Bypassing real estate agents - useful or stupid?

[WebBoard]

From: Steve Van emmerik


Anyone have any knowledge or experience buying or selling residential property but not using real estate agents?

How do you do it and is it worth it?

Buy side eg. looking for properties by doing letter drops in an area or looking actively for sellers who are not going through real estate agents.
Sell side eg. marketing the property yourself (I have seen a few websites that attempt to help you do this) and according to them 50% of sales in Europe occur in this manner.

Thanks in advance
Steve1

 

[paulzag]

Reply: 1
From: Paul Zagoridis


I've never bought from a private vendor although I've tried a few times. Private vendors generally have unrealistic valuations of their property.

Direct marketing to home owners is appealing. But, like all business advertising, I'd guess your results will start off patchy.

Most businesses get very bad results from direct marketing and advertising. Then they give up. If you spend the money on regular campaigns you should get better results.

On the selling side... I'll let you know once I've sold my apartment residence in Sydney. Going the private sale route now, I don't think I'm overpriced (but I'm the vendor).

Regards

Dreamspinner

 

[WebBoard]

Reply: 2
From: Dave


Steve,

Are you trying to sell or buy? If you're looking to sell, it depends on
where you live and what type of property you have.

I sold my first home 6 years ago this way. After getting 5 agents in to
let me know what I could expect of them in marketing/selling my
property, I decided to go it alone because:

1. There was a good demand for properties like mine, and in my area.
2. It was different to others in the area (I think it was the only
concrete rendered home within 1km)
3. There were 'drive-by' purchasers around my area every weekend -
looking for boards, land, or ideas.
4. Being my property, I felt I could "sell the sizzle - not the
sausage" better than any real estate agent.

I put up a large attractive board and sold it for 13% more than the
agents said I could expect...within four days of putting the board up!

Once you get people into your home, you have a much better chance of
selling it than an agent. It's YOUR house and you are more passionate
about it than someone who's just seen it once. You're able to portray
the lifestyle the home offers and talk about the moods/ambience in the
home during certain times of the day etc. (All the warm and fuzzy stuff
that appeals to women especially..I mean, it's they who make the
decision when it comes to a family home, right?)....ouch!! *gets
smacked in the head*

A tip for you, if you DO decide to sell a home without an agent, make
sure your asking price is at least 10% above what you'd be happy with.
It leaves some room for negotiation and lets the purchaser feel as
though they've got a good deal, as well as a good home.

The same rule applies to buying from a private vendor (which is a great
thing to do) I LOVE it when a Real Estate agent lets it slip who his
vendor is. You find out very quickly how motivated they are and what
they're prepared to let the place go for. When making offers, again I
generally aim for about 10% less than the asking price.(although the
last IP I bought was going for $235K and I signed the contract for
$200K)

.....in my humble opinion, the only real benefit you can get from an
agent is when you decide to auction your property, or if you use them to
manage your IP's.

...ahhh, why did I ever get out of real estate sales.....

Cheers,

Dave

 

[Owen]

Reply: 2.1
From: Owen .


>>> I LOVE it when a Real Estate agent lets it slip who his
vendor is.

So if you do find out who the vendor is, you approach them directly and bargain a good price, will the real estate agent still get his commission? I thought they would because they have a contract with the agent even though the negotiation was not done by them. I guess this would be the case as the agent would have introduced you to the property first. What if the house has an agent sign up? Can you just walk up and knock on the door?

 

[WebBoard]

Reply: 2.1.1
From: Dave


Owen,

There are often "exit clauses" built into the sale authorities. If the
agent has an exclusive authority, the vendor has the right to stipulate
certain performance conditions such as:

1. Weekly feedback
2. Number of calls received
3. Proof of actual marketing done on the property

...etc...etc.

In reality, the agent RARELY performs to the vendors expectations...they
say what they need to do just to get the listing.

I contact the vendor, tell him I'm very interested in the property, and
ask them straight out if they're happy with their agent and whether
they're willing to talk to me direct. After that, go for the kill! (in
a manner of speaking)

The vendor can then chose to tell me to forget it, or continue talking
to me and give his agent the bad news that he's terminating the
authority for lack of performance...and deal with me from now on.

By the way, I RARELY give my real name to an agent when first enquiring
about a property - for that very reason!...You don't want them to have
the "...I had the first contact" leg to stand on.

Cheers,

Dave

 

[Owen]

Reply: 2.1.1.1
From: Owen .


Thanks Dave. Interesting info.

 

[WebBoard]

Reply: 2.1.1.1.1
From: Samantha Lind


Howdy,
There is a mob called FSBO ( For Sale By Owner ) that provides a package type deal for vendors to sell their own prop. It has all the basic legals etc included in it. You can buy props. direct from vendors here.
I'm not sure on the quantity of props available or quality - but give it a look if you're interested in that type of thing.
www.fsbo.com.au
Sam

 

[WebBoard]

Reply: 2.1.1.2
From: Kevin Forster


Dave

That doesn't sound very ethical to me. I think if you negotiate a good price then that price is put through the real estate agent. Real Estate agents have to make money too they're often working for commission. After all real estate agents need money to live as well.

Gazumping could also be a problem with the method. If you negotiate a good price with the vendor and then someone comes along and offers $1000 more there is nothing stopping the vendor from then changing the buyer and you get gazumped. Most real estate agents have stopped gazumping.

In the end it's stupid to bypass real estate agents and it will defeat the purpose of having them.

Any thoughts welcome

Kevin

 

[WebBoard]

Reply: 2.1.1.2.1
From: Dave


Hi Kevin,

Ethics? My view is based on experience from both sides of the fence. I
have worked in real estate, have sold properties through estate agents
(and privately), and have bought properties through estate agents and by
by-passing them.

At the end of the day, this is where it's at. We call upon Real Estate
agents to sell our property because we feel they have the
expertise/marketing strengths to do better than we do. Once we give
them permission to market our property, they put the squeeze on us by
wanting an exclusive authority. Their explanation for this is they can
focus all their efforts on selling it...rather than being half hearted,
knowing several agents in the area are also marketing the property. I
used to use the same line. However, in reality this is crap. If
someone calls them looking for a particular property in a particular
location, they will push a general listing property just as hard. In
fact, I used to pride myself on selling a property before my competition
did.

If a vendor does sign an exclusive authority, he/she expects the agent
to actually do all the things he claimed to do..all those things that
"set them apart from the other agents in the area". The harsh reality
is, this more than likely doesn't happen. Isn't this un-ethical? So, shouldn't the vendor have some sort of recourse here? I
think so. Minimum performance conditions in the sale authority ensure
the VENDOR is treated ethically. After all, the agents work for the
vendor, not vice versa...despite how many mouths they have to feed.

I have known far too many people who have been burnt by agents who have
sucked them into signing an exclusive 6 month authority. After the
first month of advertising, the sole lonely board on the property is the
only effort being made to sell the property. And, the poor vendor can't
do a thing about it. That's not ethical, don't you agree?

Wouldn't the vendor appreciate a genuine, self-qualified and motivated
buyer contacting him? I think so.

Kevin, I appreciate you feeling some sympathy for real estate agents.
However, in this case, I would only agree with you if the agents were
able to prove to the vendor they were doing there damned best, above the
vendors expectations, to sell their property. Sadly, this is rare
indeed. So, if real estate agents DON'T add value to the property sales
function, you're right - they themselves defeat the purpose of being
there. I don't think I'm the only person that has this view...or am I?

Cheers,

Dave

p.s I take it you, or someone in your family, is in real estate sales?

p.ss I can honestly say I have never heard the word "gazumping" before. Where have I been?

..it sounds like a term used to describe two gazelles in the act of mating.

 

[Jude H]

Reply: 2.1.1.2.1.1
From: Jude H


Amen to that

Jude

 

[WebBoard]

Reply: 2.1.1.2.2
From: The Wife


What doesn't sound very ethical Kevin ? getting a good deal?

The real estate agent works for the seller, right? not for the buyer.

I dont think ethics come into the question here, what is at question, is the level of service a real estate agent gives to the buyer, if no service, the buyer will look at other options to buy? is this unethical? hell no!Is it illegal? hell no!

And you know, if a real estate agent cant make any money, he should try a career change, the only successful real estate agents I know, are the ones that follow Napoleon Hills tips, that is, you must give something in exchange for the money you so desire, 'successful' real estate agents give a LOT in return, they give hard work, and all of their family time up in exchange for their commissions,

this is their choice, if they dont like it, maybe they should try a new career, but I dont think anyone here would be using a real estate agent, saying " oh the poor buggers, better buy a house of 'em, give 'em some money".

TW,

PS, been guzumped several times, I hate it, did you know that in Canberra, people gazump each other on rent????....amazing!




On 5/17/01 10:31:00 AM, Kevin Forster wrote:
>Dave
>
>That doesn't sound very
>ethical to me. I think if you
>negotiate a good price then
>that price is put through the
>real estate agent. Real
>Estate agents have to make
>money too they're often
>working for commission. After
>all real estate agents need
>money to live as well.
>
>Gazumping could also be a
>problem with the method. If
>you negotiate a good price
>with the vendor and then
>someone comes along and offers
>$1000 more there is nothing
>stopping the vendor from then
>changing the buyer and you get
>gazumped. Most real estate
>agents have stopped gazumping.
>
>In the end it's stupid to
>bypass real estate agents and
>it will defeat the purpose of
>having them.
>
>Any thoughts welcome
>
>Kevin
>



~Life is a daring adventure, or nothing at all~

 

[WebBoard]

Reply: 2.1.1.2.2.1
From: Sergey Golovin


I think it is a conflict of interest here.
Real estate agent, on one hand, does represent seller and on the other buyer.
It is very unique position and it is only found in real estate game. No other sales team do that. They are ether - the Sellers or the Buyers (Purchaser).

Did I do sale? Yes Sir I did. Do you need thick skin? You do. Do you care about competitors? Theoretically yes, practically - I do not think so.
Did I read Robert Kiyosaki Books? I did.
Did I like it? Yes I did.
Do I know anything about the Navy? You beat...

Only thing I can tell you Kevin – get real and get on with it son.

Serge G.

 

[WebBoard]

Reply: 2.1.1.2.2.1.1
From: Dave


hehe...

You know, this forum is an invaluable source of information - I've
learned heaps from here over the last few months. However, I had no
idea just how many laughs I'd get at the same time.....you people rock.

...still laughing

Dave

 

[WebBoard]

Reply: 2.1.1.2.2.1.1.1
From: Sergey Golovin


Who does real estate agents represent?
No one.
And Dave is right - you did sell it you laugh and if you did not, well... try it again.
Regardless if it is real estate or something else.

Serge G.

 

[WebBoard]

Reply: 2.1.1.2.2.1.1.1.1
From: Dave


Actually Serge, the agent ALWAYS represents the vendor (seller).

You are right in one sense, though. If a buyer knocks on their door
wanting to buy a property, of course an agent will try to sell them one.
However, BECAUSE they work for the vendor, they don't (or shouldn't)
sell it below what it's worth, or try to convince the vendor to accept a
ridiculous offer, just to make a sale. If they do, they are acting for
the BUYER, and should lose their licence.

Dave

 

[WebBoard]

Reply: 2.1.1.2.2.1.1.1.1.1
From: Sergey Golovin


Sorry Kevin,

It is not about you personally; it is more about an attitude amongst the wider community.
We do depend on too many things these days and got use to be "milked" by almost anyone.

Regards
Serge G.

 

[Sim]

Reply: 2.1.1.2.2.1.1.1.1.2
From: Sim' Hampel


On 5/17/01 1:39:14 PM, Dave ;-) wrote:
>Actually Serge, the agent
>ALWAYS represents the vendor
>(seller).

I think you mean "the agent IS SUPPOSED TO represent the vendor (seller)".

I have seen many examples posted by people on this forum where this is clearly not the case. It seems as though there are many agents who regularly cross that "ethical line" (and maybe even a legal one).

 

[WebBoard]

Reply: 2.1.1.2.2.1.1.1.1.2.1
From: Dave


Yes Sim, you're right..that's what I meant.

Thanks for the translation buddy!

 

[WebBoard]

Reply: 2.1.1.2.2.1.1.1.1.3
From: Kevin Forster



Actually none of my family or any of my friends sell real estate for a living or was a real estate agent.

If you missed the point as I was making is BUSINESS ETHICS. Now assuming that you are running a real estate business with IPs, if you're not operating ethically then you might as well not operate. If you are just mucking around with real estate or not even in the game then I guess it doesn't really matter.

Bleating about all the wrongs and ills that real estate agents do to the battlers doesn't make you anything you do against them right.

So now my question is who should pay for the signage and advertising for the property? The real estate office even though they've done all the work but get no income for it.
The vendor?
You?

Dave, if you've sold real estate as an agent how would you feel if you did all the hard work and then the buyer went and saw the vendor and then cut you out of your commission. It would hurt doubly so if you prospected the vendor from a cold call.

Serge - I am out there doing it but at least I can lie in bed at night with my conscience at ease.

Kevin

 

[WebBoard]

Reply: 2.1.1.2.2.1.1.1.1.3.1
From: Dave



Kevin,

Cool...I think we both understand one anothers point(s).
All the best buddy.

Dave