I think that we can all say that on occasion, even the best of us have grumbled about our customers, but when grumbling turns into contempt or you feel compelled to put it in writing for telling the world how stupid your customers are, there might be a problem. This article is for the portion of the real estate market that can’t quite seem seem to figure that out.
As a full disclosure, I am not a fan of the rank and file real estate agents that populate the Stockton market. I know from experience that out of the 3563 licensed agents in Stockton, that only a small percentage are worth their hefty commissions. That is even more true when you start to talk about distressed houses and a real estate agents value at the point of sale.
Today I stumbled upon two companion pieces on Realtor.com that explain so much about the psyche of the real estate agent and why they have become so irrelevant in today’s real estate market. I admit that I have never been a big fan of the rank and file real estate agents. As a group, I find them entitled and woefully less than proficient at both Sales and Marketing. I have voiced my concerns for anyone that pays high commissions in several articles over the past several years to the ire of many real estate agents that simply dont understand that their license is a piece of paper and not an entitlement to a large chuck of your equity.
The last straw was reading “7 Things that Buyers do That Real Estate Agents Hate” (like anyone cares) and “6 things that Sellers Do that Real Estate Agents Hate”, (Seriously) I came to the conclusion that they obviously are out of touch. Regardless of the content, the titles are a reflection of how most real estate agents really feel about buyers and sellers.
You have to understand that these articles appear on Realtor.com. This is the website that represents Real Estate Agents in an industry that is declining in relevance. Some editor said OK to publish these absolute crap pieces that boil down to the contempt that real estate agents have for home sellers and buyers. Can you say… bite the hand that literally feeds you?
Unfortunately for most real estate agents, they cannot see the walls closing in as their value is being questioned. The smart real estate agents recognized years ago that they were slowly being squeezed out with the emergence of the online companies like Zillow, Trulia and Realtor.com. They recognized that unless they could individually add value, the rank and file real estate agents were not going to be able hold onto the traditional role that real estate agent held for years. Now, that other local and national online discount real estate brokerages are popping up, the market is once again consolidating and sellers are starting to see the kinks in the armor that real estate agents exhibit in every market.
So today’s article is going to focus on What Real Estate Agents Do That Sellers Hate.
When you’re selling your home, you usually have your eye on two Objectives: Getting it sold fast and getting a great price. The problem is unless you hire the very best agent in any market, you might be better off representing yourself or just selling your house to a cash home buyer in Stockton. When you consider the savings from repairs and upgrades, delays for inspections and your commission savings, the mathematical comparison may surprise you.
I am one of the premier cash home buyer in Stockton, Sacramento and Modesto and I can scale the cost and sale of any house minus the cost of repairs and some holding cost and often times put more cash in your pocket at closing than if you hired a real estate agent. Why? because I know what I am doing and I cannot afford to waste your time. It really is that simple. I am not paid a commission when your house sells. I pay you cash at closing. There is a big difference between hoping that your house sells and someone actually writing a check.
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What Real Estate Agents Do That Sellers Hate
1) Talk About Their Clients Like They are Idiots
It’s always the little things, but too many real estate agents talk to other people about their clients and it is inappropriate. I learned a long time ago that everybody has a story to tell, but it is clearly their story to tell.
2) Not Being Honest Regarding their Level Experience
I am the first to admit that hard work, intelligence, creativity and diligence is what transcends experience. People that are tenacious, enthusiastic and display integrity will always rise to the top, especially in real estate. But we are talking about an industry that is over crowded by inexperience, a lack of formal training and a nationwide ad campaign that paints all real estate agents as highly qualified individuals deserving of a portion of your equity.
I say not so fast. If 87% of all real estate agents wash out with in the first 5 years. Shouldn’t you know whether your agent is in their first or last month? Real estate has always been a numbers game and it’s time the sellers understand that they are the ones paying the commissions for both the sellers and the buyers agent. That endeavor should be worth it and unless you hire the best you are wasting your money..
On a side note, more and more sellers are shocked to find out that many real estate agents have never even been homeowners. Let that sink in the next time you think that the run of the mill real estate agent can negotiate a sale or advise you on what repairs make the most sense. When I hear a seller tell me what their real estate agent recommended, often times I cringe.
3) Recommending Thousands in Repairs
I understand that with all of the Fix and Flip and HGTV shows everyone believes that they know exactly what type of remodeling adds value. Before you listen to a real estate agent about what updates that you need to make, dont you think that they should have some greater credentials than just a real estate license. As sellers you should be aware that some houses will never recoup the cost of the upgrades that a lot of real estate agents recommend. You need to understand what your cost basis is and what the top of the market can bring. Once you subtract your basis from the top you have a good idea. Now subtract out your monthly holding cost, the commissions you will pay, 2% for closing cost and some dollars for repairs…
Here is the deal, aside from not being contractors, they have no experience in investment real estate, budgeting or project management to access the cost and ROI on a lot of projects that I have seen homeowners undertake. There are not many things that can rival formal training except for years and years of experience. Most real estate agents have neither formal training or experience and are therefore not in any position to make recommendations regarding construction.
If you are looking for advice as to what repairs and updates you should make for your house, start at the basics and make sure that you will not exceed the top of market value for your house when your projects are complete. I have met a lot of real estate agents that think that they know what to do. They do NOT, otherwise they would not be realtors!
A side note and tip… most real estate agents that are self proclaimed “rehabbers” are NOT.
4) Recommending Home Inspectors that are Hustlers
There is nothing worse than spending tens of thousands of dollars in repairs based on a BAD Home Inspection report. I can’t tell you the number of times that houses I have sold were inspected by the buyers agents friend that works as and inspector. They recommend thousands in repairs for work that does not need to be done.
It doesn’t matter which realtor recommended them… always get a second opinion. House inspectors are not licensed contractors nor are they necessarily trained in any trades. Taking any inspectors word on face value is an expensive proposition and ill advised. Finally, never let the inspector that discovered the problems repair the problems without a second opinion.
5) Not Making a Commitment To Timetable
Selling a house is not a one and done event. You dont simply plant a sign in the front yard, hold a few open houses and proclaim the house sold. It can take months and cost thousands of dollars. Real estate agents love the fact that they are not accountable to a time table and many have now converted their closed ended listing agreements to open agreements that allow you to fire them at any time without penalty. Many have NOT.
All Realtors should embrace that concept. It would solve a lot of expired listings that have really bad representation.
Remember a listing agreement is not a contract to sell a house, it’s a promise to pay a realtor a commission.
6) Realtors Have No Real Marketing Plan
Just as a listing agreement is not a contract to sell a house it is also NOT a marketing plan. I think sellers get confused about the actual skills real estate agents have based on the brochures that they distribute. Let the buyer beware, that very few real estate people have advanced degrees in marketing and the ones that do are not the rank and file. They are the best of class and if you are going to hire a real estate agent hire the best.
Rest assured a colorful brochure designed to give you confidence in an agent, is not a marketing plan to sell your house. Either is a binder filled with charts and graphs, website information and demographics that is labeled “Marketing Plan”. Those binders with hundreds of pictures and graphs and charts actually tell you nothing about how they plan to market and sell your house. They are designed to convince you to hire them.
A sign in the front yard and a listing on the MLS is hardly a plan. Unfortunately, most Realtors are neither marketing executives or sales people. Sellers hate finding this out the hard way 180 days later.
7) Being Late
It is a fact of life. Flexible schedules to work around children’s school and other activities is a double edged sword. Most real estate agents are really just part timers and the effort that a lot of homeowners experience reflects that fact.
8) Realtors that Cancel Scheduled Open Houses
Some open houses are not scheduled to sell your house. Others are an integral part of a professional marketing plan. What’s the difference? Most real estate agents couldn’t tell you. I can and I will.
Open houses that are open to the general public are a waste of your houses time. Listing agents love to have them as a way to farm or cultivate new customers that happen to be out shopping for houses. The truth is, that most buyers looking at open houses are just tire kickers and looky loos from the neighborhood to look at the house.
The open houses that actually mean something are the ones that realtors schedule for their office to tour the new listing. The bigger the local real estate office the better for the seller. It means that more agents will tour your house improving the odds that they will be able to match your house to a buyer that they are working with.
9) Allowing Buyers Unchaperoned Access
Your house your rules… until the party begins when you are not home. Open houses are generally ok until your agent allows buyers to enter and browse without supervision. Lockboxes are for a real estate agents convenience, not for your safety.
10) No Follow Up and NO Feedback
You would think that your listing agent could call you at least once a week for a status update on the weeks activity or a strategy or feedback session. Sellers hate having to chase their agents down especially if the agent is not even returning phone calls. I have so much experience with this as I deal with buyers agents as well… Real estate agents are allowed to unplug but if you do it for 2 weeks in the middle of a transaction, you should have a back up plan…
11) Missing Paperwork
Most of the delays in closing a sale can be attributed to a lack of urgency on one or both real estate agents part. Missing paperwork is so common. Real estate agents have teams and order processors that they delegate to. They all are trained to look at a 30 day closing as a process and as long as its completed on time they consider it a success. Most transactions do not CLOSE within 30 days andi it is because of laziness and procrastination… whether is old paperwork that someone overlooked like a FHA Amendatory Clause or a new broker required disclosure, real estate agents are notorious for dragging their feet and scrambling at the last minute.
Missing appointments for inspections and appraisals is common and both are directed to use the lockbox. Selling a house requires that real estate agents know what is going on and it is critical that agents are present for both inspections and appraisals. Their job is to represent your interests and present your homes best light to all that enter.
Finally, sellers hate that real estate agents act like they have all of the time in the world. Remember that as the seller “You are the only one with skin in the game.” If this transaction is going to close then everyone needs to know what you desire. It is not enough for you to assume that just because your real estate agent will make a commission, they are motivated. Whether a closing happens tomorrow or 2 weeks from tomorrow is generally the difference between what a real estate agent feels like doing on any particular day.
12) Not locking up
This is NOT a laughing matter. It is to the point that I will not leave lockboxes on any of my houses anymore. How hard is it to remember to shut and lock windows and doors?
13) Leaving the Lights On
Residential houses are not Hotels and even if Tom Bodett wants to leave the light on, it’s not too much to ask the real estate agent to turn them and the HVAC off before leaving. Blinds up and all of the lights on inside a vacant residential house in any part of town is like painting a target on any house.
Is there no respect for other people’s property or common courtesy anymore?
14) No Math Skills
We received a FHA offer of $270,000 ($5,000 under asking price) and a request for a 2.5% credit for closing cost. The house was listed at $279,000 and the buyer was pre-approved at $265,000 as a stretch. No matter how you do the math, the offer, whether it was accepted or not was $750.00 more than what they were approved for. The sellers agent recommended that we accept. The math needs to work on paper before an underwriter will approve a loan.
15) No Negotiation Skills Whatsoever
One week later the same “sellers agent” presented a conventional offer of $275,000 for the same house with a $550 home warranty and a $7,000 credit for down payment assistance contingency. the buyer was pre-approved for $300,000 with a 30 day close. The sellers agent recommended we accept the offer. We suggested back to OUR agent that we counter offer to $285,000 accepting their other terms with a 25 day close as it was a conventional loan. Our sellers agent recommended against the counter offer and thought we’d lose the sale. Guess what… The buyers accepted the counter offer and the transaction closed in 24 days.
16) Not Negotiating on Commission
Look at almost any online seller’s net proceeds calculator and you’ll see that the agent’s commission rate is pre-set at a 6% rate. When you talk to most real estate agents the common quote is of a 6% commission rate as well.
There are no laws or regulations dictating the commission rates that agents can charge. This means that 6% is ALWAYS up for negotiation.
As the Seller you need to be reminded that it is your equity and no matter what your “agent” thinks their value is, a real estate license is not an entitlement to fixed commission unless both parties agree. Add value, have a real marketing plan and make sure that the sales price absorbs that cost to the seller. I think that most real estate agents just take for granted that the sellers pay for all of the commissions without the corresponding acknowledgement that if it were not for their house no opportunity would exist.
My advice to sellers… hold your ground, great real estate agents understand that real estate is a numbers game and they will work with you to achieve your goals.
17) Including Disclosures that are not Required
If there is one thing that is abundant in real estate it is the paperwork. I used to wonder why it was so voluminous because I have a 2 page purchase and sale agreement and three pages of disclosures when I buy or sell a house for cash.
That is versus the 20 page standard that goes out in California. Of course most agreements are boilerplate templates that take into consideration so many different possible scenarios including financing. But in the past 5 years I have watched the sheer number of disclosures grow out of control and most of them are not a requirement of the sale but a protection for the real estate broker that is afraid of being sued as a party to the transaction. ( that in and of itself is very telling about the role of a real estate agent in any transaction)
Oftentimes the inclusion of these disclosures, creates another layer of liability for the seller, protecting a broker for things that real estate agents do, that should never be the responsibility of the seller. Sellers blindly sign them creating new liability for themselves without realizing that the commission that they pay an agent is to pay for for things like a broker’s liability insurance.
Sellers hate it when real estate agents ask them to sign documents that are NOT required for the sale. If you are the seller ask your Title Company what the minimum required documents are in California. They will tell you. So will your lender… If neither of them require the paperwork chances are your realtor is having you indemnify them.
Sellers hate unnecessary and underhanded paperwork.
18) Expired Listings
Most sellers just dont know that nearly 40% of all residential real estate listings expire before an offer is accepted. I am convinced that it is because most real estate agents are not familiar with the numbers either because no one is talking about it. The truth of the matter is that the one size fits all approach utilized by the real estate industry has always accepted a high mortality rate for the bottom 40% of the market.
One thing is clear, if real estate agents were honest about their experience, especially with listing distressed houses, sellers would explore other options to sell them more quickly without wasting a lot of time and money holding onto pipe dreams of a sellers market and high prices for any houses. This is a major failing of the residential real estate market and why I see the rank and file real estate agent as a problem for sellers.
Sellers need to do more to vet their prospective real estate agents and hire them with their objectives in mind. Listing agreements for houses that wont sell are clogging up the MLS until they eventually fall off leaving sellers in the lurch to find an alternative method of selling. Sellers hate being lied to about the likelihood that their houses will sell. Tell the truth.
Sellers Should Explore all Selling Options…
My name is Peter Westbrook and I am a real estate investor in Stockton, Sacramento and Modesto. We buy houses in any condition and we pay cash. If you have a house that you need to sell I would like to talk to you, preferably before you waste a lot of time with a run of the mill real estate agent that is just looking for an opportunity to list your house and cash a commission check. I understand the pressures of buying and selling houses because I have been on both ends of hundreds of transactions and I have personally witnessed the insanity of the residential real estate markets as they churn right past certain houses.
One thing in real estate is certain. All houses have value and a market for resale. You just need to talk to the right buyers. I can also assure you that the average real estate agent does not know me and if they do they probably dont like me, because I am not going to be recommending them to you anytime soon.
Call Me at (209)481-7780
