The cult of professional specialists

[pjwal]

Middlemen.

Yes, they can and will always provide value in a free market economy. The very fact we have investing services for common stock avows to this. You can complain that a common man cannot walk into the trading floor on Wall Street to make a transaction but the efficiency of the free market would be completely bogged down if it was not represented by trading services.

The best we can hope for is a competitive system where individuals like sdr provide an honest service, in which we will pay more if we had focused all our learning for a long time (assuming we were smart enough to pull it off). But as any consumer, we often pay a little bit more because it is not our “unique ability” to know this market otherwise we would make it our career. We wander over to Costco and Home Depot rather than buying from the Samsung/PepsiCO/Fisher directly. If you feel bad about it, you can always pick up some of their bonds on the market and hold them till maturity to make up some of that markup (as you can with home builder as well btw).

Don’t take your anger out on these middlemen. Find one that is honest to deal with and be happy for that.

[pjwal]

HOWEVER,

I do appreciate the honesty displayed in this topic which is similar to what is going on in the market as a whole. ETFs and straight up service fees in the investing community is happy change for the market as a whole. sdr and BG announcing the costs and giving specific info on data very appreciated and informative and I thank the OP for bringing that out. My wifes family biz is dealing with the Health Care fiasco as an agency and are picking up biz from old school agents that have sat on their ass by being upfront about their commissions (which don’t cost their clients anything).

The market benefits from all this openness! (Although we could get a little more from the law side ;-).

[pjwal]

HOWEVER,

I do appreciate the honesty displayed in this topic which is similar to what is going on in the market as a whole. ETFs and straight up service fees in the investing community is happy change for the market as a whole. sdr and BG announcing the costs and giving specific info on data very appreciated and informative and I thank the OP for bringing that out. My wifes family biz is dealing with the Health Care fiasco as an agency and are picking up biz from old school agents that have sat on their ass by being upfront about their commissions (which don’t cost their clients anything).

The market benefits from all this openness! (Although we could get a little more from the law side ;-).

[pjwal]

HOWEVER,

I do appreciate the honesty displayed in this topic which is similar to what is going on in the market as a whole. ETFs and straight up service fees in the investing community is happy change for the market as a whole. sdr and BG announcing the costs and giving specific info on data very appreciated and informative and I thank the OP for bringing that out. My wifes family biz is dealing with the Health Care fiasco as an agency and are picking up biz from old school agents that have sat on their ass by being upfront about their commissions (which don’t cost their clients anything).

The market benefits from all this openness! (Although we could get a little more from the law side ;-).

[pjwal]

HOWEVER,

I do appreciate the honesty displayed in this topic which is similar to what is going on in the market as a whole. ETFs and straight up service fees in the investing community is happy change for the market as a whole. sdr and BG announcing the costs and giving specific info on data very appreciated and informative and I thank the OP for bringing that out. My wifes family biz is dealing with the Health Care fiasco as an agency and are picking up biz from old school agents that have sat on their ass by being upfront about their commissions (which don’t cost their clients anything).

The market benefits from all this openness! (Although we could get a little more from the law side ;-).

[pjwal]

HOWEVER,

I do appreciate the honesty displayed in this topic which is similar to what is going on in the market as a whole. ETFs and straight up service fees in the investing community is happy change for the market as a whole. sdr and BG announcing the costs and giving specific info on data very appreciated and informative and I thank the OP for bringing that out. My wifes family biz is dealing with the Health Care fiasco as an agency and are picking up biz from old school agents that have sat on their ass by being upfront about their commissions (which don’t cost their clients anything).

The market benefits from all this openness! (Although we could get a little more from the law side ;-).

[CA renter]

[quote=sdrealtor]NJ
There are no fantasies and I would be happy to sit down with in person on a computer and prove it. You know nothing of the intracies of what i am involved with and my actions are part of my fiduciary duties. My ficuciary responsibility does not include picking up in the middle of my daughters dance recital or my son’s soccer game to go show a property to someone who is calling half the agents in town and wasting all our time. I can smell the BS a mile a way and there is nothing wrong with politely letting them know they are more than welcome to see the property and that they will be at no disadvantage using any other agent they want.

Most of the dealings I have had in the last few years are short sales and my duty to my client is not to bring them every buyer, it is to get the property sold and to get them released from liability under the most favorable terms. Bringing every Tom, Dick and Harry very often would damage them.

Here are 2 concrete examples.

1.) Tom Schmo brings a very high offer on the property, in fact too high in my estimation but seller wants to accept it and even counters higher as much as I try to convince her otherwise. Buyer agrees to higher price and we submit it to the lender against my recommendation. Seller has a refinanced 2nd for $250K with full lender recourse. The 2nd lender approves the sale and buyer changes mind. Seller will never see another offer like that and lender will no longer accept fair market value which is actually at least $70K below the offer I told her was too high. Property will get foreclosed upon and instead of getting released from future laibility seller faces a $250K judgement and is heading into BK. This is an actual case I am dealing with right now.

2.) Buyer calls me and wants to submit offer on property direct through me. I know nothing about this buyer and of course they want me to give them back a portion of the buyers side commission. I explain to my client that a buyer like this is calling every agent on the block and is a kin to a John seeking out hookers. We know nothing about it and the way they approach things tells me they will never hang in. Seller says thanks but disagrees and chooses to go with them over another buyer who is represented by a very good agent I know who tells me about the buyer they have been working with for months but their offer is $10K less. After 4 months sale is approved and of course the John has found another hooker to screw around with. The sale is approved but that buyer is no where to be found. We then go back to the buyer I recommneded who is still thrilled to get the property but will still only pay $10K less. After 4 more months of wrangling we finally get it done but the seller now has far more credit damage than if they got it done with that buyer the first time. This is another actual case I have dealt with.

There are dozens more…..[/quote]

Just a quibble…but aren’t there a lot of buyers who back out of short sales when the lenders take too long to get back to them? The fact that this buyer backed out isn’t necessarily because he/she wasn’t being “represented” by another agent, was it?

Personally, if I were a seller paying a 5% commission for “professional representation,” I would absolutely expect my LA to show the house if a potential buyer called. I’m not sure why listing agents feel entitled to this commission simply for listing a property on the MLS and following the transaction through escrow.

[CA renter]

[quote=sdrealtor]NJ
There are no fantasies and I would be happy to sit down with in person on a computer and prove it. You know nothing of the intracies of what i am involved with and my actions are part of my fiduciary duties. My ficuciary responsibility does not include picking up in the middle of my daughters dance recital or my son’s soccer game to go show a property to someone who is calling half the agents in town and wasting all our time. I can smell the BS a mile a way and there is nothing wrong with politely letting them know they are more than welcome to see the property and that they will be at no disadvantage using any other agent they want.

Most of the dealings I have had in the last few years are short sales and my duty to my client is not to bring them every buyer, it is to get the property sold and to get them released from liability under the most favorable terms. Bringing every Tom, Dick and Harry very often would damage them.

Here are 2 concrete examples.

1.) Tom Schmo brings a very high offer on the property, in fact too high in my estimation but seller wants to accept it and even counters higher as much as I try to convince her otherwise. Buyer agrees to higher price and we submit it to the lender against my recommendation. Seller has a refinanced 2nd for $250K with full lender recourse. The 2nd lender approves the sale and buyer changes mind. Seller will never see another offer like that and lender will no longer accept fair market value which is actually at least $70K below the offer I told her was too high. Property will get foreclosed upon and instead of getting released from future laibility seller faces a $250K judgement and is heading into BK. This is an actual case I am dealing with right now.

2.) Buyer calls me and wants to submit offer on property direct through me. I know nothing about this buyer and of course they want me to give them back a portion of the buyers side commission. I explain to my client that a buyer like this is calling every agent on the block and is a kin to a John seeking out hookers. We know nothing about it and the way they approach things tells me they will never hang in. Seller says thanks but disagrees and chooses to go with them over another buyer who is represented by a very good agent I know who tells me about the buyer they have been working with for months but their offer is $10K less. After 4 months sale is approved and of course the John has found another hooker to screw around with. The sale is approved but that buyer is no where to be found. We then go back to the buyer I recommneded who is still thrilled to get the property but will still only pay $10K less. After 4 more months of wrangling we finally get it done but the seller now has far more credit damage than if they got it done with that buyer the first time. This is another actual case I have dealt with.

There are dozens more…..[/quote]

Just a quibble…but aren’t there a lot of buyers who back out of short sales when the lenders take too long to get back to them? The fact that this buyer backed out isn’t necessarily because he/she wasn’t being “represented” by another agent, was it?

Personally, if I were a seller paying a 5% commission for “professional representation,” I would absolutely expect my LA to show the house if a potential buyer called. I’m not sure why listing agents feel entitled to this commission simply for listing a property on the MLS and following the transaction through escrow.

[CA renter]

[quote=sdrealtor]NJ
There are no fantasies and I would be happy to sit down with in person on a computer and prove it. You know nothing of the intracies of what i am involved with and my actions are part of my fiduciary duties. My ficuciary responsibility does not include picking up in the middle of my daughters dance recital or my son’s soccer game to go show a property to someone who is calling half the agents in town and wasting all our time. I can smell the BS a mile a way and there is nothing wrong with politely letting them know they are more than welcome to see the property and that they will be at no disadvantage using any other agent they want.

Most of the dealings I have had in the last few years are short sales and my duty to my client is not to bring them every buyer, it is to get the property sold and to get them released from liability under the most favorable terms. Bringing every Tom, Dick and Harry very often would damage them.

Here are 2 concrete examples.

1.) Tom Schmo brings a very high offer on the property, in fact too high in my estimation but seller wants to accept it and even counters higher as much as I try to convince her otherwise. Buyer agrees to higher price and we submit it to the lender against my recommendation. Seller has a refinanced 2nd for $250K with full lender recourse. The 2nd lender approves the sale and buyer changes mind. Seller will never see another offer like that and lender will no longer accept fair market value which is actually at least $70K below the offer I told her was too high. Property will get foreclosed upon and instead of getting released from future laibility seller faces a $250K judgement and is heading into BK. This is an actual case I am dealing with right now.

2.) Buyer calls me and wants to submit offer on property direct through me. I know nothing about this buyer and of course they want me to give them back a portion of the buyers side commission. I explain to my client that a buyer like this is calling every agent on the block and is a kin to a John seeking out hookers. We know nothing about it and the way they approach things tells me they will never hang in. Seller says thanks but disagrees and chooses to go with them over another buyer who is represented by a very good agent I know who tells me about the buyer they have been working with for months but their offer is $10K less. After 4 months sale is approved and of course the John has found another hooker to screw around with. The sale is approved but that buyer is no where to be found. We then go back to the buyer I recommneded who is still thrilled to get the property but will still only pay $10K less. After 4 more months of wrangling we finally get it done but the seller now has far more credit damage than if they got it done with that buyer the first time. This is another actual case I have dealt with.

There are dozens more…..[/quote]

Just a quibble…but aren’t there a lot of buyers who back out of short sales when the lenders take too long to get back to them? The fact that this buyer backed out isn’t necessarily because he/she wasn’t being “represented” by another agent, was it?

Personally, if I were a seller paying a 5% commission for “professional representation,” I would absolutely expect my LA to show the house if a potential buyer called. I’m not sure why listing agents feel entitled to this commission simply for listing a property on the MLS and following the transaction through escrow.

[CA renter]

[quote=sdrealtor]NJ
There are no fantasies and I would be happy to sit down with in person on a computer and prove it. You know nothing of the intracies of what i am involved with and my actions are part of my fiduciary duties. My ficuciary responsibility does not include picking up in the middle of my daughters dance recital or my son’s soccer game to go show a property to someone who is calling half the agents in town and wasting all our time. I can smell the BS a mile a way and there is nothing wrong with politely letting them know they are more than welcome to see the property and that they will be at no disadvantage using any other agent they want.

Most of the dealings I have had in the last few years are short sales and my duty to my client is not to bring them every buyer, it is to get the property sold and to get them released from liability under the most favorable terms. Bringing every Tom, Dick and Harry very often would damage them.

Here are 2 concrete examples.

1.) Tom Schmo brings a very high offer on the property, in fact too high in my estimation but seller wants to accept it and even counters higher as much as I try to convince her otherwise. Buyer agrees to higher price and we submit it to the lender against my recommendation. Seller has a refinanced 2nd for $250K with full lender recourse. The 2nd lender approves the sale and buyer changes mind. Seller will never see another offer like that and lender will no longer accept fair market value which is actually at least $70K below the offer I told her was too high. Property will get foreclosed upon and instead of getting released from future laibility seller faces a $250K judgement and is heading into BK. This is an actual case I am dealing with right now.

2.) Buyer calls me and wants to submit offer on property direct through me. I know nothing about this buyer and of course they want me to give them back a portion of the buyers side commission. I explain to my client that a buyer like this is calling every agent on the block and is a kin to a John seeking out hookers. We know nothing about it and the way they approach things tells me they will never hang in. Seller says thanks but disagrees and chooses to go with them over another buyer who is represented by a very good agent I know who tells me about the buyer they have been working with for months but their offer is $10K less. After 4 months sale is approved and of course the John has found another hooker to screw around with. The sale is approved but that buyer is no where to be found. We then go back to the buyer I recommneded who is still thrilled to get the property but will still only pay $10K less. After 4 more months of wrangling we finally get it done but the seller now has far more credit damage than if they got it done with that buyer the first time. This is another actual case I have dealt with.

There are dozens more…..[/quote]

Just a quibble…but aren’t there a lot of buyers who back out of short sales when the lenders take too long to get back to them? The fact that this buyer backed out isn’t necessarily because he/she wasn’t being “represented” by another agent, was it?

Personally, if I were a seller paying a 5% commission for “professional representation,” I would absolutely expect my LA to show the house if a potential buyer called. I’m not sure why listing agents feel entitled to this commission simply for listing a property on the MLS and following the transaction through escrow.

[CA renter]

[quote=sdrealtor]NJ
There are no fantasies and I would be happy to sit down with in person on a computer and prove it. You know nothing of the intracies of what i am involved with and my actions are part of my fiduciary duties. My ficuciary responsibility does not include picking up in the middle of my daughters dance recital or my son’s soccer game to go show a property to someone who is calling half the agents in town and wasting all our time. I can smell the BS a mile a way and there is nothing wrong with politely letting them know they are more than welcome to see the property and that they will be at no disadvantage using any other agent they want.

Most of the dealings I have had in the last few years are short sales and my duty to my client is not to bring them every buyer, it is to get the property sold and to get them released from liability under the most favorable terms. Bringing every Tom, Dick and Harry very often would damage them.

Here are 2 concrete examples.

1.) Tom Schmo brings a very high offer on the property, in fact too high in my estimation but seller wants to accept it and even counters higher as much as I try to convince her otherwise. Buyer agrees to higher price and we submit it to the lender against my recommendation. Seller has a refinanced 2nd for $250K with full lender recourse. The 2nd lender approves the sale and buyer changes mind. Seller will never see another offer like that and lender will no longer accept fair market value which is actually at least $70K below the offer I told her was too high. Property will get foreclosed upon and instead of getting released from future laibility seller faces a $250K judgement and is heading into BK. This is an actual case I am dealing with right now.

2.) Buyer calls me and wants to submit offer on property direct through me. I know nothing about this buyer and of course they want me to give them back a portion of the buyers side commission. I explain to my client that a buyer like this is calling every agent on the block and is a kin to a John seeking out hookers. We know nothing about it and the way they approach things tells me they will never hang in. Seller says thanks but disagrees and chooses to go with them over another buyer who is represented by a very good agent I know who tells me about the buyer they have been working with for months but their offer is $10K less. After 4 months sale is approved and of course the John has found another hooker to screw around with. The sale is approved but that buyer is no where to be found. We then go back to the buyer I recommneded who is still thrilled to get the property but will still only pay $10K less. After 4 more months of wrangling we finally get it done but the seller now has far more credit damage than if they got it done with that buyer the first time. This is another actual case I have dealt with.

There are dozens more…..[/quote]

Just a quibble…but aren’t there a lot of buyers who back out of short sales when the lenders take too long to get back to them? The fact that this buyer backed out isn’t necessarily because he/she wasn’t being “represented” by another agent, was it?

Personally, if I were a seller paying a 5% commission for “professional representation,” I would absolutely expect my LA to show the house if a potential buyer called. I’m not sure why listing agents feel entitled to this commission simply for listing a property on the MLS and following the transaction through escrow.

[CA renter]

[quote=njtosd]

Although I’m not in favor of anecdotes, here goes: We are currently selling our home on the east coast and received an offer after our listing agreement had expired and before we relisted (we had gotten kind of discouraged and had decided to put off relisting until the kids were back in school). We were much more willing to come down in price (and did come down more than we had originally planned to) since we didn’t have an agent’s fee to pay. The final steps of the negotiation here take place in the “attorney review” process, so our attorney is taking care of some of the jobs that would be done by an agent/broker in CA. So in this case, the buyer is getting a better deal than he would have otherwise because there is no listing agent involved.[/quote]

I’ll add my anecdote to that. When selling our house in 2004, we listed on the MLS for a flat fee (around $300-$500 dollars, IIRC), and offered a 2.5% commission to the selling (buyer’s) agent. We certainly were willing to take a slightly lower price because of the commission saved.

Another anecdote:

As sdr knows, we’ve been in contact with our current LL about the possibility of purchasing our rental. They have already agreed to split the savings from commissions with us.

IMHO, the saved commissions are usually split between the buyer and seller, so while the buyer might not get the full benefit, they can often get half of the savings. I will say this though, most FSBOs are grossly overpriced and delusional, so there’s no guarantee of any savings.

[CA renter]

[quote=njtosd]

Although I’m not in favor of anecdotes, here goes: We are currently selling our home on the east coast and received an offer after our listing agreement had expired and before we relisted (we had gotten kind of discouraged and had decided to put off relisting until the kids were back in school). We were much more willing to come down in price (and did come down more than we had originally planned to) since we didn’t have an agent’s fee to pay. The final steps of the negotiation here take place in the “attorney review” process, so our attorney is taking care of some of the jobs that would be done by an agent/broker in CA. So in this case, the buyer is getting a better deal than he would have otherwise because there is no listing agent involved.[/quote]

I’ll add my anecdote to that. When selling our house in 2004, we listed on the MLS for a flat fee (around $300-$500 dollars, IIRC), and offered a 2.5% commission to the selling (buyer’s) agent. We certainly were willing to take a slightly lower price because of the commission saved.

Another anecdote:

As sdr knows, we’ve been in contact with our current LL about the possibility of purchasing our rental. They have already agreed to split the savings from commissions with us.

IMHO, the saved commissions are usually split between the buyer and seller, so while the buyer might not get the full benefit, they can often get half of the savings. I will say this though, most FSBOs are grossly overpriced and delusional, so there’s no guarantee of any savings.

[CA renter]

[quote=njtosd]

Although I’m not in favor of anecdotes, here goes: We are currently selling our home on the east coast and received an offer after our listing agreement had expired and before we relisted (we had gotten kind of discouraged and had decided to put off relisting until the kids were back in school). We were much more willing to come down in price (and did come down more than we had originally planned to) since we didn’t have an agent’s fee to pay. The final steps of the negotiation here take place in the “attorney review” process, so our attorney is taking care of some of the jobs that would be done by an agent/broker in CA. So in this case, the buyer is getting a better deal than he would have otherwise because there is no listing agent involved.[/quote]

I’ll add my anecdote to that. When selling our house in 2004, we listed on the MLS for a flat fee (around $300-$500 dollars, IIRC), and offered a 2.5% commission to the selling (buyer’s) agent. We certainly were willing to take a slightly lower price because of the commission saved.

Another anecdote:

As sdr knows, we’ve been in contact with our current LL about the possibility of purchasing our rental. They have already agreed to split the savings from commissions with us.

IMHO, the saved commissions are usually split between the buyer and seller, so while the buyer might not get the full benefit, they can often get half of the savings. I will say this though, most FSBOs are grossly overpriced and delusional, so there’s no guarantee of any savings.

[CA renter]

[quote=njtosd]

Although I’m not in favor of anecdotes, here goes: We are currently selling our home on the east coast and received an offer after our listing agreement had expired and before we relisted (we had gotten kind of discouraged and had decided to put off relisting until the kids were back in school). We were much more willing to come down in price (and did come down more than we had originally planned to) since we didn’t have an agent’s fee to pay. The final steps of the negotiation here take place in the “attorney review” process, so our attorney is taking care of some of the jobs that would be done by an agent/broker in CA. So in this case, the buyer is getting a better deal than he would have otherwise because there is no listing agent involved.[/quote]

I’ll add my anecdote to that. When selling our house in 2004, we listed on the MLS for a flat fee (around $300-$500 dollars, IIRC), and offered a 2.5% commission to the selling (buyer’s) agent. We certainly were willing to take a slightly lower price because of the commission saved.

Another anecdote:

As sdr knows, we’ve been in contact with our current LL about the possibility of purchasing our rental. They have already agreed to split the savings from commissions with us.

IMHO, the saved commissions are usually split between the buyer and seller, so while the buyer might not get the full benefit, they can often get half of the savings. I will say this though, most FSBOs are grossly overpriced and delusional, so there’s no guarantee of any savings.

[Author]

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