I just finished watching 60 minutes and its segment about real estate. First off, let me say that I am a regular 60 minutes viewer. I enjoy the show. I don’t believe everything I watch because the nature of the program – they often seem to take sides in covering an issue, which I don’t mind.
So- Lesley Stahl’s segment talked about how online real estate sales are lowering broker commissions. Redfin Chief Executive Glenn Kelman was interviewed by Stahl. Redfin claims to offer a radically different real estate service. They charge flat fees for their “high tech” listing service. An agent at Redfin claimed she used to be a traditional real estate agent, but couldn’t believe she earned upwards of $12,000 for something she spent 5 hours on. How do I respond to that? She clearly was not a “full service” agent at that time if she spent that few hours on a transaction. Some transactions are easier than others, but I have never had one that required that little of my time. Some agents working at “full service” brokerages are not full service (not all agents are created equal- a topic for another blog!). Hiring an agent at a traditional brokerage? Interview them, check their references and make sure they are truly full service!
Limited service agents probably do have their place. Some people prefer to do things themselves. Lawyers and accountants still exist despite software to make wills or do taxes. Contractors are still busy as can buy despite do-it-yourself stores and Weekend Warrior type shows on HGTV. Some people buy a kit to handle a divorce or respresent themselves when they go to court but Attorneys still exist.
Some of my clients are Clean Offer “junkies”. They are online all the time looking for houses. Some log on to the clean offer (a subscription Marin MLS service) 20+ times in a day! And some find the houses before I have the opportunity to call them about them. This doesn’t mean that I am not full service and I don’t work for my money! Finding the right house is just the beginning. We have to negotiate a price, do inspections, and review disclosures. These inspections and disclosures often uncover issues that require research and further investigations. Sometimes the deal is renegotiated. Many buyers and sellers would never close escrow if a competent agent wasn’t involved. Emotions involved in real estate transactions sometimes prevent buyers and sellers from making rational business decisions. As a real estate agent, I am a counselor, a negotiator, a researcher and facilitator. I regularly advise my clients to walk away from houses that are a bad fit for them- be it a potential problem with resale value, issues that could impact the property or the stability of the neighborhood, or sometimes just because the home doesn’t meet the goals of the buyer. I don’t get paid unless I close that transaction- but I still say “no- don’t buy it” to my clients. Does an online broker care if the house meets the goals of their clients?
Most real estate transactions are complicated. A qualified agent who knows the area is able to provide in-depth local knowledge that an online broker cannot. This includes information on new building in the area, a history of the house or neighborhood (that isn’t statistical), an understanding of the buyer or sellers motivation. Don’t need this information? Don’t see the value in my services? Than don’t hire me. Want an advocate, a knowledgeable resource, a skilled negotiator? Let’s talk.
Real estate transactions are undoubtedly influence by the internet. Buyers are savvier and better informed. I LOVE working with clients that use the internet to research, but I don’t worry that they are doing my job. The job of a real estate agent has changed substantially in the last 20 years, and the media and public perception has not. Finding the house used to be a big part of the transaction. Real estate agents had big books that held all the listings. There wasn’t a realtor.com or a clean offer type service. Buyers had to go through agents to find properties for sale. Contracts were one page. Transactions were simpler (although buyer beware!). Today, real estate agents may not have to find the house, but they do have to know and understand hundreds of pages of contracts, disclaimers and disclosures. They have to understand technology and how to use it to provide the best possible service and information to their clients.Full service agents have to adjust to changing times and utilize the internet to its fullest. The real estate licensing system needs to change- licensing qualifications for real estate licensees need to be much more stringent in my opinion. I don’t care if a broker is full service or limited service- brokers and agents need to be qualified and trained to properly represent their clients…but I think i will save that topic for another blog…