I might be the only one who thinks Realtors are sales people. In case I’m not, here is some clarification about realtors.
Realtors are not sales people. Realtors are “experts” in the pricing, marketing & paperwork regarding home sales. This is what the realtor does:
They come to your house with a long presentation of the “comps” in your area. Based on these “comps” they advise you to list your house at a price much different than your understanding of the “comps”. To be clear, you have already done your homework, which is simply looking at Zillow to find out what has sold & what is for sale. Not rocket science, no secret tricks. The realtor has the exact same information you have. There are 3 types of realtors when it comes to setting the listing price:
1 – gives you a ridiculously high number. They appeal to your pride and greed. You will want to go with them. Two weeks after listing they will advise you to drop your price by at least 5%.
2 – the one who gives you a ridiculously low number. You won’t hire this person; rightly so. Be aware though – this is probably the price you will get.
3 – the realtor in the middle. This person mocks the other realtors. The one who is too high is simply delusional. The low baller is not a good “salesperson”, a phrase you will come to question.
I’m no longer sure it matters who you hire. Once you have hired someone, here is what they do:
- The takes pics of your property and list it on zillow. They are in charge of picking the pics and writing the description. Some are better than others at this but in the end, it’s hard to mess this up. They also list it with their own company, maybe Trulia and maybe a few other sources.
- They set you up with an app that will notify you of showings, giving you the option to say yes or no. If you say no they will call you and ask you why you said no, then tell you how short-sighted that is of you.
- Next they wait. And wait. And wait.
- At some point you’ll get an offer. They will do the “negotiations”. Once the details are settled they do the paperwork.
- Then they buy you a bottle of champagne.
That’s it. That is their job.
I have so many problems with this system it’s hard to know where to start. I’ll list just a few.
With the exception of the paperwork, a teenager can do what the realtor does. And, a smart teenager could figure out the paperwork. I guess this is why we see an increasing number of teenagers in the field.
There is no reason, at all, for a realtor to negotiate for you. In fact, it is actually to their disadvantage to negotiate for you. They have 1 goal: move your property as soon as possible. It is a numbers game, by which I mean the only way they become successful is by moving a large number of properties in a short period of time. Most people, when shopping for a realtor, are looking at those numbers only. How many homes have they sold, and how long did it take to sell them. Unfortunately, these are the wrong numbers for us to be looking at.
Realtors collude. My realtor told me all about the people making an offer on our house. Judging by their counter offer, he also told their realtor all about us as sellers. Last I checked, this is not negotiating in my favor, it is an attempt to make a deal happen quickly.
There is no reason for a realtor to try to get you a good price for your home. In fact, it is counter-intuitive for them to push the price. Suppose your property is worth $300,000. Sold at that price your realtor gets $9,000 commission. What if your property is worth $300,000 but your realtor gets an offer of $260,000. The difference to him is $1,200. The difference to you is $37,200 ($40K – 7% closing costs). It is to the realtors advantage to get you to accept the deal so he can move on to other properties. He’s going to do better selling 5 properties for less than they are worth than 3 properties for their actual value. Five properties, with commissions of $7800 equals $39,000. Three properties at full price yields him $27,000. Not only is he earning much less, he is lowering his statistics because he has sold fewer homes and probably taken longer to get them sold.
This is a crazy system. There is one strange thing that has happened during our home sale: my ex and I have agreed. Numerous times. The first thing we’ve agreed on in 20 years! Unless he’s just agreeing to whatever I say without really paying attention, which, now that I’m writing it seems to be the most likely scenario.
Suffice it to say, I hate realtors.
One final piece of advice: pick a woman. Always. Trust me on this. Pick a Woman.