“The Subprime Blame Game: Where Were the Realtors?”

[cantab]

From http://knowledge.wharton.upenn.edu/article/1824.cfm

“It is a scene millions of Americans have been in — sitting next to a real estate agent
at closing to sign the papers for a new home. Often, the buyer has spent months with the
agent. And to hear agents tell it, they are indispensable guides through the hazardoushome-buying terrain. How is it, then, that millions of borrowers took on toxic subprime
mortgages that could cost them their homes? Why did their agents not warn them off? While
much criticism has been leveled at subprime lenders and mortgage brokers, some experts
say that real estate agents have managed to escape their share of blame for the subprime mess.”

One possible simple answer: Agents have a fiduciary duty to the seller, not to the buyer or anyone else. It benefits the seller to sell at a high price, regardless of the risks to the buyer and to his/her lender.

[The OC Scam]

I don’t know about everyone elses experience with agents but our almost purchase in 2004 was with an agent that was a family friend new in real-estate for about 3 years. She left it up to us to find a good loan and suggested a loan company only once. Thankfully I read the documents before signing a interest only loan and decided I would putting my family into serious financial trouble especially when we were renting a perfectly find home for 50% percent less than I would have paid for a home loan. This is when my eyes were opened to the bubble trouble

[The OC Scam]

I don’t know about everyone elses experience with agents but our almost purchase in 2004 was with an agent that was a family friend new in real-estate for about 3 years. She left it up to us to find a good loan and suggested a loan company only once. Thankfully I read the documents before signing a interest only loan and decided I would putting my family into serious financial trouble especially when we were renting a perfectly find home for 50% percent less than I would have paid for a home loan. This is when my eyes were opened to the bubble trouble

[XBoxBoy]

This article really gets at the issue that rubs me. When I’m out buying a house, my agent is really working for the seller. After all it is the seller who is going to pay them. I was working with one agent and I can’t tell you how often the question, “Hey whose side are you on?” crossed my mind as we looked at houses and talked about developing a strategy to get a low price for the house. There is something so wrong about the whole agent commission thing. I probably haven’t expressed it well, but I can’t shake the feeling that this is one deceitful business relationship.

[XBoxBoy]

This article really gets at the issue that rubs me. When I’m out buying a house, my agent is really working for the seller. After all it is the seller who is going to pay them. I was working with one agent and I can’t tell you how often the question, “Hey whose side are you on?” crossed my mind as we looked at houses and talked about developing a strategy to get a low price for the house. There is something so wrong about the whole agent commission thing. I probably haven’t expressed it well, but I can’t shake the feeling that this is one deceitful business relationship.

[HLS]

Most agents represent ONE party, that being themselves.

No transaction equals no income, many are just used home salespeople, with little background, just like most loan people.

Most don’t exactly represent the buyer OR seller.

The seller is “paying” with money that is taken from the buyer.

I do not believe they have a fiduciary responsibility.
(But they should)
Most don’t even know what that means, nor can they spell it.

I suggest that is THE BEST first question you can ask a real estate agent OR loan person…
IF they don’t know what it means, move on.

[HLS]

Most agents represent ONE party, that being themselves.

No transaction equals no income, many are just used home salespeople, with little background, just like most loan people.

Most don’t exactly represent the buyer OR seller.

The seller is “paying” with money that is taken from the buyer.

I do not believe they have a fiduciary responsibility.
(But they should)
Most don’t even know what that means, nor can they spell it.

I suggest that is THE BEST first question you can ask a real estate agent OR loan person…
IF they don’t know what it means, move on.

[NotCranky]

I have been on the sidelines. If I decided to break my anonymity sdr or SDR could prove it. Now honestly that wasn’t a big change for me because I was never big….but I did stop selling houses, curse out a few mortgage brokers and hang it up. Obviously, I am trying hard to believe in karma.
I don’t hate the agents or brokers. How many people would quit their job because the nature of the game changed radically? Besides that people didn’t give high ratings to real estate types when I got my license in 1998 and they never will. My instructor for the basic licensing requirement brought a chart with relative respect by trade or profession. RE people were right there with used car salesmen.
My experience also proves that very few people would have listened to someone giving warning. I actually had people call on referral and when I told them it wasn’t a good time to think about SD homes they told me “what the hell kind of real estate guy are you anyway”. I think they know now.

Now I get frequent calls from people who are screwed and want to know what to do. I feel bad for them and offer whatever I can ,which is basically nothing. They do confirm what the bad boys on this blog are saying about being greedy and stupid with the equity in their houses if they ever had it. Some of them were on easy street for having bought in the 90’s too.

[NotCranky]

I have been on the sidelines. If I decided to break my anonymity sdr or SDR could prove it. Now honestly that wasn’t a big change for me because I was never big….but I did stop selling houses, curse out a few mortgage brokers and hang it up. Obviously, I am trying hard to believe in karma.
I don’t hate the agents or brokers. How many people would quit their job because the nature of the game changed radically? Besides that people didn’t give high ratings to real estate types when I got my license in 1998 and they never will. My instructor for the basic licensing requirement brought a chart with relative respect by trade or profession. RE people were right there with used car salesmen.
My experience also proves that very few people would have listened to someone giving warning. I actually had people call on referral and when I told them it wasn’t a good time to think about SD homes they told me “what the hell kind of real estate guy are you anyway”. I think they know now.

Now I get frequent calls from people who are screwed and want to know what to do. I feel bad for them and offer whatever I can ,which is basically nothing. They do confirm what the bad boys on this blog are saying about being greedy and stupid with the equity in their houses if they ever had it. Some of them were on easy street for having bought in the 90’s too.

[Raybyrnes]

With respect o representation you can alway speend the money and hire an attorney. With respect to a real estate agent my though is that they are transactional. With the infinite amoutn of information I see their role as identifying what it is I am looking for and helping me find the property.

In an ideal situation you can give them a set of criteria and they can quickly identify the 3 very best properties that match that criteria.

While the internet is a good starting point it is almost too much information and often times needs to be filtered. A good realator can help in the filtering process and remind you of what is important about the transaction.

Asking them to take on a fiduciary responsibility is “scope creep”

[Raybyrnes]

With respect o representation you can alway speend the money and hire an attorney. With respect to a real estate agent my though is that they are transactional. With the infinite amoutn of information I see their role as identifying what it is I am looking for and helping me find the property.

In an ideal situation you can give them a set of criteria and they can quickly identify the 3 very best properties that match that criteria.

While the internet is a good starting point it is almost too much information and often times needs to be filtered. A good realator can help in the filtering process and remind you of what is important about the transaction.

Asking them to take on a fiduciary responsibility is “scope creep”

[SD Realtor]

I would have to say that there are alternatives out there for everybody. I have told my story many times over. I got tired of paying commissions so I did it for myself initially. Yes things progressed but I was tired of paying my own sister in law full commission.

It is much easier to complain about things then to do something about it. I do believe there are PLENTY of poor agents, brokers, and others in the profession. I cannot worry nor change thier performance. There are also plenty of good ones as well. Those people who have had bad experiences are much more diligent in posting thier experiences then those that have not. Yet I would bet there are people right now who are reading this sentence who actually did have a good agent or realtor or broker.

There is another thread on a recent post about people who have found mold in thier home, who warned about tilted slabs, who warned about mercury in the water for homes that you are going to buy. How many people have had good experiences and posted in that thread about the home they bought and didn’t have that problem?

The realtor did not sign on the dotted line when the buyer decided to do the loan. The realtor did not make the decision. The cigarette companies that peddle poison to people don’t plunk down a few bucks at 7/11 to buy a pack of camels. Yet they shove as much advertising and sponsorship down everyones throat in our country as they can legally do. Are you dumb enough to smoke them? The USA is 100% about consumerism. My observation is that if you do not have restraint, you will never succeed whether the issue is buying houses, cars, flat screens… whatever. Our society is and will always be about people pushing other people to buy and overspend. It is enforced and encouraged by our government, by many professions, and is embedded in our fabric. Lots of blame to go around everywhere…

Agreed the system is not optimal and many professionals in it are devious and scoundrels and I could go on about the commission structure… Yet there are good realtors out there… alot of them… and they did NOT recommend stupid vehicles for financing. The good realtor takes a long run picture at the client and knows that good advice will be THE BEST avenue for this sale, future sales, and referrals.

Unfortunately, the consumer has to find the good realtor and that is tough.

SD Realtor

[SD Realtor]

I would have to say that there are alternatives out there for everybody. I have told my story many times over. I got tired of paying commissions so I did it for myself initially. Yes things progressed but I was tired of paying my own sister in law full commission.

It is much easier to complain about things then to do something about it. I do believe there are PLENTY of poor agents, brokers, and others in the profession. I cannot worry nor change thier performance. There are also plenty of good ones as well. Those people who have had bad experiences are much more diligent in posting thier experiences then those that have not. Yet I would bet there are people right now who are reading this sentence who actually did have a good agent or realtor or broker.

There is another thread on a recent post about people who have found mold in thier home, who warned about tilted slabs, who warned about mercury in the water for homes that you are going to buy. How many people have had good experiences and posted in that thread about the home they bought and didn’t have that problem?

The realtor did not sign on the dotted line when the buyer decided to do the loan. The realtor did not make the decision. The cigarette companies that peddle poison to people don’t plunk down a few bucks at 7/11 to buy a pack of camels. Yet they shove as much advertising and sponsorship down everyones throat in our country as they can legally do. Are you dumb enough to smoke them? The USA is 100% about consumerism. My observation is that if you do not have restraint, you will never succeed whether the issue is buying houses, cars, flat screens… whatever. Our society is and will always be about people pushing other people to buy and overspend. It is enforced and encouraged by our government, by many professions, and is embedded in our fabric. Lots of blame to go around everywhere…

Agreed the system is not optimal and many professionals in it are devious and scoundrels and I could go on about the commission structure… Yet there are good realtors out there… alot of them… and they did NOT recommend stupid vehicles for financing. The good realtor takes a long run picture at the client and knows that good advice will be THE BEST avenue for this sale, future sales, and referrals.

Unfortunately, the consumer has to find the good realtor and that is tough.

SD Realtor

[NotCranky]

“Asking them to take on a fiduciary responsibility is “scope creep”
I have enjoyed the tidbits you have inserted in your posts where you are drawing on you managerial expertise. People here are proving why so many have trouble with RE types. They abdicate responsibility to someone who really is not, generally speaking, in a very sophisticated role. I think to some extent crying about it puts them in that camp.

“Scope creep”;Great expression. I do think people in all fields SHOULD advocate for their clients though.

Another thing , all rookie agents, and mortgage folks gets used and abused by buyers and sellers, sometimes by friends. This is no excuse but it can easily be seen as a heartless situation by all parties(recall how many people are telling Raptorduck to dump his agent who has worked very hard doing the best she can). In fact everyday that you go out into the world of sales you can be confronted by phenomenal bull shit. Don’t be surprised that many aggressive, thick skinned and self preservation minded people are at the forefront. This has been true forever.

[NotCranky]

“Asking them to take on a fiduciary responsibility is “scope creep”
I have enjoyed the tidbits you have inserted in your posts where you are drawing on you managerial expertise. People here are proving why so many have trouble with RE types. They abdicate responsibility to someone who really is not, generally speaking, in a very sophisticated role. I think to some extent crying about it puts them in that camp.

“Scope creep”;Great expression. I do think people in all fields SHOULD advocate for their clients though.

Another thing , all rookie agents, and mortgage folks gets used and abused by buyers and sellers, sometimes by friends. This is no excuse but it can easily be seen as a heartless situation by all parties(recall how many people are telling Raptorduck to dump his agent who has worked very hard doing the best she can). In fact everyday that you go out into the world of sales you can be confronted by phenomenal bull shit. Don’t be surprised that many aggressive, thick skinned and self preservation minded people are at the forefront. This has been true forever.

[Author]

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