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Toddster’s Real Estate Series: Finding a good Real Estate Agent by Toddster
Started on: 10-06-2006 04:34 PM
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Last post by: Toddster on 10-10-2006 07:57 PM
Toddster
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Toddster’s Real Estate Series: Finding a good Real Estate Agent

For the benefit of those who don’t know what this series is all about I will repeat the first paragraph of my initial thread. The rest of you can move on to paragraph #1.

As your local Fiero Realtor it has been my pleasure to assist each of you with your Real Estate questions and needs. But I have realized that many of the PMs and emails I get are starting to sound a bit repetitive. In the interest of answering your questions efficiently I am beginning a monthly series discussing various topics that are forefront in your minds.

Each topic will begin the same, Toddster's Real Estate Series: _______" and the name of the topic. This will make searching easier if you forget to bookmark a thread. The topics covered will include how to find a GOOD Real Estate Agent, Property Investment, Home Improvements, Insurance, and much more.


My first topic was Credit; what it is, how to get it and protect it, and how to fix it if it sucks. My second topic was mortgage and equity financing. Today we will discuss how to find a good real estate agent. I will cover how one becomes an agent and what differentiates agents. How to check into their background and references, and what questions to ask when qualifying one.

1) Do you need a Realtor?

Let me answer by asking what would you do if any of these things happened?

The Buyer/Borrower:
1) Does not tell the truth on the loan application
2) Submits inaccurate information to the Lender
3) Has recent late payments on Credit Report
4) Discovered additional debt after loan application
5) Borrower loses job
6) Co-borrower loses job
7) Income verification lower than stated
8) Overtime income not allowed by underwriter
9) Borrow makes large purchase on credit before closing
10) Illness, Injury, Divorce, or other setback during escrow
11) Lacks Motivation
12) Gift donor changes mind
13) Cannot locate divorce decree
14) Cannot locate bankruptcy petition or discharge
15) Cannot locate tax returns
16) Cannot locate recent bank statements
17) Difficulty in obtaining verification of rent
18) Interest rate increases and borrow no longer qualifies
19) Loan program changes with higher rates, points, and fees
20) Child Support not disclosed on application
21) Borrower is a foreign national
22) Bankruptcy within last 2 years
23) Mortgage is double the previous housing payment
24) Borrower does not have steady 2 year employment history
25) Borrower brings in hand written pay stubs
26) Borrower switches to a job with a probation period
27) Borrower goes from salaried income to 100% commission
28) Borrower, co-borrower, seller dies
29) Family members or friends object to the home
30) Buyer is too picky about property in their price range
31) Buyer feels the house is misrepresented
32) Veterans DD214 form not available
33) Buyer comes up short of money at closing
34) Buyer has no “paper trail” for source of down payment
35) Buyer does not bring cashier’s check to close escrow
36) Buyer backs out of deal because they found a property they like better
37) Buyer is arrested prior to close of escrow
38) Buyer borrows the down payment and loses the loan
39) Buyer changes his/her mind for no reason at all
40) Buyer turns out to be a registered sex offender
41) Buyer has accounts frozen during escrow
42) Buyer will not remove contingencies

The Seller:
43) Loses motivation to sell
44) Cannot find a suitable replacement property
45) Will not allow appraiser in home
46) Will not grant access to inspectors
47) Removes property that was included in sales agreement
48) Cannot clear-up leans – is short of cash at closing
49) Does not own 100% of property
50) Can’t get partner’s signature
51) Leaves town without giving anyone Power of Attorney
52) Delay’s the projected move out date
53) Did not complete the repairs agreed to in the contract
54) Seller’s home goes into foreclosure during escrow
55) Misrepresents information about the neighborhood
56) Does not disclose all defects
57) Builder miscalculated completion of new home
58) Builder has too many cost overruns
59) Final inspection on new house does not pass
60) Seller won’t sign closing documents
61) Seller is arrested prior to close of escrow

The Realtor(s):
62) Have no client control over buyer or seller
63) Delays access to property for inspections and appraisals
64) Unfamiliar with client financial/equity position
65) Does get complete paperwork to lender on time
66) Inexperienced
67) Takes time off during escrow and can not be reached
68) Misleads other parties in the transaction
69) Does not do due diligence
70) Fails to convey information to each party

The Property:
71) County will not approve septic system, well, site plan, etc.
72) Termite report reveals substantial damage and the seller will not repair
73) Size and condition of home was misrepresented
74) Home is damaged prior to closing
75) Home is not structurally sound
76) Can’t obtain Insurance for the home
77) Property incorrectly zoned
78) Portion of structure encroaches on neighboring property
79) Appraisal comparables difficult to find
80) Natural Hazard Report shows property in a flood zone, dam inundation area, seismic zone, or under a flight path.

The Escrow/Title Company:
81) Fails to notify lender of unsigned or unreturned documents
82) Fails to obtain information from beneficiaries, lien holders, insurance companies, or lenders on time
83) Let’s principals leave town without getting all signatures
84) Loses or incorrectly prepares paperwork
85) Fails to pass on important information
86) Does not coordinate well causing delays
87) Inflexible in problem resolution matters
88) Finds last minute liens or title problems

The Appraiser:
89) Is not familiar with the local market
90) Is unable to finish on time
91) No comparable sales are available
92) Is not on the lender’s “Approved Vendor List”
93) Makes mistakes on appraisal
94) Lender requires a “review” appraisal

The Inspectors:
95) Pest Inspector not available when needed
96) Pest Inspector not proficient or experienced
97) Pest Inspector overlooks an important flaw that is later discovered
98) Home Inspector not available when needed
99) Inspectors reports alarm buyer and sale is cancelled
100) Inspector over/under estimated cost of repairs

And just to let you know, there is a 100% chance of at least one of these things happening on any given transaction. I’ve NEVER had a transaction that did not have one or more of the problems listed above come up. These need to be resolved by an experienced professional. You need a Realtor.

2) What do Real Estate Agents charge and what do they earn?

Let’s answer the second question first. The common misperception that Real Estate Agents earn an outrageous amount of money has it roots in two basic fallacies: The first is based on modern mythology. Agents often drive new cars and wear expensive looking clothes, hence, they must have lots of money…right? The fact is that many agents DO drive new, or nearly new cars, but not because they are rich, because they need professional, clean, reliable transportation to show property to clients. They often lease the cars. Who wants to be stranded on the side of the road while your agent looks under the hood to get his car running again? Will this event inspire much confidence in you towards your agent? Additionally, agents get great tax deductions for their cars since they are fundamental to the business. It just makes economic sense to lease your business car and replace your car every 3-5 years. The second fallacy is that agents keep most of the commission money they charge. I wish! The chart below shows who gets what.

Participating Broker 50%
Listing Broker 15% (more or less)
Business Expenses 15%
Uncle Sam 9%
Yours Truly 11% <---- yippee!

Assuming an agent sells a $733,000 home (the median home price in Santa Clara County) he/she will take home approximately $4,838 for that transaction after tax. You can see how many transactions you will need to make every year to generate a steady income. The fact is that the average Real Estate agent in Santa Clara County did less than 2 transactions last year! Agent’s often have to go several MONTHS without a paycheck too. Subsequently, agents with poor savings habits are often washed out of the business by economic necessity. Being self-employed means higher taxes too. On top of everything else we pay a 15% self-employment tax over and above our normal income tax. This is not a business for those who think it is an easy road to riches. Only 2% of Real Estate Agents ever achieve financial independence selling Real Estate. According the the National Association of Realtors (NAR) the median income for a Real Estate broker was just $52,800 in 2004. Sale agents earned just $37,600 in 2004. And because many Real Estate agents do much of their business on the weekends, the average number of hours worked per week was 46. And if you think it doesn’t cost much try these numbers on for size; Errors and Omissions Insurance (mandatory) is about $2000 per year, desk fees run about $800/month and copying, phone, and other office expenses run about $300/month. Advertising (for the agent alone) is about $250/month, Association fees and lockbox subscriptions are about $500/year PER MLS (I’m a member of 3 MLS’), and so on. My expenses last year were around $60,000 JUST to be in business. Add another $80,000 in direct expenses for client advertising, property inspections, stagings, etc. and you can see how pricey things get. Don’t take my word for it, there are other Realtors on the forum, ask them.

For these reasons, agents tend to charge relative to their own market and business plan. If your costs are higher your fees will be too. Some agents focus on condos others on Multi-million dollar homes. Each sale requires different levels of activity and as such fees will be different. When you talk to agents about fees make sure you are comparing apples and apples. Just because one agent charges the same as another agent does not mean you are getting the same service. ASK what you get for that fee. Like myself, many agents have a menu of fees so you can choose your level of service. My menu runs from as little as 3% total commission to as much as 10% of the sale price depending on what services you want. Always ask what you get for your money.

This brings us to one of my most often asked questions, “what about those discount brokers”? How can they afford to list my house for just $4995? Well, they can’t. It’s that simple. The number of discount brokers going out of business should be a give away but for those of you interested in hearing how the scam works here it is:

The sales pitch goes something like this, “I can list your home for $4995 and give you the exact same service as those full price brokers. The savings is passed on to you. I don’t want to get rich for just shuffling a few papers so let me list your house and you can keep your money!” Sound familiar?

Let me share the fine print with you. As we have already seen with the commission pie chart, there is a certain amount of expenses and taxes that simply can not be avoided. So how does the Discount Broker make a living? It works like this: Even though they tell you they will “list” your house for $4995, they often wait til the last minute to mention that they STILL have to offer 3% to the reciprocating agent, if they mention it at all. THIS is the first gotcha. They blame “Full Service” Brokers for this claiming that there is nothing they can do about it because these brokers won’t show your house unless you offer a full commission.

So, you reluctantly deduce that 3% + $4,995 is STILL cheaper than 6% and you feel angry at those’ horrible’ Full service brokers for not wanting to show your house and say, “OK”.

The truth is that Full Service Brokers rarely show Discount Broker’s listings even if a 3% commission is being offered. And Discount Brokers know this. Full Service brokers are not guilty of price fixing or any other such nonsense; we just know that as Full Service Brokers we are going to have to do 100% of the work when dealing with a Discount Broker. If a listing agent is only earning $4995 he is going to do nothing more than he has to by law. And that isn’t much! We will have to take responsibility for obtaining disclosures, scheduling inspections, ordering hazard reports and basically doing all the work and assume all of the liability…times two! For 3%? No thanks. It’s simply a smart business decision. Full service brokers don’t work with discounters unless necessary. This is a HUGE disadvantage to you, the seller, because it is the brokers who own the buyers. If they don’t show your house how will it sell?

This is how Discount Brokers make their money. If Discount Brokers KNOW Full Service Brokers won’t show the house how do they stay in business? The answer is that the Discount Broker plans to make his money by selling your house to one of his OWN buyers. Then he gets 3% + $4995….NOT BAD! But it gets better. Most Discount Brokers, unlike Full Service Realtors, are Mortgage Brokers too! Most Full Service Realtors are just that, Realtors; a difficult profession that requires specialized training and skills. Being a mortgage lender as well, splits loyalties and could not be a worse conflict of interest for you the seller. So the discount broker gets another 2% of the loan value as a commission for brokering the loan. For example, If you sell a $500,000 house then this agent gets:

1. 3% Selling fee - $15,000
2. plus his Listing fee - $4,995
3. plus 2% Mortgage Commission (which on an 80% LTV loan is) - $8,000
4. for a total pay day of $27,995 for selling a $500,000 house!

So you say to yourself, “OK so what? He may be making a lot more than I thought but I am not paying his mortgage commission so I am still saving $10,005 out of my pocket over a 6% listing fee…right”?

Not quite. Remember that Full Service Brokers and Discount Brokers do not WANT to work together. Full Service Brokers do not want the extra work load or liability. And the Discount Broker wants you to work with HIS buyers. Most of your offers will come from the listing agent’s buyers that they captured through their website.

But Full Service Brokers are committed to representing their client’s wishes. So what happens if a Full Service Broker DOES present an offer on your property and you accept it? Your agent just lost $23,000 of his $27,995 anticipated commission. Think he will be happy about that?

Remember that he wants you to accept offers from HIS buyers. Ask yourself this question, if these buyers are truly financially sound, why are they going through a Discount Broker when a Full Service Broker will represent them for FREE? The buyer’s agent gets paid by the seller! This is the second gotcha. These buyers have probably been turned down for a loan from everybody in town and have no choice but to work with a discounter, most of whom have alliances with sub-prime lenders.

This brings us to the third gotcha, Loyalty…or lack thereof. The Discount Broker is very motivated to please his Buyer and his Buyer’s Lender (usually brokered by himself). His Buyer and the Buyer’s Lender represent $23,000 of this deal to him. If the Buyer or the Lender says we want to reduce the price by $10,000, where do you think the Discount Broker’s loyalties will lie? Do you think he is going to fight for you, his client, to get the best possible price or is he likely to try to convince you that you should come down on your price to close the deal?

Just look at the statistics. Organizations that claim to Help-You-Sell your property get on average only 92-96% of list price compared with 99-103% for a Full Service agents like myself! That is a 3% to 11% swing! At an average of just 6% that is $30,000 more money at close of escrow in our example above. Still think you saved $10,005? You lost nearly $20,000!

Here is another important and scary statistic, Discount Broker’s listings stay on the market 3 times longer than Full Service Broker listings and are 50% MORE likely to end in litigation! Why? Because homes do not sell themselves. Even during the 2005 Boom year in Real Estate 36% of all homes listed in Santa Clara County DID NOT SELL! What makes this problem catastrophic is that the longer your home stays on the market, the “staler” it gets. A “Stale” property invariably gains a reputation, deserved or not, for being a “problem property”. This is a reputation NO seller can afford.

And keep in mind that none of this analysis takes into account the “A la Carte” menu of services the Discounter offers and eventually convinces sellers to use attributing the length of time on the market to a failure to purchase these extras. It is like the old saying of dying a death by a thousand cuts. You pay as much in the end for your listing as if you listed it with a full service broker but it takes your house much longer to sell, you get less for it than you could have, you do all the work, and your broker skates with virtually no liability since he is not selling your house; he is only there to help-“you”-sell your house. Still sound like a deal?

I have a ton of newspaper articles about victims of this legalized bait and switch game, some calling for legislators to end the practice, others are just mad clients rants. In the end I have never met a satisfied client of a discount broker. Ask one simple question, if full service Realtors charge around 6% (on average) and MOST of them go out of the business within 2 years at that rate of income, how can the Discount Brokers survive if they aren’t getting their money in other ways? It just doesn’t pass the sniff test.

BTW, I happen to know that trailboss used a discount broker to help him sell his house last year. I watched that house sit on the market for months and months and months and watched the price drop dramatically in that time and sell for a LOT less than its original price, a lot less than it should have sold for. Even though the information is a matter of public record, I won’t share the details out of respect for trailboss’ privacy. Maybe he’ll chime in and share his thoughts.

3) What do Real Estate Agents do?

This is actually great question to ask any of your prospective Realtors. Most will give you a list of 5-10 things they do. I have a list of 95 things! And it’s growing every day. The biggest problem I have with the Real Estate industry as a whole is how easy it is to get a license. Tragically, any moron can get one. You do not need a college degree, you do not need special training, you do not need legal or sales or marketing expertise, you just need to pass a correspondence course. As such, the ease of entry and the widespread fallacy of instant wealth has every dollar chasing schmuck with no aptitude for anything else signing up and muddying the waters. They race it, do as much damage as they can do, lose money, and end up in court. And professionals like me get the reputation Realtors enjoy today. It makes me sick.

In the first place, a professional Realtor is just that, a professional. Not because he wears a nice suit or has a slick business card, but because he is WELL versed in matters of contract law, construction, public works and infrastructure, economics, marketing and sales, finance, investment, appraisal, and a dozen other lesser disciplines. Those of us with these skill sets are only too willing to share our credentials and client feedback and those without it are hopelessly out gunned.

4) How do I tell the quality agents from the rest?

Real Estate Agents are as varied as any other profession. Just as some doctors graduated from John’s Hopkins and did residency at Boston General, some graduated from lesser colleges and served in small clinics. Don’t misunderstand me, we need all of them. If you are looking to sell a small townhouse that you’ve been using as a source of rental income for 10 years then perhaps a critical analysis in choosing your Real Estate Agent is less important to finding someone fast who is just competent. But if you are talking about the home you and your family live in, the most valuable asset you own, can you afford to make a mistake by picking the wrong agent? Would you hire a general practitioner for a heart bypass operation or would you want the best specialist you could find? The choice is yours. But at least you will understand the different levels so that your choice is an informed one.

To obtain a Real Estate license requires that you take accredited college level Real Estate Principals, Real Estate Practice, and one elective course in either, Real Estate Finance, Law, Appraisal, Economics, etc. Upon passing these requirements and proving; citizenship, identity, lack of a felony criminal record, and passing a state exam you can become a licensed Agent with the Department or Real Estate. To Become a Real Estate Broker you must complete three more core courses and pass an additional exam with the state. There are approximately 4 million licensees in the United States.

However, there are just under 1.3 million Realtors in the United States as of April 2006. People with a license and nothing more, are not even part of the matrix above. You do not want to work with ANY real estate agent who is not a member of the National Association of Realtors (NAR), which enforces a strict code of conduct on its membership and mandates training in ethics and consumer protection. The term “Realtor” is actually a copyright protected name for members of NAR. You can not call yourself a Realtor without this membership. Most licensed non-Realtors do not actively practice Real Estate. They are lawyers, lenders, and appraisers who just wanted to have their real estate license for their own personal transactions and education value. Although these people can legally represent you in a real estate transaction, the fact that they are part-timers and not up to date on current laws and practices makes it a risky move to consider using them as your agent. I once received an offer from a car dealership owner with a real estate license who was representing his wife’s sister. The offer was summarily rejected by my seller for this reason alone. Work with a Realtor.

Of the nearly 1.3 million Realtors in the United States 74% do not have any additional education at all. 26% have Bachelors or Graduate degrees which shows greater amounts of education. Of those, fewer than 3% went to a top 20 ranked University. Only 18% are Graduates of the Realtor Institute (GRI designees). The Realtor Institute was founded by NAR as a means of providing college level education to Realtors who did not already have a degree, or did, but did not have much education in Real Estate, Finance, and the like. The GRI is a one year study program of 14 college level courses. The time and financial commitment to obtain the GRI designation is significant and only the most dedicated agents undertake the rigor.

The top designation for a Realtor is the CRS (Certified Residential Specialist) designation. A Realtor must have a GRI and/or a B.Sc. degree as well, most have both. But the CRS also requires a demonstration of top performance in their market place. They must be able to show 2-5 years worth of top performance (75 transactions in 5 years or 25 in the last 2 with over $8 million in volume in one year) to even apply for the designation. One must also complete several core and elective courses in advanced real estate studies. There are only 44,000 CRS designees in the United States which accounts for only the top 4% of all Realtors and about 1% of all licensed Real Estate Agents. The CRS designees are the best educated, best experienced, and best consistently productive Realtors in the business. Knowing what I know, I would never work with a non-CRS agent myself, but it’s an individual choice.

The last thing to consider are awards. There are performance awards in every industry and Real Estate is no exception. Different companies use different names for these awards but always be sure to ask what the award represents. For example, President’s Club at Coldwell Banker is a much more prestigious award than President’s Club at RE/MAX. Same name, different level of achievement. Go online and look ‘em up or ask.

4) What questions should you ask your prospective realtor?

When hiring a doctor or a lawyer or any other professional you are apt to check them out before trusting them with your health, legal problems, etc. A Realtor is no different. The following questions are not difficult for a professional Realtor to answer quickly and clearly. If you interview an agent who has trouble answering these questions you should be very cautious.

1. How long have you been in Real Estate and is this your Full-Time Job?
And don’t fall for the old, “Well I’ve been in Real Estate so long I can remember when houses sold for $100,000”. THEY STILL DO….in Nebraska. Ask how many years they’ve been in the business. Although experience is no guarantee of skill, it is a good indicator of that person’s staying power. Bad Realtors don’t last long. Anything over 2 years is usually OK, over 5 is better. NEVER work with a part-time Realtor. It is an oxymoron.

2. What other Education do you have?
Few Realtors have a college degree. Even if they majored in a subject other than property development or management the discipline a good university offers should be a good indicator of smarts, work ethic, and problem solving skills. Only 1 in 4 freshman make it to graduation at the top schools in the country. Also, what other real estate related education and experience do they have: General Contractor, Inspector, Appraiser, etc.?

3. How many days did it take you to sell your listings as compared to the industry average?
Don’t take their word for it either. Make them print out a list of their sales from the MLS over the last year and present it to you. And ask for the Industry report for comparison. Both are easily printed up in 2 minutes. Don’t ask for more than one year as markets change and you only care about what they have done lately. Don’t accept a report from 1997, in other words.

4. How close to the initial asking price of your homes was the final sale price?
Most top agents will have a sale price of over 101% of list price. That means they know how to negotiate and are willing to fight for you to get more money. Be sure to specify “INITIAL” asking price. Prices get adjusted as properties sit. It’s easy to make your stats look good if you tell a client you can get a high price then later ask to drop the price. You want to know how close to the mark they were at the start.

5. Can I have the names and phone numbers of your three most recent clients?
Often Realtors will collect testimonials from satisfied customers. But what do you care about a 20 year old letter? Get the names and numbers of their most recent clients, no more than 1 year old preferably. If they hedge a bit, be cautious.

6. What distinguishes you from all the other Realtors?
This is perhaps the most important question. They should be able to show you innovative and creative marketing strategies, tools, and systems that the average Realtor does not have. They should display certainty of their plan and confidence in the result.

7. Have you ever had your license suspended or revoked or faced disciplinary action from DRE, NAR or your local board?
You don’t have to ask this if you don’t like confrontation but you NEED to know the answer. Feel free to drop in on the Department of Real Estate web site at www.dre.ca.gov and click on the “check license status” button. You can also visit the National Association of Realtors website at www.realtor.org and search in the “find a realtor” link for ethics violations.

8. Who are the buyers of THIS house and how will you reach them?
The reality is that on average there are only 3 willing buyers for your house at any given moment in time. Reaching those 3 buyers is what distinguishes professional Realtors from the crowd. A professional will be able to tell you what type of buyers will be interested in your property and how to reach them.

9. What guarantee do I have that I will be satisfied with your service?
A professional realtor puts his money where his mouth is. Does he offer a written service guarantee? An independent website showing customer satisfaction information? Does he offer a contract cancellation clause?

10. What designations do you have?
Professional Realtors who work at their jobs full time are likely to be self motivated and seekers of additional knowledge. The National Association of Realtors sponsors a variety of training courses, some lasting a year or more. At graduation the agent receives a designation. Some of the more important ones are:
• CRS (Certified Residential Specialist) – This is THE top designation for Residential Realtors. As stated previously, only 44,000 out of 1.3 million Realtors (4%) in America have this designation and to even apply you must show 2-5 years of high level productivity and pass several advance Real Estate Courses. CRS Realtors are simply the best.
• GRI (Graduate of the Realtors Institute) - The GRI is the most time consuming designation to earn taking up to one full year of courses (14 in all). Approximately 18% of all Realtors have this designation. It is obtainable without actually having to demonstrate any level of performance, but is still highly regarded due to the amount of time invested in earning it and the depth of the core courses.
• ABR (Accredited Buyer Representative) – The ABR is focused on dealing with Buyers and their needs. About 15% of all Realtors have an ABR designation.
• SRES (Seniors Real Estate Specialist) – The SRES is a challenging designation to obtain since it requires certain performance standards as well as class time and exams. This is a very valuable designation for clients 50 years of age or older. An SRES Realtor is a specialist in dealing with the needs of senior citizens.
• E-Pro (Electronic Media Professional) – The e-Pro is a relatively new designation designed to address the need for internet and other electronic media specialization in the Real Estate Industry.
• QSC (Quality Service Certification) – The QSC designation is relatively easy to obtain but it is also one of the most important. By obtaining a QSC a Realtor is allowing a 3rd party company to do customer surveys of ALL the Realtor’s clients. Anyone can go online to www.qualityservice.org and see this feedback on the agent. You have to be VERY sure of your ability to serve clients well to be willing to have the whole world see all of your client’s feedback.
• CRP (Certified Relocation Specialist) – For those moving from one state to another there is more to settling in than just getting a new home. Schools, lifestyle changes, etc all come into play.
• CLHMS (Certified Luxury Home Marketing Specialist) – For those with homes that are not your common run-of-the-mill tracks it requires extra special skills to market.
• CCIM (Certified Commercial Investment Manager) – This is the premium designation for investment property specialists and is one of the hardest designations to earn. Less than 1% of all Realtors have a CCIM designation.

These are the basic questions to get you started but you may wish to add some of your own. Remember, your Realtor should be someone who is not just well educated, ethical, and experienced but someone who has your best interested at heart; an agent who understands your wishes, is flexible, and respectful of your personal lifestyle, budget, and needs.

5) When to be leary?

Above all else YOUR Realtor should have YOUR best interests at heart. If you hear your Realtor say in front of a seller, “Gee, why did you price your house so low?” Fire him! If the house is under-priced then that this thee last thing you want the seller to know. Additionally, what other motive could he have but to try to convince you that you should make an offer on that house in order to scoop-up a “great deal”?! OF COURSE, the seller is going to agree that it should be priced higher…DUH!

Make sure your Realtor is on YOUR side. By that I mean that he will respect your relationship as a client and keep privy all matters of price, terms, and negotiability. He will also not be afraid to tell you the truth. Sometime he will tell you things you do not want to hear. Be grateful you have an agent who is willing to tell you these things. At least then you will know he is on the level and not just giving you lip service.

6) Where to begin looking for an agent

The process begins with someone you trust in the Real Estate Industry. That could be me, or another agent here on PFF, or someone in your Church, or a neighbor, just make sure the person is knowledgable and well connected.

I’ve given you some links above to do some of your own research but there is some information you can’t get as easily. So ask a pro. IT’S FREE!

Yes, we get a referral fee for hooking you up with an agent but it is a nominal fee and comes out of HIS pocket, not yours. That is the price we pay in this business, and gladly I might add, for getting a customer dumped in our lap from heaven. It costs us a small fortune each year to FIND customers through advertising, flyers, mailers, door knocking, sponsorships, etc. When someone calls us out of the blue and says, “Want a client?”, it’s pants wetting time!

So take advantage of the opportunity to ask a pro to provide you with a list of agents in your area. Ask for at least 3 from different companies and a brief resume of their qualifications. Interview all three and pick the one you like the most. Just email me for if you want a list of good agents in your area.

In conclusion, I could go on with this for 500 pages and still not cover it all. But I have given you some of the basics to consider when looking for a Realtor. Remember that a Realtor should be a long term relationship like you have with your doctor, lawyer, accountant, Insurance agent, etc. This guy will be there to answer you questions about Real Estate for a life-time so pick one you can work with for the long haul. Naturally I am available to answer any questions you have. Just shoot me a PM or an email.

Next Month – Real Estate Investing
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Report this Post10-06-2006 06:05 PM Click Here to See the Profile for RWDPLZClick Here to visit RWDPLZ's HomePageSend a Private Message to RWDPLZDirect Link to This Post
A good, informative read as always.
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Report this Post10-06-2006 10:06 PM Click Here to See the Profile for DeabionniClick Here to Email DeabionniSend a Private Message to DeabionniDirect Link to This Post
Thank you for taking the time to post these threads. I'm sure that this wealth of information is useful to many members on here.
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Report this Post10-07-2006 05:41 PM Click Here to See the Profile for ray bClick Here to Email ray bSend a Private Message to ray bDirect Link to This Post
a Real Estate Agent is a useless scam mosty
just like a used car dealer [stealer]
if you want to pay top dollar use a dealer / agent
if you want a bargan , hunt a house on you own
and save big money

btw the FSBOs that are the best deals
will NEVER BE SHOWN by a Real Estate Agent
that alone is the best reason to avoid Real Estate Agents

------------------
Question wonder and be wierd
are you kind?

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Report this Post10-09-2006 11:53 AM Click Here to See the Profile for ToddsterClick Here to Email ToddsterSend a Private Message to ToddsterDirect Link to This Post
 
quote
Originally posted by ray b:

a Real Estate Agent is a useless scam mosty
just like a used car dealer [stealer]
if you want to pay top dollar use a dealer / agent
if you want a bargan , hunt a house on you own
and save big money

btw the FSBOs that are the best deals
will NEVER BE SHOWN by a Real Estate Agent
that alone is the best reason to avoid Real Estate Agents




Hmmm, the ignorance and stupidity is so overwhelming I hardly know where to begin.

1) Read the thread before commmenting seems like an appropriate place to start.
2) I've shown GOBS of FSBO homes, what planet do you live on?
3) FSBO deals are not good for buyers because of a simple concept called MATH. If the goal of the FSBO is to save the commission on his sale then how is it a bargain for the buyer since both parties can't save the SAME COMMISSION? [Jeopardy Music]
4) AND...Since agents represent buyers for FREE since the seller pays the commission why would anyone be dumb enough to buy a house without an agent who assumes all the liability and does all the work?
5) As for not needing one, next time you need an appendectomy rayb, please video tape you operating on yourself. This I gotta see.

I could go on and on but rayb is a kid and has a lot to learn...including manners.

If the rest of you have SERIOUS questions or observations feel free to share them.
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Report this Post10-09-2006 12:31 PM Click Here to See the Profile for blakeinspaceClick Here to Email blakeinspaceSend a Private Message to blakeinspaceDirect Link to This Post
 
quote
Originally posted by Toddster:
because they need professional, clean, reliable transportation to show property to clients. They often lease the cars. Who wants to be stranded on the side of the road while your agent looks under the hood to get his car running again? Will this event inspire much confidence in you towards your agent?


What, so you don't show property in one of your Fiero's?

Nice write up... again. I especially liked the part on questions to ask of your potential agent.
If one does not know what to ask, or what the answers will mean... it does them no good!

Now that you have shed some light on the educational qualifications that you suggest are worthy, do you mind if I ask if you hold any of those quals yourself?...
Like the GRI or CRS? I assume that you are a member of the NAR, as much as you mentioned that...
Hey, I am a member of the NRA....

Also, Todd, how many MLS's are there? (I am guessing that stands for Major Listing Service?...)are most nationwide, or just local? Is there one or two that maybe non real-estate minded person has heard of?
I am thinking that a MLS might be like your credit reporting agencies... 3-4 of them and everyone has heard of Equifax and TransUnion...
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Report this Post10-09-2006 12:38 PM Click Here to See the Profile for blakeinspaceClick Here to Email blakeinspaceSend a Private Message to blakeinspaceDirect Link to This Post
 
quote
Originally posted by Toddster:
3) FSBO deals are not good for buyers because of a simple concept called MATH. If the goal of the FSBO is to save the commission on his sale then how is it a bargain for the buyer since both parties can't save the SAME COMMISSION? [Jeopardy Music]


It has been my experience, that in some cases FSBO's might be an attractive option for 2 reasons, both good for seller and buyer.

1) good for seller bcz they do not have to pay agent commision = more money in pocket after sale
2) good for buyer IF seller did not raise the initial cost of property to cover expected agent commision = lower initial purchase price

OTOH, I am certain there are what... 100 (from your list, and growing) reasons that the FSBO may not be the way to go, but I think in a perfect world my answers work
Maybe that is what Rayb was getting in a much less tactful way.
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Report this Post10-09-2006 07:03 PM Click Here to See the Profile for ToddsterClick Here to Email ToddsterSend a Private Message to ToddsterDirect Link to This Post
 
quote
Originally posted by blakeinspace:


What, so you don't show property in one of your Fiero's?


It was OK until I had to strap Grandma onto the luggage rack and people complained.

 
quote
Now that you have shed some light on the educational qualifications that you suggest are worthy, do you mind if I ask if you hold any of those quals yourself?...
Like the GRI or CRS? I assume that you are a member of the NAR, as much as you mentioned that...
Hey, I am a member of the NRA....


Yes, I am a member of :

NAR (not to be confused with gun toting crazies...wait I'm in the NRA too )
CAR
SCCAOR
SCRA

MLS memberships:

RE Infolink
Bay East/Paragon
Metrolist

Designations:

CRS
GRI
SRES
QSC

Education:

B.Sc. Georgia Tech (class of '87)
Minor Certificate in Organizational Psychology (GA Tech '87)

Related disciplines:

Licensed General Contractor
Licensed Electrician
Licensed Plumber

Awards:

Platinum Club 2005 (RE/MAX second highest award for production)

 
quote


Also, Todd, how many MLS's are there? (I am guessing that stands for Major Listing Service?...)are most nationwide, or just local? Is there one or two that maybe non real-estate minded person has heard of?
I am thinking that a MLS might be like your credit reporting agencies... 3-4 of them and everyone has heard of Equifax and TransUnion...


MLS stands for Multiple Listing Service and each service covers a specific geographic area. For example, RE Infolink covers 5 counties in the South San Francisco Bay Area (not including the city of SFO), Bay East includes 2 counties on the other side of the bay, and Metrolist includes 8 central Valley Counties. I can sell REal Estate From Placer County to the Monterey Coast.....and do! My mileage is nuts.

The MLS is the system Realtors use to list homes for sale and Realtors subscribe to these services to let people know about their listings and to search for other agents listings for buyers. These services provide detailed information about properties. There are a few national listing services which we also subscribe to. For example, you could go to Realtor.com and type in Todd Amelio and find my listings here in California, even though you may be across the country. It's a good way to let people know what we have the offer.
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Report this Post10-09-2006 07:09 PM Click Here to See the Profile for ToddsterClick Here to Email ToddsterSend a Private Message to ToddsterDirect Link to This Post
T
 
quote
Originally posted by blakeinspace:


It has been my experience, that in some cases FSBO's might be an attractive option for 2 reasons, both good for seller and buyer.

1) good for seller bcz they do not have to pay agent commision = more money in pocket after sale
2) good for buyer IF seller did not raise the initial cost of property to cover expected agent commision = lower initial purchase price

OTOH, I am certain there are what... 100 (from your list, and growing) reasons that the FSBO may not be the way to go, but I think in a perfect world my answers work
Maybe that is what Rayb was getting in a much less tactful way.



I understand what you are getting at and I want to let you and everyone know that I have NOTHING against FSBOs except for the fact that if I present an offer, I know I will be doing all of the work since the sellers are ALWAYS clueless about disclosures. Now I should also point out that California has some of the strictest requirements in the nation for disclosure and unlike some other states which can do it on a handshake by comparison, a home sale is a complex process.

I have a great FSBO guide that I will post here as well. If you really want to sell your own house, for the challenge, the fun, the savings, whatever, you might as well do it right. I will give you the tips to do it.

Keep in mind though, 80% of people who try to sell their houses themselves ultimately list with an agent and half of the remaining 20% end up in court. The odds are not in your favor and I will explain why in the FSBO thread.
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Report this Post10-09-2006 08:23 PM Click Here to See the Profile for WichitaClick Here to Email WichitaSend a Private Message to WichitaDirect Link to This Post
I've been househunting for quite a while. (Finally found one and will close this coming Friday).

I've checked out FSBO homes myself and found out that they aren't the best deal. This is at looking at so many homes both FSBO and listed by real estate agents. This is what I found.

1. FSBO homes all tend to be homes that the owners are not desperate or in a hurry to sale, therefore their sale price is higher than those around the area. Also! I've tried to negotiate down on three attempts on a FSBO and all three were ridgid and didn't accept the lowered price. Also! I was buying on an FHA and the FSBO homes are always on conventional (basically, AS IS) sale condition. They wouldn't accept doing the little fix it up things that needed to be done to allow the home to be accepted as FHA compliant (good guttering, replacing damaged roof shingles, etc.)

I just find ones that are listed by Real Estate agents are the best. Because the sellers will make the home FHA compliant, usually always put a home warrenty on it for at least 1 year, you can negotiate the sell price and closing cost, and most owners are motivated to sell as quickly as possible, either they have another home on consignment or just bought another home and need the equity money as soon as possible.

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Report this Post10-10-2006 08:31 AM Click Here to See the Profile for ray bClick Here to Email ray bSend a Private Message to ray bDirect Link to This Post
 
quote
Originally posted by Toddster:
Hmmm, the ignorance and stupidity is so overwhelming I hardly know where to begin.

1) Read the thread before commmenting seems like an appropriate place to start.
2) I've shown GOBS of FSBO homes, what planet do you live on?
3) FSBO deals are not good for buyers because of a simple concept called MATH. If the goal of the FSBO is to save the commission on his sale then how is it a bargain for the buyer since both parties can't save the SAME COMMISSION? [Jeopardy Music]
4) AND...Since agents represent buyers for FREE since the seller pays the commission why would anyone be dumb enough to buy a house without an agent who assumes all the liability and does all the work?
5) As for not needing one, next time you need an appendectomy rayb, please video tape you operating on yourself. This I gotta see.

I could go on and on but rayb is a kid and has a lot to learn...including manners.

If the rest of you have SERIOUS questions or observations feel free to share them.


I was born in 1950
and have both bought and sold homes
I also worked inside a MEGA real estate CORP, GDC
btw I quit when I figured out they were total crooks esp to their own salesmen
and even worse to the buyers

1 I read your post
2 in my world no agent , and about a hundred came by, or called to try to get me to list
none EVER brought a buyer to look at my FSBO , not one
and no FSBO can get on the real MLS [ what a racket]
3 ways to save, buyer can hunt for under priced houses
just like buying a car the private owner allways is a better deal the the dealer[stealers]
sellor saves 6% every time and can split that with the buyer
4 NOBODY WORKS FOR FREE who is paying the money
that right the buyer the guy who is paying
inspectors and appraisers value the house and it's condision
lawyers and survey check the legal end
title insurance protects the owner as does the abstract
all are needed or required by the bank the agent/broker is NOT
what does the sales hole do except call those people
the only risk the broker takes is if he LIES or hides facts
btw total time required to get the paperwork done
was about 20 hours inc driving and watching the inspectors ect
not a bad amount of time to save thousands of dollars

5 selling is not the same as surgery LOL at the fool who thinks it is the same


------------------
Question wonder and be wierd
are you kind?

[This message has been edited by ray b (edited 10-10-2006).]

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Report this Post10-10-2006 10:30 AM Click Here to See the Profile for MinnGreenGTClick Here to visit MinnGreenGT's HomePageClick Here to Email MinnGreenGTSend a Private Message to MinnGreenGTDirect Link to This Post
Todd, Thanks for another great read.

I've always considered myself lucky for working with the agent that I do... being only 20 and looking to buy a house, I just randomly met & started working with my agent (he's a friend's brother...). Turns out that he's very well qualified - and after reading the description of some of the credintials (and what is required of them), I'm even more-impressed with him (CRS, GRI, ReMax: "Hall of Fame Agent", 100% Club, 10 yr service award, Twin Cities Business "Super Agent" 2004 & 2005, etc...).

We just did a transaction with him a couple of months ago... we priced our house to sell, and he marketed it to the right people. We sold a house that would normally have sat on the market for at least a couple of months in only 7 days (actually, to the 1st people that viewed the property the weekend it was listed). IIRC I read or heard that on average, houses sould through Realtors sell quicker & on average for 16% more than those FSBO.

As to Ray's comments... good luck with whatever you're trying to do. I've seen what happens in "rough" transactions, and while I now understand far more about Real Estate than I did 7 years ago... I still want my realtor on my side if/when the stuff hits the fan!

------------------

Looking for Fiero posters?

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Report this Post10-10-2006 06:27 PM Click Here to See the Profile for ToddsterClick Here to Email ToddsterSend a Private Message to ToddsterDirect Link to This Post
 
quote
Originally posted by ray b:

I was born in 1950


Then what is your excuse to talking like an ignorant fool?

 
quote

and have both bought and sold homes
I also worked inside a MEGA real estate CORP, GDC
btw I quit when I figured out they were total crooks esp to their own salesmen
and even worse to the buyers


And.......?

What does a sales person's job have anything to do with a professional Realtor? I suppose you think that doctors are "salemen" too just because they charge a fee for thier services?!

Doctors? All they do is stick you with a knife and rip stuff out. Anybody kin do dat!



 
quote

1 I read your post


No. Actually, you didn't. Based on your comments it's pretty obvious. But keep saying so if it makes you feel better.

 
quote

2 in my world no agent , and about a hundred came by, or called to try to get me to list
none EVER brought a buyer to look at my FSBO , not one
and no FSBO can get on the real MLS [ what a racket]


Racket? Let me see if I got this straight. The MLS is a private organization established by Realtors for which we each pay a small fortune to be able to list our properties. But we are supposed to let YOU use it for free?

Yep, you're a liberal alright.

As for no one coming by your house, how did you market it? Let me guess, an ad in the paper and a cardborad "For Sale" sign in the yard. Smooth move genius. How did you ever figure THAT marketing strategy out?

 
quote

3 ways to save, buyer can hunt for under priced houses
just like buying a car the private owner allways is a better deal the the dealer[stealers]
sellor saves 6% every time and can split that with the buyer


Read my post.

 
quote

4 NOBODY WORKS FOR FREE who is paying the money
that right the buyer the guy who is paying
inspectors and appraisers value the house and it's condision
lawyers and survey check the legal end
title insurance protects the owner as does the abstract
all are needed or required by the bank the agent/broker is NOT
what does the sales hole do except call those people
the only risk the broker takes is if he LIES or hides facts
btw total time required to get the paperwork done
was about 20 hours inc driving and watching the inspectors ect
not a bad amount of time to save thousands of dollars


No one works for free? Except Realtors should...is that what you are saying?

BTW, every other word proves you didn't read my post.

 
quote

5 selling is not the same as surgery LOL at the fool who thinks it is the same



BWAHAHAHA, now I KNOW you didn't read the post.

Doctors are salesmen! Give me a knife while I do this appendectomy on myself!


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Report this Post10-10-2006 07:45 PM Click Here to See the Profile for fieroluvClick Here to Email fieroluvSend a Private Message to fieroluvDirect Link to This Post
I admit I didn't read the whole thing, I don't have all night.... But I do have one question though.

If the seller assumes the huge chunk of the realtor fees, why do I the buyer still have to pay out the nose in fees... i.e. 6 thousand closing costs.. inspections... surveys... and appraisals that is all out of pocket not included in down payment or can't be rolled into the loan?

Edit: I suppose I should mention this only on an 80K house.

[This message has been edited by fieroluv (edited 10-10-2006).]

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Report this Post10-10-2006 07:57 PM Click Here to See the Profile for ToddsterClick Here to Email ToddsterSend a Private Message to ToddsterDirect Link to This Post
 
quote
Originally posted by fieroluv:

I admit I didn't read the whole thing, I don't have all night.... But I do have one question though.

If the seller assumes the huge chunk of the realtor fees, why do I the buyer still have to pay out the nose in fees... i.e. 6 thousand closing costs.. inspections... surveys... and appraisals that is all out of pocket not included in down payment or can't be rolled into the loan?

Edit: I suppose I should mention this only on an 80K house.



Closing costs are related to other services in your transaction. Keep in mind that each state is different. But in general you will need to get a loan from a bank to buy a house. If you get a loan you will have underwriter fees, application origination fees, document preparation fees, etc. You may also need to pay points for the estabilshmnt of the laon or to buy down the rate.

You will also need to pay title fees for an insurance policy on the deed. This protects the buyer should a problem on the chain of ownership come up. This keeps you from losing your life savings. Title insurance is the most expensive part of an escrow but mandatory if you are borrowing from a bank. They don't want to lose their money. You will also need to establish an escrow which allows the buyer and seller to transfer the deed and the money in a safe and honest manner. The escrow company charges a fee for this service. In some states Title companies and Escrow Companies are one in the same and in some states they are separate. They also have miscellaneous fees like copying fees, recording fees for the county recorder, notary fees, etc.

None of this has to do with the Realtor but with your lender and the escrow company.

Now, as for who pays...that is ALWAYS negotiable. You can negotiate into the contract that the seller will pay these fees. But you run the risk of having your offer rejected or countered if the seller is not that motivated. THAT is between you and your Realtor. A good Realtor can often negotiate many of these fees into the seller's column.
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