Yes, I’m a licensed agent!
But I have to say that agents–while protecting some homebuyers and sellers–are adding an incredible amount of extra work and effort to the real estate recovery. Their added fees are creating inflated home prices, keeping sellers and buyers from reaching deals.
How exactly is this the case? Simple. They are adding unnecessary work, rules and negotiation to an otherwise easy process.
In addition, sellers, knowing they have to pay 6 percent to an agent (5 percent if they’re lucky), simply add this to the price so they still get their ultimate bottom line out of the house. This means the buyer actually ends up paying, even though the documentation shows that the seller is paying the agent’s commission. Therefore, we could have a faster home recovery without agency fees!
On top of all this, the agent adds to the process wasted energy and time, which could be spent house hunting, financing or moving.
Here is how the process should work. By the way, I just had this experience tonight working with an agent as an agent, representing myself:
1. Buyer looks at houses online, finds the house, visits the house. Buyer likes house.
2. Buyer and seller come together.
3. Buyer and seller negotiate on a price, based on both parties’ needs, in one room.
4. The buyer and seller, if they can’t agree, move on.
5. The buyer and seller, if they do agree, understand and hear each other’s emotional as well as financial needs (yes, leaving a house can be emotional), and they are able to come to terms that take everyone’s requirements into consideration.
6. Buyer and seller sign paperwork (easy to find online inexpensively), buyer and seller assign escrow and find title company. Then escrow processes everything.
If anything goes astray, legal teams get involved (no matter what, agent or no agent).
Here is how it goes with an agent:
1. Buyer looks at houses online, finds the house, visits the house. Buyer likes the house. (Note: Buyer is still doing the work, just not getting paid).
2. Buyer has to find an agent to represent him or her, or buyer gets “dual representation” from seller’s agent (thereby increasing seller agent’s commission for doing little to no extra work, but adding 2 percent to 3 percent to the purchase price).
3. Buyer still looks at the same houses he/she would look at it with or without an agent.
4. Buyer’s agent has to present an official offer to the seller’s agent.
5. Seller’s agent has to take offer to the seller, present it, “mull it over,” discuss it, decide how much can be squeezed from buyer and present a counter offer to the buyer’s agent.
6. Buyer’s agent presents counter offer to buyer. Buyer tells agent what he or she wants to counter with, and steps 4 to 6 repeat until everything in the situation without the agent is finished–the same process that could have been done in one hour with the seller and buyer together.
7. Seller’s agent puts documents into escrow.
8. Seller’s agent and buyer’s agent “stay in touch” throughout escrow to make sure they get paid.
9. No direct communication exists between seller and buyer, so anything the buyer or seller needs must go through an intermediary, thereby justifying ridiculous commissions and inflating home prices.
Bottom line? From an agent? Sell by owner. Putting your house on the MLS is as easy as going to housepad.com. Unless you have some overly complicated situation, don’t waste your time or money with agents.
Dani
