Arcadia Housing Blog

Do you take pride in your work? Dan & Joy Blanding of REMAX Realty obviously don’t because their downed RE sign has been in front of this house for at least 4+ months. It was removed temporarily and then resurfaced in the exact same position about a week later.

Do you make people angry? Do you have unsatisfied customers? Fazian Bakali (also of REMAX) apparently pissed off someone enough to warrant vandalism of his RE sign. This piece of junk has been in front of 622 Longden Avenue for months.

Real estate agents are people who make a living off 3% commission by representing a buyer or seller. In exchange for their paycheck, agents do market research, show homes to clients and drafts offers. There isn’t much skill involved in being an agent and that’s probably why everyone and their brother has a real estate license these days.

This profession has been around for a long time mainly because of access to information. Before the internet, it was fairly cumbersome and difficult for the general public to find listings if you did not belong to a group such as the NAR or CAR because they essentially owned the listings database. That remained true until recent years when the internet granted public access to many listings.

When I sit down to write a post, I almost always start by looking at Redfin, Zillow, ZipRealty or any of the free listing websites. They provide me access to current listings, asking price, square footage, number of bed/bathrooms, colored photos, previous sales history and a host of other valuable information. With that, any buyer can scout and screen homes as well as do market research on comparable sales in the desired neighborhood. And now with companies like Redfin and Help-U-Sell, you can even use their agents to attend open houses and draft offers for a mere 1% fee.

Will Redfin and ZipRealty do to RE agents what Expedia and Travelocity did to travel agents? I don’t think the profession will get wiped out because there is some value in qualified, respectable agents. Let’s face it, buying or selling a home is a very emotional and stressful time and it’s nice to have a representative during negotiations. In my opinion, there is a need for good real estate agents, but they should work for a flat fee instead of a percentage commission.

A 3% commission on a $600k home is $18,000. Looking up a few homes and drafting an offer doesn’t sound like $18,000 worth of work to me. Also, it doesn’t require anymore work to find and buy a $300k home than it does a $600k home – so why should I pay $18,000 for the realtor to do the same work as he/she would have done for $9,000 on a $300k house? That doesn’t make a bit of sense.

If the realtors work for a flat fee, they would have more incentive to actually work in the buyer’s interest instead of always trying to push a sale in order to get paid. The current system is dysfunctional because there is a direct conflict of interest. The higher the sales price, the more the agent get paid so how can they possibly work in the buyer’s best interest? However, if the agent gets paid a flat fee based on customer satisfaction, there would be no conflict of interest. A good, valuable agent will have repeat customers and benefit from customer referrals while a bad realtor will simply get screen out of the industry altogether.

Real estate agents are not certified financial advisors, analysts or economist and do not have the qualifications to give financial advice any more than I do. Customers need to understand that just because they’re real estate agents doesn’t mean they know what they’re talking about. Most of them are under-qualified people looking to make a quick buck.

I don’t like to make generalizations, but you must question the validity and accuracy of their advice when their income directly depends on you making a transaction. You must question their motives. I wouldn’t take anything a realtor says for more than just a grain of salt. Besides, when was the last time you heard a realtor say it wasn’t a good time to buy a home?