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Hi folks. This post is an edited version of an article I wrote back in November of 2006. The comment thread on the original post is, in my opinion, one of the best in ActiveRain history. The comment thread involves consumers and members of AR heavily debating 
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67 Comments on It's not what we do that creates value....it's how we do it!
lane,
Lay off with the "personal attack inanity. Let's be real. The one you speak of is the one who levies attacks. Go back and read what she wrote BEFORE you start pointing fingers.
Now doctors and lawyers are bad enough..now you want to compare your self to welders? Unreal! Even they require more of an apprenticeship before becoming a realtor.
Lane...this forum is becoming tired and the sameness is stale. I don't have time for enduring the cheerleading. You keep believeing what you want, keep doing what you're doing and you'll keep getting what you're getting. If it is working for you then fine.
I for one, and those we speak to work based upon cold hard fact which seems to be irrefutable.
I have no desire to continue this dialogue on AR trying to show agents how change is better for the industry. I will reserve my focus for those who want to be around for the coming years and want to prosper. Not saying that you or anybody else won't..I just feel that MORE success will be lauded on an agent who is a Web 2.0 super agent.
If it is working for you...then don't change a thing. No one really needs to be on Google page 1 for Tucker real estate do they? Here's hoping you're right!
As a lender, I feel that realtors most certainly earn their commissions and I don't understand why any one that is a good Realtor would offer their services at a discount. My husband (an appraiser) has seen some of the lending deals I've done, and when he makes way less per appraisal than I make per loan, he says the money isn't enough to do my job. And that's how I feel about Realtors, the money isn't enough for me to want to do your job!!!!
Cool BB. We're doing some follow up to the REALTOR value discussion that was sparked earlier this week by that Markwtwatch article. We're doing five things in a row on it... and will probably include a link to your great discussion here.
best
Bryant, Thank you for bringing back this core question. We answer this question every day, every minute of our practice. Consumer cares about the result and almost does not care how we technically organize our business, what techniques we use and how hard we work to make the transaction happen. Ironically, today's slow market gives us a big apparent "advantage" in justifying our fees to the consumers - the length of our work with the client. More time we invest - easier is to charge the fee, better we expose the insights of our job, better chance we have to show what we do and how we do it. Is it really advantageous to the client? Answer this question to those whose listings expired.
Disintermediation is a tricky trend for our profession. As it eliminates a value of previously closed property information, it creates an idea of easy savings on opportunity to DIY or on using the limited service providers. Does it kill our profession? NO! It opens us the chance to become a trusted advisors and professional consultants, skilled negotiators and knowledgeable coordinators. Add to this personal involvement and psychological support for educated clients and capitalize on these priceless skills.
WOW!!! Really awesome comments!! This has been a great discussion. And Kudos to Amanda for reading all 143 comments on the original post. I know that takes a lot of time to do. I hope whoever else took the time to do that....got something from it.
And Brett, My apologies for questioning your intelligence. That was uncalled for and I apologize. I was reacting to your statement about Lenn, who is a friend of mine, and it got away from me. I strongly disagree with the "presentation" of your thoughts but that certainly does not give me a reason to attack you back.
Thank you.
Bryant, Wow!
And I think our favorite old dino mades a great point. Buyers don't seem to question our value, especially when we are able to negotiate a great deal for them. Sellers on the other hand, resent agents, at least the buyers' agents, for those negotiating skills. And in this market, even the best listing agent has a hard time pleasing a seller.
This is one of the best things I've seen on Active Rain - and the comments, most of them anyway, are as interesting as the post. Thanks for writing it! And you need to know that after I read the first couple of comments, I did a frantic search for the video - maybe you could put it back, please, please?
Brett, Thanks. Now go read my most recent post. Hopefully......you will find it thought provoking.
Thanks Barabara-Jo!! I hope all is well with you.
Patricia, The video is over in my side bar. It was just a re-post of the "Obnoxious Broker" video. It's the one in the middle. You've probably seen it before. I am an exclusive listing broker and agree my job is very difficult right now. It's frustrating not to be able to sell a property no matter what I do. My market is at a stand still. 5 years worth of inventory on the market!!!
Amanda, That is an awesome compliment!! Thanks you.
"make sure you and the agent know what your expectations our for each other. And ask your agent to give you a list of what he/she plans on doing to sell your home. That way you know up front you can make sure that your agent does what he/she promises"
I don't think this is very helpful in choosing an agent. I've spoken to lots of agents and they basically all say the same thing about how they expect to move a property.
I'm looking for an agent to add value to my side of a deal. A chimp could sell my house today for $350k, but what I want is $400k. What I'm paying the agent for is that extra $50k.... the problem with the system is that the chimp would earn a commission of $17,500 and the agent would earn $20,000. It's not a good business model to be paid $2500 more than a chimp on a real estate deal.
A better system for a house like is to have an agent get 0% on the first $350,000 of the sale, but 50% of every dollar over $350,000. More complicated, but at least the difference would be chimp get s$0 and a good agent gets $25,000 on $400k sale.
RRsafety, I have to agree with you that it's not what they say, it's how they perform, that matters. If it were me I would want to see a list of their recent sales in my area. Not only do they have to be able to sell houses but they have to be able to do it in your area. Check their sales stats and compare listing prices to sold prices and also see how the sold prices compare to other homes that have been selling in your area.
I do want to mention though that no matter how good they are, a REALTOR(R) will not be able to sell a house for more than it's worth. Pricing is what sells a property no matter how extensive the marketing is. That's fact. Especially in this market where the buyer has many homes to choose from.
The reality is that "what you want" has nothing to do with the value.
Look at this way. If you have a visa card with a $20,000 limit and you "want" to buy something on it for $25,000, you out of luck. The card isn't just going to miraculously be "worth" $25,000. It is what it is. Your want will not affect the value of the card in anyway. Make sense?
Being a "discounter" I thought you guys would appreciate my take on these things! Frankly, I think that commissions got out of hand. The basic idea of charging "X" percent across the board on homes just didn't make sense to me. Why should it cost a home seller 3 times as much to sell a $300,000 home as it does a $100,000 home? Is there 3 times as much work involved? Is there anything that you do to sell the more expensive home that you don't do for the lessor expensive home and if so, how much value does that add to the transaction.
The truth of the matter is that it's generally easier to sell the more expensive home because the buyers tend to be better qualified and in reality there is only so much that we as agents can do to sell a home. If the home is priced right (rrsafety, a listed home DOES generally bring more money than a home that isn't listed because it's exposed to a much broader market and the agent does bring value to the transaction for all of the other services that they perform - as Bryant pointed out in his post) and is properly exposed to the market it will sell.
The funny thing about being in my position is that I have to "sell" my program against what I refer to as "no-service" companies (MLS Only companies) all the time. In order to do so, I have the seller do a Ben Franklin test where they draw a line down the middle of a piece of paper and list out the advantages of each possibility on one side or the other.
The "no-service" company gets the nod on cost...I can't argue with only paying $299.00 to get put on my local MLS...that's a hell of a deal at first glance....but from that point on it's all me....
On an average transaction I'm usually a couple of grand more expensive than the MLS only companies, but I field the telephone calls...is that worth the $2,000 by itself? Nah, probably not, but it is worth something for most consumers who have jobs and other responsibilities.
I show the property....is that worth the extra $2,000? Again, by itself, maybe not...but I'm a somewhat disinterested third party who, through years of sales and communication training, can ask the hard questions and get real answers as to what the customer's objections really are. I've had people willing to walk on a house that met all of their criteria because the dining room was painted a weird color! In short, I as a professional real estate agent am better able to ascertain what the customer's objections are and to over-come them whereas on their own, a seller might have more difficulty doing this.
I help in contract negotiations....who hasn't had a seller dig their heels in over $500.00 on a $400,000 or more purchase? Part of my job is to sometimes hold your hand....to sometimes pat you on the back...or to sometimes give you a little bit of a shove...Is this worth the extra $2,000? You better believe it is! If you don't believe me, talk to a FSBO that walked from a deal over something trivial like $500.00 only to sit on the house for an extra 3 or 4 months!
My list goes on, but I hope that you see my point. If you're a traditional agent and you have to compete against me, it might come down to your sales ability to be able to convince the seller that you're worth the additional money that you charge over me. It happens all the time.
Bryant, again...an excellent post!
Bob Mitchell
ValueList Real Estate Services, Inc.
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