****I have no experience with any realtors who are members or sponsors on this forum. Nothing I say is intended to damage anyone's reputation here and I mean no disrespect. This is a rant about the industry, in general.****
I don’t have much experience with the real estate process, but I do understand how things are bought and sold and the effect of price in the speed of sales. It's not the simplest thing in the world, but it’s not that complicated. Realtors are supposed to help facilitate this process based on the needs of their client. Some of them are excellent. Unfortunately, too many of them are dangerously stupid and some of the smarter ones are choosing to max out their profit or image over their specific client's needs.
Why is this? I think it's partly because it's too easy to become a realtor and that attracts some of the same morons that get excited when they see the "work from home and make $2k/week" advertisements on TV at 4AM. Think about it... "I can make $8-grand selling a $400,000 house and all I had to do was take some pictures and put it on the internet?! Derp! How long does the course take until I'm on this gravy train? Sign me up!!" Once they get in, they realize that it’s a lot more work and weird time commitments than sitting on the couch while the checks roll in. But it’s too late – they are now realtors.
So, this puts far too many realtors into the marketplace and with only so many Buyers/Sellers, there's not enough money to have everyone make a living. On the plus side, a bunch of the realtors are really stupid and lazy so they shouldn’t be taking much market, but how is someone just moving to a new city supposed to get a decent realtor to show them around? They can't ask their friends or anyone in the new city, because they probably don't know anyone there. Now they're stuck picking based on glossy advertisements, bus stop signs or blindly trusting a big company like Century-21 or whoever... This is how the stupid ones still get by.
The smart realtors that don’t have enough contacts still need to convince the market that they’re better than the morons. They do this by claiming to be simultaneously two completely opposite things. “I am the best Seller’s realtor because I will sell your house for the most money in the least time.” Their second pamphlet says “I am the best Buyer’s realtor because I will help you get your Seller's price down below market value so you get the best deal.” I don’t understand how anyone could fall for this but I also don’t drive a new Jetta on an 84 month loan. Lots of people are driving those cars and lots of people believe that these realtors have the magic buying and selling formula. If you can sell something for a higher price than other market comparables, you’re not going to sell it quickly, if you’re able to sell it at all. If you’re making terrible offers all the time, the Sellers aren’t going to always be desperate enough to give their houses away and your Buyers aren’t going to be buying.
Another tactic if you can’t sell enough houses is to take more training courses that give you some imaginary letters after your name so people armor your profession more. “Oh look. I’m a CCIM and the religious fanatic that taught the course said right in the brochure that ‘a CCIM is a PhD level credential’ so you know I’m knowligeable”. (I’m not making this up. There’s a CCIM dude that claims “it is PhD level”.)
So, here’s my experience (from a few years ago and before I joined this forum) and why I am upset about this industry. I wanted to sell my house. In order to do that, you need to find out what it’s worth. In order to do that, you can look at your property assessment and get a rough idea, but what you really need to do is contact a realtor for one of these “free assessments”. What they essentially do is look at the recent sales in your area of comparable homes and work out approximately what $/sq-ft houses are selling for. Then adjust if your house is unique or crappy or better. Does that seem hard? Also, no. But you need a realtor to access their data base of the actual selling prices, otherwise you’re just pricing based on a bunch of asking prices instead of legit, selling prices. How do you pick this realtor? If you know someone or you have a friend whose opinion you value and you’re certain that they had a good realtor, then that’s great. If not, you’re stuck with the glossy crap that 5 different realtors put in your mailbox every week and the internet. Great.
So you ask your friend who just sold his house and he recommends _______ and brags that his house sold on the first day and they had multiple offers. That realtor must be good, right? No! That realtor is one of the smarter ones that’s being a lazy piece of crap. He priced that house way too low and it sold instantly for way less than it should have. If you put an E46 M3 in Laguna Seca Blue on Kijiji for $9-grand your phone will explode and after you recover your messages you’ll sell that car for more than $9-grand but you’re not suddenly a genius salesman. You’re an idiot. If my friend owed some bikers a pile of money and he needed to sell that house instantly, that realtor did his job but I know that he could have held it for a year without suffering.
I don’t want that realtor or anyone like him. Next step is to try to remember some names from the pamphlets that you’ve been throwing directly in the garbage for years and years. The one that you’re able to remember is a decent looking woman (because hotness can sell houses) and off you go to her website. She’s got a Facebook page and a website and a phone and Instagram and LinkedIn and Twitter and a trillion ways to get in touch. Fill out her online form from her website and wait to hear back. I would expect something in minutes but after a day of hearing nothing I phoned. Someone took a message with my info and then I still never heard back. How the hell does someone that has literally been begging for my business for years and has wasted their money on all these websites and advertisements not call back?
Now I don’t want her but I still need someone to get me a price point. Next I’m stuck driving around my area looking for names on realtor signs because they should have a clue about my neighborhood. I finally get ahold of two. First guy comes over and has a quick look and gives me a report and it’s low. Stupid low. The next guy comes over a couple days later and he even brings a partner with him. They both agree on a much smaller range that is also quite low. The guy actually said “the last thing I need is another listing sitting on the market”. Whoa Playa. So sorry for wasting your time! Dunno what made me think you sold houses for a living.
Great. Now I’m doubting my own value because I’ve got 2 or sort of 3 realtors that have said my house is worth way less and I’m talking about numbers between 10%-15% below what the house should sell for. That’s a huge chunk in realty. This ain’t like buying used tires on Kijiji for half of what the guy was asking. A lot of realtors won’t even show their clients an offer that’s 5% below asking price. Finally another friend comes to the rescue with a realtor. This guy comes over with a report that’s not way different from the others but he goes way farther back in time with his because the recent sales were not really that similar to my house and then he factors it because of the current economic conditions and market. Does that seem hard? No.
I list with him and the house doesn’t sell in the first day or week or month. But it does sell within the average time that houses are selling for in Edmonton. That means it was priced appropriately and I got tens of thousands more in my pocket than if I went with the others.
Why were the others so off in their pricing? Maybe they weren’t. The fee structure system rewards realtors for doing this. If you’re selling a $400,000 house for 10% less at $360,000 the listing realtor only makes $600 less while the Seller loses out on $38,800 cash in their jeans. The realtor sells the house in less than one week and can brag that he is a miracle salesmen and get ready to list another house. He can even get the client to shake his hand and thank him rather than break his hand in a vice beat him with a lead pipe for costing the Seller thirty-nine thousand dollars. That $600 out of the realtor’s pocket is nothing more than an investment in future sales. He’ll make it back 5-fold by getting to list his next house that much sooner. How could you sleep at night denying a medium income family $39,000 in their pocket, just so you can quickly list another house and make another eight thousand?! You’re stealing from your customers when you should be stealing from your association! They’re the ones pumping out licenses on a conveyor belt!
Let me repeat that some realtors are excellent and this isn’t all about bashing realtors. But the criminals and the ones that suck need to get weeded out and the stupid Realty Association had better start doing something about this because right now they aren’t and vigilant new competitors with alternatives are taking care of it for them. Answer your phone. Stop being lazy and pricing houses so low that they sell instantly. You’re not a hero, you’re a crook who left a bunch of your client’s money on the table. If you have a web presence and social media you need to actually use it beyond simply setting it up. Don’t spend all day handing out junk mail and then act all high and mighty when someone wants to give you some business. It’s fine to be proud of your job, but stop acting like you’re invaluable neurosurgeons or you’re going to end up like Film Projectionists.
Do your job!
*Again - references to "you" and "your" are directed at lousy Realtors, not anyone here. This was written years ago...