First off, let me say that there are a lot of good Realtors out there, with many different brokerages. There is not just one brokerage that is good and there is not only one good Realtor out there. Many go to work every day taking care of their clients and doing the best job they can.
Many real estate agents are not good at their work- not good for the industry or their clients. Of all the Realtors in the three states (Utah, Colorado, California) I have been a broker in, I would estimate that about 5 to 10 percent of real estate agents are what I would consider to be really good Realtors. The majority of brokerages and agents either put themselves above their clients, or are simply average at what they do, selling a few homes eachyear to family or friends, but not excelling in their field. The good ones learn their business well, continue to grow and always put their clients first.
If you call three agents, even from the same office of almost any real estate company and ask them to present you with a market analysis and marketing presentation to sell your home you will almost certainly get three completely different marketing plans and three different values for you home. And these are three people in the same office of the same company. Why?
Because each agent decides how much money they want to spend marketing a home based on any number of factors, including how much money that agent has, how much time they want to spend creating marketing, how much they think they will make from the sale of the home, how talented they are marketing, the resources available to them, the culture of their company, the seller’s needs and demands, etc.
The opinion of value will vary because each person has their own opinion and use their own comparables, but also because some agents want you to believe that your home is worth less than it really is so they can get a quick sale and some agents will tell you your home is worth more than it really is just to get the listing, while other agents will be fair and honest with you.
And if an agent doesn’t want to pay for a virtual tour do you think they are going to say to the seller, “I’d rather not pay for a virtual tour, even though it would really help us sell your home, is that okay with you?” Of course not! They’ll tell the seller that they don’t need a virtual tour or that tours don’t sell homes or they just won’t bring it up at all. But no matter which of these options they choose the seller loses. The seller, their client, is the one who is hurt. And this is from the person they are asking to help protect them.
The agents usually want to price it right and put it on the MLS. “Price it right” usually means to price it for as low as they can get the seller to price it. So they are actually trying to get the seller down in price, working against their own client, before they even start.
And then they ”put it on the MLS” hoping that another agent will sell the home. The lowest priced home in any group of comparable homes will theoretically sell first. But who wants to be the lowest priced home in a group of comparable homes?
I teach our agents to always put the client first. And this includes giving the sellers the very best information on pricing so we can price the home to get the seller as much money as possible, even if it takes us a little longer and costs us a bit more to sell. Because that’s what the client wants- as much as they can get. If the seller wants to price it lower for a quick sale than that’s their decision, but it won’t be because we pressure them into it trying to make a quick buck.
Flexibility in marketing homes= BAD. Making sure every home has a full marketing package= GOOD.
Using a below-market price as the marketing plan= BAD. Helping a seller decide the highest price they can get and then marketing the home to get that price= GOOD.
Our company, BlueRoof, has standards that are higher than most brokerages when it comes to representing a seller. When we market a home we start by representing our clients.
We are a full-service real estate company. We do not do “entry-only” or ‘limited services” listings. We represent our clients- all of our clients. We schedule the showings and present the offers and negotiate on behalf of our clients and we coordinate the entire transaction, all the way through closing. We market like crazy and work on nights and weekends and we (gasp!) answer our phones.
Over 90% of listed homes sell because of the MLS and internet. Either another agent finds it for their buyer or the buyer finds it online. This is where much of the marketing value comes into play, but we market everywhere (including print, postcards, and radio) because we don’t want to miss any buyers out there.
We market homes for less commission than some brokerages, and more than others. I know what my services are worth and that is what I charge. When it comes to personal services, you get what you pay for. Hire an attorney or a landscaper and you’ll find the same thing- the best charge more because they are worth more.
Bad agents sell homes as quickly as possible, good agents sell homes for as much as possible.
Bad agents tell you what to price your home at, good agents help you determine the highest price possible.
Bad agents are hard to get ahold of, good agents are easy to get ahold of and have an assistant to help.
Bad agents take a listing and then you don’t hear from them, good agents have systems and are accessible. They coordinate the transaction.
Bad agents count on other agents to sell your home, good agents market directly to buyers as well as the MLS.
Bad agents do as little as possible, good agents do as much as possible. Bad agents try to convince you that the higher their commission is, the more money you’ll make, good agents negoatiate a commission that works for you, and explain that buyers and selers determine the final sales price, not the agent (or their commission).
Bad agents do not like their competitors, good agents appreciate working with other people in the industry and realize that these people help them, and their clients, when they work together.
There are some major differences between brokerages and agents, and there are good Realtors and bad agents in every market. It’s always good to know your options…
October 19, 2006 at 9:08 am
I’ve been a mortgage broker for a long time. Therefore, by necessity, I’ve been exposed to HUNDREDS of realtors/agents over the years. 99.98% of them have been MORONS. Idiots. Fools. OVERPAID in almost EVERY single instance. Because of this, I am sceptical about engaging an agent (realtor) to sell any home I have an interest in. Still. FSBO always works just fine for me. But not for everybody. That’s probably not what you wanted to hear.
That being said, I’ve seen the BlueRoof billboards, advertising, etc. I’ve been a lurker here for a while now too. I blog. Anyway, if I were to consider engaging a realtor, I’d probably seek advice here.
I still don’t like realtors, because most are crooks who don’t understand their job duties, and CONTINUALLY overstep their boundaries. The ego is often astonishing in scope.
Blueroof SEEMS different to me. My business card has the tag line: “getting a mortgage is a big deal… and so is being treated with repsect.” That’s the most important thing for me. My clients go away from a transaction with me, educated and aware of every single detail that went into their mortgage process. They show up at the closing table happy to be there, knowing what they are signing. They know what my services cost, and they know I don’t work for free. Often, they express the thought to me, afterwards, that although their agent made 3 or 4 times more than what I made, they have no idea what he did for his money, and frankly saw absolutely no value in his/her representaion.
This is sad to me. They say this to me as they hand over three or four family/friend referrals.
So, what’s my point here? It is this: The real estate industry – at the “realtor” level – needs to change. Fees need to generally GO DOWN. Realtors think that because they have what they view as “exclusive” access to the MLS, that they should still be getting 6% of the selling price as pay. BUNK, I say. That’s not fair these days. Maybe in the days when every home was protected by a loan that required 20% cash into the deal. Maybe that was okay then, but it’s not now.
Times have changed, but realtor fees have not. It’s time for new agressive stances on fee structure, marketing techniques, and client service. It’s no longer a free ride, and you realtors have to start changing in the ways that BlueRoof has outlined above.
I say congrats to BlueRoof, I hope your ideas take hold, and affect positive change in the community, which will improve your image out there.
Do you know you are generally viewed as cheesy-suit-wearing SHARKS? You are. Time for you to change that perception.
Let’s get out there and make that change.
Thanks for listening.
October 19, 2006 at 9:49 am
BJensen – As of last Sunday I’ve been in the business 37 years. I’m a second generation broker, now mentoring my son, as I ready myself for retirement. Your view is not unique in my experience by any stretch. However, I have some observations for you.
I’m in the investment side of real estate, but still must do the same things of which Greg so eloquently spoke. 99.98% is a little harsh, but I’d say the vast majority of licensees are either under-trained, unethical, lazy, or just plain clueless. The real issue though is what do real pros bring to the table, and what’s it worth? I can only speak for myself.
I offer significant increase in both net worth and retirement income, along with the potential of retiring much earlier than planned. I reduce income taxes, arrange for capital gains that aren’t taxed, even though received. And those are just the highlights. You can see that I offer real value to my clients for the money they pay me. And whatever that amount is will be judged not as fair, but as worth it or not in the market as a whole.
I still charge the equivalent of six percent, three to buyers. When I’m occasionally asked if I’ll reduce it, I explain what I see as the value of my services, don’t reduce it, and let the chips fall where they may. I imagine Greg does something similar once he’s at his bottom line with a particular client.
If in five years I can take a client from a net worth of $300K to one requiring two commas, I’m worth what I charge, don’t you agree? If I give them the option to retire a decade sooner than anticipated am I not worth six percent?
It’s all in the value perceived to be received by the paying client. Greg quite obviously provides not only great service, but incredible value founded upon unassailable integrity, transparency, and work ethic.
I do the same, and am training my son to continue that tradition when I’m gone. Although they may be in the minority, Greg and I are not by any means alone. It’s a large minority.
Keep up the good lending work. In my years I’ve met about 10 who are worth the time it takes to forget them.
October 19, 2006 at 11:18 am
Greg,
Very insightful post. Although, 5 to 10% is a bit of a spread to me. Tell us what you really think
It’s hard to say at this point which business models will emerge as the most successful. One thing is for sure, the necessity for flexibility is going to lie in the development and roll-out of those models.
I loved your Virtual Tour analogy, because it is very true. The successful agents I am aware of have fully developed marketing plans that apply to each property they market. Their listing presentations are professional business proposals that outline why their system works and the value proposition associated with it. The best of the bunch have no problem establishing the value of their fees or commissions. They are not “discounters” in fact, I would venture a guess that their average deal probably well exceeds any industry average for compensation. Each and every one of them have increased their revenues and customer base year after year.
I think the changes taking place in the market today are eventually going to drive pikers out of the business and the winners are going to be the kind of sales,marketing and business professionals you would see in any other big ticket sales situation. What does it take to succeed in large ticket sales? Product knowledge, great business acumen, exceptional marketing skills, top notch customer service, research and development, human resource skills, understanding how to invest in and apply technology. And that’s only a few of the components of businesses that sell products and services in the same price range as a home.
It’s interesting to watch BlueRoof, BloodHound Realty and number of others sharing your business processes and plans via blogs. That kind of cooperation and transparency will go a long way toward shaping the future of the industry and I think your efforts should be applauded. I think anyone in the business should be paying attention and taking copius notes.
October 19, 2006 at 12:32 pm
Jeff, Greg, et al.
okay, 99.98% might be severe, but you get the point.
You mentioned that many of the licensees are either under-trained, unethical, lazy, or just plain clueless. (or any combination of the above…)
You, Greg, myself, and many others, I’m sure, in the real estate industry are indeed providing great value for service. There are also a vast number of bottom feeding predators out there. They, unfortunately, seem to find those who can least afford their “services”.
There are lots of agents out there who view a client as simply a ride to the bank.
That’s what needs to change.
Keep going, both of you, and all of the rest of us who offer GREAT service, whether it be in the finance side, or on the property side. We need to work better TOGETHER to provide a value proposition that far outweighs its cost. That is the whole point.
Do me a favor, though, and the next time you attend a closing, don’t start questionging my 2.5% or 3% in fees when you are sitting there with 6% at the top of the sheet. And certainly don’t start that in front of my borrower.
I can’t tell you how many times that has happened. Makes me want to take the offending agent outside, yank his own arm off, and feed it to him myself.
October 19, 2006 at 2:36 pm
Great (and timely) post, Greg. I think we’re on the same page here.
There is a chasm of difference between good and bad. I’m on the side of good (who isn’t, but the bad?), and I agree with mlpodcast that changes in the industry will help the ‘good agents’.
October 19, 2006 at 2:41 pm
[...] As if he were reading my mind, Greg at the Blueroof Blog goes into greater detail about the differences between good realtors and bad agents. Here’s a excerpt: Bad agents sell homes as quickly as possible, good agents sell homes for as much as possible. [...]
October 20, 2006 at 10:02 am
[...] The Difference between good Realtors and bad agents [...]
October 30, 2006 at 5:28 am
[...] The Difference between Good Realtors and Bad Agents. [...]
October 30, 2006 at 6:59 am
Man… long post = long responses
Don’t forget, there are also Bad REALTORS and Good Agents.
I wasn’t a big fan of how you made the (what appears to be biased) distinction. Just my two cents.
November 8, 2006 at 8:53 am
[...] Greg at Blue Roof pointed out awhile back some differences between good agents and bad. The statement I love most is: Flexibility in marketing homes= BAD. Making sure every home has a full marketing package= GOOD. [...]
April 7, 2007 at 11:48 am
[...] 21, 2006One of the Best Blog Posts Ever Written!!!! The Difference Between Good Realtors and Bad Agents October 18, [...]
April 14, 2007 at 8:57 pm
[...] listing agent is doing or has done any of these things, have a serious talk with them. Greg from BlueRoof Blog in Utah has a wonderful post on the difference between good and bad agents. Anyway, here’s my [...]
June 17, 2007 at 6:12 pm
Why isn’t anyone talking about the mortgage brokers who are also real estate agents who are also appraisers, etc. In my opinion, mortgage people who also share an added interest in the sale of a particular house are a SERIOUS conflict of interest for consumers. THAT should make more people upset than a REALTOR who has done his or her job well and EARNED a 3 percent commission which he or she will then only get to keep about one percent of. And further, as a third generation, COLLEGE GRADUATE Realtor who will probably be running our family real estate business someday, I only send my clients to the most professional mortgage companies and you can be sure that any mortgage company that is going to dump on Realtors is not very professional in my book. I have established relationships with quality mortgage companies who respect my profession as I respect theirs. I know they will give my clients excellent service which will reflect well on me as their Realtor as well.
Business is all about relationships and as partners in the real estate industry we should be cordial and professional to each other because we all want what’s best for the client.
June 20, 2007 at 11:50 pm
Bjensen-
Over paid? Cheesy-suit-wearing sharks? Idiots? Fools? That’s pretty funny. Those words could be used to describe 99.98% of all the loan officers I have met. I agree that education and licensing requirements need to be changed in this state…but not just for real estate agents…..loan officers are just as bad. We are over paid? You abviously do not understand what it takes or how much money it costs to run a successful real estate business. I am sure from where you sit it’s not too bad hanging out in your office getting referrals from all of us over paid real estate agents that are not worth what we are getting paid. I have a big news flash for you….it takes a lot of time and costs a lot of money to procure buyers for you to get loans for. It also take patients, and a lot of knowledge and skill to make sure our clients are protected and serviced at the highest level possible. I have to say I am completely shocked and dissappointed about the comments made about realtors in your post. In every industry there are people that offer substandard service…that doesn’t mean they are all sharks. There are a lot of fantastic real estate agents and loan officers in this state that offer great service for their clients. They deserve to get paid for their work. Let’s not degrade ourselves and our profession by putting all professionals into one category when they don’t deserve to be there. If I was a loan officer I would never post a comment like that anywhere. Bjensen…I would love to know what company you work for so I can make sure that I or any of my over paid peers don’t ever make the mistake of sending a client to such a disrespectful loan officer.
October 18, 2007 at 6:19 pm
first of all bjensen obviously wanted the type of negative response that he got with all the replies. I seems that people that are as negative as he is has underlying issues like family problems, paying endless child support, kids hate him. im sure he has never made any mistakes in the morgage business, and is more artagant than donald trump.ive worked with some dull mortgage brokers but never critized them. it seems that he needs a good home to go to
November 25, 2007 at 2:58 pm
I think you’re ALL nuts! C’mon.. It isn’t the profession, it’s the person. Honestly, I laugh when a mortgage officer has the gall to suggest we as real estate agents are overpaid. Bring down your fees first, buddy! Most (not all) but most Mortgage officers are all sleazeballs, especially the ones who come in every week wasting our time with mindless blah blah blah, hoping for a chance to quickly “bond” with the agent. Funny thing is, they usually wind up wasting their time with the lowest producing agents in the office. The top agents are experts at ignoring these “pests”.. Pardon me, I have my two mortgage officer contacts that I recommend, and if they screw up or play games with either myself or my clients I WILL DROP THEM LIKE A HOT POTATO! AND THEY KNOW IT! It wasn’t the real estate agents that were able to give all these folks loans with 120% loan ratios. Some of the more “ethical” mortgage officers I know would either not do this OR THEY WOULD TELL BOTH MY CLIENTS AND ME WHAT THEY ARE ABOUT TO DO IS IN THEIR OPINION VERY VERY DANGEROUS! So before you shoot off in the mouth and tell us we’re dirty maybe YOU should scrub your filth away.
January 15, 2008 at 6:30 pm
Im looking at a career change into the real estate field and want to know what constitutes a good agent from a bad one.
I always hear about the 80/20 rule and i definitely want to be in the rare crowd. I initially studied appraisal so i do have some background on valuations anyway.
These blogs give some great insight so keep blogging guys!
February 21, 2008 at 5:04 am
can you stear me in the right direction. I have reason to believe that the realestate agent I am using (have submitted a contract to purchase for me) is corrupt. I found a nice forclosure to purchase and it appears the agent is trying to sabatauge the deal. It is as if the agent wants the property for herself or someone else. Two days after we submitted the offer to purchase the house was vandalized in certain areas of the home. Only no force entry was used. The house does not even have a sign for sale or bank forclosure in the yard. The house had been completely redone. I will not note every sign that leads me to this opinion. What can I do?? I don’t want to lose the house but don’t want this agent to represent me. Help??
February 21, 2008 at 9:26 am
Dee,
Sorry to hear about your dilemma. You may want to ask an attorney for your options. You can speak to the broker of the agent and ask them to be involved (every agent must have a priciple broker that is responsible for them).
The real estate divisions also have investigators who can help if there is some negligence, but that wouldn’t help you get the home- only catch the agent that is hurting you.
I suggest contacting the principle broker or an attorney first.
Good luck with getting your new home, and the representation you deserve.
July 2, 2008 at 1:28 pm
You will always find good and bad realtors. We called in 8 realtors; only 4 showed and 2 came back! Perhaps relators shoudl offer Home Staging as a way to enhance their services. I worked with realtors using my home staging and the homeowners were thrilled to get the extra help and service! Contact me for more info.
February 7, 2009 at 8:07 pm
[...] I bet he’s not the only one out there that has had a bad experience and wrote off the value of the entire real estate brokerage industry. It’s too bad, because I’ve had the exact opposite experience–in buying and selling hundreds of homes for investment, all of the terrible agents I’ve encountered have made me really appreciate the great agents I’ve found. Here’s an interesting post on the difference between a bad and good real estate agent. [...]
August 26, 2009 at 12:59 pm
Just looking into becoming a realtor. My big concern is the reputation of realtors. This information has really helped me
in understanding what I need to do to become one of the best.
August 26, 2009 at 10:12 pm
Glad to help e.bowman- my advice to you is;
1- Approach your real estate career as a business- you are a business owner and need to approach it the same way as though you were starting a clothing store or a McDonalds- as a business
2- Learn your trade- become a master of the market you serve
3- Market Yourself- get your name out through social media, your family and friends, and focused marketing efforts
4- Be better than the rest- be better at returning phone calls and emails- engage in social media better than the rest, be available for better hours, be friendlier and more accomodating, become a better negotiator, be better
5- Have a great website- get a BlueRoof360 (blueroof360./com) custom website and give it your personality
Best of luck to you,
Greg