All Forum Posts by: Ken M.

@Ken M. - The MLS originated to level the playing field for buyers and sellers. There was a significant problem where residential buyers and sellers would have to participate in the good'ol boy system, just to purchase or sell a home. Deals were based on who you knew.

Not sure about other MLS's but the one I'm familiar with is funded by monthly fees to agents. The party represented has no bearing on the fee nor the number of transactions.

Not all MLS's are created equal either...

Wow awesome, thanks! Any resources/ introductions are greatly appreciated. I'm absolutely looking to attend any and all meetups so I'm open to learning more about how I can be connected with Rex and Katrina. 
Thanks for the help! 

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Quote from @Steve K.:

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Quote from @Marcus Bostick:

What should I consider when moving forward with a property being sold without a agent (FSBO) ? Should I still use one ?

Thanks in Advance for any insight!

No, not really. Look it up on Redfin, Zillow and Realtor to get a price to negotiate with. I go a bit further and I look on Redfin for "Solds" of the same general type, sq footage, year built and condition within half a mile of the property that has sold in the last 90 days. You can do that, it isn't rocket science. Or, have your lender help you. 

Once you have a "meeting of the minds" ( a contract) you open escrow and let them do the rest.

 
This might work fine for someone with your level of experience Ken, but I’ve also seen multiple people make 6 figure mistakes following this advice. The vast majority of buyers will be better off with a competent buyers agent than going it alone. People often leave the transaction thinking that they did well by not using an agent, but they’ve goofed up majorly and don’t even realize it. For example the doctor I know who overpaid by $500k in order to “save” $30k by not using a buyers agent. He probably still brags about that at parties, he still doesn’t even know he gave up $470k. I see situations like that all the time. Not to mention everything that can go wrong between going under contract and closing, or after closing if things aren’t handled properly. They often call me after closing and ask about suing the other party for something that they themselves goofed up on. It’s too late, you didn’t do your due diligence and made a rookie mistake, now you’re out more than you “saved” not paying commissions.

A high percentage of agent-less deals end up with one party benefitting much more than the other, or falling apart, or in court suing each other over something that could have easily been avoided. Sure it can be done, but if you haven’t done dozens of transactions then you’ll be operating at amateur level and making beginners mistakes that can cost you many thousands more than an agent’s commission.

I almost made this mistake myself before I got my license, when buying a property off of a friend that I thought was a great deal. I had done like 6 transactions in that same area and knew it well. I ran the numbers by my agent just as a gut-check and she said I was overpaying by about $70k. I ended up having her step in to help me show the seller what the real value of the property was, and she saved me a lot more than her commission plus made the transaction go really smoothly and the seller and I stayed friends after.

Almost every FSBO I see is overpriced. People are what we call "house proud" and want their property to be worth more than what the market will likely bear. That's why you see FSBO's listed forever and they end up selling for way less after like a year of the seller trying to sell it. A big part of what listing agents do is convince sellers to list at a reasonable price that will have a chance. Then what a buyers agent does is negotiate more and get the price lower. If you can do both the listing and the buyer's agent's job of convincing the seller to come down to earth, then go for it. Most people can't and end up wasting their time or have to overpay when dealing with a greedy FSBO seller. That's not even getting into the mechanics of the transaction after you are under contract, which is way more than you can learn in this format because every deal is different and only years of experience can prepare you for what might come up.

Here is from HousingWire

DataDigest: Study shows agents are aplenty, most with few or no sales

Does real estate need more and/or higher barriers to entry?January 10, 2024, 6:00am by Will Robinson
Most agents seldom sell homes, according to a new study published by the Consumer Federation of America last week. (Jan 2024)

The study’s findings are far below the 12 sales per year for the median agent suggested by the National Association of Realtors’ member survey, which the study attributes to sample bias for the survey – successful and full-time agents are more likely to respond to the survey than unsuccessful or part-time agents.

The median agent in the study’s result, by contrast, had two sales per year, leading the study’s author, CFA senior fellow Stephen Brobeck, to conclude, “the residential real estate industry is clearly a part-time industry.”

Many of the individual agents in the study had other full-time jobs as “teachers, government workers, restaurant servers, commercial employees

On this, NAR has previously reached the same conclusion. A 2015 NAR study noted that becoming a licensed agent takes on average 70 hours, which is 302 hours less than it takes to become a cosmetologist.

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My comment: It's very difficult to become proficient, let along capable, let alone be worth hiring if the agent only sells a couple of houses a year. It's far better to do it your self and use an attorney for their $1,000. IMHO

 Or just hire an agent that closes deals and has experience, problem solved. 

 
This might work fine for someone with your level of experience Ken, but I’ve also seen multiple people make 6 figure mistakes following this advice. The vast majority of buyers will be better off with a competent buyers agent than going it alone. People often leave the transaction thinking that they did well by not using an agent, but they’ve goofed up majorly and don’t even realize it. For example the doctor I know who overpaid by $500k in order to “save” $30k by not using a buyers agent. He probably still brags about that at parties, he still doesn’t even know he gave up $470k. I see situations like that all the time. Not to mention everything that can go wrong between going under contract and closing, or after closing if things aren’t handled properly. They often call me after closing and ask about suing the other party for something that they themselves goofed up on. It’s too late, you didn’t do your due diligence and made a rookie mistake, now you’re out more than you “saved” not paying commissions.

A high percentage of agent-less deals end up with one party benefitting much more than the other, or falling apart, or in court suing each other over something that could have easily been avoided. Sure it can be done, but if you haven’t done dozens of transactions then you’ll be operating at amateur level and making beginners mistakes that can cost you many thousands more than an agent’s commission.

I almost made this mistake myself before I got my license, when buying a property off of a friend that I thought was a great deal. I had done like 6 transactions in that same area and knew it well. I ran the numbers by my agent just as a gut-check and she said I was overpaying by about $70k. I ended up having her step in to help me show the seller what the real value of the property was, and she saved me a lot more than her commission plus made the transaction go really smoothly and the seller and I stayed friends after.

Almost every FSBO I see is overpriced. People are what we call "house proud" and want their property to be worth more than what the market will likely bear. That's why you see FSBO's listed forever and they end up selling for way less after like a year of the seller trying to sell it. A big part of what listing agents do is convince sellers to list at a reasonable price that will have a chance. Then what a buyers agent does is negotiate more and get the price lower. If you can do both the listing and the buyer's agent's job of convincing the seller to come down to earth, then go for it. Most people can't and end up wasting their time or have to overpay when dealing with a greedy FSBO seller. That's not even getting into the mechanics of the transaction after you are under contract, which is way more than you can learn in this format because every deal is different and only years of experience can prepare you for what might come up.

2. This is an odd way to look at last year's very slow market. Transaction volume was the lowest it has been in 35 years. That doesn't automatically mean 71% of agents are bad agents. Plus a lot of those licenses are probably folks that are half-retired and just keep their license active for the occasional deal, or investors that just use their license for their own deals and didn't do any deals last year, or licensed assistants that don't close deals but support a team, etc. that percentage doesn't mean 71% of agents are bad. What percentage of Sub2 people didn't do a deal last year? Probably 99.9%. Does that make them all bad? 52% of buyers finding homes online means nothing. You realize agents put those listings online right? Looking at a home online is like 1% of the buying process.

As long as people select carefully, they can find a good agent to work with. There are a lot of good agents and a lot of not so good agents. Before I got my license, I worked with 3 different agents that were all excellent and I never had a bad experience, personally. One of them even saved me from overpaying on an off-market purchase as described above. It's easy to avoid bad agents with a few interview questions. 

Many buyers I have worked with have gotten instant equity, so I'm not sure why you think that's not possible when working with an agent. It seems like you're just putting agents down in order to sell your consulting services, similar to Bob the "20% Net Caps All Day" guy who got kicked off of here permanently. 

 Appraisals almost always come back at contract price, when there is a contract. However when there is no contract, appraisals can be way off. An appraisal is really just a best educated guess at what a buyer will pay. If there is a contract stating that a buyer will pay X price, then X is the most likely outcome for the appraisal. They are not accurate for off-market properties. 

 I'm not really worried about the agents who didn't close any deals last year. Thinning the herd is good. It should be harder to get a license.  

By the way aren't you a consultant/ coach? Don't you teach sub2 or something? How much do you charge? Do you have a license/ what qualifications do you have to consult on sub2 or whatever it is that you do? 

Hello! 
Looking for recommendations for a real estate attorney in the Boise area who is knowledgeable and can close creative real estate deals such as lease options, sub2, etc. 

Thanks in advance! 

 
This might work fine for someone with your level of experience Ken, but I’ve also seen multiple people make 6 figure mistakes following this advice. The vast majority of buyers will be better off with a competent buyers agent than going it alone. People often leave the transaction thinking that they did well by not using an agent, but they’ve goofed up majorly and don’t even realize it. For example the doctor I know who overpaid by $500k in order to “save” $30k by not using a buyers agent. He probably still brags about that at parties, he still doesn’t even know he gave up $470k. I see situations like that all the time. Not to mention everything that can go wrong between going under contract and closing, or after closing if things aren’t handled properly. They often call me after closing and ask about suing the other party for something that they themselves goofed up on. It’s too late, you didn’t do your due diligence and made a rookie mistake, now you’re out more than you “saved” not paying commissions.

A high percentage of agent-less deals end up with one party benefitting much more than the other, or falling apart, or in court suing each other over something that could have easily been avoided. Sure it can be done, but if you haven’t done dozens of transactions then you’ll be operating at amateur level and making beginners mistakes that can cost you many thousands more than an agent’s commission.

I almost made this mistake myself before I got my license, when buying a property off of a friend that I thought was a great deal. I had done like 6 transactions in that same area and knew it well. I ran the numbers by my agent just as a gut-check and she said I was overpaying by about $70k. I ended up having her step in to help me show the seller what the real value of the property was, and she saved me a lot more than her commission plus made the transaction go really smoothly and the seller and I stayed friends after.

Almost every FSBO I see is overpriced. People are what we call "house proud" and want their property to be worth more than what the market will likely bear. That's why you see FSBO's listed forever and they end up selling for way less after like a year of the seller trying to sell it. A big part of what listing agents do is convince sellers to list at a reasonable price that will have a chance. Then what a buyers agent does is negotiate more and get the price lower. If you can do both the listing and the buyer's agent's job of convincing the seller to come down to earth, then go for it. Most people can't and end up wasting their time or have to overpay when dealing with a greedy FSBO seller. That's not even getting into the mechanics of the transaction after you are under contract, which is way more than you can learn in this format because every deal is different and only years of experience can prepare you for what might come up.

That sums up the last 10 minutes of the recent On the Market podcast. It's unfortunate, as @Dave Meyer is usually well researched and knowledgeable.

Ensuring a listing is advertised as much as possible benefits the public. Limited advertising helps the pro's. If Company A has a listing and can double end the deal, why would they "give up" half the commission and advertise to Company B to bring a buyer? Does that help or hurt the public? In 2025, we understand marketing mostly means on-line syndications, which is a core feature of MLS's. Yard signs and other activities have limited impact related to selling a property. Anyone who ever used websites like Zillow or Redfin or to find a home, or conduct market research (@Dave Meyer - looking at you!) benefits from this marketing.

In the recent On the Market podcast (which is the best Podcast BP has right now), guest James brought up the Compass v. NWMLS lawsuit. It's clear that James and others don't know their history, or don't care. During the discussion, James was openly braggadocios about breaking the NWMLS rules and paying fines. According to James, Compass considered similar fines for breaking rules to be a cost of doing business and kept violating rules. Now Compass and NWMLS are heading to court.

This stems from NWMLS requiring all licensees to enter their listing into the MLS in a timely manner. I'm not a member of the NWMLS, but the MLS I am a member of has a similar rule. These rules exist because of historical problems like redlining and other abhorrent behaviors designed to limit housing access to a select few. That's why "pocket listings" and "coming-soon" are generally not allowed in many MLSs. Ensuring a listing is advertised as widely as possible benefits the public, which is a core function of any MLS.

Another concern is double-ending transactions. Pocket listings benefit the agent or broker, as they receive the entire commission if they don't have to advertise publicly and can keep transactions in-house.  Most retail buyers or sellers do not understand what happens in a transaction, and do not benefit from one agent “representing” both sides.  It's like an attorney representing the plaintiff and defendant!

Ultimately, retail buyers and sellers benefit from a system encouraging a (mostly) level playing field and competition. Pocket listings encourage backroom deals, which might work for investors and pros, but not for most Americans simply buying or selling a home.  Put a closing statement in front of an average buyer or seller, usually all they understand is the bottom line and trust/hope that their agent has helped them.

James argues that property owners should be able to sell their homes however they want. I agree. If sellers want the best price, that implies participating in the retail marketplace, with retail rules. If they don't want to participate in a fair, public market, they should call a wholesaler, not a real estate agent, or sell FSBO.

There are always exceptions (Dave mentioned one), and no set of rules is perfect. However, Dave and James would do well to remember that a mostly functional system creating a level playing field is better than one (or a few) companies having outsized influence and limiting housing to a select few.

The weak argument made during the discussion about a free market appears to be a red herring.  It appears, this guest prefers pocket listings and wants to stick it to the NWMLS for fining their own bad behavior. Watch the last 10 minutes of the podcast with that in mind and see what conclusion you reach.

On the Market Podcast