Stuck in the middle: Realtor blues

Good morning, Dennis Dixon.

The Los Angeles Times today explores the current plight of Realtors -- stuck in the middle between picky buyers and unrealistic sellers, and fed up with both breeds:

"ATTENTION, you picky buyers who think you have all the time in the world to house hunt before you ink an offer. (And this goes double for those of you who think that a listing price is just some silly number pulled from the air and that you can offer 30% less.) Listen up: Agents are mad as hell and aren't going to take you anymore."

Story says realty agents (we sometimes say "Realtors," knowing full well that only some agents are Realtors) are looking for flexible sellers and real buyers, and brushing off the rest. One guru is quoted as saying agents should skip repping buyers entirely, and spend their time looking for motivated sellers. Another agent, Valerie Van De Zilver, advises straight talk to unrealistic sellers: "Sometimes, I have to tell a client that he just isn't going to be able to meet his price goal in this market and that maybe he should think about holding off on his plans to sell."

Our take: That sounds like a nice enough brush-off, but we wonder if it is helpful. We've talked with agents who see it another way entirely: "The longer you sit on a price that's too high, the weaker the market will get, the lower your eventual selling price will be. Prices are falling; the smart time to sell is now, not later. Being stubborn -- or unrealistic -- will cost you money."

Your thoughts? Comments? Insights? E-mail story tips to lalandblog@yahoo.com.

Comments

[dog-walker]

OMG!!! How long?!!! How hard?!!! How much sweat for a "Realty Agent" to "earn" his fifty-thousand dollar take from a million dollar (two bedroom, one bath cottage) home sale?!!!

One LIFE guru has been advising, "Oh cry me a river!!"

Another said, "Let's get rid of the whole bunch kit and kaboodle, with their secretive MLS system and their "exclusive listings!"

My dog just rolled over and went back to sleep!

(Um... this post clearly evoked in me a sensation of exasperated hostility. Is that wrong headed? Or justified? Opinions?)

[Dr. JwB]

Sounds to me like somebody is pissed off that their job involves actual work, perhaps for the first time. "Money used to fall from the sky and now it doesn't any more, and that makes me crabby". Talk to other salespeople about how many people walk in the door, test the product, then make an excuse and walk out. Your job now is now a real job, and you need to make some effort to bring the buyers and sellers together - because if you don't, you will starve. Welcome to the real world. And quit with the "Mad as hell and I'm not going to take it any more" attitude. It is just a waste of energy - energy you will need to bring in your next paycheck. A tantrum never solved anything - but that fact that some realturs feel this way explains much of the behavior I've read on this and other blogs (especially SMDM). Time to grow up.

[First Time Home Buyer]

Reading stuff like this is exasperating. The full article is even worse. Realtors brag that they make buyers jump through hoops before they will even take them on. I guess it should just be our privilege to buy an overpriced house that doesn't meet our needs because we already looked at four other houses. Time is money right? With all the listings available on the internet, remind me why I even need a lazy realtor agent again?

[Diaphne Down]

>"Sometimes, I have to tell a client that he just isn't going to be able to meet his price goal in this market and that maybe he should think about holding off on his plans to sell."

Right! Sellers have been faulting their agents for not having the skills to sell. Yet 90% of props on the glutted westside MLS were purchased at the peak of the market--2004-7. And sellers still think they should be making 20%/yr on their house-piggy banks. It's about time agents stopped 'buying' their listings, and started honestly describing this market to sellers. No one is selling in this bloated market unless they need to. And they may not be in default on their property taxes, because they made no downpayment; with piggy-back mortgages, and PMI--which is paying prop taxes even as they enter default.

Our society has come to accept 'spin'--but in this case, spin is simply lying. It does prolong the agony, and is a disservice to sellers. As for anger towards low-balling buyers (read 'prescient buyers')? You've got to be kidding. How many agents cut off their noses to spite their faces!

[Toby]

I think al of these excess "realty agents" needs to go back to their prior job....Car salesman.

The good news is, at least with car sales, they wont have to lie as much.

[JK]

Realtors are tired of working with picky buyers? So what! The same rule that applies to the current housing market applies to them. If they are not willing to represent you, there will be plenty of others who will!

They'd be foolish to think that their greedy counterparts will leave a ton of unrepresented buyers out there!

[blah_to_you]

Forget realtors. Their time is fast ending. What possible service do they provide that comes close to 6% of the selling price? Lazy, lazy, lazy as well as generally in the realty biz due to no other abilities.

The faster realtors follow the Dodo, the better.

[N_C]

It makes sense not to take an unrealistic listing since it costs the Realtor money out of pocket to list it. I don't believe anyone can fault them for being sensible.

If some buyers can't find their dream home in the first round of houses you show them, it is part of their job to find homes to show the buyer. Why else would you hire a full service Realtor?? If I were a buyer, I wouldn't find "emails" an acceptable substitute. Might as well go to redfin.com and find the homes yourself.

[War ChestSM]

The real irony here is that many agents are currently trying to unload their own failing flips right as we see quotes (and attitudes) like these. I'm not here to bash real estate agents, but many folks involved in the real estate industry got too bullish near the peak and dove into investments of their own.

The more this stuff comes up, the more it looks like a perfect storm.

Thanks for the shout out JWB...Peter, when is this blog going to do another mention/story on the Distress Monitor? We have been seeing some early 2005 rollbacks in the once "bulletproof" Santa Monica area.

[Giacomo]

Realtors: And so now you reap what you have sowed. All those years of insisting that 6% was fair and necessary compensation. All that shiny advertising about how you're here to "help" buyers AND sellers with wise guidance. Your industry organization having to be SUED by the Justice Department over antitrust violations.

Let's stop pretending that Realtors look out for anyone but themselves.

RE agents had no ethical problems selling homes to people who couldn't afford them. After a bit of grumbling, they'll be pushing their listings towards capitulation, because that's what it going to take to generate sales.

"Second prize is a knife set. Third prize is you're fired."

[Doug Willis]

There seems to be some animosity towards agents from the comments I have read. But as Colonel Jessup said "You want me on that wall, You need me on that wall". So when it comes time to sell the house, who do you call? What other industry offers free, professional advice, while at the same time investing their own resources, only to find that there may be no commitment on the part of a client.

[Charles Wilson]

That article is really a chronicle of the air being let out of the tires of the real estate speculation game. All of the grievances are genuine:The looky-loo buyers are indeed playing games, and so are the blockhead sellers. And so are the real estate agents who are learning that they can't, in the words of the article, survive by being order takers.

By the time this comes back to earth (or as close to earth as is possible in Southern California, which is, oh, about 20,000 feet) everyone's going to be a little more realistic. The sellers will be only slightly out to lunch. The buyers will be slightly ridiculous. The agents will be fewer in number, and be working much harder.

The salad days are over, at least for another 10 or 15 years. The smart ones have already moved on to another game. Commodities, anyone?

[Nicole]

The agent Walter Sanford from the article is arrogant and would never get my business. Who wants to jump through his "hoops" and questionnaires? There are plenty of good real estate agents out there. Why pick a meglomaniac?

[JoeBuyer]

Picky buyers? Are you kidding? Anyone who is even partially conscious knows the market is tanking. Buyers are trying to keep from getting burned by overpaying. Can you blame them?

[joeinlosangeles]

Nicole: --The agent Walter Sanford from the article is arrogant and would never get my business. Who wants to jump through his "hoops" and questionnaires? There are plenty of good real estate agents out there. Why pick a meglomaniac?--

I am sure that when he presents the questionnaire to buyers he says something like, "Please feel out this questionnaire; I know it's a bit of but it will give me a deep insight into the kind of house that you really want so I'll be able to save your time by showing you the houses that really suit you." And that's not unreasonable, actually.

[K. Linn]

Last week they (the l.a. times writers) blame the greedy banks and mortgage sales industry and now this week they blame greedy sellers and buyers (who after all can't be blamed for looking out for their own bottom line), trying to make the RE people look like saints for "putting up" with their clients. Maybe just maybe it's just the greedy newspaper trying to manage the "housing slump" through manipulating public opinion of the perception of the "current crisis". After all when real estate markets suffer so do the "advertising dollars" which all those real estate companies and professionals pump into the coffers of the "greedy newspaper executives".

[Catching the Falling Knife]

I didn't buy during the big boom because my husband and I were newlyweds and wary of testing our new marriage with a big scary mortgage at the time. Over the last few years I got my law degree and now have a great job that will allow us to comfortably afford the nice house we always wanted. I expect we will spend anywhere between 700K to 800K. With the realtor's take at 6%, are they honestly saying that for 42K to 48K they want me to jump through hoops? They are too busy to show me more than a handful of houses? I hope that the realtors interviewed represent the exception, not the rule.

[Rich]

"Last week they (the l.a. times writers) blame the greedy banks and mortgage sales industry..."

Linn, do you understand how a blog works? Peter Viles, the guy whose picture is at the right of your screen, chooses articles and quotes, gives you something to read, and asks you what you think of it. The material he cites is not his own opinion, it's an example of somebody elses' opinion. And Viles, by the way, has explained it the past that he's a hired hand working out of Boston, not a staff writer for the LA Times. NOW do you get the picture?

As for realtors, (or whatever they're supposed to be called; I've always used the term as a generic for any real estate agent), I'm one of "those... who think that a listing price is just some silly number pulled from the air and that you can offer 30% less". My own experience in house-hunting this year is that an awful lot of the asking prices out there, especially for high-end homes, are just that: wishful thinking. A buyer would be foolish not to offer "30% less" for overpriced homes: how else is the market pricing mechanism supposed to work for buyers if sellers are prevented from getting lower offers?...

[Pete Viles]

Rich wrote, "Linn, do you understand how a blog works? Peter Viles, the guy whose picture is at the right of your screen, chooses articles and quotes... And Viles, by the way, has explained it the past that he's a hired hand working out of Boston, not a staff writer for the LA Times."

Thanks Rich, but you're wrong. True, I am a "hired hand" and not an LATimes staff writer. But I live and work in Santa Monica, which, last time I checked, is part of LA County (Although the Red Sox victory celebration in front of Sonny McLean's on Wilshire last night did look like something you might find in Braintree, Brighton or Brockton).

It's always interesting to know how misunderstandings like this come about, so I'd like to hear back from you -- why did you think Boston? Because of my undying allegiance to Matty "Ice" Ryan and the Boston College Eagles? Or perhaps, my utter cluelessness on things LA (It is true that once, during a live shot for CNN, I referred to the 10 as, "I-10" ("eye ten")).

Pete Viles
Gruntled Renter
Red Sox Nation West

[sheila]

Catching - just so we are clear - assuming you are using a buyer's agent, and are not "double ending" with listing agents, who, by the way, won't drive you anywhere, the commission is usually half, and is often half of 5%. not saying $17,500 is not a lot of money, but $48,000 it aint.

they have to pay a significant portion of that to their brokers (from 5 to 50%), so if you got a young agent at a big brokerage, for example, they would net closer to $9,000 - $10,000 before taxes, and they have no benefits, so they pay 15% off the top for the whole SS mess, then income taxes, health insurance, unmatched IRA contributions, cover their own sick and vacation days, etc. so once you start making it look like the "paycheck" YOU are getting, the net your buyer's agent would be able to see is closer to $5,000 - $6,000. never mind amortizing that across 3 other clients who were never able to actually close, which is certainly a cost agents absorb.

oh, and of course you also realize that you aren't paying a dime of that, right? since all commissions are paid by sellers? i'm not saying that agents are victims or shouldn't have to work for their money (and i'm not in this biz), but as someone with my own business, when i see these exaggerated figures from someone who gets a paycheck, i have to chuckle.

[cardinal and fool's gold]

Doug Willis: "what other industry gives its time without commitment?..."
Media Advertising Executives. Real estate "agents" are weenies.

[John]

Doug Willis said: "What other industry offers free, professional advice, while at the same time investing their own resources, only to find that there may be no commitment on the part of a client"

Doug: EVERY OTHER RETAIL type industry, from restaurants to electrical supply to The Container Store to Home Depot offers pre-sales advice, often putting up their own expertise and time/money etc. with no commitment on the part of the client. What do you thin the word "estimate" MEANS?? You are not unique, and you should realize that sad fact soon.

[G Spot1]

"Picky buyers?" If agents are (allegedly) telling sellers they are unrealistic about sales prices, why don't they just tell buyers they should wait 1-2 years until prices meet their expecations? It's just not in their DNA. They can't walk away from a potential commission no matter what the circumstances. They won't take the risk that the buyer goes somewhere else. I don't believe for a minute that they will refuse to take on buyers.

Doug, another industry that "offers free, professional advice, while at the same time investing their own resources" without hope of a payoff are personal injury lawyers. Just like realtors, they want to do the minumum work possible and get a large cut quickly. Can't imagine why your profession is held in similar esteem...

[Doug Willis]

I don't have much respect for you anonymous posters (cardinals and fools gold). SInce you are not willing to identify yourself, your simply not much more than a "blog terrorist". You throw a few verbal grenades knowing that you may return to your veil of secrecy. I acknowledge that Media Advertising Executives may work under the same premise of "service with no commitment" as many salespoeple do. I did for many years and had a nice company expense account to see that I traveled and entertained clients. Most real estate agents are independent contractors operating on thier own money, with no expense reimbursement. So "cardinal and fool's gold" before you launch your next verbal assault, think before you throw.

[MyLessThanPrimeBeef]

Apparently some renegade realtors still have not received the memo from their national headquarters - buyers will be added to the endangered species list, as soon as the industry finishes with their installment payments to all the presidential candidates, which is a smart move, if you ask me, becuase a smart bettor always places his/her bet on all sides to ensure he/she will come out a winner.

So, don't mess around with them buyers. If the realtors or anyone out there, me for example, so much as touch a buyer's hair, much less make the buyer jump through hoops, 50 points will be automatically deducted from the offender's FICA score.

But the politicians are smarter than realtors though, becuase while realtors can only legally sell a home once, a politician can sell all of his or her soul as often as he or she can to various interested parties, in fact, even to opposing parties.

[Rich]

"Thanks Rich, but you're wrong"

Wow, that never happened before! ;)

Well, I got half of that right. Or maybe you mentioned something about doing a blog for the Boston Globe and I extrapolated? Or maybe I'm the next baby boomer who should be lining up for social security?...feel information overload...coming on...

[please come to Boston for the spring time;]

I'm the number one fan of the man from Tennessee.
Doug Willis, you may not be Erik Estrada or Chuck Woolery;
but, you can stand up there with them and hold the Bronze.

[joeinlosangeles]

Doug Willis: "what other industry gives its time without commitment?..."

Um, yes, it is illegal for anyone to walk onto a car lot and waste the salesman's time if he does not buy the car. It is illegal to ask a clerk in a store for help without buying something. It is illegal to rask someone to put together a proposal to win your business if you do not give them your business. Because that would be just using their time without commitment.

Seriously, EVERY industry gives its time without commitment. It's called selling.

[Just Call Me Maria-Westside Story]

"ATTENTION, you picky buyers who think you have all the time in the world to house hunt before you ink an offer. (And this goes double for those of you who think that a listing price is just some silly number pulled from the air and that you can offer 30% less.) Listen up: Agents are mad as hell and aren't going to take you anymore."

Well thanks Mr. Professional realtor. You are the reason that we have been looking through Catalist.

Our living quarters are too tight right now, but not so tight that we are going to over pay for a house because the comps going back to 2005 indicate that $1,200,000 for a teardown in Mar Vista is a good listing price. Same goes for the fabulous 763 Muskingum in Pacific Palisades. If 1416 Beverly Glen hasn't made a sale for $1.1 million (technically that is Bel Air) and that piece of land is already cleared, then why would you pay more for a scraper in Mar Vista?

[joeinlosangeles]

Doug: "Executives may work under the same premise of "service with no commitment" as many salespoeple do. I did for many years and had a nice company expense account to see that I traveled and entertained clients. Most real estate agents are independent contractors operating on thier own money, with no expense reimbursement. So "cardinal and fool's gold" before you launch your next verbal assault, think before you throw.

Um, Doug, your view is a little simplistic. OK, yes, you personally had "a nice expense account," but your company -- and ultimately -- the owners of the company -- had to pay for those expenses. The only difference is that with the realtors the buck stops with them. Ultimately, though, in both cases money and time was being spent on a speculative basis to try to win business.

[Ann]

(1) What other industry offers free, professional advice, while at the same time investing their own resources, only to find that there may be no commitment on the part of a client.
Posted by: Doug Willis | October 28, 2007 at 08:06 PM

Personal injury lawyers – no win no fee. That is an enormously expensive area in which to litigate. Expert witnesses want a cool $4000 – 20000 up front and long before trial when the case is being prepared. For a major med mal or products case, the Plaintiff’s lawyer has probably sunk about $100000 – 250000 into the preparation and that does not include the time he/she spent. They are gambling that the case will pay off – and a lot don’t as not all cases are winners.

(2) they have to pay a significant portion of that to their brokers (from 5 to 50%), so if you got a young agent at a big brokerage, for example, they would net closer to $9,000 - $10,000 before taxes, and they have no benefits, so they pay 15% off the top for the whole SS mess, then income taxes, health insurance, unmatched IRA contributions, cover their own sick and vacation days, etc. so once you start making it look like the "paycheck" YOU are getting, the net your buyer's agent would be able to see is closer to $5,000 - $6,000. never mind amortizing that across 3 other clients who were never able to actually close, which is certainly a cost agents absorb.
oh, and of course you also realize that you aren't paying a dime of that, right? since all commissions are paid by sellers? i'm not saying that agents are victims or shouldn't have to work for their money (and i'm not in this biz), but as someone with my own business, when i see these exaggerated figures from someone who gets a paycheck, i have to chuckle.
Posted by: sheila | October 29, 2007 at 10:50 AM

(a) they have to pay a significant portion of that to their brokers (from 5 to 50%), “

The fee-sharing arrangements of a realtor do not affect the value of the work that they do. A lot of fields have fee have arrangements including one for just providing the name of the person. No reason that buyer or seller should pay for the rest of the staff at a real estate office who didn’t do any work. Law firms don’t raise the hourly charge because ‘oh gee, the fee has to be split among the partners.”

(b) “they have no benefits, so they pay 15% off the top for the whole SS mess, then income taxes, health insurance, unmatched IRA contributions, cover their own sick and vacation days,”

So does every other person who is self-employed like the plumber, the electrician, the insurance agent, the lawyer, the doctor, the hairdresser…….. That rotten excuse for over-charging by realtors is so-o-o-o-o old that it has moss growing on it.

(c) “oh, and of course you also realize that you aren't paying a dime of that, right? since all commissions are paid by sellers?

What the fricking H are you talking about??? OF COURSE THE BUYER IS PAYING THE FEE! It is built-in to the SALES PRICE. Not only does the buyer get to pay that 6% on the day of closing, they get to keep paying for that additional 6% every time property taxes roll around and every single month when the ante up the extra interest for that 6%.

[cardinal and fool's gold]

Doug Willis: you have again given many people as reason to warm up
with going FSBO. And we give Used Car salesmen a bad rap.
Doug Willis, go back to twirling your sign which probably reads these days
"Eat at Joe's."

[sheila]

Ann, you seem pretty wound up. it's just a blog, hardly worth bursting all the blood vessels in your eyeballs for, although it will make for a GREAT halloween look. and, as i mentioned, i'm not a realtor, and i have a long history of advocating alternative compensation schemes for this business, both in my life and in my comments on this blog.

that said, i don't really understand your point. I understood her comment to mean that if her agent was ending up with $42,000 to $48,000 in their pocket from the deal, they should work harder.

i was trying to make the point that (a) they are "making" nowhere near that amount in the way that we understand "earnings," and (b) the seller cuts the check so it's not like she has to drum up the cash, unlike many of the costs they may have to pay at closing. if she was hiring another type of professional, like a lawyer, she'd have to cut a check on the spot - this is a big deal with all the expenses crushing you at that exact moment. i imagine if she wanted to cut the commission check(s) for an equal reduction in sales price, in order to avoid all that interest and property tax, she would be welcome to do so.

I think that in CA, a non-broker agent is required to affiliate with a broker by law, but not sure. i'm not advocating the brokerage system or their fees - just admitting they exist. i gotta say i'm curious, though - which law firm is it that doesn't cut partners in on the income earned by the other lawyers or pay overhead (including staff who "do nothing") out of client fees?? and how many lawyers do you know who work for a firm and earn the actual hourly rate that shows up on the client's bill? yep, none. maybe a bad example. oh, and moss grows on new things, too, if the moisture and shade are optimal.

and your examples of self-employed people are confusing, since i did mention that i was self-employed. i felt that i made my point pretty clearly, but maybe not - for the most part, we consider "what someone earns" to be the"salary" amount after many of those expenses are paid (pre-tax) by the boss. If you "make a hundred grand a year" at a job, you need to "gross a hundred fifty grand a year" in your sole proprietorship to end up in the same financial position. trust me, even though this fact appears to piss you off in the extreme, imagine how we feel. but yet, there it is.

so, if we are talking about what a buyer's agent will "earn" in a given transaction, i think it's only fair to run the numbers the way they are run in life, including from the agent's view of the transaction... cuz let's face it. if you feel like someone is walking away with 50 grand, you are gonna expect a radically different level of service than if you feel like they are earning 6 or even ten grand. so's your agent.

[investorguy]

Toby et al: you're either a professional troll sor clueless -- which is it (I'm betting the latter)?

Yes, there are real estate agents who haven't a clue and shouldn't be in the business - just as in every field. But there are others who work their asses off on things like short sales -- 10 weeks of daily negotiations with banks and lenders, and no guarantee of an actual sale on the other end. That Realtor or broker earns EVERY penny.

[Ann]

Shelia you wrote “Ann, you seem pretty wound up. it's just a blog, hardly worth bursting all the blood vessels in your eyeballs for, although it will make for a GREAT halloween look. and, as i mentioned,”

Hardly upset – I just have never seen the point in suffering fools gladly as it is a complete waste of time. (And you would never fit into any costume I could wear – I am a size 0-2.)

(1) the seller cuts the check so it's not like she has to drum up the cash, unlike many of the costs they may have to pay at closing

You still DO NOT GET IT. The money to pay the realtor is coming out of the sale proceeds. The seller will net Sale Price – 6% or 94% of the price less other closing costs. If there was no realtor, then the seller could sell directly to a buyer at the same 94%. The buyer is most definitely picking up the tab for the realtor by the amount that they pay for the property.

(2) “. i gotta say i'm curious, though - which law firm is it that doesn't cut partners in on the income earned by the other lawyers or pay overhead (including staff who "do nothing") out of client fees?? and how many lawyers do you know who work for a firm and earn the actual hourly rate that shows up on the client's bill?

The earnings of the firm are split among the partners after paying the salaries of associates and staff. No one, however, gets their time billed if they did not do any work. A real estate broker who does not work on the transaction has earned nothing from the client. The mere existence of the broker is no reason to inflate the fee. No way is someone who is not even required to have a high school diploma and only has a few weeks of formal training in a field worth even $5000 when they put in less than 250 hours of work. (And no realtor ever puts that much into a sale.)

(3) “and your examples of self-employed people are confusing,”

What is “so confusing ?” You made the silly claim that realtors should have inflated fees because they have to pay their own FICA/FUTA and no one gives them paid days off. ANYONE who is self-employed has that situation. If, as you claim, you are self-employed, you should know that the price which you can charge for a good or service has to be competitive and you can not jack up the price just because you have higher expenses than what is charged for the services or goods provided by someone who is employed by a business.

If a hairdresser (call her A) works for a shop owned by someone else, their employer will pay the employer’s share FICA/FUTA and provide the benefits (health insurance, paid vacation etc.) The price of a haircut at that shop will be set at the going rate. If another hairdresser (call her B) has her own shop and is self-employed, she has to pay her own FICA/FUTA plus the employer’s share, buy her own health insurance and save her money to take a vacation. What B charges for a haircut will be no more than what the shop where A works will charge. Can’t inflate the price that B can charge so it is a lot higher than what A’s employer charges or it will cost B customers who can get a better deal at the shop where A works. A ‘s salary or wages are probably less than what B grosses but the price of the service to the customer stays the same.

So what if a realtor is self-employed? That does not justify raising the cost of the services.

Someone IS walking away with $48,000, 50,000 or whatever. And frankly, I have yet to meet a realtor who can justify charging that much for the amount of work that is done. It doesn’t matter where the money goes - it matters how much work the person did. What the realtor does with that check for $50,000 when they walk out of the closing is not the issue and is the business of the realtor. That realtor’s involvement just cost the seller (and through the sales price, the buyer) $50,000. For that kind of money given the amount of time worked and the de minimis job qualifications and training, the realtor should be nearly able to raise the dead.

Investorguy says he has known realtors who worked on a deal for 9-10 weeks. At, say, $50,000, that would be about $5000 a week or $125 an hour if they worked 400 hours a week solely on that sale. Since, they would not have been working solely on that deal for 40 hours a week for 9 –10 weeks, and probably spent only 1-2 hours a day on it at max, that means that they are charging around $700 AN HOUR for about 71 hours of work. I don’t know any securities law attorneys who charge that much and that it one of the most esoteric fields in law.

(4) The existence of a broker is irrelevant to the value of the work done by the agent.

There a McDonald’s franchises and then some McDonald’s are owned by corporate. The price of the hamburger is the same at all stores. The corporate-owned stores send their profits back to corporate. The franchise stores’ profits are split between the owner of the franchise and corporate in the form of franchise fees. The corporate-owned stores return more profit to the owner. The franchise owner make less from their store than corporate does from one they own directly. Now try applying that to an independent broker versus an agent who works under a broker. How much the agent nets is not the issue –they are like franchisee. Neither is it relevant that their own business arrangement involves fee-splitting with someone or something else.

I will say that following your digressions is a bit difficult – and I have spent over 30 years practicing corporate and business law. . Capitalization, commas, periods and the use of subjects and verbs in sentences are most useful. I assume that you covered the use of those things in 6th –9th grade. If I had received a document from a job applicant that looked like that, I would have tossed it in the trash

[Charles Wilson]

sheila, you're missing the point. The article chronicled the arrogance, fear, and stupidity that has been spread far and wide during the salad days of residential real estate. A lot of easy money got made, and now the worm is turning. Everyone's going to have to come to Jesus, as they say in the South.

The one broker who asks customers to fill out a questionnaire is an arrogant, lazy goofball who doesn't belong in a sales position. There is nothing wrong with his wanting that information, but someone so artless as to ask a potential customer to fill out a form -- and to do this in a market that is spiraling downward no less -- should be have his head examined. Before or after the dissection is up to him.

Sellers who think the rules haven't changed need to be slapped. Real estate agents are entirely within their rights, and frankly within their obligations, to tell them to get real or wind someone else. That's called integrity and honesty, which occasionally does exist out there. The crash will separate the wheat from the chaff.

As for the looky-loos who have no intention of buying, well, that's an occupational hazard that all salespeople face. It takes guts and experience to figure out who's real and who isn't.

As a former landlord who had a tenant move out right after 9/11 as the economy was going down fast, I had a prospective tenant call and tell me he'd "make me an offer you won't understand." He wanted some lease-purchase thing. I was polite, but firm. I told him my price was $1,600 a month, with first, last and a month's deposit required. I never heard from him again, and I was just as happy not to. A week later, I had a tenant.

Anyway, lots of games have been played. Fewer games are what the future holds in store. It's Southern California so it'll never be rational, but it's going to a lot less crazy than it was, and people will be working harder for less money. You can count on it.

[Charles Wilson]

I wanted to add something about that post-9/11 experience. The tenant who moved out was paying $2,000 a month. I can assure you that it was painful to cut the rent to $1,600. But I detest and ridicule people refuse to face the truth, and I try pretty hard to apply my standards to the guy in the mirror.

So, when the one tenant moved out I swallowed hard and took a 20% haircut. Even then, it wasn't exactly a day at the beach getting it rented but I did find someone. I didn't sit there and whine to her or anyone else, either. She got a good deal, and I got a great tenant. She was happy, and I was relieved.

People are going to have to face the music. You, too, shiela.

[Enlightenment]

Time to axe all Realtor's and use the internet to replace those "middlemen".