Zillow-Trulia will reduce the number of bad real estate agents

[Crewleader]

August 12, 2014

Zillow-Trulia will reduce the number of bad real estate agents


Irvine Renter 26 Astute Observations

The merger of Zillow and Trulia may force marginal agents out of the business and concentrate activity among the best producers.



American realtors have long maintained a system of high commissions that bloats the number of working real estate agents. Many poorly trained and poor performing agents stay in the business despite completing few transactions because they can make a great deal of money on the few transactions they do complete. Real estate recessions purges many of these bad agents, but like April showers bring May flowers, increased sales volumes sprouts tens of thousands of new agents who cling to the margins.

Other countries don’t have our high commission system, and they have fewer real estate agents. In Great Britain for example, commission average 2% to 3%, and they support far fewer real estate agents. Potential homebuyers in Great Britain typically aren’t shown dozens and dozens of properties without making any offers. Over there agents are only willing to work with serious buyers, and if a client doesn’t make offers, agents will fire them. Since the there are far fewer real estate agents, lookers don’t have a large stable of agents available to work with, so only the most serious buyers go to a real estate agent to begin their search.

American buyers are spoiled. Since there is so much agent competition here, most agents will patiently work with buyers to look at as many houses as they wish, hoping that buyer will lead them to a pot of gold to make it worth their while. If the number of real estate agents is reduced, something that may happen with the new Zillow-Trulia merger, then buyer behavior will have to change.

http://ochousingnews.com/blog/zillow-trulia-will-reduce-number-bad-real-estate-agents/

[djean111]

1. Or commissions will go even higher.

Gee, how terrible of people to want to look at a lot of houses before they sign a mortgage.
I think my definition of a bad agent is one who doesn't show me enough possibilities, and their definition of a bad agent is one who does not sell many houses.

[Warpy]

2. I've laughed at Zillow from the beginning

when their "Zestimate" of a 2 bedroom 1 bath rundown house in a barrio with a bad reputation was over a quarter of a million in 2006. That dump is mine and I knew what neighbors had sold/bought their houses for and it was half that. They had totally failed to research the local market, one which had escaped the housing bubble thanks to builders who were slapping up McMansions as fast as Californians boarded the real estate speculation tour buses here. They'd simply ASSumed it was the same as Phoenix and Las Vegas.

That's a dangerous thing to do when you're trying to establish yourself as a real estate maven.

[flamin lib]

3. The "traditional" commission in the US is 6%. That commission is split between the listing agent

and the buyer's agent. In some cases the brokerage the agent works for takes half of the commission. So, unless the agent both lists the property and sells the property the commission is considerably less than 6% to the agent.

The real estate market in the US is pretty screwed up. To pay the fees, licensing and professional dues costs close to $5000 a year and a good marketing plan may cost another $5-10 k. Things vary by state but in Texas RE agents are regulated very strictly and becoming an agent puts a big target on your back. There are two kinds of agents in Texas, the ones who have been sued and the ones who will be. It's a shit way to make a living.

There are some really bad agents out there, I wasn't one of them.

[msongs]

4. the traditional commission is the biggest scam in real estate....

that is 6% of the sales price which also includes the debt owed on the property not just the equity in the property.
In essence you have just added 6% of new debt on top of your existing mortgage when you give a real estate scammer this commission. I think the commission should only apply to equity above the mortgage otherwise the agent is just working for the freebie and not the best outcome for the owner

[flamin lib]

5. I agree that the RE profession is messed up.

There are ways to fix it. The myth of 6% is just that, a myth. At best it is 3% in most cases and 1.5% in many. So to pay the $5000 base price to maintain a license an agent must sell about 4 houses a year @ $100,000 each just to pay for the privilege of working 7 days a week and taking phone calls at all hours. To make $20,000 a year one must sell at least 7 properties @ 100k each a year. RE isn't a piece of cake and its damnd hard to make a living if you are ethical and moral. I spent 2008 talking people out of buying houses because anybody could get a loan regardless of ability to repay. I could not with a clear conscience help people buy homes that I knew would be foreclosed on.

I suspect that you don't know a damn thing about the profession and speak from ignorance. Ignorance can be cured but it takes effort.