WSJ: The Realtor Racket - The victims are middle-income home buyers and sellers.

Wall Street Journal ^ | August 12, 2005 | Editorial

[LetsRok]

There is absolutely no reason why a real estate agent must get paid twice as much for selling a $400,000 home as he gets for selling a $200,000 home

One reason is that there are fewer people who can affort the higher priced home, so the marketing plan is different.

[LetsRok]

How about a fixed rate of $1,500.00 - $2,500.00. I'm a professional myself and I don't believe they deserve $1,000.00 an hour for what they do.

Do you even know what a licensed real estate agent does? Most people think they just take people around showing them houses. That is the easy part. Real estate agents and mortage brokers are TWO SEPARATE INDUSTRIES.

[lafroste]

I am aware that mortgage brokers and RE agents are different things. I know what a real estate agent does because I have played that role in my own transactions a few times. It simply is not THAT complicated to warrant such high fees.

[NonLinear]

My Opinion:

Real estate is not difficult, and the laws are no more complicated than any other laws.

Realtors know they are over-paid for what they do. How do I know this? Every time I've sold my home as an owner, they immediately try to discount the price by 6%.
If it is worth 6% for them to do it, why is it not worth 6% for me to do it? I bought a color printer, took pictures, made color brochures as I needed them, built a box to put them in, out front and had a sign printed up. Cost? Way under $1,000. Commission? It would have been $12,000.

The only reason to use one is when you HAVE to move out of town, and have to sell your house in absentia. It is a big pain in the arse to sell a house when you are hundreds of miles away.

But, that's just my opinion. I work on my own car too, and do my own home repair unless I don't have the tools to do the particular job.

[cbkaty]

It simply is not THAT complicated to warrant such high fees.

You may change your approach if and when you get sued....for overlooking a minor detail....regardless of whether the complaintant wins or not....you will have to defend yourself. A litigation attorney will ask for a minimum of $5,000 retainer...but then maybe you can become an attorney over the weekend too...

Yes I am being sarcastic...and I assure you I mean no harm...GRIN

[Dems_R_Losers]

The National Association of Realtors is the biggest legal organized crime syndicate in America. Not only are they rigging state laws to prevent competiton, they have bought many members of Congress and gotten appropriations riders to prevent the Treasury from enacting regulations allowing national banks to enter real estate brokerage or management. (The NAR is the largest trade association PAC in the country.) They successfully fought HUD regulations that would have forced them to reduce closing costs and cough up some of the profits from title insurance agencies that most large brokerages own. They run advertisements trashing even Republican congressmen who dare to oppose their cartel. They have been on a jihad for five years against Rep. Mike Oxley because he refuses to allow a committee vote on their bill to permanently keep banks out of real estate.

Not only are the realtors rigging the system politically to prevent competition, they are largely responsible for the housing bubble that has priced many ordinary Americans out of the market. They will set a sales price 5% higher than the last sale in the neighborhood, then tell all the potential buyers that prices are about to go up even more so they had better take that price or bid even higher. They are able to generate bidding wars and get buyers to sign escalation clauses that guarantee themselves larger commissions. They get 6% for doing nothing in most markets, because houses are selling themselves. I know people who have had threats made to them by realtors when they listed their home as For Sale By Owner. When they give market analyses to sellers, they will not include any FSBO sales because they almost always sell for less than homes sold by realtors. They take huge illegal kickbacks from mortgage brokers to get access to their buyers, or if their brokerage happens to own a mortgage company, they will steer the buyer to their mortgage company and lock out the mortgage broker who might have a better loan deal for the buyer.

I had to use a realtor when I moved last year because my company paid for my relocation and it requires realtors. I had a wonderful realtor and she ended up doing a lot of work because the closing got screwed up - in fact, the buyer's realtor screwed up by failing to inform us that the buyer actually had a contingency, which was not met before closing and so their loan did not go through. Our realtor found another lender that made the loan in a day. That is great service. But was it worth $36,000? I don't think so.

[cbkaty]

The National Association of Realtors is the biggest legal organized crime syndicate in America.

Could you be exagerating just a tad...or do you also do the NARAL ads and work with Harry Bellafonte? Jeesh!

[LetsRok]

They will set a sales price 5% higher than the last sale in the neighborhood, then tell all the potential buyers that prices are about to go up even more so they had better take that price or bid even higher.

The real estate agent IS SUPPOSED to get as much for a property as the market will bear. That is what the seller is paying for. If my neighbor sold his house for $600K I would be stupid to not list mine for at least $610K once his is off the market.

[cbkaty]

buyer's realtor screwed up by failing to inform us that the buyer actually had a contingency, which was not met before closing and so their loan did not go through.

excuse me...but you must approve of the very contingency that prevented closing. Your Realtor is responsible for this mistake...not the BUYER's agent.

[cbkaty]

They take huge illegal kickbacks from mortgage brokers to get access to their buyers

That is illegal and will land any Realtor in jail and cause revocation of his license for life....

You simply seem to have a ha_d on for Realtors....and I resent your broadbrush accusations. Most of us as in any industry are honest hard-working people...

Man...take a walk, kick a dog...do something to blow some steam b4 you pop!

[kidd]

In some situations a good realtor is worth their own weight in gold.

We had one of those. During a super-hot real estate market, when desirable homes were selling for $10K-$20K above the asking price, our agent put us in contact with a seller who wanted a quick sale before the home went on the market. We got excatly the house we wanted, at the asking price. We've gained $100K in equity over the past 5 years on this home.

[1L]

>>Frankly, there is no way that the average person can spend a weekend and acquire all the RE law required to protect oneself in a legal transaction that can have consequences long after the sale<<

As a Texas attorney and one with sufficient educational requirements to sit for the RE sales agent's exam today, I can tell you that a class that encompases 3 weekends (which is what most of them cover now) isn't enough to meet your standard here. What's needed is a common sense approach to all transactions, insurance coverage, and a phone call to an attorney when there's a question that you don't know the answer to. Unfortunately, the problem (and it isn't strictly limited to Realtors) is that some people are too cheap to hire an attorney, but end up paying much more later for someeone to clean up the mess.

[nickcarraway]

This is going to anger a lot of real estate agents.

[tazannie]

before we put our house on the market a few months ago, we interviewed 3 realtors, and decided to try to sell ourselves. our asking price was averaged from the three estimates we got from the realtors, and we sold in less than a week, saving ourselves $20000.

there were only minor problems which were handled by our attorney. I don't think we will ever use a realtor again.

[Xenalyte]

You're a real estate agent?

I simply MUST know the answer to this question: Why do some Realtors(r) refer to themselves as "real-a-ters"?

[pointsal]

ping

[petercooper]

You can buy or sell $500K worth of Intel stock for $9.99. Why would you need to pay a $30K commission to a realtor to sell a $500K house? What a waste.

No law against selling it yourself.

[expatpat]

Well done.

[Dems_R_Losers]

I have worked for a long time in this industry. I also know people who do enforcement for HUD and many attorneys in the field. I know a lot about how this business REALLY works. Everyone in it is breaking laws all over the place every day. The greed is unbelievable. I know many mortgage brokers who have paid kickbacks to realtors. The realtors don't care because they know HUD does not have enough enforcement people to come after them, the mortgage brokers won't talk because they need the business, and consumers are clueless and don't complain. I also lived in northern Virginia for 20 years, and I can absolutely say that crooked realtors in that market have driven up prices beyond what they would otherwise have been. They control the buyers as well as the sellers.

My best friend bought a house and was represented by the same agent that had the listing. The house had been on the market for over 6 months. Yet this agent magically turned up multiple bids for this house, all with escalation clauses, and my friend ended up paying $75k over the asking price for it, because she had already sold her house and had nowhere else to go. This agent had also sold my friend's house and so she knew exactly what my friend could afford and magically brought the price up to exactly that point. If that is not a blatant ripoff and conflict of interest I don't know what is. Yet realtors get away with this crap all the time.

I had realtors call me and yell at me when I listed my house with an agency that had not sold any houses in my neighborhood, because I did not want to do business with the crooked ones. There is a realtor in my old neighborhood who has gone in to homes and convinced the elderly owners to sell their homes to her in private sales, then she "sells" the homes to her husband's construction company which puts a few dollars into them and then flips them for exorbitant prices. And guess who gets the listing and the 6% sales commission?

I know a lot of other stuff about NAR's sleazy lobbying practices, its discriminatory hiring practices, and other things that if you are a member you would not be very happy about.

[cbkaty]

I can tell you that a class that encompases 3 weekends (which is what most of them cover now) isn't enough to meet your standard here.

I do wonder what you mean by "meet your standard here"?

Maybe I don't understand your response....but I will add that unless you are an attorney that specializes in Real Estate...you need more than a few weekends of instruction.

Minimum Requirements - State of Texas

The Texas Real Estate License Act requires that an applicant be at least 18 years old; a citizen of the United States or a lawfully admitted alien; have a sponsoring broker for an active license; complete 180 clock hours (12 semester hours) of acceptable post-secondary education and prove competency by passing the salesperson’s exam. A minimum of 120 hours of the required classwork must be core real estate hours as defined by the Texas Real Estate License Act. 60 of these hours must be Principles of Real Estate, 30 of these hours must be Law of Agency and 30 of these hours must be Law of Contracts . The additional 60 hours of instruction may be either core hours or related hours from your college transcript.