Saturday, January 31, 2009

The Role of the Internet in Real Estate

With online tools like Zillow, Redfin, Property Shark, Dataquick, Melissa Data, Realty Trac, Foreclosure Radar and now, Los Angeles Blockshopper, access to coveted "Realtor" information is now at your fingertips. Anyone can now do their own research and be better prepared to enter into transactions. All of these are available in my Real Estate TOOLS/DATA Section. Throw in real estate blogs like Dr.Housing Bubble, Patrick.Net, WestsideBubble, etc., and people have a public forum by which experience and pertinent information can be exchanged.
Exactly how much, do we need realtors today? Should their commission structure be adjusted? Or, are they needed more than ever?

10 comments:

Anonymous said...

I despise realtors...really I do.

They made sooo much money in the last 5 years answering the phone and typing 'home for sale' info into the MLS.

They are the worst sort of salesperson. Lazy, incompetent and money grubbing....

Used car salespeople look better....

David said...

I think many realtors are quick-buck scheisters as well.... but they're saints compared to the ultimate bottom-feeder scum-buckets: greedy, unscrupulous mortgage brokers & loan officers.

That money is gone, spent. I saw 27 year olds go from driving 8-year old Honda Civics with body damage (too expensive to repair) to $75K Mercedes E-classes.... and that money will never have to be repaid.

Basically the whole porky overblown westside RE market is (or at least was) disgusting, almost pornographic in nature.

Screw the greedy pigs.

Maggie Knowles said...

Oh stop painting all agents with the same brush. I started working in real estate in March 2004 with the goal of making enough money to help send my granddaughter to college. I started working as an assistant for a broker who had been in the business for 30+ years. I remember reading an article that year that homes in Los Angeles were 30%-50% overpriced. I showed the article to him and he said, "There's nothing you can do except take advantage of it." I watched as properties turned over multiple times in one year. When I got licensed in Jan. 2005, I worked for a company that did loans and real estate - I got into this to make money for granddaughter's college fund and this company promised double commissions, I could originate loans and sell real estate. I'm glad I took that path because I learned how lenders got paid, the bonus they receive if they sell a particular loan by a certain date (usually end of month) and without the borrowers knowledge.

One of my first transactions, I was working for a fireman who would marry in a few months (he was referred to me by a mutual friend and came pre-approved with his own lender who had been referred to him by a fireman friend), he wanted to purchase a home before the wedding. When we started his home search, he had zero% down, and always lost in multiple offer bids. He started working allot of overtime and managed to save $20K to offer a down payment and finally got an offer accepted. About one month later at the escrow office, reading the loan documents, his loan broker had an $18K broker fee (in addition to his 2% commission). Apparently, the lender figured that if the fireman could raise another $20K, it should go to the lender. The lender never gave the borrower a good faith estimate.

We played hardball with the lender for about 6 hours refusing to sign the docs, he finally dropped the $18K to just under $5K (and this was in addition to his 2% commission), still too much, but the fireman said he could live with that. I told him that I thought the lender would probably collect another bonus if the fireman signed the loan docs before the end of the month, so he withheld until after the first of the month. I was quite satisfied when the lender called me to get the docs signed before that and I told him nope, fireman wasn't going to do that.

I learned that I didn't want to be in the loan business and left that company after 8 months.

I remember clients taking option arms, pick-a-payment loans where they pick a less-than-interest-only payment. I remember that these products were sold to borrowers who were told that they would be able to refinance their way out of the bad loan before the reset and they believed it. I remember how hard it was to get a lender to put their quote in writing. I always told borrowers to get it in writing, then shop the loan for a better deal. Some did, some didn't.

I remember reading about the office of thrift telling states they couldn't legislate against predatory lending practices. I remember the day Roland E. Arnall of Ameriquest was nominated by President Bush to be ambassador to the Netherlands as a thank you for all those campaign contributions and that on the same day of the announcement, Ameriquest "set aside $325 million for a possible settlement of allegations of predatory lending tactics." http://www.washingtonpost.com/wp-dyn/content/article/2005/07/28/AR2005072801842.html
or
http://tinyurl.com/2vg4yr
"Arnall's company, Ameriquest Mortgage Co., is being investigated by regulators in 30 states. A $325 million settlement would be one of the largest ever in a predatory lending case."

Not every real estate agent is just looking for their commission, some actually care about clients and give them good advice. Of course, it's a trade off, you don't make as much money as other agents, but I hope this changes as I build my business. I drive a 1992 Miata and hope that possible clients don't judge me as unsuccessful because I live within my means and value thrift and ethics above becoming #1 in sales in my office.

Nice blog, thanks for your good work here.

Latesummer2009 said...

This is not meant to be a realtor bashing post. As with any profession, there are good and bad in the business. We are discussing how the "Access" of information has changed over the years and how services performed by real estate agents may have changed as well.

Please try to keep your writing objective. Thanks.

Peter said...

I mainly need a real estate agent to open lock boxes on houses that did not have open houses, and to help with documents.

That's the main reason I had to use one when I recently bought a house. I actually found the place I bought before the agent did.

Anonymous said...

And now the firefighter is homeless.

Anonymous said...

I'm not sure about being better prepared with sites like Zillow and Redfin, which are biased towards the industry, but if you know what to look for, then, yes, no excuses.

Anonymous said...

The real estate industry has been quick to capitalize on the blog-o-sphere, where they see the exchange of information as being a powerful tool for re-shaping buyer behavior from the traditional purchase of a home as a 'home', to a more informed investment decision. Buying a home will never be the same again. The most important thing is for independent blogs to ensure that commercial blogs do not gain a monopolizing foothold. This would be more dangerous than the old system.

Anonymous said...

Per the comment about the fireman & 0% down, I'd have to say real estate agents, brokers & lenders should never have considered giving anyone with no money to invest, well, an investment. Whatever happened to something called saving? It's nice to want, but hey, we can;t always have what we want. There are more shoddy real estate agents & brokers then there are good faith business men & women in the field. Adjustments should be made accordingly. Since the bubble there are more people in the industry then needed, I would think that would give buyers & sellers the upper advantage in whom they chose & what should transpire. Then again, that would equate to buyers & sellers knowing there rights, what they need, what is the duty of those they employ & holding them accountable. That's the dilemma. At best, real estate agents are the new car salesman. For the benefit of the public though, they are expendable & can be pushed out.

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