Do YOU have a durable power of attorney?

So, I haven’t been on RCG for a while because I am gone from Seattle to Wichita, KS where I and my siblings are on hospital watch. My parents were hit by a drunk driver on Monday night and so I caught a flight here immediately since both of them were in the hospital with injuries. My dad has a brain injury and has been unconscious for several days now. For anyone that is interested in reading my blogs about the experience feel free to do so at this link:
When I’m working with clients there are always situations that come up where we have to deal with difficult circumstances. My partner, Michael, and I frequently ask our clients if they have a durable power of attorney. Typically we make it for a specific property based on the transaction and usually the title company has to approve the POA to insure the purchase. Sometimes the POA is put in place under in the context of just making sure we are able to get signatures if there is a spouse or partner that travels a lot or an out of country trip is planned that would make it difficult to get notices or addendums signed. I’ve used these when I have siblings in multiple states as well who are buying or selling property.

Thankfully my parents did put together POA’s about 4 years ago. My mother is a REALTOR(R) in Wichita and my dad works with her as a licensed agent. They also own several rental properties and they had just received mutual acceptance on an offer for one the day they got in the accident.  My mother is conscious, although on pain medication for her broken bones, and she is aware enough that she knows what is going on and can sign things for herself. However, while I am my dad’s medical POA one of my siblings is his financial POA.  I’ll likely have my sister sign for my dad just so there is no question about mental faculties with my mom when the additional paperwork for this transaction is turned in.

It’s been a relief for me (and I think my mom too) to be able to come in and help out with her business while she and dad are in the hospital. I can’t practice real estate agency in Kansas but I have contacted some other agents that know my mom (she’s been an agent 20 years) and they’ll help with any items that require licensing and I’ll be a knowledgeable “gopher”. This also relieves stress from my siblings who may not know what they should do for her contracts and listings. I hadn’t really considered I’d have to help out in this way, but I sure am glad that I can.  It helps to also give me something else to think about rather than my dad in ICU.

My comments to all that read RCG is that if you don’t have a durable power of attorney for your personal affairs you really should do it and the sooner the better. You never know when a truck will slam into you and render you unconscious and you’ll need help with your medical and personal affairs such as paying bills. We stress this kind of long term planning to pretty much all of our clients and we host a client event every year that covers things like this to prevent more cases like Terry Schiavo. I hope you’ll consider it and go do it soon yourself.

Whose client is it, anyway

Scenario: buyer says that they will be buying in 3 months. You say, perfect, let’s get you pre-approved so you’ll be ready by then. You believe the buyer until they call you 5 days later with the great news that they just bought new construction from a site agent! Aren’t you happy for them? 

But before you get really mad [photopress:mad_face.JPG,thumb,alignright]and start telling your clients they didn’t have representation, consider the following and you’ll see it’s not black and white. 

Most buyer’s agents hate new construction sites, especially those with site registration policies since they could lose their clients to the site agent. A few builders (notably an ex-agent on the Eastside, name will be supplied upon request!) will only pay the buyer agent 1% if the buyer goes to the site the first time without the agent (whether or not the buyer says they are working with said agent). But normally the site agent, if they are getting paid by the builder will be agent friendly and not give you a bad time and if you write it up, you’ll get paid.

The question is, can a site agent adequately represent a buyer?

The answer:  It Depends.  Here are the different models that I know about 

1. Builder can hire an in house team, where the agents work for the builder, sometimes on salary and are generally the listing agent and are privvy to all the deals that have been written.

This is the best scenario for the builder since the agent can not go elsewhere to earn money. The agent isn’t paid if the site doesn’t sell.  This agent is not able to represent a buyer. 

2. Builder can sub-contract to a marketing team, say “company A”, where the listing agent again can not pick up clients and take them off site under any circumstance. If there is a buyer for whom that product does not fit, then the listing agent is encouraged to refer that buyer to one of the team of agents who is associated with Company “A” but not a site agent. The site agent, the builder and “company A” each share in the referral portion of the commission if the referral agent sells the client. These agents are labeled buyers agents and are often on site to meet with buyers, but first the listing agent must be thoroughly convinced that their site is not a fit for this buyer. This can be a great source of buyer clients for the referral agent although there is a stiff referral fee Not as good for the builder, except for his 1/3 share of the referral fee since there’s not any incentive to sell the builder product especially if the client wants to come back to the site, the referral agent will not get the sale.  Can this work for the buyer? I’d say, maybe but there’s the big problem with going back to the original site to buy in which case the referral agent won’t get paid and may try to talk the buyer out of this.

3. Builder can sub-contract to a marketing team, say company “B”.  Here, the listing agent is not the agent that puts in time at the site. The listing agent represents the seller and hires a staff of agents out of company offices that are buyer’s agents. These agents may get a couple hundred per door, but they say they are buyer’s agents and in general are not privy to insider information.  These agents will likely have a sign, “buyer agent” on their desk and should advocate for their buyer in any discussions with the seller.  However, if this agent continues to work the seller for price considerations, etc, you can be pretty sure the builder will ask for the removal of that agent.  So, I still see a conflict of interest here.  If the agent consistently works on one builder’s site, then I’d wonder to whom loyalty is given.

4. Builder can sub-contract to a single listing agent.  In this case, the listing agent is probably too small to have much of a program in place for a team of site agents. They might casually bring other agents in to the site just to pick up buyers and to work when the listing agent doesn’t.  If the site is small, this is often the case. The listing agent in this case is often the agent that brought the builder the land. The buyer’s agent rarely know anything about inside information and are on site simply to help buyers. I call this Site fill in work:  This is a great avenue for prospecting for a buyer but I’ve never understood why a builder would want to have his site full of agents who earn an SOC either off or on site. At the first negative hint that a buyer might not like the builder product, the agent whips out the computer and starts showing buyer other properties. If I were the builder, I would be looking for 2 person listing teams to cover all shifts.  Does this work for the buyer? [photopress:j0400346.jpg,thumb,alignright]If the buyer meets the fill in buyers agent and connects, I believe this is a great situation for a buyer without an agent already, otherwise you’ll be working against the site agent for this client.  The site agent can represent the buyer possibly better than a non site agent because they know the plat and product better and presumably know new construction better. That agent owes no allegiance to the builder and can very well advocate for that buyer.  For instance,understanding how a builder addendum and limited warranty really affects a buyer isn’t something most agents are familiar with. Did you know that one very prominent builder requires the first buyer to hold the builder harmless if there is a sale before 4 years and the second buyer is part of a class action law suit? Would the average agent understand those 12 pages of builder addendum well enough to read this and have their buyer consider the repercussions? and to realize there is often an automatic removal of the financing contingency in 2 weeks?

So before buyers or other agents decide how bad it is for a buyer to choose to work with an agent they met on site, first you have to know the relationship of that agent to the seller and in some instances, I think the site agent makes a very strong buyer’s agent.  So best move is to tell your buyers ahead of time what will happen when they go to a new construction site without you and study those builder contracts.  I used to give out a blue “buyer passport” book that had a spot for my business cards and a place where the buyers could write down each site they visited. That way, you’ve gotten a step ahead of them and it makes a great opening for the “watch out for the site agent” speech. 

It may be broken, but here's a plan to fix it!

Ah, finally get to catch up on reading some RCG posts. What a prolific group this is! Makes you wonder just how important a degree in creative writing might become to the average agent in the future. I’ve been busy cuz I’ve been doing alot of recruiting these days.  So, when Eric, in a recent post  wonders about the mega agent model works I can’t help but commenting that it works great for the mega agent and not so great for the mini agents on the team and especially not so great for the customers of said Mega Agent who may not want to be foisted off on a newbie. Ardell says that the industry is broken because agents don’t help train newbies anymore. Couldn’t agree more. Fact is, there are agent training programs within offices, called Mentor Programs, but they cost the newbie a lot. I just heard about one such program that offers the mentoring agent 70% of the commission! No wonder its broken, but I have an idea of house to fix at least a part of it.

I wonder if people outside of this industry know that 85% of all new agents have left the business within 2 years and that average agent income is around $32,000 below the average household income of $34,000! When we talk about the industry being broken, how could it not be when out of every 100 agents, 85 of them have under 2 years of experience practicing in an industry that demands a high level of legal education and an equally high and complicated knowledge base. I’ve blogged before about the need to raise the bar for new agents. But I don’t see it happening unless I want to get on the Real Estate Commission which I don’t want to do. Untrained agents are like driving over a train track with the train coming. Shoot, I once had a seller move out a month early because his agent misread the financing deadline for closing of the transaction! Like Ardell, I could tell thousands of other stories. Isn’t the fact that there are so many newbies who are inadequately trained but allowed to handle any kind of transaction greatly affecting the quality of service to the clients? Doesn’t this create most of the problems with transactions?

So, now I’m in a position to make a difference. I can’t affect the other agents but I can sure affect the ones at LTD. There is a huge fault with the traditional business model for a real estate company, starting with recruiting.  When recruiting, brokers use the same practices to recruit new agents that you find in multi level marketing. They point to the super agent making all kinds of money and driving the ego car and hold them as the example of what the newbie can become. It’s enticing and makes the mouth water. The newbie can hardly wait to get a piece of that fortune and so eagerly joins the firm with all the zeal and ambition that should make them succeed. They are given the standard goals: take forms classes, establish a farm, knock on doors, do open houses, develop a sphere and take floor time.  But sadly, they don’t usually succeed with this advice. At least not 85% of the time.

Part of the problem is the upside down business model in the traditional company. This model and the model taught in broker training, is that once an agent has earned enough, typically $50,000 and splits this 50/50 with the brokerage, then that agent no longer earns money for the company, and is, in fact, a drain on the office, supples, training, etc.  Instead of being tied to the ongoing success of the agent, the office does just the opposite and depends instead on recruiting new agents instead of developing what talents they already have. Why, because their model is make $25,000 from as many agents as they can. Thus the revolving door.  Agents that carry heavy listing farms are also recruited but not for the reasons many might think. The heavy listing agent is sought after by almost all companies because they get the companies name on the streets with signage and have listings advertised to get the phones to ring. Do sellers know that their home isn’t advertised in the paper to necessarily get it sold as much as it is to take up print space and serve as image marketing? Plus the phone rings at the office to give the ‘up’ agents leads thereby providing a way for a new agent to get business.The newbies often do the open houses, not to sell the home, but to develope clients.

But what I think is an even greater cause of this failure are the many, many hats an agents wears, all requiring a different personality, skill and intelligence level. They must understand and implement all of the forms used in listings, sales, Federal forms and laws (asbestos, lead paint, fair housing) without which they can look at jail time and/or fines, disclosure subleties, etc. A typical agent must also learn how to read people, how to know just when to push and when to hold back. They must be strong enough in a listing presentation to sell themselves as the best while empathetic enough to work with buyers and understand their points of view. A good buyer’s agent must know how to perform a buyer consultation.and know how to find the exact right house out of the many thousands that are on the market, and not have buyer’s remorse.   A typical agent must know geography, house styles, demographic trends, know how to price, employer information, school information, church and communtiy information, transit information, structure and design.  Additionally, this practice requires a high level of negotiating skills, assistance during the inspection where many deals take a nose dive, plus the ability to stay on good terms with other agents in the market place without which they are doomed.   Agents are asked for advice on mortgage progrmas, title issues, need to understand and explain builder addendum (if that’s possible) and warranties, understand the escrow process and data base management, etc.

This is but a small list of the knowledge and skills an agent must have or fail. But, as if that weren’t enough, they have to be able to wear a marketers hat, as well. What is the best way to attract clients? How do you ever set up those lucrative programs aimed at building a referral base. Do you advertise in magazines, newspapers, online, do you buy lead sources like House Values, do you blog, do massive mailings, do you establish a farm?  Who will build a web site and teach how to make it a useful lead source. And on and on.

Do you see why it is ludacrous to ask all these skills of one person? How could any well balanced individual know all of this stuff and still have a life. Even the mega agents who scale as Eric has suggested might be a good real estate model, these agents must be even more talented since now they must also be managers, and, worse, they are ultimately responsible for errors made at any level by the team, any lawsuits, ommissions or mistakes by the assistant will be born also by the mega agent.

What we see in other companies in America are several different departments with different specialties and responsiblities.  When I owned two restaurants, a nightclub and a boatyard and marina, as you might imagine that I had 10-12 departments reporting to me at any one time. And I certainly didn’t know how to repair a twin screw diesel engine nor could I entertain as well as the All Male Revue! I contracted out marketing, I hired bookkeepers, I paid well for department heads that were specialists in their fields. Why not have a real estate company set up the same way, i.e., with different departments doing what they each do best. The agent should be the person who is face to face with the clients, not the person who is mailing out postcards or doing the research on the different lead generator sources. Even deciding how to outsource the different parts of the job is time consuming.  Each agent should work with the PART of the business that best suits his or her personality style, and you determine this with a personality assessment and lots of coaching, i.e., if you want to work at night and you are not shy and have a commanding presence, you’d probably like being a listing agent. If you get your kicks out of assisting someone in finding their dream house, you’d probably love working with buyers. If numbers fascinate you and you love the work of high finance, you’d probably prefer investment real estate and if you can’t tear yourself away from watching a home get built, you’d probably love new construction. For the well connected, whether by church, networking groups, family, and all kinds of social groups, and you love to give parties, then a referral based practice might work best for you.

Agents need to know themselves and find their own best fit in the business, then I firmly believe that they will succeed at a much higher level and make it through the first two years better than if they follow the typical one size fits all advice of their broker. Or, worse yet, take every referral coming from the relocation department and only make about 30% and lose belief in themselves.  As the agent grows, learn the ropes and learn what they love to do best, then migrate throughout the different departments within the company and take on more challenges.

We need a new model. We need to create companies where the agents are treated as individuals and trained as such. Where it’s acknowledged that they can not wear all the hats at once.  We need to have all the effective marketing in place and offer assistance with implementing it. We need to provide FREE leads to our agents. We need to create an economic model where the agents continuing success is directly tied to the continuing success of the office.  We need to give agents the reason to stay loyal to the company and to take away all the stumbling blocks to success.

It’s a huge order, but doable. I know and it works. Start out with bright, likeable and agressive people, have programs set up in the different fields within real estate so there is enough diversity, have the marketing materials and programs researched and implemented so that the agent can be with the client and do what they do best.  Have the negotiation, legal and transactional support to augment the knowledge base of the agent, and mentor and coach as long as necessry. This is no Walmart model, nor is it a Costco model. It’s not the super agent model where only the super agent makes a good living, it’s a Super Office model where all can do well, all are supported, teamwork is highly regarded and there is incentive to grow the company, too. A happy and successful and nutured agent will cure this industry of what ails it. 

Why I do not support the use of Buyer Agency Agreements

[photopress:buyer.jpg,thumb,alignright] For many years I have been at loggerheads with most of my peers around the country, regarding the use or lack thereof, of Buyer Agency Agreements.

After eight years of “ad nauseum”, insider agent forum discussions on this topic, I continue to feel that buyers are most often, better off without them. Most often I am the only agent, in a forum of 28,000 agents, who does not support the use of buyer agency agreements. So maybe I am the “loggerhead” who refuses to “get it”.

The only time I will use them, and I have used them, is when there is a clear and present reason for the buyer to have one, that is of benefit to the buyer. Everything I do is on a case by case basiseverything…and must pass my smell test for being right for this client at this time, given the objectives of this client. Often I wish I didn’t impose that ethical standard on myself 🙂

I was one of the first agents to use a buyer agency contract in the area I worked in at the time. The buyer had a previous bankruptcy. Under the rules in play in that area at that time, I would need to disclose the previous bankruptcy to the listing agent, even though it had no potential negative impact on the seller, as it did not affect this buyer’s ability to secure a loan. The only way I could get around this, was to explain this to the buyer and have them sign a buyer agency agreement. They agreed, we signed it, and the buyer got both the loan and the house. Some disagree with me on this and feel the seller has a right to know everything about the buyer, regardless of whether or not it will impact the seller. I do not agree.

Today, in this area, I do not need a contract with the buyer to represent the buyer, but at that time and in that place I did, so I used one in that particular case. I used one because the buyer could not attain their objective, buying that house, unless I did use one. It passed my smell test of being better for the buyer client for me to use a written buyer agency agreement.

Some of my peers argue/ask, “Why do you always use a contract with a SELLER client?” as if the issues are one in the same…a “contract is a contract” is their mantra. I always use a contract with a seller, because it is in the best interest of the seller to have all of the members of the mls show the seller’s property. In order for the seller to gain access to the mls, the sellers must sign a written agreement to pay, through me, the agent who shows the property and brings an acceptable and accepted offer. In other words…it passes my smell test for being best for my client for my client to sign it.

“Disguised” FSBO Market Share

Some big news happened last week in Texas which I discuss on my blog [link removed]. In a nutshell, the FTC obtained a Consent Order from the Austin Board of Realtors to eliminate a rule that treated Exclusive Agency Listings different from Exclusive Right to Sell Listings, at least with respect to the publishing of those listings on public web sites. Rules like these have been adopted to deal with flat fee listing brokers who did nothing more than insert the listing into the MLS database. In other words, these are “disguised” FSBOs where the owner has agreed to pay some selling office commission but usually receives little or no additional help from the listing broker.

In its investigation, the FTC found that, prior to the adoption of the rule, 18% of the listings in the Austin MLS were Exclusive Agency Listings. Once the rule was adopted, the number of Exclusive Agency Listings dropped to 2.5% of the total.

I have always heard that the FSBO rate was somewhere around 10-15% nationally. Since the 18% figure does not include what I might call “pure” FSBOs where the seller basically hammers up a sign and calls it good, the actual FSBO rate in Austin (before the rule adoption) was probably greater than 20%. Is this surprising? Do you think it reflects historical numbers or is some kind of trend? Any thoughts on where the 15.5% went after the rule was adopted?

California realtors make a call for higher standards…

There was an interesting article (requires a subscription) on Inman yesterday about the California Association of Realtors ( pushing for higher licensing standards. CAR’s president noted that currently in California someone who cuts hair requires more training than real estate agents to obtain a license for their profession.

I applaud the fact that the industries own are finally calling for improved standards — though I’m not sure they are asking for a high-enough bar, but that’s just my opinion. Currently in Washington, the Department of Licensing requires you to be at least 18-years old, complete 60 clock-hours of training and pass the state exam with a score of 70% or better.

I personally would not want to be represented by that agent who scored 71%…I’ve already met enough of them across the table. It’s not all bad though…Let me also state that I HAVE BEEN impressed with the quality of agents hired by some of the more well known brokerages. They have displayed the professionalism I wish we had across the board in this industry.

So what do you think? Is 70% a reasonable bar for licensing? Should an AA or Bachelors degree be required? Is it the amount of clock hours that matter or the testing to demonstrate prociency in what you’ve learned.

Lots More than Just the Sexiest Real Estate Agents

It’s been a while since I had a real “ramble” post, but considering the occasion, hopefully people will forgive me for trying to cover a lot of ground in one post.

Happy Birthday to Rain City Guide!!!
It’s been one year since I wrote my first post (Hello World, of course) on Rain City Guide. I probably would have taken down the first post since it was just a test except we got a comment right off the bat and I’ve never been very good at deleting comments…

I have no (clear) idea where RCG will go over the next year, but considering the real estate industry is clearly in a pivotal position and I’m extremely excited to have front row seats.

New Broker For Anna
LTD Real EstateWe’re excited to announce that, as of today, Anna has officially switched her broker to LTD Real Estate. This major change for Anna began when I struck up a conversation with a broker at LTD, Jon Ribary, after noticing that we were both developing tools to map Seattle listings this past summer (who wasn’t???). Just like my gHomes tool, his search tool hasn’t kept up with some of the amazing tools that have been released recently (including ours!). However, our similar interests led to many conversations and ultimately a much stronger bond between Rain City Guide and LTD. Anna and I look forward to working closer with Jon and his staff in the days, weeks, months and years to come. If you’re wondering, don’t expect much to change here at Rain City Guide based on Anna’s move to LTD (besides the logo on our sidepanel!). Anna’s move is really related to the fact that she was searching out a broker who understands that the real power of marketing on the internet is when you use the tools to communicate with potential clients as oppose to talking at them. About the only thing you can expect to change is that Jon and I have some ideas for side-projects that will allow RCG to continue innovating so that we can achieve our mission of being the best resource for real estate information in Seattle.

Ride Home from the MIT Forum
The MIT forum is tonight and it is sold out in a major way. I definitely plan to attend, but I have a minor issue in that we’re a one-car family and Anna has something else that she must attend. Getting between my work in Downtown Seattle and Downtown Bellevue tomorrow afternoon without a car will be easy. The part of the trip that I’m not sure I can handle is the trip to my home in Crown Hill this evening. Is there someone attending who wouldn’t mind giving me a lift home after the forum is over? Found a ride home! Feel free to email me directly.

Sexiest Real Estate Agents
I was checking my log files earlier today when I noticed that someone came to Rain City Guide based on the Google Search: [sexiest+real+estate+agents]. I was deeply saddened to find out that we are ranked a dismal #2 on this all-important search. So, if you are a blogger interested in helping us celebrate our birthday in a zany way, consider linking to this post with the phrase “sexiest real estate agents”. I’ll bet it won’t even take a full week for us to be rated #1! Okay, it is obviously getting late, so I’m going to go to bed and try to sleep off the celebratory Champaign that Anna and I cracked open tonight!

What do real estate industry people talk about?

My 10-12 weeks of “blogging” have been quite interesting for me, in that for 15 years I mostly have talked about the real estate industry with other industry people, and talked about local real estate with my own clients and local agents. Blogging opens up talking to consumers generally about the industry, which is in and of itself, quite a revelation.

Given I will be attending the MIT dinner event tomorrow, I am contrasting the speakers of that event with the participant theories of my normal industry discussions. Tomorrow’s event will be “the newbies” Zillow and Redfin plus HouseValues, whom I wouldn’t call a “newbie”.

I am “lifting” this discussion of the past few days from the forum that has been around since 1995 or so, and I have participated in since 1998. I thought this particular discussion was a huge complement to whatever I may hear tomorrow night. For the benefit of those attending tomorrow night, you might want to read this beforehand for “balance”. I have removed the names, except mine, since I am “lifting” it out. I think at least Robbie’s interest will be peaked by that part of the discussion that suggests that the MLS may cease to exist as an end result to all of this.


Agent A says:

I would guess that there is not a large brokerage in the country that doesn’t have plans to withdraw from MLS depending on the outcome of the DOJ suit. I believe that many large brokers are considering withdrawing from MLS REGARDLESS of the outcome of the DOJ suit…

All across America, in every major city there are 3 or 4 large brokers who control around 80% of the inventory. If COURT mandated MLS rules don’t make competitive sense to those brokers MLS will END.

Even if you and Attorney Barry and the rest of the majority of the NAEBA are victorious your victory will be pyrrhic– MLS will be run YOUR way but it won’t contain enough listings to be a market force.

“Ardell” wrote:

What I am asking everyone one to focus in on is what “should be” as opposed to what “has been” since before buyer agency existed.


My major beef with the industry is that buyer agency was set into a system, parts of which should have been revised accordingly, and still need to be revised.

Agent B says…

Could it be that buyer agency will be given as the justification for the large brokers pulling out of the MLS? As Ardell notes, the whole system is a carry-over from a time before buyer agency. Does it really make sense to “cooperate” with other brokers in an adversarial relationship in the same way as when it was a subagency relationship?

One could argue that a listing agent is not truly acting in their seller’s best interest by making the property available to buyers working with their own agents until they have made every effort to find a buyer themselves. If a buyer agent is really going to save their buyer money, help them get more concessions, etc, isn’t it in the seller’s best interests for their agent to find an unrepresented buyer?

Consider this hypothetical situation:

Large brokerage with a state-of-the-art website and large advertising budget decides that they will take all of their listings as exclusive, non-MLS, non-cooperating listings for 45 days. No lockbox, the listing agency will conduct every showing, and there will be no showings to buyers who have not gotten a mortgage pre-approval. During this period, they will not do dual agency, and will attempt to find buyer customers for their listings. If they do not sell in 45 days, the listing will then be entered into the MLS. Their justification for this is that they believe that this maximizes the chances that the seller will get an offer that is in their best interests. Is there anything that would be illegal or unethical about this?

I think it is very easy to come up with scenarios in which the MLS becomes the dumping ground for the bottom of the barrel properties and over-priced dogs. It’s also easy to see scenarios in which MLS entries are very bare bones affairs with just enough info to generate a lead from, but not enough to be useful for other agents anymore. I find it very hard, though, to picture a scenario in which the large brokerages will just happily keep providing data-rich, picture-laden MLS entries for all of their listings, if they lose control over how and where these listings will be used and displayed.

I thought this might be food for thought for those who have not considered how the industry might change in order to counteract the events currently taking place with regard to mls access.

Are real estate agents an endangered species? — upcoming article

Heard an interesting interview with economist Steven Levitt on NPR this morning. He co-wrote an article that will be coming out in the New York Times Magazine titled Endangered Species – The future of real estate agents. He dicusses all of the innovations going on right now in real estate and how like travel agents we will become obsolete as “all we do is connect buyers and sellers on the MLS system“. Oh how easy my life would be if my work ended at the point I put a listing on the MLS.

A second point he makes in his radio interview is that in spite of the “high commission” most agents don’t make that much money. The reason is there are so many agents chasing the available deals that they have to spend so much time finding new clients. Look at California where 1 in 75 people has a real estate licences. This touches on my pet peeve. If the real estate industry really wants to be viewed as the profession it should be, than they should raise the standards of what it takes to become an agent. I’ve just looked at too many incomplete contracts, had an agent try to force his way (without prior notice) into a rented unit at a duplex I was selling and other instinces that demonstrate an individual with the intellect to fog a mirror but not much else.

It should be an interesting article. So what do you think? Is the real estate agent going the way of the Dodo? Do people really want to buy a house from an “ for homes” or an agent that can guide them through the whole process? How about the idea of fee-per-service or hour basis instead of percentage of sale?


"Klaatu Verata Niktor"

Before we read Osman’s piece on Buyer’s Agency, let’s do a little review.

Does the seller or the seller’s broker really pay the buyer agent’s commission? To suggest, as Osman does, that the buyer is getting a “free ride” (down the garden path), is too simplistic.


The day we envisioned that buyers would control their half of the transaction, we, the real estate industry, spent about 30 days toying with the concept. Then, in a New York Minute everyone turned on a dime and backpeddled to their comfort zone. That place where the seller and the seller’s broker controlled everything.

When you start talking about Buyer Agency in this Country, you might as well be spouting “Klaatu Verata Niktor”, as only agents seem to want to talk about it, while the general public’s eyes glaze over.

Buyer’s want a house, sellers want a buyer, and agents want to talk about agency.

Osman, buyer’s pay the buyer agent fee, not the seller. Unless we think of it that way, buyer’s will never be empowered in this Country, regardless of this whole data control “smoke and mirrors game” everyone is playing.

There are still many old curmudgeon rules in play, that prevent the buyer from truly controlling that fee, but let’s not suggest that buyer’s are getting anything for “free” please. The day the buyer takes possession and the right to pay a big mortgage payment every month, he starts paying for that fee in his monthly payment. The fact that he finances that fee, does not mean he doesn’t pay it…he pays it with interest!

Until we recognize this fact, buyer’s will remain Klaatu’s and will never become true Jedi’s.