It Actually Is Not Personal - They Just Suck

I got some feedback about my recent real estate-oriented essays that felt that I was a bit too harsh or maybe just too strident in my reproach of real estate agents. It's true, I did leave it sounding a bit unfair, but unfair it is not. I'll try to make it sound a bit more reasoned and then I'll try to drop the real estate topic for a little while. The fact that it's huge mainstream media news right now probably means I should move on to more interesting topics.

Real estate agents a.k.a. REALTORS® (note that is a trademarked word), are they feckless creeps? Yes. They are. Here is why.

1. They have a dreadful conflict of interest. The book Freakonomics does a fine job of reviewing the ways that RE agents are *not* on your team. They are on their own team and that is generally at odds with your team's objectives. An extra $10k might be a lot of money for you, but it is only $350 to them. On a $200k house (imagine a market far away from Southern California), they stand to make $7000 anyway. Why would they want to do hard work by going the extra mile for just $350? And it turns out, empirical evidence shows that they do *not* go that extra mile.

2. They take way too much money from the transaction. Bring me a RE agent who has sold a *median-priced* home in San Diego ($566,700 in 2005) and let him/her look me in the eye and tell me they *earned* every penny of $19,834 (!). And the buying agent, who also makes as much, would do well to not get too close in case I vomit on them in the middle of their lie. Imagine that your sewer backs up one day and you call a plumber and he tells you that a long section of pipe in your front yard has collapsed and 30 feet of sewer pipe needs to be replaced. Do you think, even if you took the highest bidder, that this would cost anywhere near $19k? Not a chance. Between that and selling a house, which job would you rather not do? So look at what you're getting and think about that. One more thought experiment- what would help to sell your house more? An in ground pool or a real estate agent; the former is much cheaper!

3. They are largely useless in performing useful services. This mostly pertains to the selling agents. If I stood to make $19k from just selling someone's house, damn, I'd make a crusade out of it. But RE agents can't even put together a coherent web page of a property. I have done this myself, yet the RE agent who is probably going to be the most expensive service worker you'll ever hire, can't accomplish this. The MLS as a web page does not count. For $20k, I want them to buy a domain or three and host a flawless website with dozens of professional quality photos and video walk-throughs narrated by Robin frickin Leach. I want detailed floor plans and text about all flattering aspects of the house. Just look at a typical MLS listing and it's pretty much disgraceful for its dearth of all but the most rudimentary information. For $20k, I want a Pulitzer prize winning work of prose fiction designed to make a potential buyer visualize the perfect life which can only be realized by living in this house.

4. They perform many useless services. Driving me around in a Cadillac to look at houses? I'm sorry, but I wouldn't take a $10 cab to go buy groceries; why would I take a few $5k cab rides to go buy a house? It doesn't make sense. The big post in the yard, is that strictly necessary or is that actually the homeowner fronting billboard space for the RE agent's business? Looking up things on the MLS used to be a critical "service" provided by agents, but in reality this practice was actually the withholding of information.

While I sincerely want this profession to die in the blaze of ingloriousness it so richly deserves, I'm not advocating death camps for these people. I'll settle for a radical reform of the profession. Buying a house is a complicated matter and having an advocate is not categorically a terrible idea. But they must actually be on your team. Perhaps the banks could pay them just like my credit union pays for a service that will help you find and buy a used car. There is no commission and these people really are only motivated to give you a good experience so that you're encouraged to not avoid it in the future - more business for the banks financing loans. I would suggest a flat fee or even better, an hourly rate with itemized billing. If you put a REALTOR® crucifix in my yard and want to charge me 100 times more than a team of gardeners who would make the yard into an immaculate garden that would impress a Buddhist monk, then that should probably be printed right up front on the invoice where people can laugh openly at it.

RE agents should be integrating information, not still guarding Balkanized databases. The fact that some bigger real estate outfits are doing a good job in this area (Zillow, Redfin) gives me hope that this is changing. All house listings should be free and available to everyone instantly. That's the modern reality unless some very powerful trade lobby (like the N.A.R.) is damming up that information flow.

Finally, RE agents need to professionally sell the place. I'm astonished by the poor quality of photos that plague the MLS. It seems that only the builders hire professionals to take their photos. And why be skimpy with photos. Photograph *everything*. Why waste my time making me go look at a house that could have been culled from contention by more easily obtainable information? And I mentioned dedicated websites showing a degree of professionalism. If it were my house for sale, I would not want my marketing message drowned amongst the dross of the REALTOR'S® stupid web site with it's ads for various agents, loan products, the parent company, etc.

If real estate salesmen started acting in their clients' best interests and started actually doing a professional quality job at marketing and/or providing advice or analysis, I'd be much less likely to spend my time thinking of ways to eradicate this profession.

Ok, let us not mention this topic again for a long while.

1 comment:

xed said...

Here's a beauty that the RE agent composed for a friend selling his condo. This is exactly how it appeared in the MLS. Note the pool's popularity.

"Unobstructable Golf Course View! ! ! !, Faces West For Ocean Breezes And Fantastic Sunsets. Penthouse Untit W/Sun Deck Access. Over 900 Sq. Ft. W/Extra Half Bath. Cental Air And Heating, Warm Gas Log Fireplace.. Inside Laundry,Includes Washer/Dryer.. Walk To Upscale Shops At Fashion Valley Mall. Little Red Trolley Acosss The Street, Bus At Your Door. Jogging Bicycle Trail To Bay. State Of The Art Workout Room, Pool Hated Rear Round. . No Need To Pay Extra Storage Fees, You Have You Own Storage Rm."