. 122

    RE: Kary L. Krismer @ 20 – Ardell more recently:

    The Roof is often the “deal breaker” in many home inspection negotiations, because it has a known life expectancy and is one of the most expensive “fixes” that might be needed at time of sale.

    Notice I did not say “one of the most expensive fixes that might be needed”
    AS A RESULT OF THE HOME INSPECTION.

    A “good” offer anticipates outcome. RARELY is the fact that the home needs a new roof something that can’t be anticipated at time of offer. Whether or not you allow for a new roof to be part of the asking price, depends on a few things.

    http://raincityguide.com/2011/06/15/why-are-so-many-pending-sales-failing/

  123. 123

    RE: RokiTBoy @ 54 – wow…thanks, RokiTBoy. Pardon me if I somehow upset you by suggesting home buyers obtain a copy of the loan docs prior to signing or that if people don’t understand the terms of their mortgage, there’s an issue they need to get resolved prior to becoming a home owner. Nowhere do I see in that post you referenced that I’m defending real estate agents. Subprime mortgages were a very small portion of the business that I originated in that era…I lost a lot of real estate agent business because I would refuse to do loans that did not make sense.

  124. 124

    By ARDELL @ 19:

    Kary

    I hear they are doing a remake of The Bickersons for TV.

    http://en.wikipedia.org/wiki/The_Bickersons

    You may want to audition for the role. :)

    Once again when Ardell is losing an argument, she turns to insults.

  125. 125
    Scotsman says:

    RE: Kary L. Krismer @ 124

    And I thought this thread would bring you two even closer. I guess there won’t be boot-scoot’n tonight.

  126. 126
    ray pepper says:

    The weather is too nice to read all this stuff between Kary and Ardell today. What I really like is when David Losh gets in the mix. Then and only then do I get the popcorn out.

    What I did find *(and I agree 100%) is this: “You have to pay Craig the same amount whether you buy a house or not. (not sure what his listing model says-he doesn’t talk about that as often).”

    I could never use ANYONE with up front fees, time limits, running tickers, and a certain time to buy or pay in full. Also the selling fees he charges are INSANE!

    Until this gets fixed Craig and Marc will remain a dog and pony show like all the others but still a step above the conventional brick and mortar!

  127. 127
    David Losh says:

    Well, that was interesting.

    Let’s pretend that the consumer looks to this thread as some form of information about Real Estate matters, the business, or a transaction.

    It shows a bunch of agents sniping at each other, claiming “I’m the best.” “Hire me.” Then Rhonda slips in with another snide comment to go along with the swipes she took at Ardell.

    Ardell, please, you have got to be kidding. Talking more is different than sales, or sales technique, but you are claiming it works for you.

    The divisiveness is the problem. Real Estate agents are their own worst enemy. There are systems in place that address all of your concerns, but every body has a different idea about how to “do it” better.

    Then get involved in building up the industry rather than tearing it down as your business model.

  128. 128

    RE: David Losh @ 127 – David, sorry – I don’t know where you’re coming from with your comment to me. I don’t have a clue where you think I’m swiping at Ardell in my comment?

    If you click the link to see what I’m responding to, maybe it will make more sense to you. RokiTBoy was attacking me out of the blue.

    I’m with Ray, it’s sunny out “for the moment”… time to detach from the computer and get outside.

  129. 129
    ARDELL says:

    RE: Kary L. Krismer @ 124

    Insults? I LOVE Don Amici! That was a compliment!

  130. 130
    ARDELL says:

    RE: Kary L. Krismer @ 22

    Yes Kary, that is exactly what I was talking about today. Sorry if you don’t “get it”.

    Yes, I MUST anticipate total cost on the high end of repairs when I write an offer, before the home inspector comes, to write a successful offer for my clients.

    Yes I can anticipate the cost of the roof and whether or not it likely needs one.

    I can’t do that without SEEING THE ROOF.

    Your point? I am not contradicting myself…you just don’t get it. I can’t tell if Scotsman needs a roof until I am AT Scotsman’s house looking at his Freaking Roof!

    You are such a tool.

  131. 131

    By David Losh @ 127:

    The divisiveness is the problem. Real Estate agents are their own worst enemy. There are systems in place that address all of your concerns, but every body has a different idea about how to “do it” better.

    I don’t think I’ve said any other system different than my own is bad. I’ve complemented Craig on his system and noted that I mention rebate brokers to unrepresented buyers, and I’ve said that choice is good. What isn’t good is agents with bad ideas or spewing bad information.

    I have said DIY forms are a bad idea, but it did occur to me while I was out that I think consumers can buy the state wide forms.

    http://www.nwmls.com/discover/xpress.cfm?SectionGroupsID=103

    They wouldn’t know which forms to select, or how to fill them out, but they can get them.

  132. 132

    By ARDELL @ 55:

    When I list a house I make it clear to the seller that if the Buyer doesn’t have an agent, the seller does NOT get the money we reserved FOR that Buyer’s Agent, nor do I. I don’t think anyone should be enriched by the fact that a buyer was shortchanged as to equal and separate representation in the home buying process. As a matter of ethics, I won’t take it. If the buyer and seller request that I be a Dual Agent for some reason, it has happened, then I work it out. But that is not the norm.

    David mentioned consumers, so I thought I would point out to consumers here that this type of system is really nothing more than a selling point some agents (non-Realtors) use to try to convince people to list with them.

    The chance of an unrepresented buyer making an offer on an agent’s listing is very slight, but it sounds really good to the naive seller taken in by such a selling point. Some clock hour teachers teach this to agents as a way to get more listings. It’s part of the class where they also teach agents respond to requests to cut a commission by saying: “Do you really want an agent to negotiate for you who is willing to negotiate away part of their own commission?” The time I saw it mentioned I think everyone in the room was a Realtor, so following the advice would have subjected them to sanctions for ethical violations. Oops.

    Also, if the buyer is unrepresented, dual agency would not typically come into play because the buyer would be unrepresented. You could create a dual agency, but I don’t know why a seller would ever consent to that where it didn’t exist prior to the buyer having viewed the property. Does the seller think so little of their listing agent that they do not want to be advised as to how to negotiate the offer or with inspection requests the buyer might make? Nor can I understand why an agent would suggest such a thing unless the buyer made it a condition of the transaction and refused to be unrepresented. If that were the case perhaps the agent and seller might want to give in if they think that’s the only way the property will sell. Otherwise, dual agency is simply a bad idea, but fortunately dual agency seldom occurs in Washington. Where an unrepresented buyer makes an offer, they typically remain an unrepresented buyer and the listing agent remains only the seller’s agent.

  133. 133
    Pegasus says:

    I see the real estate “professionals” and I use that term lightly are hard at work cat fighting as I predicted. The headline is right out of the Redfin playbook to slap away at full service firms. How about a headline that reads: “Tim: Pleasant guy or wife beater?”. Maybe the consumers will show up on that one….

  134. 134
    ARDELL says:

    RE: Kary L. Krismer @ 132

    Kary…again…wrong…sellers do not want the buyer to get that money. I do NOT use that to “get” listings. The sellers want to KEEP that money…not give it to the buyer! Seriously. You’re just being ornery now…or obtuse.

    Kary said: “The chance of an unrepresented buyer making an offer on an agent’s listing is very slight…”

    Maybe where you work…not where I work. Where do you work again?

  135. 135
    ARDELL says:

    RE: GreenAcres @ 21

    Thanks Green Acres. I’m getting a little deja vu. Didn’t we have this conversation before? I’ll try to remember next time. I say queue more than I write it. :)

    Once in a while I need to disclose that one of my clients has priority status. That happened once with a woman pregnant with twins. My other clients agreed that she should. She made it into her new house before they were born. Normally there is no need to give someone unequal priority status. When there is, my clients are good people and always agree with me that it is the right thing to do. The others aren’t short changed…but I feel the disclosure is needed once in a blue moon.

  136. 136
    ARDELL says:

    RE: Kary L. Krismer @ 32

    Sorry…catching up on comments at the end of the day.

    Kary said: “Also, if the buyer is unrepresented, dual agency would not typically come into play because the buyer would be unrepresented.”

    Again…you are a tool. An “unrepresented” buyer is NOT better than Dual Agency to a Buyer! Why don’t you just throw them under a bus until it’s time for them to close and pay you. Really. You can say UNREPRESENTED Buyer is Better than PARTIALLY REPRESENTED Buyer with a straight face?

  137. 137
    Scotsman says:

    Well let’s see, with 137 posts 40 or about 30% of them are by Kary and another 37 or 26% are by a mixed bag of realtors, or those with related interests. All advocating for their model and their ideas. Very few were advocating for the one person who brings the money to the table- the buyer. That’s telling.

    Shouldn’t y’all be out moving property?

    “Mixed bag of realtors” Heh- sounds like something found at . . . (?) ;-)

  138. 138
    LocalYokel says:

    By Scotsman @ 137:

    Well let’s see, with 137 posts 40 or about 30% of them are by Kary and another 37 or 26% are by a mixed bag of realtors, or those with related interests. All advocating for their model and their ideas. Very few were advocating for the one person who brings the money to the table- the buyer. That’s telling.

    Shouldn’t y’all be out moving property?

    “Mixed bag of realtors” Heh- sounds like something found at . . . (?) ;-)

    A mixed bag of nuts is still a bag full of nuts. .

  139. 139
    ray pepper says:

    RE: Scotsman @ 137

    How much MORE advocating do you want for the buyers? We already give them back 75% of THEIR money!

  140. 140
    ray pepper says:

    RE: Scotsman @ 137

    Scots..reread post # 46..All your answers are there provided by a gifted soul…

  141. 141
    Hugh Dominic says:

    On topic. It took me 6 years, two college degrees, with about 9,000 hours of study to become qualified to enter the workforce as a junior engineer. About 300 of those hours was just being tested to ensure that I understood the discipline.

    Last I checked, you need about 80 hours of study and one two-hour test to become qualified to be an RE agent. You can actually do the coursework online in like 30 hours. You can be an agent in, like, a week.

    If you wonder why you have to wade through so many bad agents to find a good one, look no further than the numbers above.

    Incidentally, a lot of you guys who are trying to figure out how to evade paying the buyers commission should just take the test and keep the commission yourself. I think the course and fees are probably only like 500 bucks.

  142. 142
    blade says:

    By David Losh @ 127:

    Well, that was interesting.

    Let’s pretend that the consumer looks to this thread as some form of information about Real Estate matters, the business, or a transaction.

    It shows a bunch of agents sniping at each other, claiming “I’m the best.” “Hire me.” Then Rhonda slips in with another snide comment to go along with the swipes she took at Ardell.

    Yup. Pretty much.
    I’m moving to SEA, intend to buy, and love reading this blog. This was my 1st time wading into the comments, and I doubt I’ll ever read the comments section again.

    I’m looking for new construction. So why do I need an agent, when I can use that 6% leverage against the builder?

  143. 143
    iShortedYourHouse says:

    Procurement clause is complete BS, way to screw the consumer. This is just another reason that the traditional model is dying and companies like Redfin and WaLaw are finding clients.

    I am of the opinion that many realtors offer terrible ‘professional opinions’ which are of little to no value. Many have tasted their own kool-aid and are now underwater, not to mention the clients they ‘helped’. Personally, I would not take the real estate advice of anyone that has, themselves, received a notice of trustee’s sale;)

  144. 144
    DHG says:

    RE: Hugh Dominic @ 141
    as a prospective buyer I find this the most telling comment. There may be very qualified RE Agents that know their business but as a consumer how am I to know? When I was first looking at buying in 2006, I got more information online than I did from the realtors I looked at houses with. I find Ardell’s comments borderline desperate and show a lot of fear that someone may look behind the curtain.

  145. 145
    Lord Koos says:

    It’s a no-brainer… a lawyer works for you, and gets paid the same whether or not there is a sale of a particular home. An agent works for a commission for himself. There are usually very basic conflicts of interest with real estate agents that do not exist when you hire your own attorney..

  146. 146
    jeff says:

    You would never hire an accountant to do your taxes where the fee was a fixed fraction of your taxes. And you would never hire a lawyer if you are sued where their fee is a fixed fraction of how much you are forced to pay. In each of these cases your representative would have an obvious financial incentive to do the job poorly. Yet buyers’ agents typically have a financial incentive to see their clients overpay. Is there any other situation you can hire a representative quite like you do with a buyer’s agent, where their financial incentives are opposite of yours?

  147. 147
    RokiTBoy says:

    RE: Rhonda Porter @ 28
    I’m sure there are some honest ethical people out there that will forgo getting paid because it’s the right thing to do. I suppose you could be one of those people who never wrote a liars loan or pushed a certain loan because it paid the most. I doubt it though.

    It was out of the blue… yet still relevant to this thread. I vaguely remembered the thread about “Home Owners Walking Away from Mortgages” and I vaguely remembered you suggested that if people didn’t understand the loans being presented to them (sold to them – by sales people), they have plenty of time to hire a lawyer to review them. “if someone is not able to “understand” the terms of their mortgage, perhaps they shouldn’t have one or that type of mortgage (ex. adjustable rate mortgage). A person has the right (and plenty of time) to have an attorney assist them with reviewing all documents”. This always rang as a sour note with me.

    Maybe I keep misunderstanding the responsibilities of the people who are making bizank by printing out some paper and asking me to sign. Are they experts, who provide expert advice, to help people make sound decisions? Or are they salespeople with no obligation other than to follow the law (which clearly had and has massive holes) and serve themselves by pushing whatever it is that pays them the most? The answer is clear to me.

    This whole system doesn’t make sense to me. Who are all these middle men that earn a huge chunk of cash and what are they doing to earn it? It just seems that automation is handling 50% of the work, I’m handling another 45% by myself, that leaves 5% for checks and balances, document review and signatures. All I need is some expert advice to make sure I’m not getting screwed and that shouldn’t cost me 10-20k.

    I want to pay a software program $500, feed in some data, and I want it to tell me what three great strategies I should consider given my situation, while also presenting me with sliders and selectors to tweak and analyze things. Doh… I have that right here… for free. Now I just need to figure out how to get past all the middle men without getting fleeced.

    Sorry for taking a swipe at you Rhonda. I bottle it up and let it out every 8 weeks, you just happened to be nearby when 8 weeks came. Maybe I’ll call you and you can give me advice on a loan. Anyone willing to thrown down on a blog thread better be legit, else everyone is going to hear about it.

    Peace!

    -m

  148. 148
    jrc says:

    Skimming through this mess, leads me and most likely others looking for agents to go with Ray or WaLaw or Redfin!

    What a bunch of wankers.

  149. 149
    One Eyed Man says:

    RE: ARDELL @ 104 –

    The split of CB into Buyer and Seller sides was probably caused by the Edina Realty case in the early 1990’s. It was a class action in Minnesota that was settled for something like 30 million. CB corporate and/or their professional liability carrier were probably at risk for failure to disclose and get permission for the inherent breach of fiduciary duty (under common law agency principles) when a brokerage (not just an individual agent) has both sides of the deal.

    The revision to the Washington brokerage license law fixed the agency law problem for brokerages by clarifying that brokers didn’t have common law agency fiduciary duties etc and giving them a safe harbor if they disclosed their agency relationship in writing and got written consent for dual agency. It was essentially a get out of jail free card for the brokerage industry provided they make the required agency disclosures.

    The changes to the brokers license law in the early 1990’s fixed the legal problem for the brokerage industry by eliminating the legal fiction of the “subagency” model which viewed the selling broker as a subagent of the listing broker. But it didn’t eliminate the SOC business/economic model of the MLS that paid all commissions through the sellers side.

    The increased volume and price of real estate deals in the Bubble years was a windfall to the brokerage industry. Normally a market place would deal with those price issues thru the negotiation of pricing, but the SOC model forced the price negotiation and competition for buyer side commissions to be done thru cumbersome and confusing rebates which are inefficient. The collapse of the bubble has taken some of the arguably excessive profit out of the brokerage industry thus eliminating some of the problem, but the theoretical issues with the SOC model being inefficient still exists.

  150. 150

    By ARDELL @ 134:

    Kary said: “The chance of an unrepresented buyer making an offer on an agentâ��s listing is very slight…”

    Maybe where you work…not where I work. Where do you work again?

    Ardell, you do realize I have access to tools that let me know those things, right? Maybe those you are trying to lure in with your sales pitches don’t, but I do.

    How about you disclose to people how many times in the past two years you’ve had a listing sell that you were the only agent involved with the sale?

  151. 151

    By ARDELL @ 36:

    RE: Kary L. Krismer @ 32

    Sorry…catching up on comments at the end of the day.

    Kary said: “Also, if the buyer is unrepresented, dual agency would not typically come into play because the buyer would be unrepresented.”

    Again…you are a tool. An “unrepresented” buyer is NOT better than Dual Agency to a Buyer! Why don’t you just throw them under a bus until it’s time for them to close and pay you. Really. You can say UNREPRESENTED Buyer is Better than PARTIALLY REPRESENTED Buyer with a straight face?

    You apparently cannot read. Where did I say it was better? I said it doesn’t occur normally under Washington law. I have said neither dual agency or an unrepresented buyer is a situation I would normally want to be in, which is why I try to get them to go to other agents.

    I know legal matters are not your strong suit, since you don’t tend to understand legal matters at all, and typically get them 100% backwards. But when you have an unrepresented buyer want to make an offer on one of your listings, you don’t suddenly end up in a dual agency situation. Maybe you should go back and take a refresher course on agency law, or the Core Curriculum course.

    But to turn the question around, why would you through your existing listing client under the bus to create a dual agency situation?

  152. 152

    RE: RokiTBoy @ 46 – On the whole reviewing the mortgage documents before signing them thing, I will note that most buyers don’t do that very well. But does it really matter when it comes to the issue discussed–foreclosure? They knew the total amount they owed. And they knew the monthly payment. Typically they are not being foreclosed out for some random term hidden in the deed of trust.

    Now there might be exceptions, such as pick-a-payment loans, where they might not have realized what would happen to their loan amount or loan payments. You might even put variable rate loans into that mix, although I really think they should have known that, especially in this interest rate environment. But overall not reviewing loan documents wasn’t part of the problem.

  153. 153
    David Losh says:

    RE: Hugh Dominic @ 141

    The problem with equating education to Real Estate is that the classes never end. It’s an experience based business. As much as you learn about basics of real Estate, the laws, codes, consumer trends, and economy changes.

    Companies like redfin, or WA Law are trying to introduce technology, or legal expertise into the business model. In the next couple of years it will be more clear that the dollars, and sense, of the business are in “making deals.”

    I understand that sounds bad. Real Estate is a lot about negotiation, it’s a give, and take. We have a lot to unwind.

  154. 154
    David Losh says:

    RE: blade @ 42

    Builders make their own deals with agents who represent them. New construction is a mine field. Even the best builders can turn out a bad product from time to time.

    I was asked to look at a house in a development that really wasn’t rocket science to figure out what went wrong. The sub contractor got behind, and hired a group of people inexperienced in framing. The house passed inspection by a fluke. The first couple of times I looked at it was for nail pops, and cracking in the sheet rock. It was a set of houses that had problems. We were waiting a couple of weeks to see what all needed to be done. While I was preparing a bid for repair a pipe broke, or whatever, and the house flooded.

    A crew came in to rip out the sheet rock and you could see, things were not right. I was asked, and it was my opinion that the plastic piping was nicked by a nail, and over the course of some months it burst. There again it may have been the dry waller initiating repairs that set it off.

    It’s a good builder, wrong sub contractor.

    So you would want an agent like Jennifer Reyer who knows construction, knows the builders, knows what to ask, and knows how to respond to the builders addendums. Otherwise only the builder has representation.

    The other thing that always gets me about these claims of “I don’t need an agent for new construction” is the commission is already built into the pricing of the property. It’s not going away. For what you get in a rebate there may be a lot that needs to be represented in the one year Washington State warranty of defects.

    I would get the best agent from the biggest, deepest pocket Brokerage in your area.

    I just wanted to show I can be as long winded as anybody else.

  155. 155

    By One Eyed Man @ 149:

    The revision to the Washington brokerage license law fixed the agency law problem for brokerages by clarifying that brokers didn’t have common law agency fiduciary duties etc

    There’s a recent appellate court decision, which I believe is up on appeal to the WA Supreme Court, that says the law didn’t eliminate common law fiduciary duties. Everyone thought it did, but this case held it didn’t.

  156. 156

    RE: RokiTBoy @ 146 – Thanks for the reply! Before I was in lending, I was in the escrow/title biz and there were very few LOs whom I had any respect for…especially back then before LOs were regulated. I’ve written posts on my blog about how I hated stated income loans and options ARMs…I never originated one option ARM…and it was the bank wholesale reps who would earn extra bank for pushing certain products like the option ARM. I think in my 11 years, I originated 3 stated where the borrower did actually make the income stated, they were self-employed and wanted to go that route due to documentation purposes.

    My comments from the previous post you referenced comes from all the calls and emails I receive from borrowers/home owners (who were NOT my clients) contacting me saying, “I didn’t know”… on fella who was stuck in a contract for a condo in Seattle called me in a panic because he knew he over-stated his income to buy the condo, when everything started to fall apart, he wanted out and knew he was going to lose his earnest money because he worked with the condo/builders lender who was ultimately not on his side… I felt bad for him…when I asked him why he overstated his income and was doing that type of loan, he said he just really wanted the condo.

    The process for obtaining a mortgage is pretty screwed up…we have had a lot of legislation go into effect these past few years however I don’t see how it makes anything much better for the consumer. SAFE Act was a start with licensing (some) LOs – LOs who do not want to meet the standards of being Licensed can go work for a big bank or credit union and be “registered”.

    The Fed recently implemented rules about how LOs can be compensated – essentially divorcing our pay from the interest rate… I like this a lot however the rule is far from perfect (I am forbidden to chip in any of my compensation to help a borrower – my pay is completely off the table). This makes it more difficult for LOs to “screw” a consumer (if not impossible) as far as rate is concerned.

    LOs are paid to originate (sale) as much as I hate to say it… some of us feel strongly that we provide a service and help educate consumers so they can make the best choice about their financing.

    I’m hoping that with the SAFE Act, consumers will be able to do more research about their mortgage originator to make an informed decision about who they’re working with….at least those who are licensed.

  157. 157
    David Losh says:

    RE: jrc @ 48

    Ray, WA Law, and redfin are the mess as much as any one else. It’s all the same big hand motions, and “Hire me” mess.

  158. 158

    By Hugh Dominic @ 41:

    On topic. It took me 6 years, two college degrees, with about 9,000 hours of study to become qualified to enter the workforce as a junior engineer. About 300 of those hours was just being tested to ensure that I understood the discipline.

    Last I checked, you need about 80 hours of study and one two-hour test to become qualified to be an RE agent. You can actually do the coursework online in like 30 hours. You can be an agent in, like, a week.

    If you wonder why you have to wade through so many bad agents to find a good one, look no further than the numbers above.

    Incidentally, a lot of you guys who are trying to figure out how to evade paying the buyers commission should just take the test and keep the commission yourself. I think the course and fees are probably only like 500 bucks.

    Being an attorney I could have avoided the courses altogether, but I didn’t. I wanted to know what agents were taught. The problem is, most of it doesn’t sink in right away for a lot of them, and for some it never does. Beyond that though, it really is just a starting point. This is an industry where you’re constantly coming across something new.

    As to your last point, about becoming licensed yourself, you’d still need to find a designated broker to hang your license with, and most have wised up to the idea of getting your own license to buy a property. It just leaves them with too much work (increased supervision is part of the new licensing law) and liability, so any deals on commission typically don’t exist for new agents.

  159. 159

    By iShortedYourHouse @ 43:

    Personally, I would not take the real estate advice of anyone that has, themselves, received a notice of trustee’s sale;)

    Are you a long term lurker being subtle or just did you just stumble onto that? ;-)

  160. 160
    One Eyed Man says:

    RE: Kary L. Krismer @ 155

    I didn’t know that, but I find it hard to believe it wouldn’t be reversed or at least limited and corrected by remedial legislation. I think it was pretty clear the intent of the legislation in the 1990’s was to confirm the elimination and replacement of common law duties. Any decision that doesn’t recognize that is as near sighted as the broad economic loss decision in Alejandra v Bull.

  161. 161

    RE: One Eyed Man @ 160 JACKOWSKI V. BORCHELT151 Wn. App. 1. See section II.

    Can you Shepardize it? I can see a petition for review granted, but that’s it.

  162. 162
    One Eyed Man says:

    RE: Kary L. Krismer @ 58

    When I moved back to Seattle from Calif in 1990, the demand for transactional real estate lawyers had collapsed and none of the better firms were interested in hiring me if I didn’t bring a book of business with me. I considered setting up a brokerage like WaLaw to market as an elite expertise brokerage firm in the Bellevue, Medina, Mercer Island high-end market. In Calif I could get a brokers license just by passing the brokers exam, but DOL told me they would only waive the work requirement but not the 90 hr class time requirement for attorneys applying for a managing brokers license.

    I didn’t do it for several reasons, one of which is that offering a higher quality of expertise and service won’t necessarily get you clients. As a very savvy real estate consultant told me, more high end residential referrals probably happen at the hair salon than in the board room. And I have slightly less hair than a billiard ball.

  163. 163

    RE: One Eyed Man @ 162 – That could be for what was then called a broker (now managing broker). I was referring to just becoming an agent (now broker). I’ve not had any real interest in becoming a managing broker, and negative interest in becoming a designated broker.

  164. 164
    Hugh Dominic says:

    RE: David Losh @ 153 – Engineering is not a static field. If it was, I’d still be writing HTML pages for your Windows 95 PC and dial up connection. What a ridiculous thing to say.

    As I recall, your classes that never end are really only about 20 hours of required coursework per year.

  165. 165
    One Eyed Man says:

    RE: Kary L. Krismer @ 61

    I pulled up and reread JACKOWSKI V. BORCHEL. It quotes the statute that says the common law duties remain to the extent that they aren’t inconsistent with the statute. I should have been more precise in my prior comment that the legislation only eliminates the common law duties to the extent inconsistent with the current Brokers license law. But JACKOWSKI V. BORCHEL probably won’t reach the issue of which if any substantive common law duties survive anyway because the only duties listed as being violated in the case were duties created by the statute. If there had been some common law duties listed, the court would have to decide whether they were inconsistent.

  166. 166
    StillRenting says:

    By Jody Epstein @ 57:

    RE: StillRenting @ 3
    A broker is on staff at WaLaw. They are great if you do all your own research and know the market inside and out!

    Thanks, Jody! I was thinking WaLaw was simply a real estate attorney service, but it looks like they do a lot more for their fee. That’s what I get for not clicking their link and reading before posting :P

    I agree that WaLaw model sounds great if you are able to do your own research and know the neighborhoods. They can and do provide legal counseling about the real estate transaction and they don’t have any monetary incentives against the buyer’s interest like a real estate agent does. They’ll probably be top on our list when we’re looking to buy in a few years.

  167. 167
    One Eyed Man says:

    RE: Kary L. Krismer @ 63

    I agree with you. I was only interested in becoming a “managing broker” for the purpose of setting up an independent brokerage with a new business model similar to WaLaw. After considering it, I decided it wasn’t worth the hassle and the risks, although I reconsidered it in the early 2000’s when the brokerage industry was on fire.

  168. 168

    RE: One Eyed Man @ 165 – I can see where you come to that conclusion by reading this section of the case:

    Specifically, they allege that Hawkins-Poe and Johnson violated their duties to the Jackowskis under RCW 18.86.030(1)(a), which requires agents to exercise reasonable skill and care. They contend that Hawkins-Poe and Johnson violated the RCW 18.86.030(1)(c) requirement that agents transmit all written communications to and from either party in a timely manner. The Jackowskis allege that Hawkins-Poe and Johnson violated the RCW 18.86.050(1)(c) duty to advise the buyer to seek expert advice on matters relating to the transaction that are beyond the agent’s expertise. Accordingly, we hold that the trial court erred by dismissing the Jackowskis’ statutory and common law claims against Hawkins-Poe and Johnson under the economic loss rule.

    That does seem to limit it to statutory violations. It’s this sentence which is causing all the concerns though:

    For clarity, we reiterate that chapter 18.86 RCW does not abrogate professional and fiduciary duties of real estate agents.

    Also, check out the docket. There’s an amicus party and a ton of extra briefing. I think this case is considered a major case.

  169. 169
    ChrisM says:

    RE: Kary L. Krismer @ 158RE: Hugh Dominic @ 141 – I reached the point where I’m now considering taking the classes and getting licensed so I can get into the lock boxes. My particular search is for hobby farms, over such a potentially huge area that a buyer’s agent or single real estate agent isn’t practical. Bellingham WA to Eugene OR is my target area!

    “As to your last point, about becoming licensed yourself, you’d still need to find a designated broker to hang your license with, and most have wised up to the idea of getting your own license to buy a property.”

    I knew this would be the sticking point. I haven’t hit the phones yet looking for one. Does anyone have a suggestion?

    Also, have any consumers gone this route? If I do, I’m planning on getting an attorney involved.

  170. 170
    ARDELL says:

    RE: Kary L. Krismer @ 150

    Four off the top of my head without the 2 year restriction, but recent enough for me to remember. 93rd and Aurora, townhome in Rivertrail Redmond, 77th St between Aurora and Green Lake, Queen Anne (except buyer worked for RE company so a company name will show on that one even though it was buyer direct). Sammamish would have been as buyer came direct but then used Redfin. They have the choice to take the money or go get an agent with it.

    The point is not whether the Buyer chooses to take the commission or buy an agent with it. The point is that the buyer and the seller both understand that the buyer is free to take it OR buy an agent with all or part of it. That the buyer has the same rights with his side of the equation as the seller does with his. Equal treatment for the Parties in Interest to the transaction.

    That mindset shift to the buyer having control of their side of the commission equation would not take a lot of red tape to implement. The system allows for it. It is only the mindset of the agent in the room that needs to change for buyers to have what I call “The Dignity of their side of the equation.”

    The alternative mindset, which is predominant, is it’s none of the buyer’s business who gets the Buyer Agent commission, which is the excuse for the Listing Agent to keep it for NOT representing the buyer.

  171. 171
    ray pepper says:

    RE: David Losh @ 157

    No mess here…just very busy at Trustee Sales..

    We decide who we want to work with based on availability of our investor agents.

    The real money ( as you no David) is the buying and selling of properties yourself and not scrubbing the public of commissions. This is why we are BUSY as HELL!

    JRC you narrowed it down to 3 good ones although I NEVER pay upfront for anything. I also suggest you look at Shop Prop and Findwell!

    Just don’t give your money away and find an Agent that will give you back as much of YOUR MONEY as you can get! Stick around here at The Bubble as well. If nothing else its fun to watch the Bashing of people trying to earn a living within the borders of this insane MLS system based form of real estate.

  172. 172
    TylerG says:

    RE: ChrisM @ 169

    This point is a bit frustrating to me, that you still need to be affiliated with a broker. A person can represent themselves in court, but they can’t represent another without passing the bar exam. Someone can do the electrical wiring on their own house (have to pass inspection, of course), even though they can’t do someone else’s without a license. You get the point, but in the case of a “roaming” real estate agent, they don’t get treated equally unless they affiliate with a broker?

  173. 173
    ARDELL says:

    RE: Kary L. Krismer @ 51

    Sometimes it is in the Seller’s best interest, and the buyer’s request, not to bring another agent into the mix. The buyer is there…wants the house…wants the whole 3%. Most seller’s would not want you to send the buyer away.

    I understand the “legal” potential ramifications, Kary. What I’m saying is that in the real world outside of the stack of papers on the table, often, very often, it boils down to the seller wants the buyer and the buyer wants the house.

    In those cases, which are many, the agency considerations take a backseat to the issue at hand. The issue at hand is you have two ready, willing and able participants with pretty much the same objective vs an adversarial stance. Then it depends on the house itself and the ability of the buyer to understand what they are buying. Not all are the same in that regard. That’s why it ends up as a “what’s best for this particular buyer and seller and house” judgement call.

    Dual Agency may not be ideal, but it is also not the ugly monster many make it out to be. Now that a buyer can go get Craig for $4,000 if faced with that scenario, it is less likely that Dual Agency or “unrepresented” Buyer would be an appropriate option. That’s why having services like WaLaw, and other alternative models for less, are a valuable option for home buyers and sellers.

    When the buyer walks into an Open House and wants that house and has no agent, WaLaw would be the most likely best option (that I know of) for proceeding. But if the buyer and seller choose otherwise, that’s OK too, as long as the house itself makes that a reasonable proposition.

  174. 174
    ARDELL says:

    RE: TylerG @ 72

    For a license to do business it may seem absurd. But when you consider that the license “to sell real estate” allows for you to walk into 100s of people’s homes, pretty much at will and unattended, it makes perfect sense.

    In that regard a Designated Broker is not supposed to let someone “hang a license” with them, once they know the only purpose of that license is for them to be a buyer of a home vs a real estate practitioner. That becomes a buyer with a keypad to enter anyone’s locked home.

    If ChrisM is honest and tells the broker “I only want to work for your brokerage so I can be an unattended buyer in people’s homes to buy a house for myself”, the Broker is not supposed to let him do that. That would be like handing your buyer client the access pad to everyone’s home. If you think about it…there’s everything wrong with a scenario where buyers are allowed to unlock the door of anyone’s home so they can go inside to see it.

    Maybe Brokers don’t provide the training everyone would like, but any reputable Brokerage would say no to hiring a Buyer so he can have a keypad access to the thousands of homes listed in the mls. That would be a “bad broker” who would hire him. So when he asks for ideas as to who might hire him, he is asking if we know any sleazeball brokerages.

    No matter how big or small the Brokerage, NO Broker should hire a buyer and hand him a keypad to everyone’s house, whether he has a valid real estate license or not. Having a license for an hour does not change the fact that he is a buyer who wants access to houses vs an agent apprenticing to be in a profession.

    Getting access to unlock everyone’s home because you don’t want to work with an agent is really not an option, and no broker should hire him to that purpose.

  175. 175
    Hugh Dominic says:

    RE: ChrisM @ 169 – You should call a desk fee broker like Skyline. You have to pay monthly dues for the duration of your affiliation but you can keep most of your commission and you can tour homes.

    By the way most agents hate Skyline but who cares.

  176. 176
    David Losh says:

    RE: Hugh Dominic @ 164

    The first thing you learn in Real Estate is to forget what they taught you.

    It’s learned by doing. There is no amount of class work that will prepare you.

    It’s also a talent. Some people have it, many don’t.

    I don’t have it, that’s why I write about it. I understand it, I know the product, the dirt, and construction really well, but the diplomacy, the calm, escapes me.

    Being an engineer, doctor, or lawyer is finite. You’re dealing with physical, and some psychological dynamics. Telling me Windows 95 compared to XP is some magic learning curve you can compare to one of the biggest financial decisions most people make in a life time, is just silly.

  177. 177
    ARDELL says:

    RE: Hugh Dominic @ 175

    That’s exactly why we don’t like them, because you are right. They may hand a keypad access to everyone’s house to anyone who will pay them a monthly desk fee, even though they are not in the real estate business at all, and have no intention to be. Should we “like” them for that?

  178. 178

    By ARDELL @ 70:

    RE: Kary L. Krismer @ 150 – Four off the top of my head without the 2 year restriction,. . .

    The point is not whether the Buyer chooses to take the commission or buy an agent with it. The point is that the buyer and the seller both understand that the buyer is free to take it OR buy an agent with all or part of it.

    So none within the past two years. As I said, it’s very uncommon. I could point out a couple myself, at least one within two years. The point is, it’s very rare.

    In reality it’s as I said, just a sales pitch you make to naive sellers to get more listings.

    The difference between you and me is: (1) I’m bound by ethical rules which would require me to disclose such an arrangement; (2) I think the NWMLS rules require the same disclosure (I know you don’t, but you don’t think a lot of things); and (3) I think the arrangement merely encourages unrepresented buyers, that encouraging unrepresented buyers is not a good thing. Because it’s so rare and the disclosure could have an adverse impact on the listing, I don’t make such arrangements. And I certainly don’t do it to obtain more listings!

  179. 179
    ChrisM says:

    Wow – the editor completely trashed this comment… Trying again.

  180. 180
    ChrisM says:

    RE: ARDELL @ 77 – I guess I don’t follow this statement:

    “That would be like handing your buyer client the access pad to everyone’s home. If you think about it…there’s everything wrong with a scenario where buyers are allowed to unlock the door of anyone’s home so they can go inside to see it. ”

    I was under the impression real estate agents routinely made purchases of houses they in fact toured themselves.

    I guess the telling point is: Does MLS prohibit real estate agents from buying homes they have toured without representation of another agent?

    If not, then it would appear we have random bozos touring (unescorted!) homes they intend to buy themselves.

    Or is it the fact that real estate agents somehow are held to a higher moral standard than the public at large? Even those of us who have security clearances and passed FBI background checks?

    Please enlighten me on why I’m an untrustworthy scumbag and real estate agents are not.

  181. 181
    TylerG says:

    RE: ARDELL @ 174

    That is the reason, the lockbox system? Why is the listing agent not responsible for giving potential buyers access to the properties they are trying to sell? If you had an “unaffiliated” real estate agent, either the property owner or the listing agent should be willing to open a property.

  182. 182
    Nick Sincere says:

    Hey Tim,
    Maybe you could open up a permanent thread alongside the Global Economic and Health Care threads just for the real estate professionals’ catfights.

  183. 183
    lynne says:

    next time we buy a house, we will deal with a lawyer. no real estate agent.

  184. 184
    Herman says:

    By ARDELL @ 177:

    RE: Hugh Dominic @ 175

    That’s exactly why we don’t like them, because you are right. They may hand a keypad access to everyone’s house to anyone who will pay them a monthly desk fee, even though they are not in the real estate business at all, and have no intention to be. Should we “like” them for that?

    No. I’ll bet it’s more work for you sometimes. But your seller/buyer will probably take their offer because they don’t care. Feel free to take advantage of your superior expertise and training by outmaneuvering the hapless Skyline agent at the negotiating table (etc.) if you can.

  185. 185
    David Losh says:

    RE: ARDELL @ 177

    As you know my license is at Skyline Properties, which I think is rapidly pulling ahead as a great place to have a license. They have excellent office staff support.

    You also know the key box system is monitored. Handing your key card to some one is a very serious offense.

  186. 186
    ricklind says:

    By ARDELL @ 104:

    RE: One Eyed Man @ 93

    Snip…”buyers still call “to see a house” NOT to hire an agent. Sellers call to “hire an agent”. Buyers call to “see a house”.

    Real Estate is THIS simple: Buyers want a house; Sellers want a Buyer. THAT is why buyers get “roped in”. Because that is what they CHOOSE.

    This will probably get lost in the dialogue but I agree with Ardell on this. I am a retail buyer and seller and choose an attorney to help me facilitate a buy side deal I have already made, and choose a good realtor to help me sell my properties on the deal I have not made. And I can tell a good atty and realtor from a not good one very quickly. This ain’t a Bernie Madoff level transaction, blind trust for years is not part of the equation.

    Rick

  187. 187
    David Losh says:

    RE: ARDELL @ 104

    I forgot about the ramp up of Buyer Agency, and do lament that it never took off.

    As you also know, my contention is that agents like the free roaming buyer concept.

    My opinion has been, for many years, that a Buyer is only a buyer once they put pen to paper. There is a gray area of some representation by verbal agreement, I guess, but think that’s really an unprofessional way to approach a home purchase.

  188. 188
    Jonness says:

    Craig:

    It doesn’t take a lawyer to memorize everyday generic RE-related terms and information. Anybody with an IQ of 90 or higher and a good work ethic can perform RE-related duties at professional-level standards. Agents who don’t know what “procuring cause” is are not stupid. They are too lazy and unmotivated to achieve the professional level of standards necessary to ethically represent their clients.

    That being said, the fact you spent a lot of years exerting hard work and effort to learn about law and have figured out a way to use it in a manner that adds value to your services says a lot and definitely provides you an edge in this industry.

    As for the con scheme you mention, I believe any person who falls for the trap and actually buys the house after finding out they were purposely deceived is a total moron. Out of pure principle they should walk so that the listing agent loses the deal. This is just good ol’ fashioned teaching the con artist a good lesson.

    Ardell:

    $6K to stage a linen closet?

    As for the winner, I have to give Ray Pepper an edge over WaLaw. Nobody out there has a better business model.

  189. 189
    Jonness says:

    By Kary L. Krismer @ 150:

    By ARDELL @ 134:

    Kary said: “The chance of an unrepresented buyer making an offer on an agent�s listing is very slight…”

    Maybe where you work…not where I work. Where do you work again?

    Ardell, you do realize I have access to tools that let me know those things, right? Maybe those you are trying to lure in with your sales pitches don’t, but I do.

    How about you disclose to people how many times in the past two years you’ve had a listing sell that you were the only agent involved with the sale?

    I’ve bought a house by using the listing agent before. I don’t see what the big deal is. I knew the agent would be hungry for a dual commission, so I used his inside relationship to the sellers to convince them to take my lowball offer. The agent told me it was too low, and they would never take it. I told the agent to call the sellers and tell them they had until 10am the next morning to make up their minds, at which time I was leaving town and not coming back. I got a call at around 9:52 saying they would take the deal but weren’t happy about it. The agent said he convinced them to take the deal by pointing out it was an owner financed deal at 10%, and they would make a killing over the life of the loan. The first payment, I included an extra 20% balloon payment. They weren’t happy about that either.

    Go for blood on these delusional sellers or you’ll be sorry. Prices are heading down in the future. Bankroll your retirement; not theirs.

  190. 190
    ARDELL says:

    RE: Kary L. Krismer @ 178

    Kary…I think you are confused.

    Used to be if a buyer came without an agent the agent would reduce the fee from 6% to 5% or 4% and the seller would get the change. Now the seller does not get that lower price and change…the buyer gets the benefit.

    In no possible way could anyone in their right mind view that as a means to persuade sellers to list with them vs a buyer benefit. The seller used to get 1% or 2% change. I think that is where you are confused. THAT is what you are referring to as a listing tool.

    MY way the seller gets NO change if the buyer is unrepresented…so no seller would “like that better” by anyone’s stretch of the imagination.

  191. 191
    ARDELL says:

    RE: ChrisM @ 80

    Chris, (and Tyler)

    Look at it this way. What is the difference between:

    1) A buyer walking into a broker and saying “can I borrow your keypad so I can go into houses until I find one I’d like to buy?”

    2) A buyer who got his license yesterday walking into a broker and saying “I want to work here so I can get a keypad so I can go into houses until I find one I’d like to buy.”

    They are really one in the same. If 1 is wrong than 2 is wrong as well.

    That doesn’t mean you won’t find a broker who will do it, but it does mean that no broker should do it.

    To make it clear Chris, your wanting to do that doesn’t make you a scumbag. But a Broker hiring you so you can do that and only be a buyer with a keypad, would make him a sleazeball There’s a slight difference between scumbag and sleazseball. I prefer Sleazeball. :)

  192. 192
    ARDELL says:

    RE: ricklind @ 86

    You make an excellent and true point.

    The people who are truly able to buy or sell real estate without an agent…just do that. They don’t spend a lot of time figuring out whether to use an agent or a lawyer.

    Those that can’t…look for a good agent, and if they can’t find one, they hire a lawyer.

    It is often that simple.

  193. 193
    ARDELL says:

    RE: David Losh @ 85

    I think you missed the issue David. Here’s the question.

    Chris wants to get a license so that he can be a buyer with a keypad. His only purpose is to buy one house for himself.

    Should ANY broker hire him knowing that is his intent? I say no. Brokers should not hire buyers so they can get keypads, whether they have a license or not. If they are not in the real estate business…they should not have a keypad. That simple.

  194. 194
    ARDELL says:

    RE: Herman @ 84

    Hmmm…I’ve met many a good Skyline agent. I know this thread is cumbersome, but the point is not about “Skyline Agents” or negotiating with them in a transaction.

    The question is should any broker hire someone who wants to buy a house with a keypad with no other intention to be in the business except to buy themselves one house.

    I did not say Skyline would do that, and no Broker should. Someone else mentioned that Skyline might do that. I don’t think they would unless the person lied about their intent when being hired.

  195. 195
    ARDELL says:

    RE: One Eyed Man @ 49

    The Law actually requires that a Buyer refuse representation in a knowing way, and that all parties must agree, vs a buyer choosing to be represented.

    “Relationships between Licensees and the Public. States that a licensee who works with a buyer or tenant represents that buyer or tenant — unless the licensee is the listing agent, a seller’s subagent, a dual agent, the seller personally or the parties agree otherwise.”

    So a Buyer does not CHOOSE to be “represented”. The law works in reverse. The buyer must state that he does NOT want to be represented, and all parties must agree. The buyer is represented by the agent he is working with automatically under the law quoted above.

    The buyer is supposed to get a copy of that pamphlet and that is the buyer’s notification that they are in fact being represented the agent who is showing them houses.

    To One Eyed Man: Note it includes the option of “a seller’s subagent”. I know its not common, but WA did not “eliminate” its potential use.

    So perhaps the agent in Craig’s 30% scenario was paid as a subagent of the seller, since that appears to be an option in the law?

  196. 196

    By David Losh @ 76:

    RE: Hugh Dominic @ 164

    The first thing you learn in Real Estate is to forget what they taught you.

    It’s learned by doing. There is no amount of class work that will prepare you.

    You don’t forget what they taught you, but they don’t teach you enough.

    My realization of that out of law school was when the partner I worked for walked up to me and asked me to prepare an “Order Shortening Time.” My thoughts turned to science fiction. ;-)

  197. 197

    By Jonness @ 89:

    I’ve bought a house by using the listing agent before. I don’t see what the big deal is. I knew the agent would be hungry for a dual commission, so I used his inside relationship to the sellers to convince them to take my lowball offer.

    That’s not the point I’m making. If you as a buyer want to do that, that’s your decision. The listing agent presumably didn’t twist your arm or deceive you into that action.

    What I’m talking about is a listing presentation scheme where the agent touts the likelihood of that occurring as being a big benefit to the seller, when in actual fact it’s something that is very unlikely to occur, and if it does occur there are possible significant downsides to the seller which are likely not disclosed to the seller at the time they sign such a listing agreement.

  198. 198

    By ARDELL @ 94:

    RE: Herman @ 84
    Hmmm…I’ve met many a good Skyline agent. I know this thread is cumbersome, but the point is not about “Skyline Agents” or negotiating with them in a transaction..

    I’ll have to agree with Ardell on that. I’ve seen good Skyline agents and bad agents with major brokerages. Also, I’ve never before heard the comment that agents hate Skyline brokers. I’m not sure why they would.

  199. 199

    By ARDELL @ 95:

    RE: One Eyed Man @ 49 – The Law actually requires that a Buyer refuse representation in a knowing way, and that all parties must agree, vs a buyer choosing to be represented.

    In the context of Craig’s example, yes. But in the context of the unrepresented buyer dealing with the listing agent, no. Where the unrepresented buyer deals directly with the listing agent they are unrepresented as the default.

  200. 200

    By ARDELL @ 90:

    RE: Kary L. Krismer @ 178 – Used to be if a buyer came without an agent the agent would reduce the fee from 6% to 5% or 4% and the seller would get the change. Now the seller does not get that lower price and change…the buyer gets the benefit.

    In no possible way could anyone in their right mind view that as a means to persuade sellers to list with them vs a buyer benefit.

    So you’re saying that if an unrepresented buyer walks into one of your listings, and that listing is $500,000, you’ll tell the buyer that the price is only $485,000 if they remain an unrepresented buyer? That’s the only way I could see all the benefit of your system would go to the buyer. And I have problems with that for the reasons previously mentioned (encouraging someone to be unrepresented, and the impact of that on your seller–and designated broker).

  201. 201
    Herman says:

    By ARDELL @ 194:

    RE: Herman @ 84
    The question is should any broker hire someone who wants to buy a house with a keypad with no other intention to be in the business except to buy themselves one house.

    No, that’s not the question. The question is why the standards of qualification for a real estate agent are so pathetically low that this scenario could be a possibility in the first place.

    Hugh makes a very good point. We don’t allow a doctor, lawyer, policeman, or engineer practice their profession with just 80 hours of training. I’ll bet strippers require more training.

    The reality is that real estate agency is just a MLM scheme, like those companies that recruit kids to sell knives to their neighbors. That’s why the standards are so low. As someone above said, a brokerage gets most of its business by deploying scores of agents to troll for friends in hair salons, church picnics, and tupperware parties. Their primary purpose is to collect customers for the brokerage, not deliver the service of good representation.

    For the most part, it is simply not a legitimate profession.

  202. 202
    David Losh says:

    RE: Herman @ 201

    Seriously, I’ll say it again, Real Estate is learned by doing. There are now college degrees in Real Estate. It changed, and changes nothing.

    Real Estate sales, as some people call it, and I kind of agree, is a talent. You either have it, or you don’t. I compare it to a circus. It’s entertaining.

    The nuts and bolts of Real Estate is the dirt, and structure. There are the financial numbers that go along with both the dirt, and structure, but that is where Real Estate is extremely local.

    Let me leave it at that, but ultimately there are good Brokerages that do good work. There are very good agents that you will never find reading blogs on the internet. Good agents are busy with clients.

    The problem I see is that buyers, and sellers settle for any agent that will talk to them. Many agents are trained, in sales training unfortunately, to tell people what they want to hear.

    Just imagine for a moment that the way you met your doctor, lawyer, architect,or engineer, was at an open house, or by attending open houses? How about picking your doctor by how they blog on the internet? Your architect may have a great web site, but most lawyer sites are fill in the blanks. Would you think you knew the law by what lawyers put onto web sites?

    To find a good agent, you make an appointment. You do an interview process, or present your problem. As Rhonda pointed out many people find her by her consultations.

    I say all the time, that I have an office. I’ll talk to you at a cocktail party, but if you want to ask specific questions about Real Estate, you need an appointment.

  203. 203
    One Eyed Man says:

    RE: ARDELL @ 95

    My point in comment 149 was about the economics of the MLS system not whether buyer’s are now truly being provided representation by brokers. The discussion of agency relationships was to point out the history that created the MLS legal fiction of “subagency” where buyers were not represented and commissions were all paid through the sellers side. The problem of lack of buyer representation was to a large degree resolved by the changes in the law in the 1990’s. But the convoluted, non-transparent and inefficient commission payment system that was a part of “subagency” has not changed.

    Craig’s issue is a symptom, not the problem. The entire point of my prior post was that even though the changes to brokerage license law in the 1990’s largely resolved the legal problem with selling brokers claiming they didn’t represent the buyer, the issue of how the selling broker got paid was left to the convoluted MLS system which is an impediment to the transparency and efficient negotiation of the commissions paid to brokers.

    Instead of the buyer and the buyer’s broker negotiating the commission up front before brokerage services are rendered, they very often ignore the issue and it gets handled through the MLS default mechanism which means that the buyer pays the purchase price at closing, part of the purchase price gets paid to the listing broker as a commission pursuant to the listing agreement, part of the commission paid to the listing broker gets paid to the buyer’s broker pursuant to the MLS agreement and the SOC set forth in the listing agreement, and finally, the buyer’s broker potentially rebates part of the commission to the buyer if the buyer negotiated a rebate and it fits within the parameters of the other potential limitations on rebates like financing, and other similar considerations might put on rebates.

    Unless the buyer seeks a rebate, the buyer is seduced if not suckered by the MLS system into ignoring how much the buyer’s agent gets paid. I’ll bet that most of the time the issue of what a buyer’s agent expects to get out of the transaction never even comes up until the time a purchase agreement is being written, eventhough brokerage services were being rendered to the client much earlier.

    The MLS commission system is inefficient and non-transparent from an economic point of view. It buries the commission paid by the buyer in the purchase price and makes that commission hard to see and extremely difficult to negotiate. It’s an anachronism created back when buyer’s brokers were “cooperating brokers” and listing broker’s “subagents” who tried to claim (commonly without telling the buyer) that they legally didn’t represent the buyer. That system (the MLS system) had an economic value at that time because it was necessary to get broadest exposure for listings through an MLS. But now as a result of technological advances, all listings will be on the internet and shared with all buyers and brokers, whether its through the MLS or through a non-MLS listing source. The MLS is now an inefficient anachronism with regard to commission structure and the only thing that keeps it alive is the inertia of an installed monopolistic business system and the barrier to entry such a system creates for any competing open source business model.

  204. 204

    By Herman @ 201:

    By ARDELL @ 194:

    RE: Herman @ 84
    The question is should any broker hire someone who wants to buy a house with a keypad with no other intention to be in the business except to buy themselves one house.

    No, that’s not the question. The question is why the standards of qualification for a real estate agent are so pathetically low that this scenario could be a possibility in the first place..

    The law now requires two years of enhanced supervision by a managing or designated broker. And they also moved a key course up–when I was licensed there was a very useful course which didn’t need to be taken until my first renewal of license, which for some is almost 2 years after getting their license. So, it is getting better in that regard.

    I do though hear what you’re saying, but part of the problem is what’s probably needed is an apprentice program rather than more “book learning.” If there was going to be a system with increased classes, I would suggest courses which would lead to a limited practice of law degree, and move licensing from the DOL to the Bar Association. One of my big complaints about agents is that they practice law, but are not trained to do so, and are often 100% wrong (something Ardell is guilty of with alarming frequency).

    Absent making a new limited practice area I’m afraid more classroom training would lead to more harm than good. One of the problems is that continuing eduction of agents teaches them about legal issues. The purpose is so they can identify the issues and suggest a referral of the client for resolution or advice. Unfortunately the agents think they actually understand the area fully from a 1-3 hour course, and try to give the advice themselves.

  205. 205

    By David Losh @ 2:

    Just imagine for a moment that the way you met your doctor, lawyer, architect,or engineer, was at an open house, or by attending open houses? How about picking your doctor by how they blog on the internet? Your architect may have a great web site, but most lawyer sites are fill in the blanks. Would you think you knew the law by what lawyers put onto web sites?

    Not a great argument because it’s also hard to find a good doctor, lawyer, etc. People think their doctor is good simply because they wear a white coat.

  206. 206

    By One Eyed Man @ 3:

    Craig’s issue is a symptom, not the problem. .

    I would disagree with this. I think the concept of procuring cause as applied to anyone other than the agent who actually writes and presents a signed offer is a problem. If they don’t have a right to pursue the buyer, they should be SOL.

    I’ve also mentioned in the past that the issue of who an agent represents in the context of an open house is a legal mess under the current listing agreements, in situations where that agent is not also the listing agent. Craig’s situation almost touches on that too, although here it was a courtesy showing and not an open house.

  207. 207
    Hugh Dominic says:

    By Kary L. Krismer @ 204:

    By Herman @ 201:

    One of my big complaints about agents is that they practice law, but are not trained to do so, and are often 100% wrong (something Ardell is guilty of with alarming frequency).

    One of my complaints is that they practice statistics and economics without being trained to do so and are often 100% wrong (something Ardell is guilty of with alarming frequency).

    Absent making a new limited practice area I’m afraid more classroom training would lead to more harm than good.

    Doctors spend a lot of time in internship. No profession succeeds just on book learning, but that extra education does improve quality and does weed out people. Can I at least get you to admit that marketing, statistics, and professional writing classes would improve an agents quality? Photography? A few business classes? I’m sure you could make a 2 year college curriculum if you started to think of agents as a more serious profession.

    That said, I think the brokerage apprentice requirements that you cite are a step in the right direction.

  208. 208

    RE: Hugh Dominic @ 207 – I would agree with your comment on economics and statistics, and have made similar comments myself. That’s the main reason I’m against agents making predictions of where the market is headed.

    Can I at least get you to admit that marketing, statistics, and professional writing classes would improve an agents quality? Photography? A few business classes?

    There are already continuing classes in marketing–too many IMHO. I don’t think marketing should count as continuing eduction, at least to the extent it’s marketing the agent and not the listing. Statistics would help. As to the writing, a lot of what you see in listings is the result of the NWMLS having extremely limited fields. The better solution would be to allow more characters in the marketing remarks. I would leave photography to the pros on the listings where that matters. Some business courses would help, but they do get a little of that (very little).

  209. 209

    RE: One Eyed Man @ 3 – Many, many great comments here, including this one! At least other than the occassional mud-slinging…

    For those of you who commented that they’ll use Ray, or WaLaw, or Redfin, note that only one of those alternatives provides you with an attorney. Yes, the other two are “contingent” fees that are due only if the deal closes, although Redfin’s fee is still higher than WaLaw’s. If you’re not sure you’re going to buy, it makes sense to use one of these alternatives. But if you’re going to buy, with only the specific house to be determined, I don’t think anyone beats WaLaw’s value or its level of service (an honest-to-goodness lawyer who represents you).

  210. 210
    Pegasus says:

    RE: Craig Blackmon @ 209 – We know you advertise here but please don’t fill the blog with self-serving comments of baloney. We need to go back to the good old days when lawyers were not allowed to advertise and solicit business. There was a reason for those old rules and you might still be in violation of the newer solicitation rules.

  211. 211
    S-Crow says:

    My very highly biased two cents: Considering technical knowledge, lending knowledge, contract experience, risk, expense, competency: The best value in the real estate space are independent escrow firms.

    Really independent, not the posers who say they are independent and are owned by a r.e. firm or an arm of Title or Lending giants. 11% pass rate on LPO exams administered by the WSBA, exceptionally high risk field (particularly now with short sales), VERY high cost to operate, undergo audits, deal not just with contracts and letting agents know that they have contract issues but drafting a number of legal docs, constantly work with banks, funding departments and title companies and recording procedures. Oh, and those that have told us that we close at 5pm and have weekends off…….in your dreams.

    In real estate, there is a top down hierarchy of perceived value and it always has been that way. In other words, the more you charge or make per transaction is commensurate with your experience or competency. Those two sentences are what is wrong with real estate.

    All that to say, we don’t open doors or list property, stage homes for sale or hold open houses. But, if someone wants to work in an industry within real estate that is by far the most stressful and get paid peanuts on a transaction, please join us! You will learn more in real estate in one quarter of a year working in an escrow office than you do in years of being in sales. That’s not an arrogant statement, just the truth of the matter. When I started the company I thought I had a good foundation. Not close.

  212. 212

    “I don’t think anyone beats WaLaw’s value or its level of service (an honest-to-goodness lawyer who represents you).”

    Which two words might not go together? How about honest, and lawyer?
    It still strikes me that there is no ” one size fits all” when it comes to who should represent you in real estate matters. Different strokes for different folks. In WaLaw Realty’s case, if you’re not absolutely certain that you’re going to buy a home in the next six months, you might be better off using someone that you don’t need to prepay in advance. It’s a different model, and I think the more options there are out there for buyers the better
    I also don’t think that one is automatically going to be getting better service simply because they hired someone with a law degree. I understand that since WaLaw Realty is a flat fee, and they’re going to get paid something whether or not you eventually buy, they will be less inclined to “push” sales in order to make a commission, and that’s a very good thing.
    But it also doesn’t automatically mean that the real estate agent just wants to make the quick buck.
    Some of us work hard to serve our client’s best interests, whether or not we make a dime, some of us like referrals, some of us care about our reputations.
    I realize that there’s not a whole lot of dignity in being a real estate agent, but you’ve never once read anything on here by me suggesting that I ” offered the most value”, or ” you can’t beat my level of service”, or ” if you didn’t use me as your agent you paid too much”.

  213. 213

    S-Crow said “But, if someone wants to work in an industry within real estate that is by far the most stressful and get paid peanuts on a transaction, please join us!”

    You sure make it sound appealing!

  214. 214
    S-Crow says:

    RE: One Eyed Man @ 203 – My take is that while there may be issues I don’t think of, if lenders allowed the financing of commissions on the buy side, then buyers could really get the representation they seek. It would also reduce all legal issues associated with agency law confusion on the part of the consumer and brokerages.

    Today, the defacto tradition is that all fees are paid/financed through the buyers loan amount/cash. Lenders have blessed this relationship for years because, without the current structure, new home buyers that are usually low to zero down candidates would have a hard time buying, thus the real estate churn wheel turns slower.

  215. 215
    One Eyed Man says:

    RE: Kary L. Krismer @ 206

    I don’t know that we have any real disagreement Kary. I called it a symptom because I don’t think the concept of “procuring cause” would even exist if you didn’t have the buyer’s broker being paid through the convoluted SOC.

    If the SOC paradigm didn’t exist, Buyer’s brokers would be entitle to a commission only based upon a written agreement with the buyer and not by being a “procuring cause.” The SOC and procuring cause exist only as a vestige of the MLS system. If there was no SOC and buyers employed, negotiated a commission and paid their agents directly (perhaps on a contingent basis in some cases), an interloper door opener couldn’t use “procuring cause” (a concept that I think only exists because of the seller paid SOC) to try and glom on to a portion of what the buyer’s agent expected to receive. At best the “procuring cause” would have some kind of claim against the listing agent or perhaps the seller for compensation, but they wouldn’t be able to drag unsuspecting buyers or true buyer’s brokers into the fight unless they had a written agreement with the buyer or the buyers broker.

    With regard to the open house issue, I agree its a mess. But I think that’s the fault of the brokers and the MLS for not dealing with an issue they know exists. Brokers aren’t supposed to draft documents but the brokerages should either have their attorney draft a standard document or have the MLS attorneys do it. There should be a standard form that designates the role of the open house agent and discloses to the seller, the buyer, and the broker who holds an open house that said broker is either a temporary sub-agent of the listing agent, or a potential buyer’s agent. The same issue exists for non-listing agents doing new home site work. The MLS should fix it but for whatever reason, its too far down their list of things to do for them to worry about.

  216. 216
    S-Crow says:

    RE: Ira Sacharoff @ 13 – Ira~ you are hereby invited to our office to make the call to “release the hounds to record!” on your current transaction with us. I’ll cut your commission check hot off the printer, sign it and we will tip a beer together with your clients. Although Mrs. S-crow said, “after hours only.” I wouldn’t want us to get a EWI (escrow while intoxicated) ticket.

    ;)

  217. 217
    One Eyed Man says:

    RE: S-Crow @ 14 – Excellent point about the financing covering the commissions S-Crow. I guess if I get my way those Buyer’s will either have to come up with the equivalent of 6.5% down (for full 3% commissions) or you’ll get a lot of additional work doing notes and deeds of trust to secure unpaid commissions to buyers brokers. ;-)

  218. 218
    One Eyed Man says:

    RE: Ira Sacharoff @ 12

    Ira we should have lunch again but I can’t think of anything we disagree on to bet on (unless you can) so I’ll pay this time. I’ll give you a call.

  219. 219

    RE: Craig Blackmon @ 209 – Wow. What a blow-hard. Clearly not one of my better moments. I apologize.

  220. 220

    By Pegasus @ 10:

    RE: Craig Blackmon @ 209 – We know you advertise here but please don’t fill the blog with self-serving comments of baloney.

    People should hire me, because they also get to work with my wife, and she’d much more pleasant than I am. ;-)

    And as an added bonus, if you’re lucky, you may get to ride in a 1989 4×4 pickup truck.

  221. 221

    By Ira Sacharoff @ 12:

    “I donâ��t think anyone beats WaLawâ��s value or its level of service (an honest-to-goodness lawyer who represents you).”

    Which two words might not go together? How about honest, and lawyer?
    It still strikes me that there is no ” one size fits all” when it comes to who should represent you in real estate matters. Different strokes for different folks. .

    I think the word you’re searching for is oxymoron. Honest lawyer would qualify as an oxymoron. Agent representation would not.

    As to the last sentence quoted, exactly! I don’t have a problem with an agent charging something different than what I do, or offering different terms. Choice is a good thing.

    The only two things that I remember here that I’ve objected to are DIY forms (but notwithstanding that I linked to a possible better source) and Ardell’s scheme, which I don’t object to because of the amount charged, but instead because it’s not something that is good for either the buyer or her client and is in effect so rarely it’s just a tool to get more listings from naive sellers. I’ve actually complemented Craig’s model. Choice is good.

  222. 222

    By S-Crow @ 14:

    RE: One Eyed Man @ 203 – My take is that while there may be issues I don’t think of, if lenders allowed the financing of commissions on the buy side, then buyers could really get the representation they seek. It would also reduce all legal issues associated with agency law confusion on the part of the consumer and brokerages.

    I’m not sure why you think lenders don’t allow that. The lenders know that the commission is being paid and they base the loan amount on a percentage of a number that includes that commission. As I noted earlier, you can argue that the commission is paid by the buyer or the seller and either could be right (it’s a chicken and egg argument).

    Also, it wouldn’t deal at all with the most confusing issue of agency–who does the agent represent at an open house if the agent is not the listing agent?

  223. 223

    By One Eyed Man @ 15:

    With regard to the open house issue, I agree its a mess. But I think that’s the fault of the brokers and the MLS for not dealing with an issue they know exists. Brokers aren’t supposed to draft documents but the brokerages should either have their attorney draft a standard document or have the MLS attorneys do it. There should be a standard form that designates the role of the open house agent and discloses to the seller, the buyer, and the broker who holds an open house that said broker is either a temporary sub-agent of the listing agent, or a potential buyer’s agent. The same issue exists for non-listing agents doing new home site work. The MLS should fix it but for whatever reason, its too far down their list of things to do for them to worry about.

    IMHO, the problem exists because of a state-wide form, but maybe I should bring it to their attention. In the past they’ve made two changes when I’ve pointed out problems with the forms. Once they were fast because they considered it a critical issue, and once they were slower because they seemingly didn’t realize escalator clauses are still used, even in this market.

  224. 224
    ray pepper says:

    RE: Craig Blackmon @ 219

    It was horrible…………….but made me laugh for so many reasons. Especially this:

    ” If you’re not sure you’re going to buy, it makes sense to use one of these alternatives. “…. huh?.. Every client I have EVER worked with was sure they were going to buy……..Are yours not? Somebody at Wa law better do some better client screening and secure that 30 Day Pre Approval on ALL clients like we do. No Pre approval within 30 days? Ship em off to Red Fin to start their tours!

    and this : “But if you’re going to buy, with only the specific house to be determined, I don’t think anyone beats WaLaw’s value or its level of service (an honest-to-goodness lawyer who represents you”

    This is wrong on so many levels..Remember you told us you Represent all clients and their needs. If you only want people who found their specific home then your like ALL the Agents on the NWMLS and lazy as heck!!! That means you never have to get outta your chair except for an inspection……..We all want clients who found the home they want…It takes time though and Buyers cannot be charged for this time, be pressured to act within a time frame with financial penalties, and above all be charged YOUR entire fee at 6 months. What if they get involved with a short sale and the months tick by? Then it results in no purchase. You are going to come calling for your 4000? Horrible on so many levels..

  225. 225

    RE: ray pepper @ 224 – That’s almost as funny as the idea that agents convince buyers to buy.

  226. 226
    ray pepper says:

    RE: Kary L. Krismer @ 225

    agreed…Insane…Convincing a buyer to buyer real estate? Impossible….

    At 75.00 an hour on tours I hope Craig doesn’t have too many of these “better moments while touring” and subject his clients to his rantings…

    Call me crazy, but I just don’t think these two guys truly engage their clients while on tours. I think they are door openers waiting to get back to their desk….I hope I’m wrong and they get big enough to hire some Agents and put them on salary.

  227. 227

    By ray pepper @ 226:

    RE: Kary L. Krismer @ 225

    agreed…Insane…Convincing a buyer to buyer real estate? Impossible….

    If you read many of the comments here in the past, it’s the fault of real estate agents that so many people wanted to buy real estate and therefore the real estate agents created the bubble.

  228. 228

    RE: ray pepper @ 224 – My comment 209 was rank, inappropriate self-promotion. What can I say? In the heat of a busy day, sometimes you make a bad decision. This is one of mine. All I can tell the Blogging Community is that hopefully I’ve now learned my lesson and will refrain from this sort of comment in the future. And I’m not going to respond to those of you who called me out because, while I disagree with some of your points, you’re overarching point is right on: My comment was inappropriate.

    However, I do feel compelled to respond to you. As my web site makes clear, we include 20 hours of tours in our flat fee, and as many tours as you want thereafter at $75 per hour. So we look at houses with our clients all the time and indeed strongly prefer to do so before writing an offer.

    You seem to think that the “rules” of hiring a professional to assist you — doctor, lawyer, accountant, heck plumber, electrician, handyman… — don’t apply to real estate brokers. You seem to think there is something unique about real estate that renders ANY non-contingent fee outrageous and unreasonable. I don’t get it. Yes, a contingent fee has legitimate advantages and is superior to a flat — and guaranteed — fee in some instances. But the flat fee has its advantages as well and is particularly well suited to anyone who knows they will buy A house, just not WHICH house.

  229. 229

    RE: Craig Blackmon @ 228 – Out of curiosity, do you preview so that a client doesn’t walk into a place that smells like cat pee, or have a huge hole on the back of the house not pictured in the listing photos?

  230. 230
    David Losh says:

    This was an interesting thread that does address the blogging community. It shows how little information the internet provides about Real Estate.

    The internet is pretty pictures, and who will do it for less, or free.

    I heard it said that the internet Real Estate sales, and it is all just a sales job, accounts for 3% of the Real Estate market place. 93% of the people may begin the Real Estate search looking at pretty pictures on the internet, then they run into the same yahoos trying to make a quick sale when they contact some one.

    Kary this wasn’t an argument, or discussion. It is what it is. Real Estate is a belly to belly business, and each property, and consumer is unique.

  231. 231
    One Eyed Man says:

    RE: Craig Blackmon @ 228

    I seldom give compliments because they so commonly smack of being gratuitous, but I will nevertheless say that I find the acknowledgment in your comment to be an admirable display of character which is somewhat uncommon in this type of forum.

  232. 232

    By David Losh @ 230:

    Kary this wasn’t an argument, or discussion. It is what it is. Real Estate is a belly to belly business, and each property, and consumer is unique.

    I agree it wasn’t an argument. Quite frankly I don’t understand some of the consumers’ “agent cat fight” comments made here. You would think they would be interested in knowing that a listing agent offering a certain commission arrangement is really nothing more than a tool for the agent and not good for the seller or the buyer. Focusing on the fact that two agents may disagree about that is rather a bizarre focus.

  233. 233
    ARDELL says:

    RE: One Eyed Man @ 215

    Every State in the Country consciously elects to cloud the issue of Buyer Representation.

    That is not the mls or Brokerages doing it directly, as it is a Law not an mls rule that governs that disclosure or a Board of Realtors directive at fault.

    I once wrote an Open Letter to the Governor on that topic, as it is the Governor who would have to move things in the right direction for Consumers, not someone in the Real Estate Industry. It is the Law of Agency, and the required disclosure forms that convey that Law to the general public, that are inadequate by design and intent.

    We (WA) have the progressive “buyer represented as default” position, which is stellar by comparison to many other States. But even we (WA) do not require that the Agent note WHICH ONE of the many choices in the 7 or 8 page pamphlet is what the person in front of the consumer actually IS…until the Offer to Purchase. That is why in Craig’s situation it was not addressed until he was writing the offer. The system in that regard is inadequate by design and intentional subterfuge.

    This is the result of NAR and it’s local subsidiaries Lobbying efforts, and why I will not participate in or associate myself with that Trade Association at present (one reason of many). In fact at this year’s Mid-Year Conference I believe they doubled the budget of PAC monies.

    Having worked in 5 states i can tell you that the disclosure to potential buyers is convoluted by design. I know this because transparent measures were adopted…and then withdrawn via NAR lobbying efforts.

    In most every State there is an Agency Disclosure of ALL options, but no disclosure of WHICH option the Agent in front of them IS…until they make an offer to purchase a home. By that time the buyer is more involved in making an offer and it is slipped in, much like a governmental body who passes a bill they know is not popular while everyone is too busy to notice…or sleeping.

    I speak with some authority on this topic, as I am one of the few agents in the Country who was experienced EVERY possible Form of Agency available to Consumers with regard to a Real Estate purchase and sale, that is available to buyers and sellers of homes in this Country and not just this State. I have been speaking with some authority on this topic in National Forums for 15 years of my 21 in the industry.

    The best I once saw lasted a few months in Florida. It was a simple one line statement that the buyer had to sign before entering any house with an agent.

    “I do not represent you UNTIL and UNLESS you HIRE ME to do so.” How simple is that?

    Clear…concise…and removed by lobbying efforts, as it caused the home buyer to think about whether or not they actually wanted the agent in front of them, whom they stumbled upon, to “represent” them.

    The buyer had to sign that Notice before entering the house with that agent. They were on notice that the agent would be representing The Seller of the home…unless the buyer HIRED them to represent the buyer vs the Seller. Brokerages and Sellers decided they did not want the buyer to get back into their car and not see the house if they did not sign that Notice, and the simple, transparent notice was revoked as a means of conveying the information to home buyers.

    In other States, along with the Law of Agency Disclosure there was a “check form” with boxes noting all of the options. The Agent had to check which they were “Agent of the Seller”, Agent of the Buyer”, “Dual Agent”, etc The Agent and Buyer had to agree on whom the buyer was representing before they could see houses. Not an “Exclusive Contract”. Merely a decision as to what they were doing and whom they were representing while doing it TODAY. No long term “agreements”. A simple form noting the “meeting of the minds” as to the actions performed at present.

    That form was removed as well.

    Granted both were removed because Buyers would not cooperate with the Disclosure. One State, I believe Michigan, made it against the Law to “represent” a buyer without their written consent. But that led back to “Sub-Agency” as 90% of the buyers at first contact would not grant that consent.

    The evil became “Sub-Agency” that the Powers That Be decided MUST be eradicated. However as you can see from the comments above from Tyler, et al “Why can’t the agent be doing it FOR the Seller”…many would still choose Sub-Agency if we let them.

    Many home buyers when asked, want the “default” to be that Agents Represent the Seller UNLESS the buyer HIRES THEM. They are not as “repulsed” by Sub-Agency or Dual Agency as the industry and the Laws of each State WANT them to be. What do we do about that? They do not WANT “forced” representation.

    Maybe we need to “Turn Back Time” and do a “do-over” in each State. It seems to be what Consumers want us to do…

  234. 234
    ARDELL says:

    RE: Kary L. Krismer @ 32

    Kary…your distaste for the clarity of what I do and how I do it is indeed “a Cat Fight” and not a discussion. Buyers and Sellers LIKE that the Buyer Agent Fee is disclosed to ALL, which is what I do.

    I make it clear to the Buyer AND the Seller that X% of the Asking Price equals the amount reserved by the Seller for the Buyer to be represented. You call that honest disclosure “a gimmick” of some kind. That is your attacking my integrity and yes…”a cat fight”.

    Your argument is weak…your attacks of me are many…you have not even ever met me and yet you attack me at every turn in every place you can find me on the internet. You are a Stalker in wait to beat me over the head as often as possible.

    Telling a Buyer and a Seller that X% of the Asking Price is FOR THE BUYER’S REPRESENTATION is NOT a negative. It is a positive. It is FULL DISCLOSURE.

    How you can find fault with that is just beyond realm of imagination.

  235. 235

    By ARDELL @ 234:

    RE: Kary L. Krismer @ 32 – Kary…your distaste for the clarity of what I do and how I do it is indeed “a Cat Fight” and not a discussion. Buyers and Sellers LIKE that the Buyer Agent Fee is disclosed to ALL, which is what I do.

    I make it clear to the Buyer AND the Seller that X% of the Asking Price equals the amount reserved by the Seller for the Buyer to be represented. You call that honest disclosure “a gimmick” of some kind. That is your attacking my integrity and yes…”a cat fight”.

    So the only people you don’t disclose it to are other agents (not reading this blog) and other buyers represented by those agents? Nice selective disclosure.

    Also it’s nice how you have not addressed in any way my concerns about how it’s not good for either the buyer or seller. Do you disclose to the seller the greater risk they face if your fee schedule actually manages to lure a naive buyer? On this I can’t know, but I suspect you don’t disclose during your listing presentation to your possible client how rare this event is or its adverse effects on them if you do get such a buyer. You deny it is rare and you deny there is an adverse impact, so why would you disclose that to the prospective client?

    My concerns are legitimate. Your concerns are a sales pitch to get more listings.

  236. 236
    ARDELL says:

    The odd Cylce of Change…or lack thereof…in the Real Estate industry is that the Industry Itself beats up on anyone with a newer concept that hints at destroying what is called “The Double Deal” or “The Double Dip” of a Brokerage who wants to both List and Sell its “inventory”. Then after they malign and disparage and boycott said “newcomers” to the Industry, they point back and say, “See…we told you…they failed so they were not a good idea”.

    The Alternative Models also beat one another up, and often moreso than the Traditional Brokerages, as with Ray beating up on Craig.

    It’s a sad cycle that inhibits good change…and I have seen it time and time again over the last 20 years. MLS4Owners learned to lay low and not engage in these squabbles online. They too learned it the hard way…but they learned quickly that to stick their head out of their shell was to risk getting it cut off.

    They quietly do what they do best, as does MySecretAgent.com. They list for a flat fee, a low one. They provide a “For Sale by Owner in the MLS” option and they don’t beat up on other models in public while doing so. Applaud them both for that. They offer an honest service without needing to scream that others are “The Devil in Disguise”.

  237. 237
    FenceSitter says:

    “Call me crazy, but I just don’t think these two guys truly engage their clients while on tours. I think they are door openers waiting to get back to their desk….I hope I’m wrong and they get big enough to hire some Agents and put them on salary.”

    As a current WaLaw client I cannot tell you how wrong you are about that. On our most recent tour many aspects of the house were examined. Needed updates and possible legal considerations were discussed. We have been more than happy with their services.

  238. 238
    ARDELL says:

    RE: Kary L. Krismer @ 35

    Kary…your argument is not only weak…it belies common sense.

    It is not a “sales pitch” to a seller to impress on them that the 3% they OFFER to the Buyer’s Agent for the Buyer’s Representation…will not come back to them like a boomerang. In fact, quite the opposite.

    I once had a Seller ask if we could ONLY offer that amount IF the buyer expressly ASKED or knew to ask in advance if they could use it to that purpose. THAT is where my decision came from. NOT from some sales technique or scheme.

    I thought about that question. I thought about a buyer walking in to the Open House who did not know that 3% of the Sale Price was “reserved” at time of listing for them to have adequate and equal representation in the transaction. It made me want to take a shower just thinking about taking advantage of someone who might be that naive about real estate transactions.

    I told the seller “no”, I could not HIDE that from the consumer. The seller was NOT happy about that, Kary. To accuse me of doing this to make sellers “happy” and hire me is, well, stupid really. There is no reason why a Seller would “like” that.

    THAT is where my decision came from, Kary.

    I learned too late in life that people call other people what they themselves ARE. Most negative things you say about me…must be you. You must think up those things because you yourself WOULD do those things. It is the only reason I can come up with, since you don’t know me at all. Your vision of bad things must come from your own mind and your own heart. That is the only possible reason I can come up with.

    It’s the old “It takes one to know one”. You think I do those things for those bad reasons…because that is the only reason why you yourself would do them. They have nothing to do with me at all…since you don’t know me, and have never met me, that is the only possible conclusion.

    To have a disclosure to all buyers of my Listings that “The Asking Price includes 3% (or whatever the amount may be in the instant case) for YOUR separate and equal representation” is simple transparency of what IS. It is not a lie. It is not ambiguous. It is not to attract or distract or appease. It is merely…THE TRUTH.

    If some rule wants me to lie about that…well, you already know what I have to say about that. No Law or Rule supersedes my integrity. None. No boss…no peer…no opinion…supersedes my integrity on this matter. Not you…in fact LEAST of all you, will dissuade me from being honest on this matter. Every listing should disclose how much of the Asking Price is reserved for the Buyer’s Representation. That is my stance…and you will not shake me from it with vile assertions.

  239. 239
    ray pepper says:

    RE: ARDELL @ 236

    “Beat up on Agents”…Let me clarify for everyone………..

    Yes, I do……..

    Conventional Brokerages: Waste of money for Buyers and Sellers! HORRIBLE WASTE! I won’t even start…….

    Red Fin/Findwell: Too much to list your property and 6000/6500 office minimum too high for Buyers! Otherwise 2 thumbs up!

    Craig and Marc: I dislike their high listing fees and their up front fees………..Cant stand it! In the absence of those 2 love them!

    MLS4 Owners: I love everything about that company. In fact I wash my car next to their office in U. P. and always smile at their drop box for sellers. They have no agents just someone inputting clients data. We also share one of the same Attorneys on hand. Our selling porting of 500 Realty was modeled after them and Congress Realty! Sellers listen here: USE THEM!!!

    Cat fights? I find it a comedy routine. Worthy of the popcorn!! Through all the banter the public can read through all the jabs and realize what they want.. They have been “milked” long enough and this BUFFET conventional agents have been feasting on should be over in the next decade!

  240. 240

    By ARDELL @ 37:

    RE: Kary L. Krismer @ 35 – I learned too late in life that people call other people what they themselves ARE. Most negative things you say about me…must be you. You must think up those things because you yourself WOULD do those things. It is the only reason I can come up with, since you don’t know me at all. Your vision of bad things must come from your own mind and your own heart. That is the only possible reason I can come up with.

    Ardell, you have a long history of being 100% wrong on legal issues. The right to get an earnest money back, where you don’t even know the form that controls. The “arms-length transaction” notice, where you didn’t take the fact that no one agreed with you as a clue that you were wrong, but instead wrote your own blog piece on the topic. The reason I address what you write so often is because you are spreading a lot of bad information on the Internet. You don’t know what you’re talking about, but that doesn’t stop you from talking.

    As to this issue ignoring the disclosure issue and the sales pitch issue, I have real problems with a system that encourages either an unrepresented buyer or if you really throw your client under a bus, dual agency. Again another matter where you are just wrong, and if you ever have one of these deals go sideways on you where a lawsuit comes about, the plaintiff’s attorney (and probably your client’s attorney) is going to have a field day deposing you.

    Finally, you’re fortunate that you haven’t had one of these unrepresented buyer deals for over 2 years. If you’re lucky, any the applicable statute of limitation is three years.

  241. 241
    One Eyed Man says:

    RE: ARDELL @ 233

    The issue I presented isn’t a legal issue. Its a business and economic issue. The brokerage industry had to change its in the 1990’s to avoid the selling office being found in breach of common law fiduciary duties because the selling agents who were preceived by buyers as the buyers agent claimed to be sub-agents of the seller under the MLS system. That legal issue was resolved by changes to the brokerage law in the 1990’s.

    The problem that remains is a business issue not a legal one. The seller still pays both agents and the buyer doesn’t negotiate the commission with their agent. Because the buyers commission isn’t effectively negotiated, it theoretically (not necessarily practically) should be too high. That creates an inefficient market place that should be forced to adapt by competition from a new business model.

    Normally business issues are left to the market place to resolve rather than forced to change through regulation. But the cost to set up an alternative to the MLS and the need to have it reach a size sufficient to be economically competitve, constitutes a barrier to entry. That set of facts probably meets the general definition of a monopoly. That’s part of the reason that the MLS’s around the country get hounded so much not to hamper the screwball rebate discount models.

    I believe that its likely that the SOC system is “anti-competitive” in that it hampers the ability of buyers to negotiate directly for the amount of commission they pay and the services they receive. Before the advent of the internet, the MLS offerred a significant benefit to consumers by allowing for a broader exposure of listings. That benefit probably outweighed the lack of negotiation of the Buyer’s side commission. But now, the ability to get nearly free exposure of all listings on the internet effectively eliminates the benefit of broad exposure through the MLS. If that’s true, a new brokerage paradigm that doesn’t hamper the negotiation of buyer’s commissions should eventually arise for pure economic reasons, assuming the economic benefit is sufficient for the new entity to obtain the capital to reach the critical mass necessary to be more economical than the MLS.

    But all of that is purely businsess theory that may be limited by other practical issues. There are some complicating factors such as the critical mass issue to get such an entity to a volume level to be economically profitable and competitive with the MLS. There’s also the issue S-Crow points out concerning the financing of buyers commissions as part of the purchase price under the SOC system, and I’m sure there are others as well.

  242. 242

    By One Eyed Man @ 240:

    The issue I presented isn’t a legal issue. Its a business and economic issue. The brokerage industry had to change its in the 1990’s to avoid the selling office being found in breach of common law fiduciary duties because the selling agents who were preceived by buyers as the buyers agent claimed to be sub-agents of the seller under the MLS system. That legal issue was resolved by changes to the brokerage law in the 1990’s..

    OEM, thank you for giving the history lesson on this topic. Prior to the change in Washington law I had been saying I saw the old system as a potential liability issue for agents, but I didn’t realize until you mentioned it yesterday that the change was possibly driven by litigation.

  243. 243
    ARDELL says:

    RE: ray pepper @ 238

    What you do not recognize Ray, is that MORE options is the goal. Not for YOU to decide which are best for ALL people, but so they have the , the consumers, have Freedom of Choice and more choices to choose from. For you to say only One option should exist is being part of the problem vs part of the solution.

    I honor and respect your position, because you really do not know why a Seller pays more than that to list their home. But acknowledge that MOST do and would not be “best served” by an MLS4Owners type operation. It is the Seller’s Choice, and thank God they have choices.

    But the ONLY reason you think and scream that more than $500 is ludicrous is because you offer that…it is your self motive to like that…even though it is not suitable to the purpose and goal of most (not all but most) sellers of homes.

    Honor that each has its place in the variety of options for consumers, Ray. I ask you that as your friend. I could not list someone’s home for $500 and look at them with a straight face and call that what they “need” to sell their home. It would be dishonest and disingenuous for me to do that. You can say that honestly, because frankly, you don’t know any better by your own admission.

    You are just flat out wrong on that…for most sellers of homes. If you ARE right…then they CAN all hire the $500 service. Most sellers recognize they need more than that to accomplish their goal.

  244. 244

    By ARDELL @ 243:

    What you do not recognize Ray, is that MORE options is the goal. Not for YOU to decide which are best for ALL people, but so they have the , the consumers, have Freedom of Choice and more choices to choose from. For you to say only One option should exist is being part of the problem vs part of the solution.

    Exactly, although I would suggest that low price listings that don’t include a Supra keybox shouldn’t be a choice, or at least it’s a choice I’m not comfortable with at all. If it’s a high end appointment only listing, where the agent will be present to show, that’s a different matter.

  245. 245

    RE: Kary L. Krismer @ 229 – Do I pre-show? Nope, unless the client wants me to do so and to count that time against the included tours.

  246. 246
    ARDELL says:

    RE: Kary L. Krismer @ 244

    Kary,

    Read what you just said. For rich people no keybox is just fine, but for poor people…all should be OK with everyone coming through. What? Define “high end” in the context you have stated it. Over what price would you make this unequal distinction?

  247. 247
    ARDELL says:

    RE: Craig Blackmon @ 45

    With today’s technological advances, that is no longer necessary most times. used to be the case. But with aerial viewing and 15 photos, rarely do I need to do that except to stand outside the house and listen for high road noise levels, when I suspect that to possibly be the case.

    Plus most clients need a point of comparison and want to see some of the bad ones and the good ones so they have a frame of reference.

  248. 248

    By ARDELL @ 246:

    RE: Kary L. Krismer @ 244 – Kary,

    Read what you just said. For rich people no keybox is just fine, but for poor people…all should be OK with everyone coming through. What?

    I’d suggest you read what I said.

    Exactly, although I would suggest that low price listings that don’t include a Supra keybox shouldn’t be a choice, or at least it’s a choice I’m not comfortable with at all.

    Thus on low priced listing I would want a keybox present for the owners’ security. That’s pretty clear.

    If it’s a high end appointment only listing, where the agent will be present to show, that’s a different matter.

    I realize this was ambiguous, but I meant listing agent. Without a keybox they would need to be present for an appointment only showing. I didn’t mean to imply that higher priced listing owners should be safe showing their own listings–unless maybe they have an armory as part of the property. I was envisioning a full service listing agent who showed the high end property (over 2M or more).

  249. 249

    By ARDELL @ 47:

    RE: Craig Blackmon @ 45 – With today’s technological advances, that is no longer necessary most times. used to be the case. But with aerial viewing and 15 photos, rarely do I need to do that except to stand outside the house and listen for high road noise levels, when I suspect that to possibly be the case.

    Okay, I’m not surprised that Craig doesn’t preview, but I’m shocked you don’t. One of the reasons for buyers to hire a full service agent is so that they don’t waste their time looking at properties that don’t suit them.

    I might not preview on the first outing, where I am just trying to get a feel for what the client wants. But after that the goal is to never cold show a client a property unless time restrictions dictate (e.g. they need to find a property ASAP) or rarely if it’s happens to be a tenant occupied property.

  250. 250

    […] posts by me and Ardell, Seattle Bubble asked its readers to weigh in, framing the issue as “Real Estate Agents: Advocates, or Dead Weight?” Both Ardell’s “rebuttal” and SB’s “poll” muddied my […]

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