Are selling agents part of the problem?

[EconProf]

BobS
Raptorduck, regarding your frustrations with seller’s agents, here’s a suggestion that maybe could have thwarted some of their games. Perhaps you should insist that your written offer be presented in person to seller by your agent, with his/her agent present, of course. Could claim (rightfully) that any questions, add’l info., etc. could be cleared up more quickly that way.
Realtors out there, what do you think?

[JWM in SD]

Raptorduck,

I’ve read this thread and have refrained from direct comment until now. I honestly don’t understand why you are looking to buy in this market. The piggingtons, HBBs, HPs are winning this battle right now. We have taken our money off the table and it is showing effects. If you don’t believe me, look at the recent exchange between me and Shari the realtor. They are monitoring these sites because they know that people are beginning to listen finally.

Don’t play their game…you don’t have to. That is the point.

[JWM in SD]

Raptorduck,

I’ve read this thread and have refrained from direct comment until now. I honestly don’t understand why you are looking to buy in this market. The piggingtons, HBBs, HPs are winning this battle right now. We have taken our money off the table and it is showing effects. If you don’t believe me, look at the recent exchange between me and Shari the realtor. They are monitoring these sites because they know that people are beginning to listen finally.

Don’t play their game…you don’t have to. That is the point.

[NotCranky]

Navydoc, we don’t have a problem. I am fiesty,even so, there is only one guy I was really angry with here. He doesn’t post anymore. I didn’t want him to leave…just fight fair. Another person threw a really low blow at a suspected homosexual, one of the better posters this blog has ever had. I don’t like that. That is a big disappointment. Otherwise it is just all internet banter to me.

[NotCranky]

Navydoc, we don’t have a problem. I am fiesty,even so, there is only one guy I was really angry with here. He doesn’t post anymore. I didn’t want him to leave…just fight fair. Another person threw a really low blow at a suspected homosexual, one of the better posters this blog has ever had. I don’t like that. That is a big disappointment. Otherwise it is just all internet banter to me.

[SD Realtor]

Raptor –

Good response. I think you are handling the situation very well. Look it is always a pain in the ass buying a home. You are coping and will eventually find the place you want. Here are a few observations….

1 – Bob S had a great post. Yes yes yes I have had the selling agent (that is actually the agent that represents the buyer… the agent representing the seller is known as the listing agent) call me up to ask if he/she could personally present the offer to myself and my client! This is VERY VALID and it merits consideration. (Good call Bob)

2 – Getting back to your original beef, it is with the listing agent. It is very frustrating indeed. However you have to remember that the listing agent is EMPLOYED by the seller and acts under instructions from the seller… IDEALLY… If you want to challenge that system you are welcome to do so… Some would say to send a correspondence directly to the seller if you feel that the listing agent is not acting under the sellers direct instructions. Nothing is stopping you from doing that. I am not saying this will produce a desired result nor am I advising you to do so. It is an option.

3 – You have employed an agent to work for you. Thus you should instruct that agent accordingly or ask for her/his guidance on how to deal with the problem.

4 – Stick to your guns, however don’t be discouraged. If the listing agent says don’t bother writing an offer up at so and so of a price, you should assume that this statement was made because the seller asked the listing agent to do so. I really really REALLY think that most of the difficulty you have encountered is from the sellers and not the agents… you don’t have access to the sellers which is very frustrating. What is even more frustrating is you see the boneheaded results of the sellers intransgience. That the home sells later down the road for a lesser price or something like that.

5 – As far as the electronics go in the home you wanted… again, the listing agent is an agent for the seller and acts in the sellers best fiduciary interest UNDER the sellers direction. While you feel it was the underhandedness of the listing agent that killed the deal it had to be authorized in the end by the seller.

As a side note, the disdain for agents on this site is not a big deal for me. However just like I blame the buyer for buying the overpriced home even though he was stupid enough to listen to the hot air from the realtor and the blue smoke from the mortgage broker… I blame sellers for sticky pricing and not pricing to sell and playing jerk around games. There are PLENTY of lame agents that muck things up… no disagreement… Yet if you price the house at price X which was recommended (most likely incorrectly) by the listing agent… and it doesn’t sell… it doesn’t take a PHD to figure out that you need to adjust it until it does sell.

SD Realtor

[SD Realtor]

Raptor –

Good response. I think you are handling the situation very well. Look it is always a pain in the ass buying a home. You are coping and will eventually find the place you want. Here are a few observations….

1 – Bob S had a great post. Yes yes yes I have had the selling agent (that is actually the agent that represents the buyer… the agent representing the seller is known as the listing agent) call me up to ask if he/she could personally present the offer to myself and my client! This is VERY VALID and it merits consideration. (Good call Bob)

2 – Getting back to your original beef, it is with the listing agent. It is very frustrating indeed. However you have to remember that the listing agent is EMPLOYED by the seller and acts under instructions from the seller… IDEALLY… If you want to challenge that system you are welcome to do so… Some would say to send a correspondence directly to the seller if you feel that the listing agent is not acting under the sellers direct instructions. Nothing is stopping you from doing that. I am not saying this will produce a desired result nor am I advising you to do so. It is an option.

3 – You have employed an agent to work for you. Thus you should instruct that agent accordingly or ask for her/his guidance on how to deal with the problem.

4 – Stick to your guns, however don’t be discouraged. If the listing agent says don’t bother writing an offer up at so and so of a price, you should assume that this statement was made because the seller asked the listing agent to do so. I really really REALLY think that most of the difficulty you have encountered is from the sellers and not the agents… you don’t have access to the sellers which is very frustrating. What is even more frustrating is you see the boneheaded results of the sellers intransgience. That the home sells later down the road for a lesser price or something like that.

5 – As far as the electronics go in the home you wanted… again, the listing agent is an agent for the seller and acts in the sellers best fiduciary interest UNDER the sellers direction. While you feel it was the underhandedness of the listing agent that killed the deal it had to be authorized in the end by the seller.

As a side note, the disdain for agents on this site is not a big deal for me. However just like I blame the buyer for buying the overpriced home even though he was stupid enough to listen to the hot air from the realtor and the blue smoke from the mortgage broker… I blame sellers for sticky pricing and not pricing to sell and playing jerk around games. There are PLENTY of lame agents that muck things up… no disagreement… Yet if you price the house at price X which was recommended (most likely incorrectly) by the listing agent… and it doesn’t sell… it doesn’t take a PHD to figure out that you need to adjust it until it does sell.

SD Realtor

[raptorduck]

JWM. I first joined this blog because of all the good information about the markets in which I am looking. I started reading and posting when I saw it was comprised primarily of folks who do not think I should buy, period.

That is good for me as you will all give me a perspective to balance my “buyer” mentality. I see this as a good market to buy for me. I don’t have to buy at the bare bottom. We have made a choice to move and buy with about a 2 yr window. I read Patrick Kilea’s stuff, but still prefer to own a home. My wife does not care about theories. I don’t do it as an investment or anything (not my primary residence anyway). Like with my cars, I intend to pay down my mortgage to 1/3 of my purchase price. This time, I am looking for a house to live in until I retire. The last time, I bought a 5 yr “transition” home and it has been 7 years. I know that the SD market is at least a 10 yr hold market and hope to hold much much longer than that.

I now appreciate the logical agruments against my plan and view, but I am proceeding anyway, as informed, careful, and prepared as I can. Folks on this board have helped me be more informed and for that I am grateful.

[raptorduck]

JWM. I first joined this blog because of all the good information about the markets in which I am looking. I started reading and posting when I saw it was comprised primarily of folks who do not think I should buy, period.

That is good for me as you will all give me a perspective to balance my “buyer” mentality. I see this as a good market to buy for me. I don’t have to buy at the bare bottom. We have made a choice to move and buy with about a 2 yr window. I read Patrick Kilea’s stuff, but still prefer to own a home. My wife does not care about theories. I don’t do it as an investment or anything (not my primary residence anyway). Like with my cars, I intend to pay down my mortgage to 1/3 of my purchase price. This time, I am looking for a house to live in until I retire. The last time, I bought a 5 yr “transition” home and it has been 7 years. I know that the SD market is at least a 10 yr hold market and hope to hold much much longer than that.

I now appreciate the logical agruments against my plan and view, but I am proceeding anyway, as informed, careful, and prepared as I can. Folks on this board have helped me be more informed and for that I am grateful.

[zzz]

Raptor – all I can say is that having looked at buying a home in the last few years myself – most agents out there are idiots who all jumped on the real estate gravy train. Its kind of like the headhunters who got in during the .com boom of which most of them are no longer headhuntres because they had no clue of the difference between a DBA and a LAN administrator. There are some very good agents who have brains, but I’d spend some time asking people you view as brighter than yourself for recommendations – at least that’s what I do. I find that I have far more sophisticated cash flow models analyzing rent vs buy vs alternative investments than many financial planners much less real estate agents. Unless you find an incredibly good one, I would not look to them for “advice” on what is a good buy – they should be relied on for finding homes that you dictate are in your buyer profile – and then completing the transaction for you. Do your own homework and analysis – the internet is a beautiful thing and allows you to do all your own research and comp analysis.

Like everyone else has stated – you should not view your primary home as an investment – its a home you should want to live in for 5-10 years. Property historically has always appreciated over time, but how much time is the question and when you bought is the other. If you need the down payment amount for other things, or would rather invest it, then rent. Evaluate the opportunity cost. There are many cash flow studies out there – and if you need to “stretch”, then hold off on buying. What is your PITI + Debt as % of gross income? If it exceeds 28%, do you have enough cash to support your lifestyle? Invest your down payment and use those gains and additional savings to properly buy the right home at the right time for you- not to mention this market will have continued to correct. Go rent that house you dream of buying.

If however the amount you’d spend renting exceeds the amount of your monthly net payments (tax benefits), or is relatively on par, then buy the home – particularly if it will provide a stable environment for you to enrich your life.

To Shari who knocks people who rent – perhaps you need to build your own financial model of evaluating why people do indeed rent vs buy – over 30 years – and still come out on top of those who spent their hole lives paying a mortgage, and at the end of it, have less money than those who rented for the same period. Perhaps then you will have the credibility to write about this topic or knock renters with some actual facts.

[zzz]

Raptor – all I can say is that having looked at buying a home in the last few years myself – most agents out there are idiots who all jumped on the real estate gravy train. Its kind of like the headhunters who got in during the .com boom of which most of them are no longer headhuntres because they had no clue of the difference between a DBA and a LAN administrator. There are some very good agents who have brains, but I’d spend some time asking people you view as brighter than yourself for recommendations – at least that’s what I do. I find that I have far more sophisticated cash flow models analyzing rent vs buy vs alternative investments than many financial planners much less real estate agents. Unless you find an incredibly good one, I would not look to them for “advice” on what is a good buy – they should be relied on for finding homes that you dictate are in your buyer profile – and then completing the transaction for you. Do your own homework and analysis – the internet is a beautiful thing and allows you to do all your own research and comp analysis.

Like everyone else has stated – you should not view your primary home as an investment – its a home you should want to live in for 5-10 years. Property historically has always appreciated over time, but how much time is the question and when you bought is the other. If you need the down payment amount for other things, or would rather invest it, then rent. Evaluate the opportunity cost. There are many cash flow studies out there – and if you need to “stretch”, then hold off on buying. What is your PITI + Debt as % of gross income? If it exceeds 28%, do you have enough cash to support your lifestyle? Invest your down payment and use those gains and additional savings to properly buy the right home at the right time for you- not to mention this market will have continued to correct. Go rent that house you dream of buying.

If however the amount you’d spend renting exceeds the amount of your monthly net payments (tax benefits), or is relatively on par, then buy the home – particularly if it will provide a stable environment for you to enrich your life.

To Shari who knocks people who rent – perhaps you need to build your own financial model of evaluating why people do indeed rent vs buy – over 30 years – and still come out on top of those who spent their hole lives paying a mortgage, and at the end of it, have less money than those who rented for the same period. Perhaps then you will have the credibility to write about this topic or knock renters with some actual facts.

[Raybyrnes]

Are Selling Agents the Solution

For every argument there seems to be a counter-argument. There is a very interesting chapter in Freakonomics that discusses why Real Estate agents will sell your home as quickly as possible yet hold out for top dollar when selling their own. The primary reason is that there is little economic advantage for them to do so. Getting an extra 100K on a million dollar home gets them 3000 of potential commission but prolongs the 30000 K they can be paid today for moving the house.

Would it not seem then, that it will be realators who will begin to form a consensus that the time to sell is now and the price to move is low? It whould be these opinions that will ultimately persuade borrowers to drop prices. Would they not then act as a catalyst for price reductions.

With this said, would it not be in a home buyers interest to identify a realator who recognizes this situation so that they can act as an advocate for your offer.

[Raybyrnes]

Are Selling Agents the Solution

For every argument there seems to be a counter-argument. There is a very interesting chapter in Freakonomics that discusses why Real Estate agents will sell your home as quickly as possible yet hold out for top dollar when selling their own. The primary reason is that there is little economic advantage for them to do so. Getting an extra 100K on a million dollar home gets them 3000 of potential commission but prolongs the 30000 K they can be paid today for moving the house.

Would it not seem then, that it will be realators who will begin to form a consensus that the time to sell is now and the price to move is low? It whould be these opinions that will ultimately persuade borrowers to drop prices. Would they not then act as a catalyst for price reductions.

With this said, would it not be in a home buyers interest to identify a realator who recognizes this situation so that they can act as an advocate for your offer.

[Anonymous]

I can see that you have the same attitude about RE agents that I do. They are nothing more than glorified used car salesmen.
I have come up with what I call the A#@hole-O-Meter. It is shaped like a typical thermometer, at the bottom are the pond scum bottom feeding car salespeople, the next rung if you will are RE agents, followed by attorneys, and finally politicians.
The great thing about this device is that you can have sub-classifications. For example, a shoe salesperson can be below the used car salesperson and a new car salesperson can be between used car and RE agent.
Remember the higher the price goes on a home the more commission these scumbags make.
Another thing to ponder. The more you pay for a home the higher your property taxes go. Some people don’t take that into account when buying a home until they get the first tax bill.
Here in the bay area, in my opinion RE agents have driven the prices so high by convincing their clients that they are sitting on a gold mine. Fact of the matter is, unless you have a ton of equity, sellers will have to move to a cheaper area or face purchasing a similar or smaller home in the area they live now.
The only real winners are the agents. They take their commission and laugh all the way to the bank. This is the society that they have created for themselves and home buyers / sellers.
Where I live (SF peninsula), I have seen the demographics change from a mixture of blue and white collar families to that of predominantly white collar. The greed of sellers and agents have driven the decent blue collar family out of the area and right into the lousy areas.
I have been considering leaving the bay area since I can’t fathom paying a million dollars for an old house that has little or no room for my family to grow.
Of course my agent thinks only of how much these homes will appreciate, and not about what I really wnat. A safe place to live for my son to grow up. I can care less what my home could be worth in five to ten years. If the price triples again in ten years then you’ll have only morons who don’t know the value of a dollar buying.
Excuse the rant but I feel no pity if someone loses their a#@!

[Anonymous]

I can see that you have the same attitude about RE agents that I do. They are nothing more than glorified used car salesmen.
I have come up with what I call the A#@hole-O-Meter. It is shaped like a typical thermometer, at the bottom are the pond scum bottom feeding car salespeople, the next rung if you will are RE agents, followed by attorneys, and finally politicians.
The great thing about this device is that you can have sub-classifications. For example, a shoe salesperson can be below the used car salesperson and a new car salesperson can be between used car and RE agent.
Remember the higher the price goes on a home the more commission these scumbags make.
Another thing to ponder. The more you pay for a home the higher your property taxes go. Some people don’t take that into account when buying a home until they get the first tax bill.
Here in the bay area, in my opinion RE agents have driven the prices so high by convincing their clients that they are sitting on a gold mine. Fact of the matter is, unless you have a ton of equity, sellers will have to move to a cheaper area or face purchasing a similar or smaller home in the area they live now.
The only real winners are the agents. They take their commission and laugh all the way to the bank. This is the society that they have created for themselves and home buyers / sellers.
Where I live (SF peninsula), I have seen the demographics change from a mixture of blue and white collar families to that of predominantly white collar. The greed of sellers and agents have driven the decent blue collar family out of the area and right into the lousy areas.
I have been considering leaving the bay area since I can’t fathom paying a million dollars for an old house that has little or no room for my family to grow.
Of course my agent thinks only of how much these homes will appreciate, and not about what I really wnat. A safe place to live for my son to grow up. I can care less what my home could be worth in five to ten years. If the price triples again in ten years then you’ll have only morons who don’t know the value of a dollar buying.
Excuse the rant but I feel no pity if someone loses their a#@!

[Author]

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