At this time when house prices are at historic highs, interest rates are at historic lows, homebuyers are vying and trying to make the most important financial decision of their lives and real estate brokerage are under fire from many sides because of easy access to information, intense competition from streamline internet operators, because of the public distrust and distaste for the high commission model that has developed, I ask the question, “how important are real estate agents?”
Real estate agents have to change. If the business of real estate is like a big machine, and the machine is broken. Real estate agents are the moving parts of that machine. We are necessary parts but the machine is outdated and overheating. It’s going to blow!
Realtors are on the front line, the foot soldiers of the real estate battle but our system, our org chart, and more importantly our battle plans are from two decades ago. For persecutive, in 1994, no one I knew carried a cellphone. No one I knew had a website. No one I knew trusted the internet as a go to place for answers to any question. In fact, no one I knew was even online.
A real estate news website I go to recently said:
“More real estate information is online today than at any other time in history, yet it’s still the most confusing transaction to navigate, arguably more so than 20 years ago.”
Industry disrupted
Agents have spent decades as the target of disruption. In the media and in movies and on TV, agents are often portrayed as unethical commission hounds, slick salespeople who would do anything to get you to “sign on the line”, do anything to “get the cheque”. Many people have stories and retell urban legends about the misdeeds of real estate agents. And I think all stories have at least some truth buried inside of them. But I argue that it is the brokers not the agents that are at fault. If the industry is going to change, it will change at the broker level.
The traditional broker business model centres around recruiting more and more, often not very carefully screened, agents, which dilutes the quality of real estate services generally. This is aggravated by the opportunity for the broker to get better splits from poor-performing agents who create a reputation problem for the industry.
Whereas the role of brokers has become irrelevant, real estate agents have more power now than we did 20 years ago. When I ask clients how they feel about my brokerage, they are unaware at least, indifferent at best. Just think, the majority of home buyers start their search online, yet no big brokerage is doing much to capture those buyers with the information about homes, schools and neighbourhoods and other issues that are important to today’s buyer. Brokerage and most Realtor sites are all about bragging, “how great I am”, or fear mongering, “you’re going to make a mistake” or enticement, “if we can’t sell it, we’ll buy it ourselves”. That’s old school selling. That’s a pants load.
A lot of people like to think that the disruption that will make the real estate industry change will come from consumers selling their own homes. It won’t. Real estate agents are here to stay. Here’s why:
Why use an agent?
Better. Stronger. Faster.
1) In most cases you will certainly be better protected and probably make more money if you use an agent to sell your house. Statistically, the time it takes to sell your house will also be significantly reduced when agents are involved.
Money for nothing.
2) If you do-it-yourself, or even worse, waste your money on the do-it-yourself marketing companies, excuse me FSBO “brokerages”, you pay for this, you pay for that and eventually you’ve paid thousands of dollars and you still haven’t sold. You don’t get that money back, nor do you get back the time you wasted. Better to use an agent. He knows that more than 1/3 of houses don’t sell and at least if yours hasn’t sold, he’s had the chance advertise himself and meet your neighbours.
The “F” word
3) Given the opportunity to buy from a private seller or through organized real estate, most buyers (smart buyers) will always chose to have at least one realtor involved. It is the fiduciary duties, implied and understood and the processes in place that buyers especially, but sellers too need and want when undertaking the biggest financial transaction of their lives.
The “N” word
4) Without an agent, you negotiate on your own. Many buyers are tempted to negotiate down from the listing price. They may negotiate hard and get $20,000 off. But how do they know if they paid a fair price? Sellers too are operating without enough accurate pricing and marketing information and suffer from over estimating the value of their home. They will take a $7,000 roof redo and add $10,000 to the list price of the home. But at the same time, buyers know that the private seller is saving the commission and will want to negotiate that away.
Caveat Emptor? Nope
5) Seller’s have to tell the truth. They have to disclose problems or they will get sued. Seller’s don’t seem to know this. Buyers are wise not to trust amateurs selling their own abodes.
Lenders like Realtors
6) Lenders like organized real estate. They like Realtors. They like to know that they are giving a mortgage for a house worth the mortgage. They send out appraisers. Lenders also want to know more about the buyer’s ability to pay if maybe they’ll be paying too much.
Sellers disrupted
7) Sellers think it is easy. It’s like holding a garage sale. It’s like selling my old golf clubs on Kijiji. All the stuff that real estate agents do help sellers eliminate the stress, get the right price and get the house sold fast so their family can move on with their lives, all that stuff is not thought about when home sellers are considering a 5% commission. They don’t think about the expert guidance, the knowledge known, the trusted advice and processes and plans. Instead, they bumble along and eventually give up frustrated.
Brought to you by Keithmarshall.ca
How important are real estate agents?
At this time when house prices are at historic highs, interest rates are at historic lows, homebuyers are vying and trying to make the most important financial decision of their lives and real estate brokerage are under fire from many sides because of easy access to information, intense competition from streamline internet operators, because of the public distrust and distaste for the high commission model that has developed, I ask the question, “how important are real estate agents?”
Real estate agents have to change. If the business of real estate is like a big machine, and the machine is broken. Real estate agents are the moving parts of that machine. We are necessary parts but the machine is outdated and overheating. It’s going to blow!
A real estate news website I go to recently said:
“More real estate information is online today than at any other time in history, yet it’s still the most confusing transaction to navigate, arguably more so than 20 years ago.”
Industry disrupted
Agents have spent decades as the target of disruption. In the media and in movies and on TV, agents are often portrayed as unethical commission hounds, slick salespeople who would do anything to get you to “sign on the line”, do anything to “get the cheque”. Many people have stories and retell urban legends about the misdeeds of real estate agents. And I think all stories have at least some truth buried inside of them. But I argue that it is the brokers not the agents that are at fault. If the industry is going to change, it will change at the broker level.
The traditional broker business model centres around recruiting more and more, often not very carefully screened, agents, which dilutes the quality of real estate services generally. This is aggravated by the opportunity for the broker to get better splits from poor-performing agents who create a reputation problem for the industry.
Whereas the role of brokers has become irrelevant, real estate agents have more power now than we did 20 years ago. When I ask clients how they feel about my brokerage, they are unaware at least, indifferent at best. Just think, the majority of home buyers start their search online, yet no big brokerage is doing much to capture those buyers with the information about homes, schools and neighbourhoods and other issues that are important to today’s buyer. Brokerage and most Realtor sites are all about bragging, “how great I am”, or fear mongering, “you’re going to make a mistake” or enticement, “if we can’t sell it, we’ll buy it ourselves”. That’s old school selling. That’s a pants load.
A lot of people like to think that the disruption that will make the real estate industry change will come from consumers selling their own homes. It won’t. Real estate agents are here to stay. Here’s why:
Why use an agent?
Better. Stronger. Faster.
1) In most cases you will certainly be better protected and probably make more money if you use an agent to sell your house. Statistically, the time it takes to sell your house will also be significantly reduced when agents are involved.
Money for nothing.
2) If you do-it-yourself, or even worse, waste your money on the do-it-yourself marketing companies, excuse me FSBO “brokerages”, you pay for this, you pay for that and eventually you’ve paid thousands of dollars and you still haven’t sold. You don’t get that money back, nor do you get back the time you wasted. Better to use an agent. He knows that more than 1/3 of houses don’t sell and at least if yours hasn’t sold, he’s had the chance advertise himself and meet your neighbours.
The “F” word
3) Given the opportunity to buy from a private seller or through organized real estate, most buyers (smart buyers) will always chose to have at least one realtor involved. It is the fiduciary duties, implied and understood and the processes in place that buyers especially, but sellers too need and want when undertaking the biggest financial transaction of their lives.
The “N” word
4) Without an agent, you negotiate on your own. Many buyers are tempted to negotiate down from the listing price. They may negotiate hard and get $20,000 off. But how do they know if they paid a fair price? Sellers too are operating without enough accurate pricing and marketing information and suffer from over estimating the value of their home. They will take a $7,000 roof redo and add $10,000 to the list price of the home. But at the same time, buyers know that the private seller is saving the commission and will want to negotiate that away.
Caveat Emptor? Nope
5) Seller’s have to tell the truth. They have to disclose problems or they will get sued. Seller’s don’t seem to know this. Buyers are wise not to trust amateurs selling their own abodes.
Lenders like Realtors
6) Lenders like organized real estate. They like Realtors. They like to know that they are giving a mortgage for a house worth the mortgage. They send out appraisers. Lenders also want to know more about the buyer’s ability to pay if maybe they’ll be paying too much.
7) Sellers think it is easy. It’s like holding a garage sale. It’s like selling my old golf clubs on Kijiji. All the stuff that real estate agents do help sellers eliminate the stress, get the right price and get the house sold fast so their family can move on with their lives, all that stuff is not thought about when home sellers are considering a 5% commission. They don’t think about the expert guidance, the knowledge known, the trusted advice and processes and plans. Instead, they bumble along and eventually give up frustrated.
Kitchener-Waterloo Real Estate Market Review
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