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Real Estate Reality

J0424482Active Rain is a real estate website with a member’s only portion. There is a conversation over there about NAR not posting a Realtor’s comment in disagreement with NAR which in a nutshell boils down to a classic quote: “(NAR) pumping sunshine up the skirts of the consumer will lead to distrust, so when there are clear signs the market is turning, no one will believe it.”

Unfortunately there are too many agents pumping sunshine up the skirts of their clients right now. We visited a listing today that is owned by a relocation company. Black and white flier outside with totally inaccurate information. Once the occupant (owners become occupants when they transfer interest to the relo company) moved out they took the spa, entertainment system and other items that were still listed on the flier. That was months ago. The relo company called us saying they had an expired listing. True, they also have an active listing and a withdrawn one. The agent would be toast in front of any governing body.

If a listing agent shows up at your home and can give a suggested listing price on their first visit, they are full of it or at best doing you a disservice. We’re previewing homes and spending more time than ever discussing/arguing about pricing (neither one of us consistently higher or lower). We interviewed for a listing where we recommended a price of $675,000 and that it would sell for $650k-ish. It is listed for $749k. We’ll see when and how much it sells for. We pay to list homes; of any Realtor’s hobbies, collecting listings should not be one of them, selling listings should be. Overstating price doesn’t do either the Realtor or client any good in the short term but may generate a sale eventually for the Realtor at a lower price than it would have sold for on day one if it had been priced appropriately.

If it sounds too good to be true it may well be. There is a caveat here; sometimes we’re just plain wrong. The market ultimately determines price.

10 Comments on “Real Estate Reality

  1. I’ll go back to Buffett on this discussion:

    “Many helpers are apparently direct descendants of the queen in Alice in Wonderland, who said: “Why, sometimes I’ve believed as many as six impossible things before breakfast.” Beware the glib helper who fills your head with fantasies while he fills his pockets with fees.”

    http://www.berkshirehathaway.com/letters/2007ltr.pdf

  2. Here is some truth in advertising for you. It is an active listing and this is what is in the public remarks (emphasis added):

    Best value for detached house in John’s Landing! This ugly ranch style home needs some TLC but has great bones including hardwood floors. Excellent close-in location with restaurants and a Starbucks nearby. No common walls or condo living either! Bring a buyer who has some vision! One car attached garage!

  3. Charles – in response to your suggestion that excessive sunshine in these times can lead to distrust. I’m looking for realtors who are informed, intelligent, and looking out for my interests. If I encounter one who wants to deny the reality of today’s market, I will assume he’s uninformed, dim, or dishonest. In all fairness, when I see new listings at overvalued prices, I don’t jump to the conclusion that the realtor is at fault. It could be the seller who’s living in a fantasy world.

    That said, the local press has done a lousy job of reflecting the realities of Portland’s market. They’re benefiting no one, not realtors or their customers. As for those sellers listing at high prices…from all the price reductions, it would appear that people are starting to realize that times have changed.

  4. Relocation Company:

    Big companies (Honda, Nike, etc) use relocation companies to manage the movement of their employees. In some cases, when the employee is moved, the relo company buys out the employee so they can purchase a new house in their new hometown. Every relo package is different. Some just take care of everything, some take care of nothing and pay the bills or give an allowance.

  5. Charles, so it goes being a Realtor. The NAR’s Code of Ethics has pretty much stated that no agent is to speak ill of another agent/broker or RE company. My own experience of dealing with my local association made it very clear to me that the sun is constantly shining everywhere and on everyone.

    For someone such as you and your wife, with MBAs, as well as being top producers in your office/company, you definitely offer more to your clients than most agents, but the NAR limits how you can state those differences. It’s about time the NAR starts to address some of these issues, otherwise they will be address in a court of law.

  6. Educate me. What does a realtor with an MBA offer that a ‘traditional’ realtor can’t or doesn’t? I am not being snobby, really, I just don’t know these things.

  7. Ah, I see. So the value is in not having to stress about selling one’s own home when moving to a new area by a certain date.

    There must be a whole can of worms in dealing with valuations when having it taken over by a relo company, especially now. So I’m not pumping people for details, does anyone have a link about it?

  8. Bearlee, that’s a great question. With a very low barrier to entry, many agents do not have much education past a year or two of college. Of course, education is not the endall in your choice of real estate agents. But you are making one of the biggest financial decisions of your life. So I prefer to have someone with analytical skills to help me with my real estate decision. Many agents do not analyze a deal for their clients.

  9. Kevbo is right but no college is required at all to be a Realtor. That said, one of our really good friends is a really good Realtor, very successful and has no college under his belt.

    I don’t know that you can quantify the difference of a Realtor’s education level. I’d like to think that I analyze and present the situation better but maybe not. I don’t always seem to be able to get my point across in this forum. Our society values education- any of the doctors at OHSU have their certificates framed on their wall? Any of them have more education that is required to perform their job? Did our MBA’s contribute to being featured in the Oregonian on Sunday as one of Prudential Real Estate’s (national) top 3% after four years in the business?

    If you are looking for a Realtor, I would highly recommend looking at the whole package, not just experience and not just education.

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