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"Why Redfin, Zillow, and Trulia Haven't Killed Off Real Estate Brokers"
You can't compare real estate agents with travel agents or even brick-and-mortar store salespeople, because of the difference in the level of complexity in buying a home versus buying an airplane ticket or a sweater.
Matt - No, but by the same token you have to wonder why some kind of adequate intermediary service hasn't been more successful. The Internet has certainly ended the necessity of brokers from the standpoint of alerting buyers to available properties or available information on inventory and price trends. Why not some in between service that refers those transacting to competent attorneys or other relevant issues that brokers cover .. for a flat fee as opposed to 3-6% of sales price?
New cars are even more commoditized than homes, but most people won't buy a car online without talking to a real, live salesperson. Even with stocks, you still have hundreds of thousands of retail brokers, despite Schwab, e-Trade etc. There is a tipping point in terms of complexity after which people feel they need help in making decisions.
I think it is largely due to a monopoly of information. Brokers try to mystify the process and make it seem like it is very complex. Agree that this might be more true in regard to co-ops (which are out-dated and only exist in NYC), but otherwise where is the complexity? It is reassuring to have a broker, but the only real value they seem to add is being able to provide very up-to date info on happenings, which can be useful in a hot market. Otherwise, the lack of information about sale prices can be an issue, although not in NYC.
Biggest thing though is simple collusion. How many times have you heard that there is no cost for buyers agents? Well if you try to do FSBO you won't see anyone represented.
In Canada the government has been trying to break down the collusive behavior and you are now starting to see intermediate services that tp refers to. I think here it will just take someone taking the simple step of charging 4% per sale. But who will do that?
I've always felt that a buy-side broker is a no brainer. Unless you're restricting yourself to FSBO properties you're going to pay a broker anyway, so why not use the service? How likely are you to get a discount representing yourself when the seller has an agent? From a seller's perspective if you know what you're doing the FSBO route can be appealing, but it will also affect the amount of foot traffic and buyer's will have the 3-6% discount in mind when offering. There will be the nagging question of 'could I have gotten more?' that perhaps doesn't arise after showing your place to its fullest potential .. but really, in NYC things seem to play out the way they're going to play out. Very few 'hidden gems' out there.
> co-ops (which are out-dated and only exist in NYC
Why are they outdated?
The price of a real estate transaction(broker commission ) is relatively inflexibile. That kind of pricing is typical of an oligopoly(see below). If the market were truly competitive you would see commissions come down. The big brokers refuse to negogiate/compete on price(effectively)
An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). A general lack of competition can lead to higher costs for consumers. [
There are a very few in San Francisco as well.
(Don't agree that they're outdated either.)
There are more TIC's in San Francisco, kind of their equivalent to co-ops with less restrictions. Why don't you see more of those here?
Yes co-ops do exist elsewhere, but hardly anywhere else in common law jurisdictions. A little ironic I always find that it is in the financial capital of the world that this socialist structure persists and is defended so ardently by very conservative folks. What happened to life, liberty and property?
And not at all an oligopoly. There are loads of real estate companies. Oligopoly would be if there was only two or three.
"What happened to life, liberty and property?"
You have the LIBERTY to buy a brownstone.
Otherwise, if you want to buy in MY building, you'll live by OUR rules.
There's your answer HB.
Why is a coop socialist? They don't guarantee acceptance, every apartment isn't identical, all shareholders don't have the same vote as it is based on number of shares which differs by apartment,
Personally I think a travel agent is more useful than a RE broker. 9 times out of 10 if I'm trying to book travel on one of those websites its more difficult than using a travel agent- they dont always show you all of the options and sometimes you cant combine the outgoing/incoming flights you want. Ditto for looking for a hotel in a city you dont know- agents have everything (or seem to anyways) in front of them on their computers.
Whereas when we were looking for a place the only value the broker added was to tell us which room was the living room and which was the kitchen and oh-did we know that the office could be used as a second bedroom- SHOCKER! With online MLS and Streeteasy type websites which pretty much list everything out there, I think brokers are pretty useless.
By Streeteasy logic, you must be a travel agent.
Not a travel agent but travel a lot for work- and my last job we used a travel agent and it was so much easier vs. now booking my owner travel.
FSBO. And I wont resort to calling you names, asshole.
my "own" travel.
I travel a lot for work and feel the opposite. Whenever someone else books my flight I end up with a five hour layover or flying out of EWR.
Any case, this is about brokers.
Interesting Bart's bit on the fsbo thread. that foot traffic depended on being open to broker agents. This is part of the problem. People think that buyers brokers are free so use them and are steered from your place if you don't offer them commission.
People are mixing the two concepts of whether brokers are still necessary today or whether they still have an effective cartel in the market. I think the latter is a greater factor in open house traffic.
> co-ops (which are out-dated and only exist in NYC
Why are they outdated?
The primary reason that Coops should be considered outdated is simple:
The Condominium act of 1964.
Ottawa - people are only steered away from fsbo listings while using a buy broker if they don't keep their eyes open. Not many are under the impression that buyer's brokers are free .. just that it could likely cost you just as much representing yourself in a non-fsbo situation. The seller's broker will likely keep the entire 6% or close to.
I once tried to sell a place FSBO. And I got lots of calls from brokers who mentioned they had interested buyers, but was I willing to "work with" buyer agents. Implication was pretty clear. Would be interesting to hear if this is true. I think people are mostly dumb and sort of close their eyes to this reality and then get in awkward situations when they go to buy a FSBO after working with an agent for a while. Would be interesting to hear from FSBOs on this.
about 2 hours ago
Member since: Dec 2008
ignore this person
I just sld my apartment in 1 month FSBO. Most traffic by far came from Streeteasy and NY Times. In my ad I offered buyer broker's 3%, ended up selling w/o any agent at all. Foot traffic was definitely lighter w/o a seller's agent, but to shut out the buy side would be a mistake IMO.
Of course I know that you are not a travel agent. I only used you are writing to make fun of those in this board. Many would call anyone a real estate broker when they said some good things about the market. So, try to read thru the humor before using the A**H*** word.
vic64- the asshole word was directed at Jim Hones who called me a fuckface because he is a broker and he didnt like that I did heap praise on brokers.
It was not at all directed at you- I know you were kidding.
"did not heap praise"
I don't know why it would be an awkward situation working with a broker but ultimately purchasing a fsbo property .. given that you found it yourself. It's a reality of their job; many people never buy anything and others find non-broker transactions. Some acknowledgement is necessary, but the explanation that this was the right property and the seller specified 'no brokers' should suffice.
On the other hand, as a seller how can you be sure that the price you get doesn't represent over 3% less than what you might have gotten with increased foot traffic?
You can't blame a broker for not alerting you to fsbo property or even for attempting to discourage you from going that route. But in a business where so much is word of mouth, they won't be doing themselves much good to be anything less than civil if this is what you ultimately do.
>I once tried to sell a place FSBO. And I got lots of calls from brokers who mentioned they had interested buyers, but was I willing to "work with" buyer agents. Implication was pretty clear.
I'm sure Jim Hones will curse you out, but from this lay person's POV, I'm struggling to see what is nefarious. Broker offers to bring you someone who you don't already have, if that buyer's bid including the brokerage fee exceeds your next best option, what is the problem? You didn't have that buyer as an alternative without the broker "working with you".
Just trying to bridge the gap between tp who thinks people will go out on their own and the reality. I just think lots of people are oblivious. In practice, I think people will not always understand what it maens to be FSBO and will still just rely on their broker. Depends a lot on market. I think in NYC, in a hot market enough people will get it. Seems though that the consensus is to at least leave FSBOs open to 3% commission. Interesting that no one suggests that the commission for both agents just be 4%. Especially in NYC, this is still robbery.
it astonishes me how much misinformation is passed around here. the going rate from major brokerages for manhattan listings is 5% for co-broke and 4% with no buyer's broker. all it takes is asking and that's the deal. and, if you come unrepresented, the listing broker is definitely going to understand and explain to the seller that your bid is 1% better.
that is not to say that there are not still a bunch of idiot second rate brokers who don't get it or appear to not get it. but for real deal, mainstream the above is a fact.
eople are mixing the two concepts of whether brokers are still necessary today or whether they still have an effective cartel in the market. I think the latter is a greater factor in open house traffic.
a RE broker is like anything else. If you have the time and will to learn how to do something yourself, you do not need anyone else.
most people would rather pay and stay blind. Im starting to see this in a new light. why blame the farmer when there is a ripe field of wheat flowing in the wind? I think i will start selling real estate.
rest easy brokers
your prosperity endures
with their ignorance
>you think i care? but you are very stupid not to think of being on the listing side. more than likely because you aren't smart enough to own any property.
You are now an owner? When did that happen? Is the "Misses" on the deed too?
why don't you explain why you changed your name from hunters burg?
c0lumbiac0unty, none of what you want to talk about absolves you for the hurt you've caused your family, your friends, your neighbors, and the people you've done business with. Your convenient nasty personality here online can't be a virtual or real life distraction for your own dire failings and all of the damage you've caused.
is that why you changed your name from hunters burg?
"Look over there, look at greensdale, avoid looking at me and the horrible things I've done as c0lumbiac0unty."
is that why you changed your name from hunters burg?
@jimhones- I happen to own 2 properties, and I've sold without brokers before. And i dont think that people who don't own property are "too stupid to own property". More likely too poor or just priced out in this crazy market.
If you are moving from out of area, that's when we found a broker helpful when looking to buy
How do you guys think the information on the MLS websites and Streeteasy is put up there?
Who do you think pays for the listings to be put up?
Do you think these websites (specifically MLS) allows just anyone to put their information up?
I've read a number of these and I think I am ready to say my part. Everyone here is RIGHT. The internet does bring information to buyers and sellers and very well should knock out the middle man. The main issue goes back to a time before these internets of ours. It all goes back to the people, the relationships, the physical interactions that must take place in order to facilitate a transaction. This personal bridge along with broker's knowledge and expertise of the current market is where their value comes. Of course you get all this info from the net, but what good is info if one cannot properly synthesize it? Brokers obsess over the markets. Most of them specialize in some niche part of it.
As a broker, I help buyers who do not know about the market, and I help sellers who do not know about their buyers. I know people. I help people see eye to eye and that's invaluable. This knowledge along with being a personal liaison goes a long way in a city where VERY different people are converging trying to make deals. Yes, what we do is simple, on paper, but being able to communicate effectively on behalf of many parties can get quite tricky and requires a lot of different skills to do well and over a long period of time. Also, as a fully connected tech savvy guy, I can help older owners bridge the gap to this tech heavy world, that guidance is key and NOT easy.
As far as our price, that's negotiable, but since there are not so many of us who can do this type of work (most agents are poorly equipped for this work), yea we command a higher price than you might think or want. Keep in mind we don't do many deals a year and the vast majority of brokers don't make much money at all. In fact, most brokers fail miserably at this. Mainly because most people are not well organized, well spoken, well educated, well connected AND good at interacting with a wide variety of perfect strangers. Brokers are not for everyone, but for most people, our services are imperative to the transaction.
I care about everyone and I want nothing more than to make all parties happy. I'm trying to carve out a new niche of agents who dismiss the antiquated bullish attitudes of controlling some fake complex facade of brokering. I invite this new open source agent, a broker who embraces our free internet market space while still holding strong to all of the better business attitudes that has traditionally help fuel the american dream. A business where personal service, translucence, decency and relationships still make all the difference.
If buyer and sellers or property owners and tenants were able to negotiate directly without letting their emotions get in the way, then there would be no need for a real estate broker's service, but that will never happen, mainly because money is involved, and money makes ordinary people behave unpredictably.
The main functions of a broker (or co-operating brokers) involved in negotiating a sale or lease is to set up a screen between the principal parties, communicate the relevant facts, and allow the parties sufficient time for an appropriate response.
In addition, a good listing broker is usually one who has been actively involved in a host of negotiations at any given time over a period of years, which puts sellers who wish to go it alone at a distinct disadvantage with respect to obtaining the right value for their property or rental space simply because they do not possess this level of experience. If you want to enjoy the 'thrill' of selling it yourself, sell a TV or your old smart phone- where you would only stand to lose a few dollars, not your real estate where tens of thousands or even hundreds of thousands can be lost due to one's own ego.
If its the amount of the fee that bothers you most, this was not a number that appeared out of thin air one day. . .it evolved over a long period of time. Most owners are unaware that a listing salespeople must split their fee with the broker/owner of the business, and often times with another salesperson- if that salesperson locates the ultimate purchaser before the listing salesperson does. Additionally, in co-brokered sales, the fee is split between the 2 broker/owners and their respective salespersons. A 6% gross fee will generally net a listing salesperson 1.5 %, unless the sale/fee is not co-brokered and the listing agent located the buyer before another salesperson in his office did. Add to this the fact that property sales generally take 4 to 6 months to consummate and I am sure you will begin to understand the reason why brokers have to charge the fee they charge.
Believe it or not, whatever you do for a living, you can be assured that your employer is charging what he must charge to stay in business and make it a worthwhile venture.
The internet will not end brokers, it will give them an outlets to make YouTube videos showing off the size of their microphones.
I pay a portfolio manager 30 bps to manage my investments (all in index funds). Could I do it myself? Of course. Would I do as good a job? Unlikely. I'd probably panic when the market dropped and sell low. I may not rebalance and reallocate when I should because I may not want to sell winners.
That's why I use selling brokers, to remove myself emotionally. I'm too attached to my home and don't want to engage with buyers. I could completely see myself tanking a deal because some buyer pissed me off. I want the screen that RealtyJack described and am willing to pay for it. For those who are cool headed and knowledgeable, FSBO is fine, but I think I would leave more money on the table than paying the broker.
Just because the internet has made information and access to homes more accessible doesn't mean the the job of being a broker is outdated. In fact, here are numerous reasons one SHOULD and needs to use a broker:
1. The broker qualifies the buyers to see if they would financially get a mortgage and pass the board
2. The broker is always available to answer questions via email and phone from other brokers and buyers
3. The broker is available seven days a week to show the apartment when the homeowner might be working or unavailable to show
4. The FSBO owners are typically paying the broker when they bring a buyer, so the buyer doesn't have to pay for the broker's fees
5. Most buyers use brokers and therefore any apartment that is listed FSBO and will not pay a brokers fee, or a listing that doesn't have a similar commission as most listings on the market will be put at the VERY BOTTOM of the list of places to see...very often the buyers will find something else to purchase BEFORE they even get to see yours
6. Brokers have access to professional marketing, advertising, photographers, etc at their fingertips. Are you willing to pay several thousand dollars to market your property out of your own pocket?
7. Brokers take away the emotion in the deal. Very often you have personal ties to a home and think it's worth more than it is. The market is the true price indicator!!!
If you need help selling your property... please contact me today with any questions.
4 and 5 are interesting; You should use a broker because there are brokers.
And then #7, are you saying that a broker will unemotionally sell an apartment at whatever price just because he or she can and in order to move on?