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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (25191)	11/10/2004 12:42:54 PM
From: bobby is sleepless in seattle	Read Replies (1) \| Respond to of 306849

In general, folks tend to hesitate to negotiate commissions out of the pocket of the agent, even though the conusmer is somewhat more sophisticated today with choices. So much easier if the "rebate" is up front. There is no confusion, straight and simple... And from the agent's perspective, who wants to prospect for business for the rest of their lives? And yes, the good agent relies on referral business in the long run. Working referral business is a job in itself, easier than blind cold calls, but still a rigorous and time consuming job if one wants to really excel in this business. And zip agents are employees with BENEFITS with leads provided to them.... Zip is just another choice for the consumer as is selling FSBO, re/max, limited service listing, etc. All have their advantages/disadvantages.

To: Tradelite who wrote (25191)	12/10/2004 12:30:58 AM
From: Doughboy	Read Replies (3) \| Respond to of 306849

Tradelite, wanted to give an account of my putting a house under contract in DC over the last weekend--with NO AGENT. And so far, it's gone smoothly. First, flew in for the weekend and went through the process of interviewing some top agents in Northwest DC and Chevy Chase, and came away not so impressed. They really didn't know much more than me. Price ranges were all over the place, "High 7's to Low 8's" "Mid-9's" "Definitely over $1 million" "Start it in the 8's and let the market take it up." "Start is high and bring it down after a week." "Price it low at 995 and let the bidding take it over 1 million." I found myself getting into debates with the agents, pointing out comparables that they missed in their analyses (the one across the street?!). One guy sketched a bell curve for me; "these are the buyers you want to capture." No straight answers. What about listing it now or later? "Wait until spring." "Inventories still low, no point in waiting" "Maybe someone will buy it as a Christmas present." Aggghh. As for fees, I got offers of 5%, 5%, 5%, 4.5%, 4.5% + a kickback (referral fee to my RE agent friend in Seattle who had referred no one). Two of the five I interviewed acted as though they were doing me a favor by taking my listing. Liked one "all star" pair mostly because they would entertain you with their constant bickering. Wasn't much closer to choosing an agent; liked the idea of FSBO, but not realistic for an out-of-town owner. Several friends walked through, but no takers. On the weekend that I was in DC I was touring some neighborhood open houses; one newly redone place around the corner was on the market for $1.5 million. Nice place, if a bit small for the money. But it's Chevy Chase. And so it's busy, with people bustling through, even though it's the weekend before Thanksgiving. (It eventually sold the next day for $1.8M ) Saw a guy standing in the corner, not really looking at the house, so I struck up a conversation. He sheepishly told me after a few words that he was the builder. I gave him my card, and told him I was thinking of selling my house and he should take a look at it. He called that evening on my cell phone; wanted it and offered the price I was looking for right out of the box. His plan--tear down the admittedly plain house and put up a 5000 sq ft $2.5 million dollar mansion. "Won't the government worker next door with the 1970s split level and his rusting chevy in the carport look out of place?" Tut tut. Don't ask questions, just keep pushing up the price. I raised the stakes another $75k--up into 7 figures--higher than what any agent had estimated. He didn't blanch. "OK. Done." No contingencies? No agents? "OK no problem." Hadn't he ever heard of a thing called a counter offer? Well, while I'm at it, why don't you also pay my share of transfer taxes? "OK." You pay all the expenses, lawyers, copying fees, escrow, next 3 months mortgage payment. "Done. Done. Done." I don't want to warrant that I have title or anything like that. "OK" When I could think of nothing else to ask of him, save the shirt off his back, I relented. We have a deal. He was beaming: No worries about the traffic noise coming off of Connecticut Avenue; the crazy neighbor who literally chases people off his driveway; the fact that he is taking on a million dollar piece of land with god knows what going to happen to the DC property market in the next 12 months. My final tally--bought in 1995 for $365k, a house we circled for three months before we made an offer. Tripled in 9 years, under contract in one weekend. No agents, and I think I won't have any selling expenses except for the cost of my plane ticket to DC. Interesting postscript. Within 20 minutes of my closing a verbal deal with the builder, an agent called me, the one who listed the builder's home on the open house and had spoken all of about 14 words to me, "Please sign in, and if you have any questions, please feel free to ask me." She wanted a piece of the action. Don't even know how she even knew it, but she knew enough. She wanted details of the deal I had struck with him. I told her that was none of her business. Turns out, she put the screws to her builder client, and he is going to give her a 1% "finders fee" for getting me to walk into the door of the open house. Plus she gets the listing when the builder puts his shiny manse on the market. Typical.