From Anna Matsunaga, Team Momentum, Keller Williams Realty www.teammomentumrealestate.com

253 353 2662

Today I had an appointment with a client and through a mix up in communication I went to meet him @ a bookstore coffee shop while he went to his office with both of us wondering where the other one was. ( we got it staightened out later on this evening.)  Anyway that meant I was in one of my favorite places ( a bookstore, in this case Barnes and Noble in Lakewood WA)....I some how had left with out the novel I was reading ( The Secret Life of Bees) and so decided to read something I saw there that caught my eye while I waited.

I ended up picking up Freakanomics....Of course I could not help but turn to the chapter about why Real Estate agents are like the KKK...I skimmed the part about the KKK and read a bit more indepth when he began talking about car sales people and then read what he had to say about Real Estate agents.  Now I am no economist and I am sure much of the book is very valid ( it comes highly recommended by an author I really like ( Malcolm Gladwell, who wrote The Tipping Point and Blink.)

However I disagree with his summary of RE agents....clearly he is an economist and likely a very very brilliant one, but I doubt he has ever been a Realtor(r) ( or a Real Estate Agent either)  He talks about how Real Estate agents homes sell for higher prices than the general public.  That they are on the market on an average for longer, but that they sell higher.  He asserts that this is because we as Real Estate agents will not accept the very offer that we would encourage a client to take.  We almost always get our list price, but often sell our client's homes for less than list price.  He essentially says that we talk our clients into accepting a lower price just so we can close and money is our only motivator, based on the fact that while our homes may be on the market longer ( an average of 10 days longer)

The book also talks about words that "help" homes sell for more, words like Granite, corrion, state of the art, and so on.  Then also words that corrispond with lower prices ( some of these will surprize you ) like spacious and great neighborhood, well maintained, chariming....he argues that we use these words as code words for lower offers since for instance well maintained insinuates that it has been maintained, but not updated, that great neighborhood infers that there are lots of much nicer homes around it and so on and so we slant things purposely to get loer offers on the homes we sell.  He also points out that Real Estate agents use more of the words that get higher offers in their advertising of their own homes......

He  also gives an example of a Real Estate agent he worked with that told him all about the appreciation he would see on the new place he was buying and then when it closed turned around and told him not to try to sell his previous home with out a broker because the market was declining.  Now I am sure there are some agents out there that are dishonest like that....but surely he has not worked with most of us.  Also he says as further proof that Real Estate agents use and twist information for their own means the fact that as the internet has opened more information about Real Estate to the consumer the gap between the amount a Realtor's home sells for and the amount the average client's home sells for has closed some what.  ( ie the consumer is gaining in advantage and we are losing......so here is my answer to this line of reasoning.

1. Part of the reason our homes we own as Real Estate agents sell for closer to or over list price is because we know the market and listen to it and we PRICE IT RIGHT IN THE FIRST PLACE,  if some how we over shoot in price WE DROP THE PRICE  when the market tells us we have.  We don't have to negotiate with ourselves about dropping the price or pricing it right we use our statistics and sell the home accordingly.  We listen to the market in the same way that our clients who get list price and above listen to us when we suggest a price. 

2. Has it ever occured to the author of that the reason words like charming, well maintained get used ( as he points out more vague terms ) or that we talk about the neighborhood instead of how excellent the house is is often because we are following the rule our mom's taught us...( if you can't say something nice, dont' say anything at all)  You see we often are selling a home that the main advantage to it IS that it is surrounded by much nicer homes in a safe neighborhood.  That if we don't say it's cute or charming the only thing we have left to say about it is that it is so small that you can sit on the toilet and both wash your hands and turn on the shower with out getting up.  We do NOT use these code words to solicit lower offers. 

3.The reason that readily available information on the internet has helped close the gap between what our homes sell for and what a consumer's home sells for is because of the fact that our client has a source of knowledge besides us, so when the client does not like what we have to say...well they check it out ( usually on line) and they see that what they find supports our findings.

4. Has he ever considered that the reason that homes that say state of the art, Granite, corrion and so on sell for more is because these homes are NOT fixers. Because they HAVE these things in them, so we can truthfully talk about them in our advertising.  AND that since Realtors know what sells we are more likely to have these things in our own homes we are selling than the average person?

5. As for why our homes are on the market for longer than a consumers, I am not sure why this is but, I DO have ideas about why in part from selling my own home. 

       a. we are so busy promoting our client's home that we don't get to work as hard on our own if we are representing ourselves.  ( It took me 3 weeks to get the virtual tour up on one of my own homes when I do that in the first week for a client) 

      b. We are more likely to counter an offer numerous times that a consumer who even when I think they shoudl counter, often does not out of fear.  It's also a hard place to be with a client when they say "should we counter"  I often think we should, but must also inform them that we could lose the buyer @ that point since they would not have to agreee oror counter back.  If the offer is close the client often goes ahead with it out of fear ( not because of our recommendation)  When we represent ourselves we are more likely to take that risk since if there is a loss it is our own.  As for agents who are represented by a fellow realtor, being in the business themselves they are more likely to follow their agent's recommendations here.

6.If he thinks Realtors (r) in general are just out for the money he has not spent much time with those of us who work with short sales.  He has not seen behind the scenes to know that many times a Realtor quietly gives up some of their commission to make something close when other options are exhausted.  He pays no attention to the fact that we are one of the only if not the only professionals who can do all of our work and do it well and still not get paid one cent because of circumstances beyond our control ruining a closing. ( or client changing their mind about buying or selling , or a bank saying no to an offer after you worked on it for over 6 months)  He has not seen the long hours or the hard work  it takes to get an offer, let alone carry it through to closing.

I am proud of being a Realtor(r) and I know I bring real value to my clients with what I do.  I would like to see his explaination of why most successful RE investors and developers consider having the help of a Realtor(r) irreplaceable.

 The book does look interesting, and will finish the read soon, but don't agree with this chapter.

Would love to hear your thoughts.

Anna Matsunaga, Team Momentum Keller Williams Realty www.teammomentumrealestate.com

253 353 2662

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