Sept. 20, 2016

Do Realtor Teams really Benefit the Consumer?

Being a Realtor working on a team with other Realtors seems to be all the rage over the past few years. Certainly real estate trends such as this have come and gone over time, but this trend seems to be here to stay. However, does a team of Realtors really benefit the consumer any more than a Realtor working alone? The answer is not necessarily as obvious as one might think.

Clearly if you are the lead Realtor in benefits him or her to leverage their time, but who else does it benefit. It certainly helps the team brag about how they sold 200 homes over the past 12 months. However, if there are 8 Realtors on the team that breaks down to 25 homes sold per Realtor which is certainly a decent amount, but it is certainly not any better than the solo Realtor who sells 40-50 homes a year. You see all team members are required to put all homes they sold under the lead Realtors name. It does sound good if you are the seller hearing a sales pitch from lead Realtor of a team. 200 homes sold will always sound better than 40 even if it manipulated math.

One fellow Realtor described it to me as most teams consist of one Rock Star Realtor surrounded by less talented Realtors who could not make it in the business on their own. After all why would another Realtor be wiling to give up half of their commissions to the lead Realtor if they could make it on their own. What seller would want to have Realtors that could not make it on their own handling one of the biggest transactions they will ever have in their life. She referred to it as the "car buying process in reverse". If you ever bought a car you know that you often deal with front line sale person who can't really make any decisions without shuffling you to 2 or 3 higher sales people first. In her mind if you deal with the Realtor teams they do the opposite in that the big gun comes in and does the selling and once the seller signs listing agreement they are stuck dealing with the lesser "team members".

 I thought that assessment sounded a little harsh when I first heard it, but I must admit I don't know a Realtor alive that would split all their commissions out of generosity. I do know plenty that would do it to survive so perhaps my colleague may have a point. 

I personally have no problem with the team concept. Although, I have been the second listing agent on a house where the first Realtor was a team of Realtors and that particular seller did not care for the team concept at all. They felt shuffled around and preferred to deal with just one person and person only. I do have to admit that think most people just by sheer human nature prefer to deal with one person on a any transaction much less one as big as buying or selling a home. Nevertheless, the idea of Realtor teams isn't going anywhere any time soon, but if you are a seller you may want to give it a little thought because what might sound great at first may be more smoke in mirrors once you analyze it.




Aug. 7, 2016

Dual agency

Should a Buyer Let the Listing Agent Show them a House For Sale?

Most buyers don't even think about who is showing them the home they want to see. They just click a button on Zillow or and will let whoever is willing to show them the house do so. "We are just looking right now" is often what buyers will say, but what happens if they end up liking the house enough and make an offer and allow the listing agent represent them? Is it a good idea as a buyer to let the listing agent show you a house and represent you while also representing the seller?

If you think about logically for a moment you may come to the conclusion that it is not a good idea. It is still legal in Louisiana, in many states it is not, but just because it is legal does it make it a good idea? It is called dual agency. Can the listing agent, who is working for the seller, get the highest and best price for the seller and also get the lowest and best price for you as the buyer? Some will say there is a conflict of interest here.

Often "just looking" turns into an offer and you have to ask yourself can you really trust that you are getting the best deal?  Just ask yourself if you were going through a divorce if you would share the same attorney as your soon to be ex-wife or ex-husband? If the answer is no then you probably should get your own Realtor to show property and to represent you and your interest even during the "just looking phase".

Posted in Dual Agency