All Forum Posts by: Tyler Y.
Tyler Y. has started 2 posts and replied 30 times.
Post: RE Investing - Not a good option right now
- Investor
- Houston TX
- Posts 32
- Votes 25
Quote from @Henry Clark:
OP you joined BP in February. Asked the beginner questions of how and where to invest. You’re an appraiser. You live in Ohio where for whatever reason people want to invest from out of state. Now you have decided a small business is the best way to go.
I tell people to Start small and Make Your Big Mistakes Early.
No matter what endeavor a person takes you have to get your failures out of the way.
Good luck in your endeavor. Right now is the best time to ever be in Real Estate though.
If everyone went step by step though each thing before doing the next thing, nobody would every do anything. Example: first you have to try stocks, then you have to learn real estate, then you try a small business, then a medium sized business, then a big business... No, it doesn't work that way in real life. You only live 80 years or more if you are lucky. If you want to start a big business, start building a big business. It's going to take a long time.
Post: Why use a Real Estate Agent?
- Investor
- Houston TX
- Posts 32
- Votes 25
Quote from @Jonathan R McLaughlin:
@Gary Lucido you make an excellent point about various middlepeople going obsolete, for real. I undersold that one It is not automatic though, and at the high end the role is VERY sticky. Investment banks, personal wealth advisors and so and so on are essentially brokers that have flourished even as the market has accommodated automation in the low end. And bookstores are making a comeback :) But, again, you make a good point.
I was initially surprised by how well the real estate brokers held on in the internet age but they have been very strategic about their positioning. The NAR lobby is very skilled. And the very volume of information has helped them preserve their expert status. The industry doesn't really have to be geared around investors, we don't do the volume homeowners do, and they want the handholding. And those people gravitate towards the trusted and known.
Certainly the current system is breakable, but I don't think the disruptors are close yet.
I agree, and the ironic thing is this : the homeowners have less money, and less knowledge, than investors, but homeowners are the biggest clients and the lion's share of business for agents and brokers. It's kind of a no-brainer, right?
So if anyone is going to "figure the closing process out for themselves," it's probably going to be the guy who already learned enough to become an investor, too. Because they already know how to find good investments, do their due diligence, and on and on... some even go on to become developers... Most agents and brokers aren't even 1/10th of the way to that kind of knowledge.
Post: Why use a Real Estate Agent?
- Investor
- Houston TX
- Posts 32
- Votes 25
Quote from @James Hamling:
Quote from @Tyler Y.:
Quote from @James Hamling:
Quote from @Tyler Y.:
Quote from @James Hamling:
Quote from @Tyler Y.:
Quote from @Wale Lawal:
The proliferation of services that help homebuyers and sellers complete their own real estate transactions is relatively recent, and it may have you wondering whether using a real estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commission rates many real estate agents command, for many, flying solo may not be the way to go--and could end up being more costly than a realtor's commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking. Find out why you shouldn't discard the notion of hiring an agent just yet.
1. Better Access/More Convenience
A real estate agent's full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents. Both the buyer's and seller's agent work full time as real estate agents and they know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real estate agent will track down homes that meet your criteria, get in touch with sellers' agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you're shopping for homes that are for sale by owner.
Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don't respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.
2. Negotiating Is Tricky Business
Many people don't like the idea of doing a real estate deal through an agent and feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is probably true--assuming that both the buyer and seller in a given transaction are reasonable people who are able to get along. Unfortunately, this isn't always an easy relationship.
What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your real estate agent can convey your concerns to the sellers' agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner's feathers.
A real estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that a seller can reject a potential buyer's offer for any reason--including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real estate agent who will represent their interests without turning off potential buyers who want to niggle about the price.
3. Contracts Can Be Hard To Handle
If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren't met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale--and you aren't approved for the mortgage--you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract.
An experienced real estate agent deals with the same contracts and conditions on a regular basis, and is familiar with which conditions should be used, when they can safely be removed and how to use the contract to protect you, whether you're buying or selling your home.
4. Real Estate Agents Can't Lie
Well, OK, actually they can. But because they are licensed professionals there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real estate agent under an agency agreement, (i.e., a conventional, full-service commission agreement in which the agent agrees to represent you), your agent will be bound by common law (in most states) to a fiduciary relationship. In other words, the agent is bound by license law to act in their clients' best interest (not his or her own).
In addition, most realtors rely on referrals and repeat business to build the kind of clientèle base they'll need to survive in the business. This means that doing what's best for their clients should be as important to them as any individual sale.
Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent's broker, professional association (such as the National Association Of Realtors) or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.
When a buyer and seller work together directly, they can (and should) seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offers or the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.
5. Not Everyone Can Save Money
Many people eschew using a real estate agent to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets the keep the percentage of the home's sale price that might otherwise be paid to the real estate agent.
However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can't both save the commission.
All the best!
This is the best answer. The liability placed on agents and brokers definitely helps. The elephant in the room, though, is the bias and NAR's monopolization of the industry. It is very hard to get an unbiased answer on using an agent ... from an agent. It's like asking a barber if you need a haircut. Or asking a car salesman if you should buy a car (from them, of course). I'm sure that if I went through the process and got a license (I've actually taken the entire course, just decided against licensing due to the liability) that it would be hard not to switch my tune because of the incentives... That's just how human bias works.
A lot of this is just assumption, assuming a Real Estate Agent is ONLY arguing to defend there profit generation. The truth is it's a LOT more like a surgeon trying to share and explain why it's foolish to try and do your own surgery, yourself.
Look, in the vast majority of cases a real estate transaction is in the hundreds of thousands of dollars. It's a lot of money, years and years worth if not decades worth of income, right, the risks are BIG from screw-up's, one mess-up easily costs thousands and tens of thousands.
Reality is Real Estate Transactions are complicated. Yes, a person "can" do it "simple", and one "can" do a surgery with a chain-saw, doesn't make it correct.
The thing in Real Estate Transactions, and newer wholesalers run into this a lot, is finding out you only did the basics, and missed things, big things, expensive things. This is law were talking about, ever seen a law library? Ever try reading a legal statute? Yeah, it ain't easy. An agent's main thing isn't for the simple obvious stuff, any ya-hoo can do a fill-in-the-blanks basic PA. An agent, like an attorney, exists for all the sh#t that SINT commonly known, for the DETAILS. On average MOST transactions have no less than 7 addendums, if done correctly. Yup, and that's just basic 101. Most is "CYA" doc's so nothing comes back after the fact, months or years later, to bite one in the arse.
There is a mountain of variables to every transaction, and knowing which applies, which does not, how to best address it for the stance one is in, how it legally impacts, THATS what an agent exists for. This whole argument of doing it one-self has stood on an assumption "it's EASY" and "Anyone can do it", which NO, that's not true, it's NOT easy and no not anyone can do it, anyone can try and most likely do it really poorly, with lots of screw-ups, and get into litigation which there ya go, that's 10X the cost an agent would have been.
Look, I simply tell the truthy, that's it. About 15% of my client base is people who did try doing things themselves, and learned the hard way. They ask me often "how do you do it" when it seems so easy that I get done "the things". It's one simple fact, this is what I do, every day, FT, for years, decades. It's infantile to think a person with 0 experience can get same or similar results to one who does it FT day in and day out.
No person would argue they can cook ANYTHING as good as Gordon Ramsey, a chef. They don't say "well, anyone can cook, so Chef's are a waste of $, I can throw together whatever they do no problem". No, everyone would laugh at that. Why is it not equally as common sense about a complicated legal process involving hundreds of thousands of dollars, layers of regulatory over-sight from Federal, state, county and local.
Yes, SOME can, stress on SOME. Some CAN cook as good as a Chef. That sure as hell does not mean ANY can.
Most agents simply aren't that good. The good ones are worth their weight in gold, but does the license make them magically smarter? No. The knowledge? Yes. Can you have that knowledge without the state or government or TRELA or NAR stamping you with their approval? Yes.
That's the point.
Yeah, that is the rub of it isn't it.
I would say from my experience;
- 50% of agents are absolute garbage, 0 value what-so-ever from that agent ALTHOUGH the 1 value point is, there under a broker, so any f-up after the fact a person can throw that agent under the bus, cite broker must make things right, and via laws and licensure, yup there is a liability. So it still holds value over self-agency because there is a party to hold accountable. One has to weigh the agent cost vs benefit, make sure there in-line.
- 30% of agent are "meahh". Now, take this with a grain of salt because I consider net-0 to be "meahh" and if the value an agent brings covers there entire fee's, well there is value in fact they did everything, you saved your time, that's valuable, and you completely removed risk as they ate that. So it's worth it, but it's not some "big win" it's just a "yeah, that makes sense".
- 15% of agents are great. They not only get the job done but better, faster, and every once in a while surprise with a off-market deal, something one didn't expect. It's a profitable relationship, one where a person says "I am luck to have found ___".
- 5% of agents "walk-on-water". What else do you say of them, they are nothing short of God like powers of Real Estate. They seemingly do the impossible or improbable, and do it weekly. They dig up deals that make a head spin (what, where the F did you find this?". They actually KNOW things. You ask them on inflation, with total calm they have the answers, not just for today but tomorrow and all the tomorrows. They knows what's happening where, when, why, how. You wonder some days if there secretly a cyborg, some special DARPA top secret project putting chatGPT into a human looking body to see how quickly ai can take over an industry, lol. Your consistently blown away by the ready answers to everything and, a bit intimidated, maybe feel almost stupid in comparison but right then they even know that and give relief that it's ok, it's why you got them, there here for you.
So yes, that IS the reality of agents out there. So what does this all mean? Does it mean since it's easy to find crap service one should do it themselves to assure crap or "meahh" results? Because that's all your doing, your assuring with 100% certainty you will NOT get to "amazing" results.
OR....... To understand this breakdown and focus energy to finding and hiring that 5%.
It's just not complicated in my mind, there is a ton of time energy and effort spent trying to do it oneself, more than it takes to find a hire a 5%'er. So it's not even a case of "but James, I can't find a 5%'er" because applying that effort of doing it via self WILL find and retain a 5%'er.
So everything actually comes back to 1 thing, FINDING AND BUILDING THE RIGHT TEAM.
The same statistic can break people down by IQ, work ethic, talent, skill, practice, or in any other profession... Wholesalers, FSBOs, business owners, you name it. The real estate license isn't magic. I'll stop quote replying to drive this point home.
A drivers license does not make one a great driver does it? No, and we all know this. This is a pointless point in this thread, nobody said a license = anything other than authorization to do a thing. Everyone knows this.
Bingo! So, other than an arbitrary law granting permission to do a thing, you can find any competent, skilled person to help you do the thing, or if you are competent and skilled, you can always do it yourself
Post: Why use a Real Estate Agent?
- Investor
- Houston TX
- Posts 32
- Votes 25
Quote from @James Hamling:
Quote from @Tyler Y.:
Quote from @James Hamling:
Quote from @Tyler Y.:
Quote from @Wale Lawal:
The proliferation of services that help homebuyers and sellers complete their own real estate transactions is relatively recent, and it may have you wondering whether using a real estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commission rates many real estate agents command, for many, flying solo may not be the way to go--and could end up being more costly than a realtor's commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking. Find out why you shouldn't discard the notion of hiring an agent just yet.
1. Better Access/More Convenience
A real estate agent's full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents. Both the buyer's and seller's agent work full time as real estate agents and they know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real estate agent will track down homes that meet your criteria, get in touch with sellers' agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you're shopping for homes that are for sale by owner.
Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don't respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.
2. Negotiating Is Tricky Business
Many people don't like the idea of doing a real estate deal through an agent and feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is probably true--assuming that both the buyer and seller in a given transaction are reasonable people who are able to get along. Unfortunately, this isn't always an easy relationship.
What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your real estate agent can convey your concerns to the sellers' agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner's feathers.
A real estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that a seller can reject a potential buyer's offer for any reason--including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real estate agent who will represent their interests without turning off potential buyers who want to niggle about the price.
3. Contracts Can Be Hard To Handle
If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren't met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale--and you aren't approved for the mortgage--you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract.
An experienced real estate agent deals with the same contracts and conditions on a regular basis, and is familiar with which conditions should be used, when they can safely be removed and how to use the contract to protect you, whether you're buying or selling your home.
4. Real Estate Agents Can't Lie
Well, OK, actually they can. But because they are licensed professionals there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real estate agent under an agency agreement, (i.e., a conventional, full-service commission agreement in which the agent agrees to represent you), your agent will be bound by common law (in most states) to a fiduciary relationship. In other words, the agent is bound by license law to act in their clients' best interest (not his or her own).
In addition, most realtors rely on referrals and repeat business to build the kind of clientèle base they'll need to survive in the business. This means that doing what's best for their clients should be as important to them as any individual sale.
Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent's broker, professional association (such as the National Association Of Realtors) or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.
When a buyer and seller work together directly, they can (and should) seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offers or the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.
5. Not Everyone Can Save Money
Many people eschew using a real estate agent to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets the keep the percentage of the home's sale price that might otherwise be paid to the real estate agent.
However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can't both save the commission.
All the best!
This is the best answer. The liability placed on agents and brokers definitely helps. The elephant in the room, though, is the bias and NAR's monopolization of the industry. It is very hard to get an unbiased answer on using an agent ... from an agent. It's like asking a barber if you need a haircut. Or asking a car salesman if you should buy a car (from them, of course). I'm sure that if I went through the process and got a license (I've actually taken the entire course, just decided against licensing due to the liability) that it would be hard not to switch my tune because of the incentives... That's just how human bias works.
A lot of this is just assumption, assuming a Real Estate Agent is ONLY arguing to defend there profit generation. The truth is it's a LOT more like a surgeon trying to share and explain why it's foolish to try and do your own surgery, yourself.
Look, in the vast majority of cases a real estate transaction is in the hundreds of thousands of dollars. It's a lot of money, years and years worth if not decades worth of income, right, the risks are BIG from screw-up's, one mess-up easily costs thousands and tens of thousands.
Reality is Real Estate Transactions are complicated. Yes, a person "can" do it "simple", and one "can" do a surgery with a chain-saw, doesn't make it correct.
The thing in Real Estate Transactions, and newer wholesalers run into this a lot, is finding out you only did the basics, and missed things, big things, expensive things. This is law were talking about, ever seen a law library? Ever try reading a legal statute? Yeah, it ain't easy. An agent's main thing isn't for the simple obvious stuff, any ya-hoo can do a fill-in-the-blanks basic PA. An agent, like an attorney, exists for all the sh#t that SINT commonly known, for the DETAILS. On average MOST transactions have no less than 7 addendums, if done correctly. Yup, and that's just basic 101. Most is "CYA" doc's so nothing comes back after the fact, months or years later, to bite one in the arse.
There is a mountain of variables to every transaction, and knowing which applies, which does not, how to best address it for the stance one is in, how it legally impacts, THATS what an agent exists for. This whole argument of doing it one-self has stood on an assumption "it's EASY" and "Anyone can do it", which NO, that's not true, it's NOT easy and no not anyone can do it, anyone can try and most likely do it really poorly, with lots of screw-ups, and get into litigation which there ya go, that's 10X the cost an agent would have been.
Look, I simply tell the truthy, that's it. About 15% of my client base is people who did try doing things themselves, and learned the hard way. They ask me often "how do you do it" when it seems so easy that I get done "the things". It's one simple fact, this is what I do, every day, FT, for years, decades. It's infantile to think a person with 0 experience can get same or similar results to one who does it FT day in and day out.
No person would argue they can cook ANYTHING as good as Gordon Ramsey, a chef. They don't say "well, anyone can cook, so Chef's are a waste of $, I can throw together whatever they do no problem". No, everyone would laugh at that. Why is it not equally as common sense about a complicated legal process involving hundreds of thousands of dollars, layers of regulatory over-sight from Federal, state, county and local.
Yes, SOME can, stress on SOME. Some CAN cook as good as a Chef. That sure as hell does not mean ANY can.
Most agents simply aren't that good. The good ones are worth their weight in gold, but does the license make them magically smarter? No. The knowledge? Yes. Can you have that knowledge without the state or government or TRELA or NAR stamping you with their approval? Yes.
That's the point.
Yeah, that is the rub of it isn't it.
I would say from my experience;
- 50% of agents are absolute garbage, 0 value what-so-ever from that agent ALTHOUGH the 1 value point is, there under a broker, so any f-up after the fact a person can throw that agent under the bus, cite broker must make things right, and via laws and licensure, yup there is a liability. So it still holds value over self-agency because there is a party to hold accountable. One has to weigh the agent cost vs benefit, make sure there in-line.
- 30% of agent are "meahh". Now, take this with a grain of salt because I consider net-0 to be "meahh" and if the value an agent brings covers there entire fee's, well there is value in fact they did everything, you saved your time, that's valuable, and you completely removed risk as they ate that. So it's worth it, but it's not some "big win" it's just a "yeah, that makes sense".
- 15% of agents are great. They not only get the job done but better, faster, and every once in a while surprise with a off-market deal, something one didn't expect. It's a profitable relationship, one where a person says "I am luck to have found ___".
- 5% of agents "walk-on-water". What else do you say of them, they are nothing short of God like powers of Real Estate. They seemingly do the impossible or improbable, and do it weekly. They dig up deals that make a head spin (what, where the F did you find this?". They actually KNOW things. You ask them on inflation, with total calm they have the answers, not just for today but tomorrow and all the tomorrows. They knows what's happening where, when, why, how. You wonder some days if there secretly a cyborg, some special DARPA top secret project putting chatGPT into a human looking body to see how quickly ai can take over an industry, lol. Your consistently blown away by the ready answers to everything and, a bit intimidated, maybe feel almost stupid in comparison but right then they even know that and give relief that it's ok, it's why you got them, there here for you.
So yes, that IS the reality of agents out there. So what does this all mean? Does it mean since it's easy to find crap service one should do it themselves to assure crap or "meahh" results? Because that's all your doing, your assuring with 100% certainty you will NOT get to "amazing" results.
OR....... To understand this breakdown and focus energy to finding and hiring that 5%.
It's just not complicated in my mind, there is a ton of time energy and effort spent trying to do it oneself, more than it takes to find a hire a 5%'er. So it's not even a case of "but James, I can't find a 5%'er" because applying that effort of doing it via self WILL find and retain a 5%'er.
So everything actually comes back to 1 thing, FINDING AND BUILDING THE RIGHT TEAM.
The same statistic can break people down by IQ, work ethic, talent, skill, practice, or in any other profession... Wholesalers, FSBOs, business owners, you name it. The top 1% of FSBOs sell just as good if not better than the ones listed with an agent... The top 1% of wholesalers run circles around agents... And so on... The real estate license isn't magic. I'll stop quote replying to drive this point home.
Post: Why use a Real Estate Agent?
- Investor
- Houston TX
- Posts 32
- Votes 25
Quote from @James Hamling:
Quote from @Tyler Y.:
Quote from @Wale Lawal:
The proliferation of services that help homebuyers and sellers complete their own real estate transactions is relatively recent, and it may have you wondering whether using a real estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commission rates many real estate agents command, for many, flying solo may not be the way to go--and could end up being more costly than a realtor's commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking. Find out why you shouldn't discard the notion of hiring an agent just yet.
1. Better Access/More Convenience
A real estate agent's full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents. Both the buyer's and seller's agent work full time as real estate agents and they know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real estate agent will track down homes that meet your criteria, get in touch with sellers' agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you're shopping for homes that are for sale by owner.
Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don't respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.
2. Negotiating Is Tricky Business
Many people don't like the idea of doing a real estate deal through an agent and feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is probably true--assuming that both the buyer and seller in a given transaction are reasonable people who are able to get along. Unfortunately, this isn't always an easy relationship.
What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your real estate agent can convey your concerns to the sellers' agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner's feathers.
A real estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that a seller can reject a potential buyer's offer for any reason--including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real estate agent who will represent their interests without turning off potential buyers who want to niggle about the price.
3. Contracts Can Be Hard To Handle
If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren't met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale--and you aren't approved for the mortgage--you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract.
An experienced real estate agent deals with the same contracts and conditions on a regular basis, and is familiar with which conditions should be used, when they can safely be removed and how to use the contract to protect you, whether you're buying or selling your home.
4. Real Estate Agents Can't Lie
Well, OK, actually they can. But because they are licensed professionals there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real estate agent under an agency agreement, (i.e., a conventional, full-service commission agreement in which the agent agrees to represent you), your agent will be bound by common law (in most states) to a fiduciary relationship. In other words, the agent is bound by license law to act in their clients' best interest (not his or her own).
In addition, most realtors rely on referrals and repeat business to build the kind of clientèle base they'll need to survive in the business. This means that doing what's best for their clients should be as important to them as any individual sale.
Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent's broker, professional association (such as the National Association Of Realtors) or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.
When a buyer and seller work together directly, they can (and should) seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offers or the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.
5. Not Everyone Can Save Money
Many people eschew using a real estate agent to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets the keep the percentage of the home's sale price that might otherwise be paid to the real estate agent.
However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can't both save the commission.
All the best!
This is the best answer. The liability placed on agents and brokers definitely helps. The elephant in the room, though, is the bias and NAR's monopolization of the industry. It is very hard to get an unbiased answer on using an agent ... from an agent. It's like asking a barber if you need a haircut. Or asking a car salesman if you should buy a car (from them, of course). I'm sure that if I went through the process and got a license (I've actually taken the entire course, just decided against licensing due to the liability) that it would be hard not to switch my tune because of the incentives... That's just how human bias works.
A lot of this is just assumption, assuming a Real Estate Agent is ONLY arguing to defend there profit generation. The truth is it's a LOT more like a surgeon trying to share and explain why it's foolish to try and do your own surgery, yourself.
Look, in the vast majority of cases a real estate transaction is in the hundreds of thousands of dollars. It's a lot of money, years and years worth if not decades worth of income, right, the risks are BIG from screw-up's, one mess-up easily costs thousands and tens of thousands.
Reality is Real Estate Transactions are complicated. Yes, a person "can" do it "simple", and one "can" do a surgery with a chain-saw, doesn't make it correct.
The thing in Real Estate Transactions, and newer wholesalers run into this a lot, is finding out you only did the basics, and missed things, big things, expensive things. This is law were talking about, ever seen a law library? Ever try reading a legal statute? Yeah, it ain't easy. An agent's main thing isn't for the simple obvious stuff, any ya-hoo can do a fill-in-the-blanks basic PA. An agent, like an attorney, exists for all the sh#t that SINT commonly known, for the DETAILS. On average MOST transactions have no less than 7 addendums, if done correctly. Yup, and that's just basic 101. Most is "CYA" doc's so nothing comes back after the fact, months or years later, to bite one in the arse.
There is a mountain of variables to every transaction, and knowing which applies, which does not, how to best address it for the stance one is in, how it legally impacts, THATS what an agent exists for. This whole argument of doing it one-self has stood on an assumption "it's EASY" and "Anyone can do it", which NO, that's not true, it's NOT easy and no not anyone can do it, anyone can try and most likely do it really poorly, with lots of screw-ups, and get into litigation which there ya go, that's 10X the cost an agent would have been.
Look, I simply tell the truthy, that's it. About 15% of my client base is people who did try doing things themselves, and learned the hard way. They ask me often "how do you do it" when it seems so easy that I get done "the things". It's one simple fact, this is what I do, every day, FT, for years, decades. It's infantile to think a person with 0 experience can get same or similar results to one who does it FT day in and day out.
No person would argue they can cook ANYTHING as good as Gordon Ramsey, a chef. They don't say "well, anyone can cook, so Chef's are a waste of $, I can throw together whatever they do no problem". No, everyone would laugh at that. Why is it not equally as common sense about a complicated legal process involving hundreds of thousands of dollars, layers of regulatory over-sight from Federal, state, county and local.
Yes, SOME can, stress on SOME. Some CAN cook as good as a Chef. That sure as hell does not mean ANY can.
Most agents simply aren't that good. The good ones are worth their weight in gold, but does the license make them magically smarter? No. The knowledge? Yes. Can you have that knowledge without the state or government or TRELA or NAR stamping you with their approval? Yes.
That's the point.
Post: Why use a Real Estate Agent?
- Investor
- Houston TX
- Posts 32
- Votes 25
Quote from @Wale Lawal:
The proliferation of services that help homebuyers and sellers complete their own real estate transactions is relatively recent, and it may have you wondering whether using a real estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commission rates many real estate agents command, for many, flying solo may not be the way to go--and could end up being more costly than a realtor's commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking. Find out why you shouldn't discard the notion of hiring an agent just yet.
1. Better Access/More Convenience
A real estate agent's full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents. Both the buyer's and seller's agent work full time as real estate agents and they know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real estate agent will track down homes that meet your criteria, get in touch with sellers' agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you're shopping for homes that are for sale by owner.
Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don't respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.
2. Negotiating Is Tricky Business
Many people don't like the idea of doing a real estate deal through an agent and feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is probably true--assuming that both the buyer and seller in a given transaction are reasonable people who are able to get along. Unfortunately, this isn't always an easy relationship.
What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your real estate agent can convey your concerns to the sellers' agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner's feathers.
A real estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that a seller can reject a potential buyer's offer for any reason--including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real estate agent who will represent their interests without turning off potential buyers who want to niggle about the price.
3. Contracts Can Be Hard To Handle
If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren't met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale--and you aren't approved for the mortgage--you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract.
An experienced real estate agent deals with the same contracts and conditions on a regular basis, and is familiar with which conditions should be used, when they can safely be removed and how to use the contract to protect you, whether you're buying or selling your home.
4. Real Estate Agents Can't Lie
Well, OK, actually they can. But because they are licensed professionals there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real estate agent under an agency agreement, (i.e., a conventional, full-service commission agreement in which the agent agrees to represent you), your agent will be bound by common law (in most states) to a fiduciary relationship. In other words, the agent is bound by license law to act in their clients' best interest (not his or her own).
In addition, most realtors rely on referrals and repeat business to build the kind of clientèle base they'll need to survive in the business. This means that doing what's best for their clients should be as important to them as any individual sale.
Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent's broker, professional association (such as the National Association Of Realtors) or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.
When a buyer and seller work together directly, they can (and should) seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offers or the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.
5. Not Everyone Can Save Money
Many people eschew using a real estate agent to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets the keep the percentage of the home's sale price that might otherwise be paid to the real estate agent.
However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can't both save the commission.
All the best!
This is the best answer. The liability placed on agents and brokers definitely helps. The elephant in the room, though, is the bias and NAR's monopolization of the industry. It is very hard to get an unbiased answer on using an agent ... from an agent. It's like asking a barber if you need a haircut. Or asking a car salesman if you should buy a car (from them, of course). I'm sure that if I went through the process and got a license (I've actually taken the entire course, just decided against licensing due to the liability) that it would be hard not to switch my tune because of the incentives... That's just how human bias works.
Post: Why use a Real Estate Agent?
- Investor
- Houston TX
- Posts 32
- Votes 25
Most people don't understand the real estate transaction process. You do. It's actually not very complicated, but before the internet, it wasn't easy to find the information.
The MLS is also secret information in many states. There's a lot of lobbying by NAR and the other associations, too.
Most consumers don't know how any of these things work and don't want to, and would sue anyone in a heartbeat if anything went wrong, so it's important to keep that in mind.
There is always the path of becoming a wholesaler, if you really do know what you are doing.
--
But the agents who compare themselves to pilots of 747s... gimme a break :-) lots of people have done wholesale and off market transactions.
Post: Any landmen? Contracts for mineral rights, wholesaling oil land?
- Investor
- Houston TX
- Posts 32
- Votes 25
Quote from @Kerry Noble Jr:
I listened to a podcast and about this. the guy made millions wholesaling land with oil on it....in the path of development to a larger company.....down there in TX
I know exactly who you're talking about, and I've visited that facility a few times ;-)
Pretty amazing backstory... No idea how those contracts work
Post: Any landmen? Contracts for mineral rights, wholesaling oil land?
- Investor
- Houston TX
- Posts 32
- Votes 25
Curious if anyone on the BP forums wholesales, locks up, or flips land with mineral rights, oil, gold, etc.
Resources? Contracts? Courses?
There are BILLIONAIRES who got started doing this, turned it into massive companies, would be awesome to see how to structure this type of option rather than just your basic contract to purchase the land or building.
Post: New Western Acquisitions relationship
- Investor
- Houston TX
- Posts 32
- Votes 25
Their deals just aren't good. If you're on their list, I would click "unsubscribe."