Redfin On 60 Minutes Tonight - Real Estate Market Disruption

Mike - on the east coast (and I think Central), the show is over - and now they are picking the sole survivor - dangit cuz this looks interesting. Perhaps they stream 60M on cbs.com.

Having just gone thru the process in NYC, removing half sounds good to me!

The article already seems to be up on 60mins’ site:

http://www.cbsnews.com/stories.....age2.shtml

Zaid - ah, good find. I added a link.

Hey good one Zaid - here is a link to the video of the segment:
http://www.cbsnews.com/section.....d=2796105n

Nice Allen. Linked that too.

> Redfin is doing their best to completely remove real estate agents and brokers from at least half of a home sale.

This is incorrect. Redfin’s cost “savings” consists of pushing the cost of buyer representation off to the listing agent and the buyer. It “saves” money by not doing the work the buyer’s agent’s commission is intended to compensate. The net consequence, if no other changes are made in the real estate industry, is that sellers and listing agents are likely to change the way they provide for the buyer’s agent’s compensation. Redfin.com has never turned a profit, and, if its business model actually gets traction, the money it “rebates” will no longer be available to it.

Greg - the fact is that the real estate market is seriously screwed up and needs to be disrupted. Agents are overpaid and often do little more than underprice a house to ensure a quick sale. The model needs to change, and Redfin is changing it. Good for them.

Amen Mike.

A broker showed me a place here that I did all the work on. I asked about the fee, she said 18% because she was the exclusive and that if I didn’t like it, someone else would be there this afternoon to take it.

Technology has made things easier (much easier) for agents, yet their fee remains the same.

Redfin is by no means the only company offering alternative to traditional full service. Check out http://BetterHomeSelling.com and http://BetterHomeBuying.com. Old ways of doing business are http://www.GoneWithTheWeb.com

@Allen
“I asked about the fee, she said 18% because she was the exclusive and that if I didn’t like it, someone else would be there this afternoon to take it.”

What was her name? Dona Vito Corelone?
18% for what?

This is excellent, and I hope to see more tools to that help break the regulatory stranglehold of these industries. Real estate is a good start, but there’s a long list of industries and jobs that are kept alive only through silly regulation. The recent Zillow case vs. Arizona is another good example of this craziness.

Ever wonder why you can’t buy a car direct from the manufacturer? Because it’s illegal.

It was a piece that made it’s points by choosing ‘facts’ to lay out. For example, to pound her point across, Leslie said that real estate agents ‘charge’ 6% to sell a home. She may have mentioned that it is split but there is no mention of the % the brokerage keeps or the overhead agents and brokerages carry each month regardless if they sell a home or not. And, it is not a commodity market. I love hearing how these people saved money. There are many parallels to the stock mkt and discount brokerages. The agents that are adding value to their clients aren’t just placing print ads and holding open houses.

Michael, being a fan of yours and your site, and being a real estate broker, your comment at 6:17 really bugged me. Your comment is spot on for some but to generalize isn’t fair or correct.

Supposedly NYC is like nothing else on the planet when it comes to real estate. She said that because the building was her exclusive, if I wanted in, it was an 18% fee.

Craig # 11: Does a broker have to do double the work if the same house that sold for $500K 3 years ago now sells for $1M ? The linear percentage scale makes little sense and is overdue for some sane correction. I understand there are some inflation indexed cost adjustments but those do not seem to co-relate to any house pricing fluctuations.

Ernest: Assuming it doesn’t matter which broker you choose out of those doing business in a market and that the net result will be a sale of 1 million and that there won’t be problems prior to close or after close, then have no argument.

Well part of what I think intrigues the public about this is that there are way more realtors out there than there should be, and the existing or old school realtors did nothing to set the barrier to entry very high. in florida you can get your real estate license in 5 days. 5 days!

also a good realtor in my opinion understands what the buyer is looking for, is also a marketer for the seller, and is well connected, because those connections sell homes faster than an ad in the classifieds.

oh i will take any forum to beat this dead horse

REAL ESTATE AGENT FEES ARE NOTHING MORE THAN A HOME PURCHASE TAX

agents do not “sell” your home. your home sells itself. when people are walking through your house, they are tuning out the agent completely. they either like it or not. no one is getting talked into paying $1 million for something they don’t want.

and the agents aren’t “finding” homes either. there are fifty ways to search listings online, and most buyers are out scoping the homes themselves before even talking to an agent.

the only thing an agent does that is remotely interesting is ordering an inspection, which you yourself can do. the agent does not do the inspection! they just arrange it.

how about the other “work” they do - take pictures of your house, hold open houses, take ads out in a newspaper…fine, are you going to pay someone $50k to do that??? if it were not that they have a LOCK on listing in MLS, they would have been toast as an industry years ago.

i can sell a $1 million dollar car to you without having to pay some ridiculous service fee to a “broker” but evidently not a $500k house. there is no sense in it, it is nothing but a TAX.

i know many people who have sold their own home, they didn’t even use “for sale by owner” services. they created a web site, they took out newspaper ads, they held open houses, they arranged the inspection and closing procedures. easy! these people probably saved $30-60k each. thats not chump change!

to #11:

“but there is no mention of the % the brokerage keeps or the overhead agents and brokerages carry each month regardless if they sell a home or not”

so i am supposed to take pity on a pickpocket who is himself being pickpocketed????

i love this, your argument is one of the first to come up when i speak to realtors. like i am supposed to feel for the bind they are in…oh boo hoo! start your own brokerage if you are so upset about it, thats what other realtors do.

“I love hearing how these people saved money. There are many parallels to the stock mkt and discount brokerages”

haha! as a FORMER client of high-end “private broker” services, i can tell you that these services are also a total waste of time designed to pander to the newly rich who love having a financial executive pump sunshine up their a$$es…people who love having the stock broker’s hot secretary run in with hot coffee when it is time for the quarterly meetup. what a joke! enjoy that coffee, it costs about $1k a month, and by the way, your results are not going to be much different than any other investors. or do you honestly think that being a “high net worth” customer lets you into some secret club where no one takes a loss???

lol…

The next time you sell a house…try FSBO - enjoy yourself!

If you have ever tried selling a home on your own, you will understand that the 6% commission is well worth it.

Anyone here who is complaining about a 6% commission is most likely a renter.

Kelman (ceo of redfin) lied in that interview. Looked straight in the camera (or at Leslie, I can’t remember) and lied.

Redfin does not have any agents closing 8 homes per week. Redfin had never made a penny. Kelman is on the road right now (see the redfin corp blog) looking for more money to keep the company afloat.

It is easy to criticize an industry or company when revenue/profit does not come up in the interview. Redfin loses money on every transaction. I would hardly call that “disruptive.”

What are the implications for commercial RE? I wonder if those who side w/ redfin on the residential side of things would want the same type of service for commercial property

Anyhow, I agree that the RE industry needs disruption, which seems to happening, however the change needs to happen on the national level with NAR (court case next year will shed some light on this as mentioned in the 60min story)

One remark that I have to disagree with is that agents are making tons of money. This is not accurate at all. Yes, some do make a great living. I am happy to say I do, but the avg agent does not do ll that well. Many agents have nice cars to create an “image” but this does not mean they are making loads of money. Do you have any idea how many deals fall through and how many hours go unpaid. There are many ways to look at this but I do not think it is fair to make this assumption.

I am 100% for market disruption. My family played a critical role in bringing Buyer Agency to the northeast when it was an unproven concept many many years ago. I understand what Redfin is going through because we got slammed for bringing buyer agency to the Noreast. Anyways, because buyer agency is now mainstream, I have recently moved to disrupt the selling side with my new start up. We are seeing a exceptional growth and we are making a huge difference in many peoples lives who are in a financial hole.

Redfin did a good job to market themselves on 60 Min., but I feel they should have said that using Redfin is not for everybody. This would have been a genuine statement that would have carried weight. Instead they may have pissed off a few more traditional agents who they may have to work with down the road.

I

For some interesting context, check out this video of Redfin CEO Glenn Kelman and Realtor CEO Allan Daulton. It’s from their BIG stand off while panelists at the NY Inman Connect event back in January 2007. I think it’s the same event 6o minutes taped for this show BUT, in it’s entirety. Pretty telling stuff.

VIDEO: http://www.wellcomemat.com/epreview/380

Here is a semi-quote I just read on another blog…

“If I used Redfin, I would expect to get 2/3 of the money back, too”

I use redfin all the time, like the web experience.

However I have a negative experience with them offline. I experiemented with them and called their number about a property that I was interested (I live in the SF Bay Area). Person on the phone was friendly but marginally helpful, and said a local Redfin agent will call me within a day. Nobody ever called, called again with the same answer, gave up.

Some local agents also do 2% discount on buyer side now. I had found a local one and will not use Redfin beyond web search.

A couple of things:

1. There are discount firms in every industry from grocery stores to attorneys and tax preparers. Real estate should be no different. There are different level service offerings for people who have different needs. There is room for both. Realtors wouldn’t look so bad if they didn’t freak out every time there was talk of why they are over paid. Real estate is just like other professions - there is a tiny percentage of people doing work that is actually worth the fee they charge, the rest are over paid. Pick any industry and that holds up.

2. Realtors need to stop clinging to the 3% split as its their birth rite. There is no set price in an open market. As soon as the DOJ gets done with the NAR the market will be more open. Prices will fall within a range based on perceived value. Lazy, mediocre agents will be compensated as such, premier, best-of-breed realtors will be compensated accordingly as well.

3. Realtors should stop complaining and start articulating value. There are some that actually earn it (not many), they should embrace the discounters, refer customers shopping prices to them, and then take the customers who want the personalized service. Mercedes, Tiffany and Ritz Carlton don’t complain when Saturn, Robins Bros or Motel 6 lower prices - they just deliver amazing value. It’s time for Realtors to get the hint.

Why people hate real estate agents?

As first time homebuyers, my husband and I searched a lot of real estate listings online in order to become familiar with the property prices in our area. Unfortunately, with most websites we were required to sign in and *register by giving out phone numbers, email addresses. Because of that we started being contacted by many different realtors, and I must admit a few of them were estremely “pushy”. Even though we had registered in the websites as planning to buy in 8-12 months, one particular realtor was extremely pushy about showing us a property the very following day. When I informed her that my husband and I were not ready to buy, she asked me, “Then why in heavens did you register to look at real state properties if you aren’t going to buy?” I tried to explain (politely even though the question felt offensive to me)that we were just trying to get a feel for the market before jumping in and buying a property. She tried once again to schedule an appointment to view this property and when I once again declined…she hung up on my face!
So while I don’t hate someone simply because of their profession, I still had a bad experience.

This is nothing new: http://www.comfree.ca

I think the problem that most REALTORS had with the Redfin clip on 60 Minutes was Stahl acted like the traditional agent was quickly becoming a dinosaur. She negelected to find an agent who could efectively explain the value in receiving full service, and believe me, there is a huge difference.

Redfin closed 500 deals? I know of several traditional companies just in my market that have far eclipsed the mark.

Redfin saved their clients $5,000,000 in brokergae fees? How much did their clients leave on the negotiating table by using this firm?

Real Estate agents make me sick.

My hairstylist is required to have more education than you and she cuts my hair. That is I let her cut something that will grow back in 2-3 weeks. If she messes up, it’s not that big of a deal is it? And that kind of trust requires between 1400 and 1600 hours of schooling.

A Real Estate agent on the other hand helps me make the single biggest purchase of my financial career and they’re required to have roughly 30 hours of education to do this? Not only that but they’re supposed to get 6% of the purchase price of the house for this as well?

I’m sorry, but that’s a god damned joke. If you want 6% why not be required to have a 4 year college degree and some financial background. These Real Estate agents who are getting their pantaloons in a bunch are sickening. Stick up for your profession and realize it’s broken. Fight for your jobs by having NAR change the educational requirements so we (the consumers) might start to understand why you deserve the money we’re paying you.

[Marge is working at a real estate firm]

Lionel Hutz: I’ve been getting a lot of calls about you, Marge. People just love your no-pressure approach.

Marge: Well, you know what we say: the right house for the right person.

Lionel Hutz: I’m going to let you in on a little secret. The right house is the house that’s for sale. And the right person is anyone.

Honestly, I think this will start putting agents and brokers in check. With so much free info and help available online, Real Estate Agents need to step up their service.

Can you still believe I work with agents that have yet to buy in to how important a web presence is?

I agree that change needs to be made, the big question is, where do you start?

Boy Stahl seemed more than a little clueless about the real estate market. That agent featured on the show really got the slimy feeling across well.

I hope our generally lobbyist-loving legislators don’t put good guys like Redfin out of business.

The view from a 30 year realty veteran who’s seen and experienced it all:

#1. What Redfin–and others–do is nothing new; been going on for at least 30 years.

#2. People who use companies like them must be willing to accept and understand that they WILL NOT receive full service; i.e. the professional “eyes” and attention a great agent/broker can provide them, the agent-attended home inspection/s, the knowledge of which neighborhoods are better than others/where prices go up more in good markets and down less in bad, etc. You can’t get this kind of value over the phone–or the Internet.

Buyers WILL NOT know about all the possible homes they could have seen, because many–including many of the best bargains–NEVER make it to the MLS; i.e the pending and actual foreclosures, the worst fixers, where sellers insist on not using the MLS (more than the public or media knows), etc.

#3. No approach is right for everyone. 60 minutes and Glenn both know and understand this, yet for the sake of expediency and because it’s self-serving to do so; they both didn’t–and won’t–tell the realty buying and selling public this.

#4. Back in the late ’70’s and most of the 80’s, my Dad and I ran a discount company. We did O.K., but our competitors were vicious; making up stories and lies to keep the public from believing they could receive full service at a reduced price. Like it or not (and we sure didn’t), people who list their homes with such companies WILL receive less exposure, fewer showings, possibly lower offers.

#5. Whether or not commissions are “too high” depends in large measure on the marketplace/s–and their respective area economies–that we’re talking about.

CBS of course used the example of San Fran (where it best served the angle they were after); where the average price is over 500k. But–the national average price is around 200k. Is 6% too high now? What about in Detroit; where prices are dropping–a lot–were homes in many area are less than 100k. Is 6% too much to get a home sold in such a market?

#6. There are many incompetent and, sadly, unethical agents in the business. Why? Too easy to get a license. Little oversight by the company brokers and managers. A unwillingness by too many companies to fire agts who operate in such a manner because they like the income such agts bring in. Agents with little or no morals; i.e. “anything for a sale.”

The best advice for realty buyers and sellers? Interview at least 3 full-time agents; including at least one from a small (less than 10 agts) company–all with at least 5; and preferrably 10 or more) years in the business. Ideally, work with an actual realty broker instead of just those with salesperson licenses; who in most states/cases had had to meet tougher experience and education requirements.

The alternate business models will continue to gain market share even if the NAR attempts to state that they are losing ground. The 2006 NAR Homebuyers & Sellers report indicated that 12% of all transactions where FSBO down from the high of 20% in 1987 but the what they fail to disclose to the public is that another 8% used MLS only and another 9% used limited services… for a total of 29% market share going “alternate”.

Things will change as home buyers begin to understand that they are financing the cost of their buyers agent purported free service of representing them into the final sales price of the home.

Companies like redfin, buyerside realty, zip, etc are finally exposing this reality and simply trying to take advantage of the current model.

Eventually sellers will also understand the process with access to comps as provided by zillow and comparing the true cost of using an agent and what their functions are as provided by this calculator:

http://www.forsalebyownercente.....lator.aspx

I found the show to be so one sided and a crusade for someone who has a business model that doesn’t tell the whole story.
As a broker I always present the value of the professional service a Realtor offers. Here it is simplified:
1. We make sure that anyone interested in purchasing your home is qualified before we would even allow that purchaser in your home.
2. We also use electronic monitoring key boxes so we control when someone can enter a home – and it records them entering and when they leave.
3. We also spend thousands of dollars marketing the listed home in venues like Google – Realtor ,com and multiple print and online media.
4. We do videos and TV listings and 360 vies and create brochures and send out thousands of e-blasts in our local, regional, national and international professional agents.
5. We have created IDX which allows our listing to be on other firms web sites so the listing is seen by millions
6. We do catered open houses – we place signs and flyers on property and at main intersections.
7. We staff phones – offices and computers equipment and websites to manage all leads.
8. Then the critical managed stuff begins – Mortgage – Title – Insurance - Inspections etc.
9. We then manage the transaction with mortgage brokers – lenders and title companies in order for the transaction to close.
10. We also manage the inspections and makes sure all parties are satisfied with the condition of the house once all repairs if any are made.
11. We verify of all that the seller disclosed is properly CO’s and all permits are in place before closing.
12. We are also libel for any known and or unknown material facts and disclosures that are critical to the future well being of the home and the area.
13. We also are responsible for pricing your home as with tools and experience that insure your goals are met.
14. Also may of us rebate and reduce commission’s ion order to make a deal offer a concession so both parties can meet their financial objectives.
15. My firm is a full service firm and on the rare occasion we maybe 2% commission on any one side of a transaction.
16. If our firm is acting as a transaction broker and is on both side of the transaction in terms of commission - then 90 % of the time we receive 3% of the 5% that is available.
17. There are firms that become part of the solution and facilitate the transactions so both parties obtain their housing goals. We are that type of firm and that can never be compared to Redfin…
18. 1st time home buyers need professional agents – seniors need professional agents – relocation purchasers need professional agents How to buy new construction or condo conversions and or Urban homes that all have particular transportation and or tax and insurance requirements. Investors and second home and or vacation home buyers we also assist.
19. We also create market comparables so to price your home correctly. We also act as consultants and advisors to local municipalities and developers and commercial properties.
20. Lastly - we earn our compensation whether it is pro bono or up to 6% and sometimes more based on the complexity of the transaction or need of the seller…but it is always earned.

To Joe Smith - the hours required to earn a license is approx 67 hours of class time - then written test of which only 40% pass and then there is continued education in the first licensure year that is 40 hours – then 14 hours per cycle for ever. Unlike cutting hair…which is an admirable profession and one I pay a handsome commission to…on top of their fee…are not required to know – constitutional law – Sate and Federal real estate law – contract law - ethics – diversity training - investing computations and employment law…by the way most agents that we hire have college degrees and at one time also cut hair.

Real Estate agents are a joke! Ron R. (#35) the self proclaimed king of all agents racked his brain to come up with that list. Selling agents say anything to get a listing, then then persuade the sellers to lower the price two weeks later so they can get a sale a move on. The only work they really do is print flyers, and put the house on the MLS. Then they wait and do nothing… Buyers agents add little value as well. All a buyers agent does is email properties and ask, “Would you like to make an offer?” Oh, yes, and they do the contract (5 minutes). Smart buyers find properties themselves. Smart buyers call listing agents directly and ask for a cut of the commission for not having an agent on the buy side. Smart buyers know how much a property is worth before they buy.

I’m a multi-state residential real estate investor. I can’t get a RE license in every state, or I would just to save 3% on these taxes to worthless RE agents.

Now, the real problem is the MLS… 3% is still too much to pay. Even with Redfin and other discounters, 3%+ is still being paid regardless of the transaction.

RE agents can try to justify themselves as much as they want, but they’re on a sinking ship. The earn their 3%, 6%, whatever, hah!!! Their services are worth about $100.

If Lesley was so gung-ho about RedFin’s model, would she use them for her home(s)? What she should have said (I think someone posted earlier on this) is that it seems like RedFin has an interesting model, but it is not the right solution for every real estate transaction. That at least would have given some impression of even-handedness. Plus I already know of lawsuits against RedFin. How come no mention of that?

[Not a realtor, just a veteran of a couple of recent transactions]

Brian B. You probably work for Redfin or another losing proposition. Didn’t need to rack and brain matter…and just to let you know…90 % of all of our listing and buyer clients are repeat clients and or referrals. In 10 years in the business in general real estate…I have been on a total of 6 listing appointments…and the average # of listing appointments my agents have been on are approximately the same…as I said referrals and repeat customers…that would indicate in anyone’s world as extreme value and quality service and a great real estate experience. If you can’t buy that…then I do believe your dissenting opinion runs in most everything you encounter. I love technology…that is why we have over 1500 domains 26 websites and are on Google and Look Smart marketing for our individual and builder clients alike.

Wow!! So much controversy over something that other realtors have been doing for years. There are always going to be sellers and buyers who want more or less service and Redfin is definitely better for someone who wants to hold their own open houses and tours. Its great for people to have choices no one realtor or group should have a monopoly anywhere, but to complain, whine, and tear down realtors simply because you want something for nothing is ridiculous. If you don’t want to pay 3% which is not standard…mine took less with no complaints…then that’s something you should be up front about. Noone is “forced” to use a realtor. There are alot of things that could be better for the consumer in a number of professions, but people also have to be honest about what they want from their realtor if they choose to use one. And to #38 Jill—-HI. On the video that someone has posted a link too Mr.Kelman is very honest about the lawsuits…they have no reson to hide it. I think a change is in the air and it could be exciting for everyone.

Kam - let me know when you want to run of office…you would get my vote…I wish all had a workable perspective in many areas as you suggested…unfortunately I had to take somewhat of a stand for my profession…of which we aren’t a typical firm either…as we do high service with discounts when warranted and or needed. We rebate more then not…when allowed and we really try to make the experience a great experience for both sides of the transaction. But I do want to thank you for taking a consumer position that allows one to make their own choice. Thank you.

Ron, you sound like a good agent. If I was over 50, and didn’t know anything about real estate, perhaps I would feel comfortable with yourself, or a similar ‘full service’ agent. The problem is that MOST AGENTS cost the same. The 20 year old kid that said, ‘what the hell, I’ll try real estate’ and the 50 year old RE vetran both charge 6%. (don’t give me that crap about the buyer doesn’t pay for it, because they do, nobody else is buying anything) Sure, you can convince a selling agent to go 5% or whatever, but you’re still paying for nothing. (of course, not with Ron- see his extensive list). RE has been spoiled with many bad agents. GOOD AGENTS SHOULDN’T FEEL THREATENED BY DISCOUNTERS. If they’re the full service they say they are, they have no need to fear. However, the other 90% of RE agents that get paid like the full service agents are upset. Ron, why are you so upset?

For the record, I think even paying 3% is too much. (See, buy or sell with a discounter, you’re still losing 3% at the mercy of a RE agent, assuming of course, that you use the monopoly of the MLS). If the public could access the MLS for free, the buyer’s agent wouldn’t exist…

As someone who actually bought a house through redfin I’ve written about here on my blog - http://www.sawickipedia.com/bl.....nal-agent/.

Moral of the story is redfin - great service but not yet a solution for all situations. I used them to buy my new house, but not sell my old house. Happy to answer questions as one of the 500 folks who have used the service.

I don’t understand why in this day and age there are sites that don’t support Safari. Please people, test your app. in multiple browsers.

Brian – I am not upset and or threatened in anyway…I guess you didn’t read close enough…I discount as well…and when I do…I do not have to limit and or reduce my services. That is the way we conduct business and my agents do as well. I have also rebated my full commission at times to newlyweds and or those I have a multiple sale relationship with and or other business dealings…or for a charity or non - profit.
But we realty do not call and or market it as a discount…as 90% of our business is based on referral and or again repeat business so each deal is unique sn measured based on the product – the goals of the client – the amount of business we have done with that client – how much marketing they want to do above and beyond what we normally do and many other variables. We have great markets and poor markets but we are in business in both…and been around for a while so we must be doing something right for our clients. We really become part of our community as well. We sponsor our little league teams – our soccer clubs…recently a reptile habitat and Saint Jude’s Hospital gets a check every month. We have good times in business and bad times…we had as much as 46 agents at one time and now we are down to 13 in this market and we try to keep them active with other work while the commissions even at 1% aren’t happening. It really is wrong to single out a whole industry that allows for individuals to create the American dream within the American dream of home ownership.
Brian – I do not know what to tell you but – not upset here – not angry - just feel that there are many sides to that story that should have been told that weren’t.
All industries and professions have a balance of positive and negative experiences…ours I do believe needs to change and adjust but it isn’t based upon a monopoly when all the listings in the world can be seen on Realtor .com and thousands of other websites…and sites like Zillow and Homes.com and many others providing a free service to the public. I hope and work towards a better real estate industry for all of us that utilize and or need assistance in purchasing and or selling a home…and I am proud to be a part of the industry that does so much good and provides such great service and offers insight and understanding to those seeking help. I even bet that you will once again use the services of a realtor…maybe to assist in a transaction in another state and or have to relocate and or would like to get an experienced professional to help you with your sunny Florida second and or third home!

so i am supposed to take pity on a pickpocket who is himself being pickpocketed????

Okay that’s enough. You know what Whoppee? Screw You! Screw you and the horse you rode in on. I watch my SO work her BUTT off for her clients. I’ve watched her get crushed between tough buyers/sellers and mediate/negotiate the impossible to make things work. I’ve watched her cut her commission to nothing, smile and say, ‘just tell your friends how hard I worked for you’ to help build a referral base. Then she says to me: “I’m not going to see someone lose the house they want so I can get my commission. I’ll make up for it next time or something” I’ve seen buyers and sellers cost her hundreds and walk away. I’ve seen her up at all hours, searching homes for buyers. I HAVE NOT seen her get rich… yet. Maybe with her attitude, she will soon.

What do YOU do for a living Whoopee? Wait! I don’t need to know. I’ll just generalize like you do: “You’re undertrained and you’re overpaid. A monkey could do what you do for a living, Whoopee. Your vocation is worth no more than 6 dollars an hour and should be capped at 8 hours a day no matter how long you work. 64 bucks a day. That’s what you’re worth. That’s what _I_ say. I know everything”

There! How do you like that? Doesn’t feel good, does it?

Shame on Lesley Stahl and 60 Minutes. They want to call themselves a news organization, try infomercial.

What a disgrace and a one sided bunch of horse …..

I find myself wondering if Lesley would use red… to sell her house? I have my doubts, but if I wanted to slam over paid people, she would be on the short list of them. What does she make, more than a million a year, for what, she sits there for 15 minutes about 40 times a year, and likely puts in possibly 20 hours a week to collect her fat paycheck. How many weeks of vacation does she get per year???

Most full time Realtors I know, put in 80 or more hours a week, just to make a average living. Your average full time Realtor probably makes $50,000 a year for all those hours worked. It has been my experience that in your average real estate market, a good full service realtor can get their client a much better deal than any discounter such as Red… The discounter just does not have the time to give quality, after all their people are just one step above a Walmart check out clerk verses a full service seasoned experenced professional. The seasoned professional will do a better job for you every time!!

Get real Lesley Stahl how much did Red… pay CBS for that 15 minute commercial???????

Saeed Said

What’s happening is that there are gutless investors who want a crash so bad that they can taste it. After this much-hoped-for crash, they can swoop in and pick over the spoils, at a great price. Then, after a crash, just like the stock market, there’s noplace to go but up.
My advice to these investors?: Find properties to vulture up that are already financially distressed. They’re out there. You just have to shake the BB around in your head and mix up the grey matter a bit

In our opinion, The market tends to gravitate toward efficiency.

We used to pay quite a bit to order plane tickets because at that time only agents can have access to the booking system (same for stocks). But that is no longer the case. No doubt that real estate transaction is much more important than buying a plane ticket or a car. However, the myth about the difficulty involved the transaction is diminishing day by day due to information available on the Internet. Real estate agents often said that they have ‘163 things to do’ (a myth) but actually the required tasks are not that much or complicated and are repetitive.

HomeMaxima.com Team
http://www.HomeMaxima.com

It continues to astound me just how many people use negativity and ignorance to prove a point instead of facts and common sense. Hi Ron! Thanks for the vote. haha
I think there is enough business to go around and if you’re this sweet and honest in person…you have nothing to worry about. Any crooks in any profession should be worried by competition, but all RA are not crooks. My agent took less than 3% by the way. Just an fyi. I know people usually react with a very “gut instinct” and thats most always because of an experience they had, but really….no one group of people can be categorized this way and put inside a neat little box and labeled “bad”. If you’re a jerk…you’re a jerk regardless of what profession you enter into.

what about the mentality of both buyers and sellers? often enough the seller is asking a price way beyond what it should be and learned later on they would need to lower the price in order to get buyers in the door. I’m a full time agent in NY and sadly to say there are many agents not exactly working on the best interests for their clients as they should. The fact is the RE market does justify the price itself. There are more and more houses on the market these days which means buyers have more choses and result a longer time to get any home sold. For a honest real estate agent who promised to do what he/she suppose to do, their expenses are increasing as well. I give all my respect to those agents who are honest to their clients and shame on those agents who embarrassed themselves and the RE profession leaving those negative impression to the public.

Consumer has choices. If they want full service they should go with a traditional agent, if they want to do everything themselves go with discounted brokers.

I really don’t see the point of putting down traditional agents. Like most traditional agents, we get repeat business because we make their experience a good one. Majority people are complaining about 6% commission is not even home owners and most likely they will never own a home. So if you are one of those people, please stop complaining.

For the rest, I can come and criticize whatever profession you are into and tell you that you don’t deserve what you make. So basically, everyone makes money that they don’t deserve?

Matter of fact, next time you go to a doctor or lawyer or any other services…..make sure to tell them they don’t deserve what they make and I am sure they will let you know where the door is.

Shame on CBS. The Redfin business plan is on line, and it is hilarious! But CBS never looked it up. The plan for sellers is: pay us $3000 up front. Price the house yourself, using Zillow and other on line services. We will not refund a penny if your house doesn’t sell - because it’s due to bad market conditions, not anything we did(n’t) do. Oh, and we will NEVER see your house. No, not ever. You price it, show it, negotiate it and process it!

And where did CBS get the idea that all agents get 6%?????? If they asked they would know 2 things: 1. The fees are always negotiable, in every state I know of; 2. the agent does not get the money directly. The agency gets the money and splits it with the agent. So if an agent lists a house for 6%, another agent sells it, that 6% is split 4 ways; the 2 companies and the 2 agents. Oh, yeah - the agents don’t get a penny till the sale is closed! RISKY BUSINESS

CBS made money and that’s all they care about. CBS did do their home work. CBS only interviewed one traditional agent. Producer of 60 minutes did not want to interview an agent that would show true meaning of traditional agent instead they picked an agent that hardly knew what she was talking about, atleast that’s what they showed after interviewing her for over 2 hours and only showed minute of it. This show was all for Redfin and to promote them only and CBS banked on it.

CBS said real estate is screwed up industry? Media is screwed up industry, whatever will make them money and why should they make all these money on everyone else’s expense?

Get real Lesley. Real Estate agents are professionals and give excellent service for their commission. Just for the record the sales agent usually splits half of the 6% commission with the buyers agent/broker and half of the remaining 3% with their own broker. So on a $500,000 sale, that would be only about $7,500 gross income to the individual sales agent. In a slowing market, after paying for all of the necessary ads, costs of holding open houses, flyers, post cards, time spent obtaining the listing in the first place, negotiating a final price, writing up a contract and monitoring conditions of escrow, it is not a lot. The broker also has a lot of costs including liability insurance, office rent, company advertising and making sure that his or her agents are following state real estate law. This is not an industry for amateurs.

Joe Smith # 29 you make me sick :
To become an Affiliate Broker (Sales Person), many of the state real estate commissions require that you must complete and pass sixty classroom hours of approved classes in “Basic Principles of Real Estate.” You may then take the state exam. After passing the state exam, many require that you return to school and complete a 30 hours New Affiliate Broker Course prior to becoming licensed. That’s just the beginning. Topics covered in the Basic Principles course include:
Brokerage ,Deeds, Property Law, Listings, Agency/Disclosure,
Real Estate Math, Sales Contracts, Financing, State Law, Leases, Appraisal, Fair Housing, NAR Code of Ethics
Next, Affiliate broker candidates must complete the thirty (30) hour Real Estate Commission’s approved “New Affiliate Broker” courses in many states. This course is in addition to completion of the 60 hour Basic Principles of Real Estate course and passing both parts of the examination with a satisfactory score before applying for licensure.
Then, before becoming a broker, one has to serve a minimum of three years as an affiliate in many states. This includes:
1. 3 Years of an active real estate license.
2. 120 hours of commission approved courses-
30 hours of which must be a broker office management course
3. Send broker application form to the commission requesting permission to take an exam.
4. In most states take and pass the broker exam with a minimum passing score of 75%.
5. File for the license within six months of passing an exam
6. Then, within three years, complete an additional 120 hours of post educational study.
Joe, sounds like the single biggest purchase of your financial career must have been the haircut your drunken barber gave you.

I have been a top producing Realtor since 1988. Two years ago I segued from selling real estate to coaching. My biggest gripe is not in what the discounters are doing, but what the so called full service companies are doing by taking discounted listings and not disclosing them. One of my coaching clients recently told me she lost a listing because the seller told her she got a 3 1/2% deal from one of the largest real estate companies in the Country. It was not disclosed on the MLS and the listing agent did not have to explain she took a discounted listing to her colleagues so my client had no choice but to move on. How many discounted listings are held at companies pretending to be full service? How many companies give back rebates in order to compete with discounters? At least the discounters advertise what they are…so maybe its time we ALL offer a menu of services to clients and let them choose which programs best suit them.

As a seasoned full service agent with intimate working knowledge of my local market, discount brokers are far from a threat to me. There are several Discounters in this area and sure, they had their day during the boom years, when a monkey in a clown suit could sell a house, when a buyer didn’t dream of writing a contingent offer for fear of loosing the house, and negotiations where nonexistent. That’s when discounting became the new fad and a bunch of new yahoo agents jumped in to the field because lets face it, houses did sell themselves back then, sometimes within hours of listing, with very little effort. Those Days Are Over, YAY!!!! These days it takes knowledge, experience, sales and negotiating skills, marketing dollars, technology and time. I have nothing against discounters as long as they follow the code of ethics. I am a firm believer that people should have a choice and discount brokerage should remain a choice for those with the time, patience, knowledge and know-how to make it work for them. More power to them. A lot of people actually need to go that route first to get the fsbo bug out of their system. Many of those people who go that route find out the whole discounter thing isn’t quite what they thought it was (or use to be) and ultimately end up going with a traditional company anyway. Those are actually some of the best clients to have because they already know how valuable my services are because they have experienced what very little/no service gets them.

Carry on….

Brian,
“If the public could access the MLS for free, the buyer’s agent wouldn’t exist…” Who do you think pays for the MLS? Buyer agents are also seller agents and pay monthly for access in addition to listing fees as part of their business expenses to offset expenses to run, maintain and update the systems. Where do you think the info comes from that is on all the other “free” sites? If agents weren’t around to pay this expense are you willing to pay for it? Doesn’t sound like it, your types want a free ride for everything. And, why would buyer agents waste their time to find you a property when they know your “MO” is to go the listing agent to cut a deal anyway? But you are smart, because as you stated, smart people find their own property and make their own deals and do much better. Sounds to me like you are on the WIIFM channel and it is so loud and clear no one wants to waste their time helping your self-serving agenda. A multi-state investor? I am surprized you don’t have a good agent in each state bringing deals to you and that you don’t see any value in your own time saved running state to state to “make your deals” with the listings agents. A serious investor friend of mine has an agent that brings him deals BEFORE they hit MLS on a regular basis. He found a good agent that he uses and as they say “one hand washes the other.” To each their own.

Also, just an FYI to you and Joe #29, realtors and NAR have nothing to do with the educational requirements for real estate licensees. NAR is a trade group of licensed agents. The real estate commissions in each state set the “standards.” They are the ones to “blame” and point your fingers at; but they probably won’t do much to change it as long as they are collecting record numbers of application fees, annual/biannual renewal fees, office license transfer fees, etc. Your negative energy might be better spent complaining to your politicians in your state regarding this issue. I think EVERYONE in or dealing with this industry would be better off with a “higher bar.” Higher standards would “weed out” the riff-raff that give the good agents a bad name and hopefully give a bigger slice of the pie to the better agents and that in theory should enable agents to work for lower fees.

Just wondering - would you pay 6% or more if an agent had a degree in real estate? Would you pay 7% or more if they had a masters degree in real estate, how much for a Ph.D? What would your arguement be then?

Seems to be the “discounters” are the “masters of the trade” with their model. Pay them $3000/$1% for 5.5 hrs. of paperwork, the consumer does all the running around and they have no accountability and still make over $600/hr.

Ok, I have to throw in my 2 cents on this one. I also am a seasoned full service agent who knows there local market well. I am not going to bash or praise Redfin for what or how they run there business. While I may not agree with or like it we live in a society which enables them to do what they do as long as they stay within the required guidlines.

What I do not like is the negative comments and perception of the Real Estate Professionals. I am not going to go on trying to justify what others already have. At the end of the day it is up to the consumer or client to do there due dilegence in hiring a qualified agent.

For those of you who have had negative experiences with agents then shame on you for working with them. You can fire your agent at any time and find one who will work for you. So if you allowed them to do a bad job that was entirely up to you and no one else.

Don’t just go with the first agent you find. Sellers should interview at least the 3 agents to list your home before you make a choice. There are countless resources on line to help you chose a qualified agent to represent you. Buyers, you should do the same. Go to Open Homes and meet the agents or in otherwards, interview them. In both cases ask for references from past clients, they should not be offended.

In my experience as I am sure other agents have as well. I have had to fire cliients because I did not feel that the match with them was a good one and that I could not represent them in the way that they were looking.

The basic numbers are really quite simple, get off the big dollars. On a $500,000 home at 5% the total split is $25,000, that is shared between the each agent at $12,500 each. Assuming that the agent has a 70% split with there broker they will get paid $8750. You have to pay taxes on the money you earn at the end of the year so we will say 25%. You are now at $6563. take out advertising money for a listing of an average of $1500 for virtual tours, print ads, internet marketing(keep in mind this money is spent up front and out of the agents pocket)etc., you are now at $5063. Assuming the home take 3 months to sell and close that averages out to $1675 a month. If that were a regular 9-5 job that would equal roughly a $15 an hour job.

AND PEOPLE THINK THAT THAT IS TOO MUCH. GET REAL

I have just found this discussion forum and I think it is so interesting. I am a real estate broker in Manhattan. A few years ago I was looking for an apartment in a differen area of the city and so I had to use services of other real estate brokers. I was so disappointed. I found all of them so sloppy and unprofessional. I always thought people exaggerate when they say that real estate agents do not deserve commissions or that they were simply unlucky to come across a bad agent.. But I met quite a few of them and all were so bad.. They made no effort at all, I made appointments in advance, I had to take time off work and go there and they would show me just one place, one agent didn’t even show up and then called me 2 hours later and insisted that I come right away.. Another funny thing, I was under impression they didn’t like me because I was…. a real estate broker. One agent showed me an apartment and tried to convince me that I .. cannot do any better… That was so unpleasant.. For all of you wanting to save on commissions, you can always try to sell/rent on your own and good luck with that, this is what I always say to my clients. Lots of sellers are lucky (especially in the current market) and they can accomplish a lot on their own. If it sells fast-good for them. But it takes a lot of perseverance to handle showing, marketing, ad cost and dealing with all peole coming to look at your home for months. So often there are times when one feels there is a need to have a real estate broker to represent them. It’s the same with hair cutting - there are people who can save money by cutting ther own hair-why not - it’s not a big deal. But then one day you’ll decide it will be much easier to go to a professional hairdresser. Sometimes you get a good one, sometimes you get a bad haircut, but you continue using the hairdresser because it makes more sense and it’s easier and you are too busy to do everything by yourself. It is true, there are too many of us, some are better educated, some not so. Some are stupid, some are smart, some are rude, some are nice. So if you need a broker, by all means, shop around. An educated seller would interview a few brokers and will realize quickly who is bragging too much and who is acting professional and making sense. I have been in real estate for over a decade. I work very hard, weekdays and weekends and I am not making millions of dollars. I am diligentl and honest and I always make an effort to make my clients happy. This is not an easy work. Many deals do not materialize, income is not steady and sometimes it looks like you work for months for nothing. But I like when my clients sometimes come back to me to thank me for the work I have done, that has to compensate for any bad times. You have to be knowledgable about the market and , it takes a lot of skill to patiently and professionally handle all the people and situations involved and to carry every deal to through to closing. There is lot of emotion involved and believe me, all kinds of things happen, and many deals would fell through if it were not fo the efforts of some hard-working real estate brokers. In every profession, there are people who are not professional and there are people why make an effort to do their best. All real estate brokers are not bad - we can be good, honest and wonderful people, too. So these are my 2 cents.

We offer a flat fee on both sides of the transaction for our service. We still offer the buyer’s agent up to 3% for our listings because I believe until the commission structure is changed we still do not know how long that agent has been working with the buyer. If they are working with the buyer for 6 months driving them around and searching for properties every other weekend $10g’s isn’t that much. If the buyer is doing most of the work for the search then that is when a company like U.S. Real Estate Depot is a much better choice than Redfin or any other company on the percentage structure. We believe that money is the buyer’s or the seller’s, but not ours.
We are completing a transaction; there is no more work in doing a $500,000 home than there is doing the transaction for a $5,000,000 home. If you are in Southern California, check us out, no venture capital money forcing us to pimp out every way possible to make money. We take no referral fees from any vendor, use the highest technology to save time and then return the savings back to the buyer or seller depending on which side we are representing.

Every department store, every attorney, every doctor, every car dealership…everyone charges a different fee. Stop worrying about what other people are making. The same jerk who is pissed with the real estate agent for quote “make too much money” is too fickle to realize that this is life. How about those individuals making $11 an hour but the boss or the owner of the company is making ten times that amount. Stop counting other peoples money!! If you think real estate commission is too much it shows that you don’t even have a business mindset. Real estate agents must run what they do like a real business which of course has expenses. Do you work for free? If you don’t like what you are being charged then sell your house yourself. I am quite sure that no intelligent agent would want to deal with you anyway!! I am sick and tired of people who have no %$#&^%#@ clue about real estate and will probably only purchase and or sell one freaking house in their whole lifetime all of a sudden become the authority about real estate. Shut up!