Seattle

[Frustrated]

Here's an update to my originally posted thread.  We have since then had another open house (this past Sunday).  It was a beautful day and so we thought it would be better than our first open house when it was pouring rain outside.  Unfortunately, this was not the case.  Perhaps it was too nice and everyone wanted to be outside "playing."  BTW, we did post signs on busy intersections, used balloons and even had Krispy Kreme donuts.  (I think these open houses are going to make me overweight when all is said and done!)  And NO ONE came again.  At this point, I just want one person to come to our open house...

I wanted to also respond to the thread that has resulted from my initial posting.  We bought a home back in July using Windermere.  I remember looking on the various realtor websites for a few months scoping out homes.  While I did like the realtor that we did use (she helped us purchase the place we are now trying to sell), I really don't think it was worth her getting paid almost $30k for her time in the end.  With the internet making it so easy for me to let my fingertips do the work, I felt like I did most of the grunt work and it turns out that we actually found the house that we ended up purchasing.  She did help take a first pass at many of the homes that I would tell her I was interested in.  But did she really do enough for $30k?!?Probably in hindsight, we should have then contacted Redfin to save us some money but felt already entrenched in our relationship with our realtor.

However, soon after putting an offer on the aforementioned house, we saw a house down the street that we also liked and was just listed that same day.  Our thought was that if this house was perfect as-is, we were willing to lose our earnest money from the initial house but needed to use Redfin in order to not take a complete loss. I wanted to see this second house ASAP since I knew it would go pretty quickly (and it turns out it did).  I saw on Redfin's website that they recommended calling the selling agent to schedule a visit.  Well the minute the selling agent heard that I was using Redfin, they said that they couldn't schedule a "special" viewing time for me and said that I need to go through a Redfin agent.  So I contacted Redfin and ended up having to leave a message with their answering service since it was a weekend.  I didn't get a call back from a Redfin agent and was a bit put off by the selling agent not wanting to show the house to us.  I guess the selling agent didn't understand that they would still make their seller-negotiated commission.

So on one hand, while there is a $$$ incentive for someone to use Redfin, I think the realtors are still reluctant to "play ball" with the new kids on the block.  It's either because they don't understand that they still make the same commission that they would normally, or they just don't want to play together in the sandbox because they are very "clique-y."

[AROOLY]

Dear Misbell,

Read again post nr 2 posted by "misbell".

"I've had 3 open houses, and none had that much traffic."

[peter]

I think that sites like Redfin will soon hit a critical mass where they have just as many listings as they do buyers and at that point old school RE agents will be forced to play ball otherwise they will go the way of the dinosaur.

[AROOLY]

Hi Peter,

You are so right, all the Realtors will start working for free or for food.
Look I just found a broker that is listing your house for free, the new era just started. Stay tuned and enjoy.

http://www.iggyshouse.com

With all the discounters it must be a great time to sell your house for free and not pay one penny to Realtors.

I just wonder why I get all the time emails from sellers and builders with increased commission.

Disclosure:
I am a CA RE Broker full commission and we are not affiliated with any of the above Discount Brokers. Also we do not know or endorse any one of them.

[mc222]

We've sold our last 3 houses FSBO and I'll never do it any other way -- it takes a lot of time, you have to do tons of homework and be a good negotiator.  I love it though, and have been very successful.  My houses were priced right and sold quickly.

On the other hand I'll always use an agent when buying and will gladly let him/her keep their 3% because they always work their a** off for me!  I can find the properties I want to see but I expect them to be available to show me a house with a few hours notice.  I want to be able to put together a list of 10 houses and see them all on a  Saturday.  I want my agent there for inspections and even if I just want to take another look.   Our last agent was fabulous.  In a month's time we probably looked at 50 houses, made offers and had inspections on 3 and backed out on two just because we saw something better later. 

Our offer wasn't accepted on a house we loved, but the buyer's financing fell through and it went back on the market.  She called to let us know and had another offer submitted within an hour.  After our offer was accepted she was there so we could get bids for a new furnace and roof repair.  She even cut short her vacation (even after I asked her not to!) so we could see a house we knew would go quickly.  I must have called her dozens of times and she always took my calls or called me back within minutes.  She totally earned her commission.

So, I guess it all comes down to what you're willing to pay for and I want full service when I'm buying -- I'll save the $$ on the other side when I'm selling!

[peter]

AROOLY seems so dramatic. Who would work for free? Discount real estate brokerage sites like Redfin still charge 1% commission. The difference is that they have built up an online computer system that makes it so easy for a person to do most of the work themselves that many people will gladly do the legwork of finding a place in order to save the 2%.

There will always be people that want to pay for a full service experience whether it be in picking their stocks or having someone help them through all of the house hunting legwork such as the previous poster. The difference is that now there is starting to be an OPTION.

[mc222]

Well said, Peter!!

[AROOLY]

My point is very simple. You will always find somebody to discount more.

This happen in the last 3-4 years in mortgage industry. The consumer wanted lower interest rates so from originators to lenders each one reduced interest rates to unsustainable limits. Fraud was committed just to stay in business. Then all the hell broke loose and we have now the subprime mortgage meltdown.

In the last few years if I wanted to compete in the mortgage market, my only chance was to push the envelope. I decided not to touch them, today I sleep during the night.

In Real Estate transactions you have enormous liability and responsibility. If an agent makes 100 transactions/year for $1000 he will not be able to verify every single detail, pay for marketing and all the other expenses. In 1 of this transactions he will make one single mistake that can cost the company $250,000 and the client life savings, do you want to be the one.

6-12 month ago experienced real estate investors used a qualified intermediary 1031 exchange company with very low commissions, most of them executed the transactions without a real estate agent or a discount one. The 1031 intermediary was using the money to make investments. One day out of the blue the company filed for Chapter 11. The real estate investors lost every single penny. Like this was not enough they own now taxes on lost money.

One guy lost 10.8 Mill and he owned IRS few more millions because he lost all his money. Another woman lost 5.1 Mill she owns today few more millions to IRS. All this guys worked like this to save FEW HUNDRED DOLLARS. FEW HUNDRED DOLLARS that is right.

In San Jose it was broker with 250-300 agents today he does not exist anymore. Few lawsuits and today he is out.

This is a story from one of my customers. He bought a house in 1979 from a FSBO for $41,000. The FSBO did not make all the disclosures he saved maybe on the agent, in 1981 the FSBO seller paid damages of $38,000 almost the full value of the house.

My point is: There will always be somebody to discount more. We discount also and sometimes a lot but this depends on the deal, property and client. My concern is always what can go wrong and how can I protect my client since this protects me also, and there are so many things that can go wrong.

For us this year looks it will be much better that previous ones. In 2004-2005 there were commissions of $500 in MLS. Today I do not see less than 2.5%, and this is seller choice keep in mind. The cost of marketing is huge in Real Estate so I think the commissions will continue to climb in the next few years.

[AROOLY]

This is an example of what I am speaking:

Foxtons started with 40 employees and 2,000 square feet in New Jersey. Now we have 500 employees, 50,000 square feet in 6 locations, and service the entire tri-state area. In addition, we have saved home sellers over $100,000,000.

http://www.foxtons.com/foxtons/about/message.html

We regret to inform you that, due to the recent down turn in the residential real estate market, Foxtons has decided to conduct an orderly liquidation of its business. To accomplish this goal, Foxtons is filing a voluntary chapter 11 bankruptcy proceeding with the United States Bankruptcy Court for the District of New Jersey. You will be receiving information concerning the bankruptcy case over the next few days.

Your property continues to be advertised on Foxtons' website and/or your area's Multiple Listing Service, as it was prior to Foxtons' bankruptcy filing. Moreover, the Foxtons signage at your property, if any, can continue to be displayed pending further notice.

As part or the liquidation of its assets, Foxtons is asking the bankruptcy court to authorize the assumption and assignment of your listing agreement with Foxtons to another broker. The identity of the proposed successor broker has not yet been determined. If the bankruptcy court grants this request, and if a successor broker makes a sufficient bid for Foxtons' listing agreements, then the listing agreement for the sale of your home would be assigned to another real estate broker. With the exception of the identity of the listing broker, all of the terms of your listing agreement with Foxtons would remain the same. We hope to have this assignment process completed within fifteen days. You will receive further information from the bankruptcy court concerning this proposal.

We regret any inconvenience to you caused by this situation and hope to transition your listing agreement to another broker as quickly and smoothly as possible.

Thank you.

Very truly yours,

Mark Horvat
Vice President of Sales

[sleepless]

he's right, you can always find someone to do it cheaper. there are people online that will do paperwork for $200-$300. i guess it comes down to how much you feel comfortable doing yourself. if you're an agent, you could do the entire transaction by yourself. if you pay one of these supercheap people i'd be a little worried that they'd screw up somehow and i'd have zero recourse. you can negotiate traditional agents fees, but then you have to wonder if they'll really put their all into it and if the agent is any good.

if your house is priced very well and has nice pictures online people will drop by. but i've seen some pretty nice places with pretty good prices that have been available for a looong time. and a lot of open houses i've walked through really feel like i'm the only one that's been there. at the MOST i've seen one other person, which means traffic is about 1 person per 15 minutes in the hottest areas, best photographed, best priced houses.

one thing you could do is walk to another open house in your neighborhood and see if anyone else is going there and what's different about it.

what's your listing #?