Lawyers, Car Salesmen, and Real Estate Agents

[albionmoonlight]

So--people don't trust and make fun of lawyers because we have lots of knowlege about specific arcane areas in which knowlege really does equal power and, unfortunately, sometimes use our knowlege, not for the benefit of our clients, but for our own personal gain.

People don't trust and make fun of car salesmen and mechanics because they have lots of knowlege about an area where knowlege really is power and, unfortunately, sometimes use that knowlege to screw people over. (Is your transmission really what's causing that knocking? Does it really cost $500 to replace those rotors? Is this Ford Festiva selling for $1,500 less across town?)

But you never hear people mistrusting and making fun of real estate agents. Which makes no sense to me. These agents act as buyers and sellers agents and all know each other. They know how much houses are selling for--they have a lot of inside knowlege in an area where knowlege equals power. Your buyers' agent gets paid more--the more you spend. In other words, his/her fiscal incentive is adverse to your interest. Your seller's agent can make more money by operating in volume than by waiting 6 months to get you the most value for your home. They also care more about keeping their own relationships with each other working than about any one client.

And you can lose way more getting screwed on a house deal than you can over the lifetime of a car.

So why do real estate agents get a free pass? Why are they not viewed in the same jaundiced light as lawyers and car guys?

Thanks to Freakonomics for inspiring this question. Fun book through which to flip in the bookstore.

[SelzShoes]

Originally Posted by albionmoonlight

But you never hear people mistrusting and making fun of real estate agents. Which makes no sense to me. These agents act as buyers and sellers agents and all know each other. They know how much houses are selling for--they have a lot of inside knowlege in an area where knowlege equals power. Your buyers' agent gets paid more--the more you spend. In other words, his/her fiscal incentive is adverse to your interest. Your seller's agent can make more money by operating in volume than by waiting 6 months to get you the most value for your home. They also care more about keeping their own relationships with each other working than about any one client.

And you can lose way more getting screwed on a house deal than you can over the lifetime of a car.

So why do real estate agents get a free pass? Why are they not viewed in the same jaundiced light as lawyers and car guys?

I make fun of and don't trust real estate agents--but I run a title company for a lawyer, so that might have something to do with. 3/4 of the agents I know can cash a check, and that's about it.

[albionmoonlight]

Originally Posted by SelzShoes

I make fun of and don't trust real estate agents--but I run a title company for a lawyer, so that might have something to do with. 3/4 of the agents I know can cash a check, and that's about it.

So you don't sell shoes, then? Not to threadjack my own thread, but I am interested in your interesting screen name.

[Ksyrup]

Originally Posted by albionmoonlight

So--people don't trust and make fun of lawyers because we have lots of knowlege about specific arcane areas in which knowlege really does equal power and, unfortunately, sometimes use our knowlege, not for the benefit of our clients, but for our own personal gain.

Not to go off on a tangent, but I think this is only partially correct. I think most people have a negative opinion of lawyers based on a negative association with particular positions taken on behalf of clients. The fact that we're well-paid to do so just adds fuel to the fire.

The fact that some litigation appears to be the creation of the lawyers, and not the litigants, is also a contributing factor. But there are two sides to every issue, and most people will come down on one or the other, so when people see attorneys on both sides, they automatically equate the attorney with the "wrong" position. This is most prevalent in criminal cases, but even in civil matters - take Miscrosoft, for instance - you had the DOJ and you had David Boies. If you were inclined to think Microsoft violated antitrust laws, you probably didn't think much of the guy who was arguing against that belief.

I think the cumulative effect of all of that is, at least partially, what has lead to a negative opinion of attorneys. And I don't know how we would combat it, since it's the nature of the job. The system abusers and all-around bad apples - which are in every profession - just exacerbate the situation.

[John Galt]

I don't trust real estate agents at all (and I think they are generally running afoul of antitrust law). I've decided that I'm going to try to sell our house without an agent when we decide to sell.

[CraigSca]

I've personally worked with 4 agents in my life and disliked 2 of them. The first time we tried to sell our house, we labored for 3 months with not a single potential buyer. After our neighbor across the street sold theirs we asked to (behind the scenes) talk to their agent. The agent told us that the other agents hated the one that was selling our house and purposely kept potential buyers away. This is the same guy that begrudgingly held an open house for us (and came prepared with a newspaper to read as well as a submarine sandwich) - no prep, no sign at the entrance of the neighborhood, no baking bread, cinnamon sticks on the stove, etc. He just showed up and then asked us to lower our price as he thought it was too high.

A year later we got a new agent (this time from word of mouth) and sold it within a day, for a much higher price than the year before.

When buying our new house out of state, another agent got us lost on the way to putting down a deposit. I thought agents were supposed to know the area, especially when their customer is from out of town. In less than a day he made a commission (despite going the wrong direction) - how easy is that?!

I know of very little professions that can earn as much money with very little education. Especially in the current real estate high that America is going through right now.

[SelzShoes]

Originally Posted by albionmoonlight

So you don't sell shoes, then? Not to threadjack my own thread, but I am interested in your interesting screen name.

From an ad in the late 1910's:

"When he wears them, 'Shoeless' Joe Jackson wears Selz Shoes. They make your feet happy."

[Rizon]

I've worked with over 10,000 Realtors over the last 9 years. Most untrustworthy people I have ever met in my life. My feelings about them are well documented at OOTP-OT.

[Ksyrup]

Moved a lot, huh?

[JonInMiddleGA]

I imagine the fact that lawyers have a higher profile & more people have personal experience with used car salesmen than with real estate agents has something to do with the disparity.

About 2/3rds of the r.a. agents I've dealt with are pretty much as sleazy & unlikable as the people in either of the other professions you mention.

[judicial clerk]

Another big thing to watch for with real estate agents is that they are interested in a quick sale. They get paid when the sale is done and so they just want to get the deal done.

I have had to deal with some sleazy agents and some agents who wanted to be lawyers, but not all agents are bad, however, and good ones can provide a valuable service.

[Klinglerware]

Originally Posted by SelzShoes

From an ad in the late 1910's:

"When he wears them, 'Shoeless' Joe Jackson wears Selz Shoes. They make your feet happy."

And I thought it was a "Married With Children" reference...

[wishbone]

As far as a generalized, public opinion of professions go, realtors get off easy because both sides can walk away happy in a real estate transaction. In a courtroom situation, someone always loses. Obviously not all lawyer activity is in a courtroom but that is what the public see and hears about most often. Nobody cares about OJ's realtor, but we all know Johnnie Cochran.

Car salesmen are another beast because of the anecdotal evidence piled against them over the years. I have never had a bad experience with a car salesman but I am constantly on guard against their trickery and deception when in their company.

[Eaglesfan27]

I definitely include Real Estate agents among my most distrusted people, and I'm really dreading having to work with one in the next year to try to buy a house.

[Fonzie]

I believe I've mentioned elsewhere that I consider real estate agents to be amongst the most parasitic and criminal of all professionals. I would generally rank them lower than most lawyers and more on a par with car salesmen.

[Franklinnoble]

Everybody involved in real estate is a dirtbag, in my opinion... from the agents to the title companies to the mortgage brokers. They're all greedy scum, and I abhor dealing with their ilk.

[MrBigglesworth]

Well, I'm a real estate agent, and I am feeling the love on this thread

There are bad real estate agents, just like there are bad everything else in this world. And yes, a great many of us know nothing about real estate (before becoming an agent I worked with a lot of them and it wa frustrating finding one I could trust that had good knowledge). Yes, we are all interested in the quick sale, because that is how we get paid. Unlike lawyers, if we lose (as in not making a sale), we don't get paid. There are no $250 hourly rates here. Frequently you can work with someone for weeks or even months, and never get any payment for it.

[SelzShoes]

Originally Posted by Franklinnoble

Everybody involved in real estate is a dirtbag, in my opinion... from the agents to the title companies to the mortgage brokers. They're all greedy scum, and I abhor dealing with their ilk.

Forgive me I only agree with 2/3 of your assessment
There are too, unfortunatly, just as many bad title agents as there are realtors. There are (in my county) a core group of about 35 title searchers from the various companies. About 1/3 of us actually work when we are at the courthouse, the other 2/3 just sit around and gab and think "what an easy job I have;" which it is if you don't do anything. There are companies that are so incompetent that if I run across a deed/mortgage that indicates they've done work on the property, I know I'm going to find unpaid mortgages/liens and inproperly recorded deeds. Real estate is one of those businesses people think they know everything when they really know nothing.

[Buzzbee]

Originally Posted by albionmoonlight

But you never hear people mistrusting and making fun of real estate agents.

So, based on the comments so far it seems that people do mistrust real estate agents. Which leads to albion's final query...

So why do real estate agents get a free pass? Why are they not viewed in the same jaundiced light as lawyers and car guys?

Perhaps because the 'exploits' of real estate agents aren't as noticeable? Perhaps as JonInMiddleGa said it is related to the infrequency of contact most people have with them. Maybe it isn't fun to bash Suzy Sunshine the real estate lady?

[MrBigglesworth]

Originally Posted by Buzzbee

Perhaps because the 'exploits' of real estate agents aren't as noticeable? Perhaps as JonInMiddleGa said it is related to the infrequency of contact most people have with them. Maybe it isn't fun to bash Suzy Sunshine the real estate lady?

I think part of it is a class distinction. It's easy to bash the lawyer that is making $200k a year, but hard to bash the real estate agent / housewife that is working part time to try and make ends meet for the family.

[Mac Howard]

Originally Posted by MrBigglesworth

Well, I'm a real estate agent, and I am feeling the love on this thread

Good to see one with a sense of humour.

There are no $250 hourly rates here.

Not so sure about that. Last one I used got $7,000 for about 4 hours work

Frequently you can work with someone for weeks or even months, and never get any payment for it.

That is no doubt the explanation but it didn't make me feel any better

[finkenst]

Originally Posted by Mac Howard

Good to see one with a sense of humour.



Not so sure about that. Last one I used got $7,000 for about 4 hours work



That is no doubt the explanation but it didn't make me feel any better

then you didn't do enough house looking...

or did you (or s.o.) get the house you were looking for and really wanted?

[Dutch]

Well, there seems to be a small problem with the assessment of all realtor's being bad.

If a buyer's realtor is trying to get you to spend more and the seller's realtor doesn't care if you get more.

I mean, everybody in the neighborhood basically knows how much their house is worth and buyer's basically know how much houses cost.

Seems like it all works out.

[RPI-Fan]

Originally Posted by albionmoonlight

So you don't sell shoes, then? Not to threadjack my own thread, but I am interested in your interesting screen name.

I do sell shoes... and wouldn't exactly use the term "interesting" to describe it.

~rpi-fan

[MrBigglesworth]

Originally Posted by Mac Howard

Not so sure about that. Last one I used got $7,000 for about 4 hours work

Well, congrats on the $500,000 house. But I imagine that if he helped you find your dream house so quickly that he was worth it.

[Flasch186]

I work for a builder so I am not really a realtor but I will say this. 80-90% of the realtors do NOTHING and make a commission. As a matter of fact many of them just send their clients out with their cards, on their own, and tell them to hand me their card (eventhough that doesnt work and he/she will not get paid). The new trend is rebates. "We will give you 1% if you use us." which gives them even more leeway to do nothing.

The good realtors earn their salt. When, we as the builder, try to push the buyer around (it happens, especially in hot markets) a good, strong realtor can help. Also some newer niche realtors are starting to provide more service for the money. For example, my dad's realty company plans on having independent home inspection, pictures taken and emailed to the client documenting the progress of the home, a knowledge of the builder's tricks (15 years working for them) and a savvy mind on what things are value options and which one's should be saved for later....all for the same price as the guy earning nothing.

I would say, that if you get a good realtor...they can be good (I'm only speaking of purchasing new construction)...however if they are not good, you will soon learn that they aren't when you want to make a change, or need some help.

I strictly work as a sales agent and "truly should not have the buyer's needs at heart" BUT I simply can't help it. I have had many of my buyer's say that they would've cancelled had it not been for my fights with my own employer(s) AND many have given rave reviews to me and my sales partner (BF) even when they are furious with the company(s). I can't sleep at night if my buyer isn't getting what he or she paid for and I always tell them, "I will fight for you and do everything I can, up to the line where I could be fired, to make sure you are satisified with your home in the end...at that point I'll give you my boss' number." That's the best I can do and I've found it quite difficult to adapt to the humongous beauracracy Im in. My Aunt calls them "golden handcuffs."

[panerd]

Originally Posted by MrBigglesworth

Well, congrats on the $500,000 house. But I imagine that if he helped you find your dream house so quickly that he was worth it.

You may want to re-do the math yourself. Around here a $7000 agent profit would be a total profit of $14000 which makes for about a $230,000 house. Which is pretty much a mean house price.

[MrBigglesworth]

Originally Posted by panerd

You may want to re-do the math yourself. Around here a $7000 agent profit would be a total profit of $14000 which makes for about a $230,000 house. Which is pretty much a mean house price.

All right, I'll re-do it: He said the agent made $7k. The agent makes 1.5% in most cases nationwide, with 1.5% going to the buying broker, selling broker, and selling agent. Which means that the price of the house would be about $7k/.015 = $467k, which I rounded to one significant digit of $500k.

Your math fails to take into account the money going to the broker, unless the agents get 12% total where you are.

[Rockstar]

Real estate agents are a bunch of drunkards. Very few get invited to wedding receptions that have open bars.

[BigJohn&TheLions]

Originally Posted by Klinglerware

And I thought it was a "Married With Children" reference...

Oh yeah... Well, YOU"RE A CHICKEN!!!

[Joe]

I've seen no difference between builders and real estate agents. They all fall under the umbrella of scumbags.

[Flasch186]

Originally Posted by George W Bush

I've seen no difference between builders and real estate agents. They all fall under the umbrella of scumbags.

Im not talking about the actual builders, im talking about their sales agents. If you bought a house from me or my partner, I think you would be happy with the service. Whether or not youre happy with the home in the end is a totally different story.

[Mac Howard]

Originally Posted by MrBigglesworth

All right, I'll re-do it: He said the agent made $7k. The agent makes 1.5% in most cases nationwide, with 1.5% going to the buying broker, selling broker, and selling agent. Which means that the price of the house would be about $7k/.015 = $467k, which I rounded to one significant digit of $500k.

Your math fails to take into account the money going to the broker, unless the agents get 12% total where you are.

Panerd had it almost exactly right. It was a $227,000 house (not $230,000 and certainly not $500,000). And it was selling, not buying.

1.5%? You're joking! It's 3-4 % here.

[MrBigglesworth]

Originally Posted by Mac Howard

Panerd had it almost exactly right. It was a $227,000 house (not $230,000 and certainly not $500,000). And it was selling, not buying.

1.5%? You're joking! It's 3-4 % here.

Well if you are paying 16% commissions, then no wonder you are pissed at real estate agents.

[panerd]

Originally Posted by MrBigglesworth

Well if you are paying 16% commissions, then no wonder you are pissed at real estate agents.

This is what I don't get about your posts. The situation he described is like 6%. I think you are thinking that he paid $14000 to each agent. You realize just real simply 10% would already be $23000, don't you? And I think 6-7% for both agents is pretty standard everywhere.

[PineTar]

Listed our house last Friday (suburban Chicago). The total commission to be paid if sold is 4.5% (2% seller / 2.5% buyer).

[MrBigglesworth]

Originally Posted by panerd

This is what I don't get about your posts. The situation he described is like 6%. I think you are thinking that he paid $14000 to each agent. You realize just real simply 10% would already be $23000, don't you? And I think 6-7% for both agents is pretty standard everywhere.

6% total
3% each to the buying broker and selling broker

Of that 3%, half (usually) goes to the agent, 1.5%, the other half the broker keeps.

[Hey Rube]

My bother is a real estate agent and he says that a new company is moving into Southern PA that is under-cutting eveybody - charging only 4.5%. That is good news (except for my brother).

I sold my house and used a good friend. I told him and his staff up front that I will not play pricing games. I asked a fair price for my house and that's what I expected to get (and probably could have received more if I wouldn't have listened to their recommendations). An offer came in quickly for $5k less that I was asking. They obviously thought that was a good offer because the buyer didn't want any inspections or contingencies, which doesn't mean anything to my wallet, especially for a house that was only 7 years old. I told them no. The buyer came back with another offer - this time $1k less than I was asking. My friend called and said "Congrats. You just sold your house" and proceeded to give me the details. Again, I told him no. That $1k is about $900 in my pocket, but only $20-$30 to him so he just wanted it done.

I finally got the full price. I guess the point is that no matter who you use, you should educated yourself about the market, look at comps by yourself, and make all the decisions based on what you see. I don't trust them to do what's best for me, not even my friend. Next time, I will be selling it myself.

[heybrad]

Hey Rube

[HomerJSimpson]

Originally Posted by Hey Rube

My bother is a real estate agent and he says that a new company is moving into Southern PA that is under-cutting eveybody - charging only 4.5%. That is good news (except for my brother).

Someone is advertising around here offering $2,500 flat-fees. They have in their advert a statement saying that by law RA rates are negotiable. I have had at least one RA in the past tell me that is not true. Snakes.

[wade moore]

Originally Posted by heybrad

Hey Rube

My one and only time saying this..

QOTM material.

[MrBigglesworth]

Originally Posted by Hey Rube

I guess the point is that no matter who you use, you should educated yourself about the market, look at comps by yourself, and make all the decisions based on what you see. I don't trust them to do what's best for me, not even my friend. Next time, I will be selling it myself.

As a real estate investor looking for bargains on the market, this is what I love to hear! Buyers that make the decisions themselves more often than not overestimate their house, leaving it on the market forever to the point where they accept the first offer they get, or occasionally vastly underestimate it to the point that you can make a good profit by flipping it.