The 10 things your Real Estate Broker won't tell you.

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Although it's a slide show of info, a fun read. Wells Fargo Bank put out something like this a few years back and in 24 hrs issued a face to the ground genuflection to the 'tard community for questioning their business model. I wonder how soon the WSJ will take to do the same.





<a href="http://www.smartmoney.com/spending/for-the-home/10-things-your-real-estate-broker-wont-tell-you/">http://www.smartmoney.com/spending/for-the-home/10-things-your-real-estate-broker-wont-tell-you/</a>





My .02c



Soylent Green Is People
 
10. ?You can probably do this without me.?

Brokers like to create a lot of mystique about selling homes, insisting that the process is complicated and best left to professionals. Not so, say homeowners who have sold their homes themselves (about 20 to 25 percent do so each year). William Supple, publisher of the sale-byowner real estate magazine Picket Fence Preview and author of How to Sell Your Own Home, says that ?properly priced and advertised, a house sells itself.? Supple adds that sellers should plant a yard sign and post online ads for the property on local sites aligned with print publications (call current advertisers to see if a site is effective).



When it comes to the negotiations between buyers and sellers, Supple thinks brokers and their commissions tend to just get in the way. ?Usually, the haggling occurs over a 5 to 10 percent difference,? he says. ?And that is more or less the broker?s cut of the sale price. You don?t need him.? Just be sure you price your home well. The way most self-sellers hurt themselves, Supple says, is in setting either an unreasonably high or tragically low asking price. ?Hire an independent appraiser for $200,? he suggests, ?and he will tell you [the parameters of] what to charge.?
 
<blockquote>5. ?Sometimes I forget whose side I?m on.?



The past 15 years have seen the proliferation of the buyer broker, agents who are supposed to work strictly in the buyer?s interest, helping him get a fair price on a home as well as avoid pitfalls along the way. Unfortunately, things don?t always unfold so nicely. While buyers may think they?re getting a broker who isn?t commission-hungry, many buyer agents are just that: They usually get about 3 percent, the same amount any broker typically earns when he gets involved with another agent?s listing. ?Buyer brokers are sometimes too focused on closing the sale and getting that commission,? says Max Gordon, an Overland Park, Kan.?based real estate broker and attorney, so it?s often in their best interest to see you pay as high a price as possible.



Even worse, some brokers who call themselves buyer advocates are actually working for companies that also represent sellers. ?Brokerages offer bonuses to buyer agents if they sell an in-house listing,? says Israel. A good way to get a broker who has no such conflicts of interest: The National Association of Exclusive Buyer Agents. Its website (www.naeba.com) can help you find a buyer agent near you who pledges to help you get the best deal possible and has no ties to sellers? agents; many even work on a fee structure rather than on commission.</blockquote>


I'm a bit confused with the aspect of a pocket/in-house listing when discussing a seller's agent holding an open house before the home is put on the MLS. We looked at a nice (albeit) small house over the weekend while driving around. No agent's sign on the lawn yet, just some Open House signs directing people to the property. The place is a flip, but nicely done.



When I asked about why it wasn't on the MLS, she stated it's an in-house listing, and won't be going on the MLS until Tuesday (today)....and didn't <strong>really</strong> answer the question....kinda like a politician.



IMO, Open House = lots of potential buyers (and lots of networking, of course). Typically, don't most buyers already have an agent when looking to buy a place (we do)? If the majority of buyers have agents, keeping a listing in-house doesn't really accomplish much when the seller's agent holds a general OH.



My take on the in-house listing, especially the way it's explained above, is the firm is more concerned with keeping ALL the commissions in-house, and doesn't give a rat's ass about the seller. It can't be that simple, is it?
 
[quote author="Adam Ginsberg" date=1248244106]<blockquote>5. ?Sometimes I forget whose side I?m on.?



The past 15 years have seen the proliferation of the buyer broker, agents who are supposed to work strictly in the buyer?s interest, helping him get a fair price on a home as well as avoid pitfalls along the way. Unfortunately, things don?t always unfold so nicely. While buyers may think they?re getting a broker who isn?t commission-hungry, many buyer agents are just that: They usually get about 3 percent, the same amount any broker typically earns when he gets involved with another agent?s listing. ?Buyer brokers are sometimes too focused on closing the sale and getting that commission,? says Max Gordon, an Overland Park, Kan.?based real estate broker and attorney, so it?s often in their best interest to see you pay as high a price as possible.



Even worse, some brokers who call themselves buyer advocates are actually working for companies that also represent sellers. ?Brokerages offer bonuses to buyer agents if they sell an in-house listing,? says Israel. A good way to get a broker who has no such conflicts of interest: The National Association of Exclusive Buyer Agents. Its website (www.naeba.com) can help you find a buyer agent near you who pledges to help you get the best deal possible and has no ties to sellers? agents; many even work on a fee structure rather than on commission.</blockquote>


I'm a bit confused with the aspect of a pocket/in-house listing when discussing a seller's agent holding an open house before the home is put on the MLS. We looked at a nice (albeit) small house over the weekend while driving around. No agent's sign on the lawn yet, just some Open House signs directing people to the property. The place is a flip, but nicely done.



When I asked about why it wasn't on the MLS, she stated it's an in-house listing, and won't be going on the MLS until Tuesday (today)....and didn't <strong>really</strong> answer the question....kinda like a politician.



IMO, Open House = lots of potential buyers (and lots of networking, of course). Typically, don't most buyers already have an agent when looking to buy a place (we do)? If the majority of buyers have agents, keeping a listing in-house doesn't really accomplish much when the seller's agent holds a general OH.



My take on the in-house listing, especially the way it's explained above, is the firm is more concerned with keeping ALL the commissions in-house, and doesn't give a rat's ass about the seller. It can't be that simple, is it?</blockquote>


In-house listings are a great way to attract buyers who do not have agents. Also, since the agent gives the impression they have valuable information, some people actually change agents to gain access to this secret information in the future.



In-house listings provide a way to give "special" clients the first look at a particular property. This can actually be a good reason to go with an agent with many listings. You won't get a better price from an agent's in-house listings, but you can get the first look at it. Often a fair-market value bid in a pre-listing situation gets the property, and it never goes on the MLS.



Agents are motivated to "double-end" the transaction, but it doesn't necessarily mean they cannot serve both parties. If two parties review the facts presented by the Agent and come to terms, the Agent's job becomes one of presenting accurate information rather than trying to manipulate one party or the other. If the information presented is accurate an unbiased, the Agent can serve both masters.
 
[quote author="IrvineRenter" date=1248325440][quote author="Adam Ginsberg" date=1248244106]<blockquote>5. ?Sometimes I forget whose side I?m on.?



The past 15 years have seen the proliferation of the buyer broker, agents who are supposed to work strictly in the buyer?s interest, helping him get a fair price on a home as well as avoid pitfalls along the way. Unfortunately, things don?t always unfold so nicely. While buyers may think they?re getting a broker who isn?t commission-hungry, many buyer agents are just that: They usually get about 3 percent, the same amount any broker typically earns when he gets involved with another agent?s listing. ?Buyer brokers are sometimes too focused on closing the sale and getting that commission,? says Max Gordon, an Overland Park, Kan.?based real estate broker and attorney, so it?s often in their best interest to see you pay as high a price as possible.



Even worse, some brokers who call themselves buyer advocates are actually working for companies that also represent sellers. ?Brokerages offer bonuses to buyer agents if they sell an in-house listing,? says Israel. A good way to get a broker who has no such conflicts of interest: The National Association of Exclusive Buyer Agents. Its website (www.naeba.com) can help you find a buyer agent near you who pledges to help you get the best deal possible and has no ties to sellers? agents; many even work on a fee structure rather than on commission.</blockquote>


I'm a bit confused with the aspect of a pocket/in-house listing when discussing a seller's agent holding an open house before the home is put on the MLS. We looked at a nice (albeit) small house over the weekend while driving around. No agent's sign on the lawn yet, just some Open House signs directing people to the property. The place is a flip, but nicely done.



When I asked about why it wasn't on the MLS, she stated it's an in-house listing, and won't be going on the MLS until Tuesday (today)....and didn't <strong>really</strong> answer the question....kinda like a politician.



IMO, Open House = lots of potential buyers (and lots of networking, of course). Typically, don't most buyers already have an agent when looking to buy a place (we do)? If the majority of buyers have agents, keeping a listing in-house doesn't really accomplish much when the seller's agent holds a general OH.



My take on the in-house listing, especially the way it's explained above, is the firm is more concerned with keeping ALL the commissions in-house, and doesn't give a rat's ass about the seller. It can't be that simple, is it?</blockquote>


In-house listings are a great way to attract buyers who do not have agents. Also, since the agent gives the impression they have valuable information, some people actually change agents to gain access to this secret information in the future.



In-house listings provide a way to give "special" clients the first look at a particular property. This can actually be a good reason to go with an agent with many listings. You won't get a better price from an agent's in-house listings, but you can get the first look at it. Often a fair-market value bid in a pre-listing situation gets the property, and it never goes on the MLS.



Agents are motivated to "double-end" the transaction, but it doesn't necessarily mean they cannot serve both parties. If two parties review the facts presented by the Agent and come to terms, the Agent's job becomes one of presenting accurate information rather than trying to manipulate one party or the other. If the information presented is accurate an unbiased, the Agent can serve both masters.</blockquote>


By definition an agent cannot serve two masters! C'mon IR you're going soft. First no more schadenfrede, and now defending pocket listings. Keep in mind that real estate agents ar not fiduciaries, so they are not obligate (read legally bound) to act in the best interest of their clients.
 
I was too chicken to disagee with IR, but IMO and agent can not represent two opposing parties. One may wax poetically about win-win, but the truth is that the buyer and seller have opposing interests.







Heck, I think that there are very few agents who can adequately represent one client.
 
[quote author="awgee" date=1248500814]I was too chicken to disagee with IR, but IMO and agent can not represent two opposing parties. One may wax poetically about win-win, but the truth is that the buyer and seller have opposing interests.







Heck, I think that there are very few agents who can adequately represent one client.</blockquote>
True, the problem comes from the fact that the agent knows privy information about each of the clients interests and goals (e.g. max price). Just a thought...one step in the right direction would be having the NAR or the States outlaw listing and buyer agents to collecting a full double commission if they represent both a buyer and seller. That would quickly eliminate the incentive for agents to try to get both sides of the commission because it would require them to do more work for the same pay.
 
[quote author="CapitalismWorks" date=1248499335]By definition an agent cannot serve two masters! C'mon IR you're going soft. First no more schadenfrede, and now defending pocket listings. Keep in mind that real estate agents ar not fiduciaries, so they are not obligate (read legally bound) to act in the best interest of their clients.</blockquote>


It really depends on how you define "serving" either party.



Is using deception and emotional manipulations OK as long as it is your realtor doing it to someone else? I think most people don't mind as long as they benefit despite how it reflects on them. If we accept that it is OK for realtors to lie, cheat and steal on our behalf, can we really be upset with them when we see this behavior?



Is telling the truth and facilitating a transaction serving either party? I argue it does. Telling the truth and being accurate can serve both parties as it does not require typical realtor lies and manipulations to gain advantage over either party.



If you define the Agent's purpose as facilitating a transaction, acting as an arbitrator, then the dual agency conflict disappears.



If you define the Agent's purpose as aggressively pursuing a clients selfish needs, acting as an attorney, then there is no resolution to the dual agency problem.
 
[quote author="IrvineRenter" date=1248516378][quote author="CapitalismWorks" date=1248499335]By definition an agent cannot serve two masters! C'mon IR you're going soft. First no more schadenfrede, and now defending pocket listings. Keep in mind that real estate agents ar not fiduciaries, so they are not obligate (read legally bound) to act in the best interest of their clients.</blockquote>


It really depends on how you define "serving" either party.



Is using deception and emotional manipulations OK as long as it is your realtor doing it to someone else? I think most people don't mind as long as they benefit despite how it reflects on them. If we accept that it is OK for realtors to lie, cheat and steal on our behalf, can we really be upset with them when we see this behavior?



Is telling the truth and facilitating a transaction serving either party? I argue it does. Telling the truth and being accurate can serve both parties as it does not require typical realtor lies and manipulations to gain advantage over either party.



If you define the Agent's purpose as facilitating a transaction, acting as an arbitrator, then the dual agency conflict disappears.



If you define the Agent's purpose as aggressively pursuing a clients selfish needs, acting as an attorney, then there is no resolution to the dual agency problem.</blockquote>


If your agent is lying to the counterparty that MAY be a problem. When you agent is lying to you that IS a problem. Or, when the agent it too stupid/mis-informed to know when they are lying, then they are worse than useless.
 
[quote author="IrvineRenter" date=1248516378][quote author="CapitalismWorks" date=1248499335]By definition an agent cannot serve two masters! C'mon IR you're going soft. First no more schadenfrede, and now defending pocket listings. Keep in mind that real estate agents ar not fiduciaries, so they are not obligate (read legally bound) to act in the best interest of their clients.</blockquote>


It really depends on how you define "serving" either party.



Is using deception and emotional manipulations OK as long as it is your realtor doing it to someone else? I think most people don't mind as long as they benefit despite how it reflects on them. If we accept that it is OK for realtors to lie, cheat and steal on our behalf, can we really be upset with them when we see this behavior?



Is telling the truth and facilitating a transaction serving either party? I argue it does. Telling the truth and being accurate can serve both parties as it does not require typical realtor lies and manipulations to gain advantage over either party.



If you define the Agent's purpose as facilitating a transaction, acting as an arbitrator, then the dual agency conflict disappears.



If you define the Agent's purpose as aggressively pursuing a clients selfish needs, acting as an attorney, then there is no resolution to the dual agency problem.</blockquote>
It is a fallacy to imply that if your agent is adequately representing your interest, then they would lie or find it necessary to lie.

That is like saying that in a court of law, the lawyers must necessarily lie to represent their clients interest.

It is the agent's job to get the best price possible for their client. A dual agent can not get the best price possible for both clients. Only in the rare circumstance that the seller's lowest price is the buyer's highest price would the best price be the same for both.

Dual agency is a myth promulgated by realtors and the NAR.

A real estate negotiation is by nature an adversarial relationship, and if you define an agent's purpose as facilitating a transaction or acting as an arbitrator as taking precedence to aggressively pursuing a clients interests, then you are in denial about the reality of the negotiation. It is the nature of the transaction that defines the agent's purpose, not the client or the agent.

Also, it is a stretch approaching ridiculousness to redefine a client's interest as a client's selfish needs. Pounding the table with hyperbole and exaggeration lays bare the emptiness of the argument.
 
^ This reminds me of a story my last realtor told me. In one deal where she was acting as a dual agent, the home had a patio covered in about 200 heavy stone pavers and it needed some sort of work done beneath them. The seller agreed to have the work completed, so during escrow, they took up all the pavers, did the work, and set the stone pavers aside in a big pile. The buyer insisted the pavers be put back as they once were or else they would walk away. The seller refused. Guess who ended up spending all day in the blazing sun, putting the 200 pavers back one by one? The Realtor. That was the day she decided she would never represent both parties again.
 
[quote author="SoCal78" date=1248521935]^ This reminds me of a story my last realtor told me. In one deal where she was acting as a dual agent, the home had a patio covered in about 200 heavy stone pavers and it needed some sort of work done beneath them. The seller agreed to have the work completed, so during escrow, they took up all the pavers, did the work, and set the stone pavers aside in a big pile. The buyer insisted the pavers be put back as they once were or else they would walk away. The seller refused. Guess who ended up spending all day in the blazing sun, putting the 200 pavers back one by one? The Realtor. That was the day she decided she would never represent both parties again.</blockquote>
I would feel internally conflicted trying to be a dual agent. I honestly don't know how some agents do it, but they shouldn't be doing it.
 
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