Real Estate Agent = Middle Man

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Your favorite farmer’s market. The blanket you bought at the craft show. The discount you found by going through the company directly. What do these things have in common? No middle men.

Today, middle men are everywhere. Some are good: the grocery store, the post office, the restaurant. But some are purely optional; in fact, I’d say they’re largely unnecessary. Consider these two examples of industries that make their money on connecting:

Middle Man #1: Travel Agent
I don’t know about you, but I have the ability to research online, call hotels, ask around for discounts, etc. Last month, I visited a friend on the East Coast and booked my plane ticket and accommodations through an online provider—I think it was Travelocity or Expedia. This allowed me to save the most money, at the most benefit to myself. Imagine if I’d used a travel agent: less control, more money lost.

Middle Man #2: Staffing Agency
How did you find your current job? Did you go through a head-hunting firm? You might’ve, and that’s fine. But you also might’ve been like thousands of other job-hunters who didn’t want to get paid less than the company could afford by inserting a middle man. You might’ve looked online at places like Careerbuilder and Monster and Craigslist and applied, interviewed and landed your position.

What each of these agencies has in common with a real estate agent is this: they are middle men. They find hotels, and they find travelers; they find jobs, and they find job-seekers. Or, in real estate, they find sellers, and they find buyers (imagine if the travel agency or the staffing firm similarly took a solid 6% of the sale, too!!). In return, they take a BIG chunk of the deal home with them. No tangible product provided—just their “connections.”

For a long time, real estate companies have been telling us that we need them, that we have to have a real estate agent in order to find the home or to sell the home. In reality though, all you need is a buyer and a seller. An agent is ONE way to find a buyer, not the only way and, in my opinion, certainly not the best. Using an agent means less money for you, and that’s never a good alternative.

If I take the analogy one step further, it’s a perfect illustration of why companies like Buy Owner are so helpful. They’re the Travelocity or the Careerbuilder of real estate. Much less cost and much more control for you.

Before hiring a realtor to list your home, consider trying your hand at finding buyers on your own, eliminating the middle man. You are fully qualified.

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  1. My thoughts are similar to Rick, yet I do embrace the fact that the customer does have choices with discount firms (travelocities) and professional firms. It’s just a matter of finding an agent who delivers on value.

  2. I also am biased as a licensee, but IMHO anyone without NUMEROUS transactions under their belt is setting themselves up for the worst kind of problems if they DIY. At a minimum, they better have a competent RE Attorney overseeing the transaction. To make a blanket statement that agents “provide no tangible product” is simply insulting.

    Sure, IF the property is free and clear, and IF it’s an all cash deal, and IF you at least know enough to complete a deed properly, and IF you are comfortable that the cash isn’t coated with a white powder, and IF you have properly disclosed ALL defects, etc. etc. etc… then yes, maybe an iniexperienced person can DIY.

  3. Richard Johnston, San Fernando Valley Real Estate on


    I can’t believe you are comparing a Realtor to a travel agent and a staffing agency.

    I consider a Realtors responsibility as important as an attorney, accountant, and doctor. It takes more than just finding a seller and buyer.

    There are hundreds of documents to sign, disclosures, contingencies, and laws. You also have an escrow company, title company, home warranty, home inspection, mortgage, etc..

    Yes, there are people who are successful in selling their home without a Realtor. And YES, there are people who win the state lottery too. But all too often, a buyer/seller will need the help of a professional Realtor to guide them through the process.

    Now because you are a FSBO fanatic, lets take a look and see why a homeseller should NEVER sell their home without a professional Realtor.

    Here the reasons:
    1. Strangers visiting your site without an agent.
    2. Strangers visiting your site who can’t afford your home.
    3. Buyers hoping to knock down the price because their are no agents involved.
    4. Negotiating with a buyer without any agents.
    4. Seller fails to disclose defects of the home.
    5. Seller and buyer get into an argument and both hire attorneys.
    6. Proper documents required by law not completed.

    Now…I can’t remember where I read this information but I think that 78-85% of FSBO’s end up listing their home with a Realtor. Also, for all you people out there who want to try to sell your home yourself “FSBO”, I suggest you take a look and see how many attorney line up your local yellowpages book.

    If you do decide to sell yourself after reading the above, I’m sure you will also not mind representing yourself in court, helping your dentist pull your tooth out and throwing the book at any professional who exists in America because you can do it better.

  4. Seasoned Investor on

    Good advice for some – Bad advice for most, mainly because of the legal interests involved. There are way too many FSBOs out there that will not disclose the imperfections of their home and a buyer needs to know what to look for…
    Btw, what do you think Expedia and Travelocity are – they are middlemen! You think they provide their service for free?
    We’ve seen way too many deals end up in court and buyers paying too much for FSBOs homes, to believe your black/white advice.
    This market is so competitive now and a seller would have to be a complete idiot to sell without an agent these days.

  5. Well, it seems I’ve really struck a nerve with this one! The truth hurts, doesn’t it? 🙂

    It’s no coincidence, IMO, that all the people crying out about the “need” for realtors are realtors themselves.

    But Richard, your comment is just too much: a realtor is as important as a doctor or lawyer? What a stretch! I could spend a lot more time giving a host of reasons for why this is SO grossly untrue, but I think most people with common sense know it’s ridiculous. For one thing: think of the amount of schooling and training docs/lawyers go through and the rigorous standards to which they are constantly being held.

    For now though let me respond to your six “reasons” that realtors are necessary, by giving my counterpoints:
    1) You control who visits your house as a FSBO. You do not need to give your address in your advertising.
    2) You can require potential buyers to be prequalified. (And BTW: realtors allow people to view your home regularly who are underqualified. Think open houses.)
    3) Buyers hope to knock down the price in any situation.
    4) A realtor doesn’t have negotiating power that a seller lacks.
    5) In rare cases, sellers or buyers may need to hire attorneys. This is a strong exception. Companies like Buy Owner can refer you, without demanding the high commission.
    6) Again, real estate is not as complicated as you’d like to make it sound. Doing a little research will show you what forms to fill out, when/how to fill out. And if you use a discount ad company, they’ll walk you through it as well.

    I understand where you’re coming from, I really do. However, I cannot agree that realtors are necessary.

  6. There is no need to contact any agent if you have full knowledge about Real estate field. I hope you guys are not aware of investing IRA into real estate. For you i have put some information related to it.

    Investing money in real estate is much more beneficial and risk free than investing in stocks.

    Following are the benefits of investing money in real estate:

    -> Value of property appreciates over time with little or no risk of falling prices.
    -> Real Estate is a solid asset whereas the value of stocks and other financial instruments
    is determined by many factors outside of your control.
    -> Investments in Real Estate can appreciate annually at a much higher rate than what
    your clients can get by investing in stocks, bonds, and mutual funds

    One can easily invest their IRA in profitable real estate without ever going to the bank(depending on the need and the total amount accumulated though) thereby
    avoiding the costly loans.

  7. I see advantages to both sides, however as an agent of upfront honesty – I have many fewer problems as a home inspector with presenting the truth to fsbo transactions than to transactions with real estate agents. Just my two cents.

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