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Three Houses And You Are Out
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You have probably seen an ad in a current series being run on behalf of the Century
21 franchise. The series is promoting how hard their agents work for each and
every client and, while a bit sappy in this reporters mind, are probably pretty
effective.
The specific ad we are addressing here is one in which a young woman, presumably
a single parent, is thanking her agent for "not giving up." While
the real estate agent fusses over the clients small child the client talks about
her limited budget and how hard the agent worked to find a house she could afford.
"You must," she exclaims, "have shown me 20 houses."
The agent ducks her head modestly and says, "Well, it was more like 34."
Well 34 is a lot of houses and if the customer's budget was truly limited,
the payoff at the end was probably not a large one. Still, some sales take a
long time, some never happen, and sometimes a buyer will walk into an office
and buy the first home he or she is shown. Those last kind of customers are
called "blue birds," and may heaven bless their hearts and bring them
happiness, success, and the burning desire to buy another house from the same
agent.
It's called real estate.
No, actually it is the heart and soul of selling anything. Ask any car dealer,
retail clerk, door to door salesman, or politician. You will spend a lot of
time and energy on people who are "just looking," and even more
on people who really want to buy but are incapable of making a decision in less
than half a life time.
So it was a little disconcerting to read a column on a national website this
past week decrying the message of the Century 21 ad on the basis that, while
the ad is advertising that the franchise does not stint on how hard they work
to serve their customers, it sends a second message is that they don't
"have a clue how to take control of a buyer or how to qualify one."
This particular writer was playing to an audience of real estate agents,
urging them to evaluate their selling techniques to reduce
the time, energy, and out of pocket expense, especially given the cost of gas,
involved in selling or not selling to any given customer. No problem with that.
As we have said here several times, real estate agents are occasionally abused
and frequently taken advantage of by indecisive, disloyal, or even deceptive
customers and need to draw a firm line in the sand or at least in their own
minds as to how far they will be pushed.
However, the author of this article goes a little further, quoting a top producer
of his acquaintance who "will not show a prospect more than three homes.
If they want to see more than that he refers them to a new agent who is willing
to 'play taxi'."
Three homes?
This is not the first time I have heard of this approach to real estate
sales. Customers have told me about agents who have verbally abused
them when they failed to make an offer after looking at a grand total of four
or five houses. One customer said that none of the homes bore any resemblance
to the specifications they had given the agent. Another said that not a one
was in their price range.
The crazy thing was that these agents were all legendary in their local market
for their high sales level. So maybe it works, at least for them. I suspect,
however, that these are agents that are not particularly interested in working
with buyers; that they view themselves primarily as listing agents. However,
these agents take on buyers because when they pass their uncooperative, slow
or unresponsive buyers off to another agent willing to "play taxi"
they will ultimately collect 20 to 25 percent of that willing agent's
commission as a referral fee. Talk about a deal!
However, from a customer service level it is a pretty selfish way to do business.
First of all, the customer has an investment in the transaction
too. The real estate agent may be spending money on gas and spending time setting
up appointments, but the buyer has invested time in establishing a relationship
with someone they hoped to work with over a period of time. To be told after
viewing only a handful of houses that they will be passed on to another agent
can be disappointing and will require time and effort to establish a new relationship
but it could also kill the desire to continue looking. An insecure buyer, particularly
a first timer, may be shaken to the core by such an attitude and made to feel
that they do not understand the process or that they are not behaving appropriately.
Real estate agents are forever advised to qualify their customers.
Are they seriously interested in buying a house? Can they afford to do so? Is
their timetable a reasonable one or might they be still looking long after the
agent retires? These are not inappropriate questions and no one disputes that
an agent's time is money and that at $3.00 per gallon so is the gas it takes
to show properties. But, in light of the article referenced above, buyers need
step up their efforts to qualify agents as well.
The old conventional wisdom was to interview an agent to make sure he understood
agency, had sufficient experience to guide the buyer through the transaction,
and was capable of driving from point A to Point B without killing his passengers.
The intangibles that make an agent one you will return to for every transaction
will only emerge over time.
However, perhaps it is now necessary to interrogate a potential agent about
his or her work ethic. Does he put a time limit (or house limit)
on his commitment to a buyer? How does he feel about educating a buyer, particularly
a first time buyer? Harder to determine at a first meeting is whether the agent
trusts his judgment more than yours. In other words, does the fact the agent
views a home as perfect for you outrank your own opinion on the subject?
Don't allow yourself to be courted then jilted. An imperious agent is
not working on behalf of the buyer; he is working on behalf of himself. He doesn't
want to waste time on a loser. And neither do you.
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Comments (25)
| RE is a tough business: The agent does several months of work and does not get paid until the deal closes if it at all. Flaky buyers and sellers abuse agents all the time and justify it through the "customer is always right" mindset. On the other side, a well educated agent will know how to properly negotiate that comission. In Jane's case, the agent is not listening to her and should be replaced. In Pianomon's case, the buyer could have covered the agents fee if the house was so perfect. |
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| Above Posted By:
Brian
| Wed, 13 Sep 2006 19:22:19 EST |
| Well I am one of those with a 3 home limit The first time. I have found what buyers say they want and what they buy are 2 different things. More than i try to sell them I try to learn from them. What stopped them from buying? I also take notes and sometimes photos of what we have seen. Finally if they choose not to buy one of these I now have enough information to find what they really want. I also e-mail the photos to other buyers. I never show anyone anything unless I have a prequel. |
|
| Above Posted By:
Jim
| Thu, 7 Sep 2006 20:43:27 EST |
| Will the real humans please avert your gaze, as for Eric here. We work hard at the same low paying job that you do. Your "go save another tree" comment is inappropriate. You sir have no idea how many of your freedoms have been eroded by virtue of the patriot act, let alone the corporate greed that underminds our ability to purcahse anything. How dare you be so rude to strangers. Practice that style of civility upon your personal aquaintances, e.g. those that will tolerrate you. We will not. |
|
| Above Posted By:
braynzbig
| Mon, 10 Jul 2006 14:13:58 EST |
| This last comment of refusing to pay a buyers agent a commission is moronic at best. 2-3% is what is required to do the kind of work that the agent must do start to finish to list or help a customer buy a home. You are in AMERICA, home of profitability. What job do you work at that you would work for less than you were worth? Non-profit, fantastic, go save another tree. Corporation, shut up and pay and enjoy the free country you live in. |
|
| Above Posted By:
Eric
| Thu, 6 Jul 2006 20:28:20 EST |
| We have been in search of a home for 8 years now. The most recent agent that we have shows little desire to get us what we want and can afford. 95% of the properties she showed were ones that I researched & sent to her. What I have found is some agents are complacent w/ mediocracy and have little the ambition to achieve greatness, their patience is awful & the level of unprofessionalism is disturbing. Now, I have decided to become a licensed agent and make this process more plesant for others. |
|
| Above Posted By:
Jazzi
| Mon, 3 Jul 2006 18:11:21 EST |
| If you found this blog then you are computer literate enough to find properties online without an agent. In fact, the sellers agent would love you too since he does not have to split the commission. Do your homework using the online tools and make your own judgement. Don't let any agent pressure you, you've got the money therefore you are a king in today's market. |
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| Above Posted By:
Steve
| Thu, 29 Jun 2006 23:22:33 EST |
| Jane- I had the same problem with a realtor insisting on only showing me properties that were listed by the agency she worked for, even though those properties did not match my criteria or price. I finally registered on several real estate websites so I could get the addresses of houses I was interested in and eventually just went to see them without "my" realtor. Since I had not signed a buyer/broker contract, I was able to move on and buy a house I found for myself, using the seller's broker. |
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| Above Posted By:
Barbara
| Wed, 28 Jun 2006 21:32:19 EST |
| Just like any other of my colleagues in the business of selling and marketing residential real estate, I have had my share of frustrations with buyers in particular. I made it a point to get all the specific information of what their "dream" home is like, their likes and dislikes, location, financial qualificiation, etc. I work hard to prevent wasting their time as well as mine (not to mention my car mileage), thus I search for the 5 best properties to show. Final decision is theirs. |
|
| Above Posted By:
Cynthia Bushman
| Mon, 26 Jun 2006 14:46:17 EST |
| Agents need to recognize that the client is "king/queen," and working hard is normal!! Some clients take a long time to make a decision, but it has to be THEIR decision, and the agent is there to provide information and help, not to push. If you have to hand someone off, then maybe you should rethink why you are in this business which is really about PEOPLE, not homes. |
|
| Above Posted By:
Rachel LaMar
| Sun, 25 Jun 2006 13:05:50 EST |
| As a broker and attorney, the lack of knowledge and preparation of many agents in this business is astounding. As I acknowledge the agent's position (lots of work, small fee) in this situation, he/she failed to establish payment terms before bringing the buyer, and therefore the onus is upon him/herself to "eat it" in this case. Both buyers and sellers need to carefully choose with whom they want to work, and this decision should be based upon knowledge, experience and a basic comfort level. |
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| Above Posted By:
Rachel LaMar
| Sun, 25 Jun 2006 13:05:13 EST |
| This case appears to have the agent responsible to the Buyer and not the Seller. Thus, the commission shoud be paid by the Buyer, who would havereduced his offer by the agreed upon percentage. Just as Sellers increase their acceptable price to factor in paying commissions. If this agent had educated his Buyer before showing the property, this situation could have been avoided, and all parties (including the agent himself) could have been better served. |
|
| Above Posted By:
Fabi909
| Sun, 25 Jun 2006 09:49:56 EST |
| With regards to the three house rule, how would one know after just three houses? This is a huge decision. The first three houses my agent showed me were awful and what is most scary now is that she is a Century 21 Agent. Is this a standard they hold? |
|
| Above Posted By:
Jane
| Sun, 25 Jun 2006 02:07:55 EST |
| cont. I need to move by July-there are plenty of homes for sale, but she is very limited on what she will show me. We have tried to submit two contracts and both have failed and I am running out of time. In both cases, both houses had been on the market 4+ months and perfectly matched my criteria. I wonder why these did not make it into her listings three months ago when I began my search. I'm told that she works for me, but right now I have my doubts! |
|
| Above Posted By:
Jane
| Sun, 25 Jun 2006 02:03:48 EST |
| I am a new home buyer-I'm very serious, I have my "ducks in a row" by having my loan preapproved, by having a month-to-month lease, and by knowing what I want and what the market value is in my area (ieI did my homework). Right now, I am VERY frustrated with this whole process. Currently, my agent takes me to see a lot of homes, but they do not match my criteria so she is wasting time for both of us! (to be continued) |
|
| Above Posted By:
Jane
| Sun, 25 Jun 2006 01:55:02 EST |
| Real estate is headed for changes being driven by the consumer, and their new tools (technology, Internet and education). With in the next few years consumer demands will be what phases out the real estate industry as we know it, the issue of commissions, customer service and efficiency will be addressed also. In the end, Wal-Mart (or someone like them) will fix the shopping problem faced by buyer agents, with no limits, and for a very economical fee. Long live the consumer! |
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| Above Posted By:
shane
| Fri, 23 Jun 2006 11:53:49 EST |
| The agent made the first contact, so disclosing any financial expectateions is his responsibility.
Even if the $1,000 was less than his "expected" commission, he had a sure sale and no listing agent to share with.
This agent is why alternate sales programs are so popular. |
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| Above Posted By:
Charles
| Fri, 23 Jun 2006 11:41:18 EST |
| I sold real estate from 1988 to 1995. Since then I have always disclosed to any agent I've worked with that I once was in the business. Recently while looking for property out of state my husband said, "don't tell the agent that you were in the business." It was amazing how poorly they performed as an agent, when they didn't know. We have since purchased property, but felt that we had to do most of the work ourselves and the agent was very impatient. How sad the business has become. |
|
| Above Posted By:
Denise
| Wed, 21 Jun 2006 19:55:31 EST |
| So you think the agent had no responsibility to disclose up front the expectaion of a commission paid by the seller?
Whether or not the agent invested time is not relevant to who is at fault and has nothing to do with ethics. For all Pianomom knew, it would be the buyer paying for the agent's time.
The agent let everyone involved down, his client included, by not ensuring the ground rules/expectations were set in advance. And shame on you "pros" for jumping on Pianomom.
IMHO |
|
| Above Posted By:
JOHN
| Wed, 21 Jun 2006 13:56:46 EST |
| As a native in a highly desired and developing area, I grew up disliking real estate agents. After becoming a R.E agent, I understand the motivation of a seller to want market value for thier property and of a buyers desire to afford to become a part of this community. Both are honest ambitions, and should be the the professional agents ambition, also. To balance these juxtaposed positions, the agent has earned his commission, fair enough. |
|
| Above Posted By:
Trond Aronsen
| Wed, 21 Jun 2006 11:48:50 EST |
| Offering a RE agent $1000 for bringing you a buyer is just wrong. Did you ever stop to think that the agent did not have to bring you his/her buyer? You tried to get something for nothing for certain! |
|
| Above Posted By:
brigidluna
| Wed, 21 Jun 2006 11:32:08 EST |
| There is a lot of time and money invested to bring a deal to the table. Shame on you Pianomom. You need to learn something about ethics. |
|
| Above Posted By:
Gene
| Wed, 21 Jun 2006 10:47:19 EST |
| As for Pianomom, You accepted the agent bringing you a buyer either without asking the fees or not caring about them and when he got you a buyer then you tried to get something for nothing. Do you have a right to sell your investment on your terms? Absolutely, but the agent has made an investment to making your sale. Do you think that as a RE agent we just pick up a buyer and bring him over to sign on the dotted line? |
|
| Above Posted By:
Gene
| Wed, 21 Jun 2006 10:46:37 EST |
| After 25 years in the RE business I have learned to ask lots of questions in many forms to determine the true desire and capabilities of the "client". I have even to go to the point of asking for a copy of their lease to determine if they even have the ability and funds to break the lease. As for Pianomom, you accepted the agent bringing you a buyer either without asking the fees or not caring about them and when he got you a buyer then you tried to get something for nothing. |
|
| Above Posted By:
Gene
| Wed, 21 Jun 2006 10:44:40 EST |
| We used one real estate agent to sell two homes and buy one. He worked hard to sell the home and even harder to fine one for us. He worked as if the client is right. Look at it from the clients view. We are paying a person potentially 2 to 5 thousand dollars to complete a job. The client is everything, without the client there is no need for a real estate agent or broker. |
|
| Above Posted By:
Rusty
| Wed, 21 Jun 2006 10:40:49 EST |
| We recently sold our home through a non-traditional real estate agency. When a traditional agent brought his buyer through our home and then made an offer, the agent was irate when we refused to pay him a commission. We offered him $1,000 and his response was, "I won't work for that kind of money." As a result, the buyer lost out on the house he wanted. Real estate agents need to realize that we, as consumers, have other options, and that our homes are OUR investments, not theirs! |
|
| Above Posted By:
Pianomom
| Wed, 21 Jun 2006 09:13:35 EST |
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