There is an old lawyer joke that is in need of update. It used to go something like, “what do you call one million lawyers at the bottom of the ocean? A good start.” I think the time has come to amend this slightly to include Realtors.
We just got so utterly squeezed by the buyer’s criminal agent and our part-time real estate agent on the sale of our estates in Virginia, that one wonders if any laws were broken. Just being told every day that “it’s a buyer’s market” and doing to us what Clinton had been doing to Monica is no way to earn a 6% sales commission. At least that’s my opinion. In fact, you’d have to have little pride in your industry to look someone straight in the face and say your industry deserves this commission – a supposedly negotiable percentage.
On second thought, there may be laws being broken by the agents. Take a look at the current housing market. We hear at least one story every day that the market is slowing and values are plummeting. Who says so? Realtors, of course. And what do Realtors have to benefit by a market in full plunge? Faster sales. So these so-called experts tell us what price to market our house and then let offers come in 20 percent below asking price and urge us to take it. I think there is collusion going on and should be investigated. It's tough being a commissioned sales agent, but have some respect and collectively advise your sellers to hold the line, not drop the price through the basement.
This is not just the comments of someone who ended up on a bad end of transaction, but someone who is seriously challenging whether or not agents are purposely driving down the price of housing to ensure more and faster real estate sales. Yes, I know there are people who made bad investments and got teased with teaser interest rates who unfortunately need to sell. But that is just more of the ginned-up sales cycle that real estate agents urged us to buy into. “Interest rates are the lowest in 40 years,” one ad would say, implying that if you don’t buy now and buy often, you’re a moron. And, naturally, let a Realtor navigate the tricky waters of buying something that ended up at the top of the market.
Whatever happened to the old investment advice of buying low and selling high? And whatever happened to real estate agents advising their buyers that they were purchasing at the top of the market? I suspect they were too busy trying to catch a quick wave that they didn’t pay attention to the sales figures.
Using the Virginia Estates as an example of the chicanery in the industry, we agreed upon a list price that was below our tax assessment. We were told up front that it was a good price. When we entered the market there were two other similar homes for sale and their asking price was about the same as ours. Within days of us entering the market, each dropped their price $30,000, no doubt urged by their agent to do so to make their properties more attractive. I sneered at their willingness to drop so readily, but after several months of no activity, we lowered our price to match them. Once again, within days, they dropped their prices another $20,000, again no doubt at the urging of their “it’s a soft-headed-market” real state agents.
So we have a running of the bears in the real estate market fueled by the chutzpah of real estate agents and the frayed nerves of the people to whom they provide counsel. In unison, it seems, we all became nervous that the value of our homes was plummeting and it would be years when the current value would return. Sell now or face worse choices, we were told.
When we finally got an illusive offer – from a young woman whose mother happened to be an agent – it was so depressing that we nearly rejected it without a counter-offer. Our part-time agents suggested a counter-offer that we normally would never consider. But we did and it barely budged them from their initial offer. To make a long story short, we did reach an agreement, but there is no joy in the end result. Sadly, when we go to buy in San Diego, we will find the meanest, nastiest buyer’s agent possible and do to others what has been done to us. Of course we will probably be told by our agent that it is now a seller’s market. Seems to be our dumb luck, anyway.
4 comments:
I completely agree with you. Over the years I have periodically thought about the size of the commission these people get for selling a house or finding a buyer. The agent is motivated to MAKE the sale, and to make it as soon as possible. That way they accomplish two things. Not only do they not lose the client to another agent but they rake in the money SOONER than later.
Based on your stimulating post and my past pondering I think the commission structure should be altered at least for the selling agent. Set the list price and then pay the agent based on a sliding commission. For example, using a house comped out at say $500K: 3% for selling the house for between $480-500K, 3% PLUS 10% of any amount OVER $500K, 2.75% for $450-480K, and 2.5% for anything under $450K.
Of course those numbers would need refining but you get the general idea. It seems to me that agents need an incentive to get your asking price (or better). They should be working FOR you and WITH you, not just for themselves!
Oh, and let's NOT wreck the ocean with a bunch of realtors!
Rape update: The buyer's agent (remember the buyer is the daughter of the agent) has reneged on the verbal agreement and tried to suck more money out of us when the written counter-offer came in. We have now rejected their counter-offer and it appears the house will be back on the market. Total sleeze. By the way, two things of importance to note: when I say my Realtor is part-time, I mean it. He actually has another full-time job, something he did not disclose to me prior to signing a listing agreement. Secondly, the buyer's agent works for the same agency and you would think they would have some inter-office ethics if they lack professional integrity, wouldn't you?
Lets get a rope and send a message.
Updated update: The criminal Realtor eventually honored her verbal agreement (a good financial raping, nonetheless) and our part-time Realtor has finished up his worthless end of the business. All and all an unsavory transaction but we're done with it. We no longer lay claim to any land holdings or estates in the Commonweathl of Virginia.
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