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Especially today, given the tools buyers and sellers have online, realtors do half the work they used to and still expecting 3%. Every time I've bought a home, I've done most of the work and consider realtors basically leeches. The entire 'industry' needs to be rearranged to benefit consumers, not a class of crooked salespeople.
The thing is those tools that are so useful are funded by agents. Esigning platforms - agents pay for them. Online search sites including Zillow - they exist because agents pay for them. MLS - created for and funded by agents. Those "standardized fill in the blank contracts" that are so easy - paid for and written with input from agents.
So the job may be easier in some ways than it used to be but it's also more expensive. And to boot it's easier and faster because of money and time invested by agents.
The thing is those tools that are so useful are funded by agents. Esigning platforms - agents pay for them. Online search sites including Zillow - they exist because agents pay for them. MLS - created for and funded by agents. Those "standardized fill in the blank contracts" that are so easy - paid for and written with input from agents.
So the job may be easier in some ways than it used to be but it's also more expensive. And to boot it's easier and faster because of money and time invested by agents.
Nonsense, I bought a plane with a cashiers check and a title search the seller took out an ad on trade a plane. The form was an FAA form that cost like $10.
Selling the house could be the same way with a title search and a quit claim deed, maybe hire a lawyer to interact with the title company to indemnify yourself of issues so you retain the right to sue either the seller or the title company etc. The problem is most people have to buy a home with a loan, now a bank is involved and hence we have all these requirements.
The reason most people have to get a loan is because the loans are available in the first place, the loans allow people to make offers who don't have money and that runs up costs.
Nonsense, I bought a plane with a cashiers check and a title search the seller took out an ad on trade a plane. The form was an FAA form that cost like $10.
Selling the house could be the same way with a title search and a quit claim deed, maybe hire a lawyer to interact with the title company to indemnify yourself of issues so you retain the right to sue either the seller or the title company etc. The problem is most people have to buy a home with a loan, now a bank is involved and hence we have all these requirements.
The reason most people have to get a loan is because the loans are available in the first place, the loans allow people to make offers who don't have money and that runs up costs.
First - a plane is not a house. There are many factors that come into a homes value. A plane has a similar value regardless of where it is located in the world. A home - well not so much. I'm also assuming if you can afford a plane you can afford a small mistake on buying a plane. Most people aren't so lucky they can afford a mistake on a home purchase.
Loan cost are not connected to real estate agent commissions so why even bring that into play here?
Fact is many buyers don't know what inspections to get, who does a good inspection, who is a good attorney, what repairs to make/ask for, or even how much the home is worth. Are you expecting the attorney to learn real estate values and run comps so they can advise buyers and sellers on RE matters? Is the seller and buyer just out on their own figuring it out? How do you solve those issues with a boiler-plate fill in the blank contract?
How do people find and access homes? How do sellers screen buyers? Who pays the attorney for time when the offers don't work out? Who pays the attorney when the contract falls apart over inspections/repairs? Who pays the attorney when the deal falls through over financing or other reasons?
Are you basically wanting an attorney to become the real estate agent and walk people through the process? If so what should the attorney's charge?
Yes, the process will probably be simplified by technology at some point in the future. It already has been to a degree but understand agents were behind the process. They conceived and paid for much of the advancement. Nowhere in your post did you actually address my points. If you want to try again go ahead. I'll wait.
For such a blanket statement, I personally can offer up circumstances that rebuke that..
Sure there are the few that need hand holding but most of us non-elderly functioning adults can find our own houses. The only thing my agent did was arrange appointments...I found my house online and went to the open house and put the offer in the next day after self inspecting for an hour. She also tried to make us go in full price and we knocked 3% off ignoring her advice. She was really great to work with and I believe would be great at selling a house but for buying, I knew what we wanted more than she or anyone could. For that she gets $23k? It is ridiculous
Sure there are the few that need hand holding but most of us non-elderly functioning adults can find our own houses. The only thing my agent did was arrange appointments...I found my house online and went to the open house and put the offer in the next day after self inspecting for an hour. She also tried to make us go in full price and we knocked 3% off ignoring her advice. She was really great to work with and I believe would be great at selling a house but for buying, I knew what we wanted more than she or anyone could. For that she gets $23k? It is ridiculous
Agree, also many other fields charging that amount of money for the time spent could involve criminal proceedings against the business.
First - a plane is not a house. There are many factors that come into a homes value. A plane has a similar value regardless of where it is located in the world. A home - well not so much. I'm also assuming if you can afford a plane you can afford a small mistake on buying a plane. Most people aren't so lucky they can afford a mistake on a home purchase.
Loan cost are not connected to real estate agent commissions so why even bring that into play here?
Fact is many buyers don't know what inspections to get, who does a good inspection, who is a good attorney, what repairs to make/ask for, or even how much the home is worth. Are you expecting the attorney to learn real estate values and run comps so they can advise buyers and sellers on RE matters? Is the seller and buyer just out on their own figuring it out? How do you solve those issues with a boiler-plate fill in the blank contract?
How do people find and access homes? How do sellers screen buyers? Who pays the attorney for time when the offers don't work out? Who pays the attorney when the contract falls apart over inspections/repairs? Who pays the attorney when the deal falls through over financing or other reasons?
Are you basically wanting an attorney to become the real estate agent and walk people through the process? If so what should the attorney's charge?
Yes, the process will probably be simplified by technology at some point in the future. It already has been to a degree but understand agents were behind the process. They conceived and paid for much of the advancement. Nowhere in your post did you actually address my points. If you want to try again go ahead. I'll wait.
So if something goes awry with the house does the realtor or the agency eat the entire cost of the house? Does the agent carry errors and omissions that indemnify the buyer?
I guess thats my biggest issue, if realtors want the big bucks then they should be taking on the same legal liability that a lawyer or title company does. But when the real crap hits the fan, I have known realtors in the past that would say things like oh in the small print we are not lawyers. Ok so im basicly paying you just to advertise and unlock doors, seems pretty steep if you dont got my back when things go south and I mean real south, like the entire buy is a bust (an example is the mineral rights issue where there is a massive rig next to my house, now my house is basicly worthless and I cant comfortably live there, thats an extreme example but thats an example of basicly 300k + flushed dont the toilet if the buyer cant get legal remedy and basicly be bought out of the home.
I am sure there are other extreme screw ups that basicly make the home unlivable thus resulting in the buyer taking a 6 figure bath if they cant lean back on someone in the process to get remedy.
I don't believe I said that we assume ALL the risks for the client.
I'm certainly open to acknowledging that I may have made a mistake somehow. No, we do not specifically insure a client during or after a transaction.
What I am trying to convey is that when you go it alone, ALL of the risks are yours, and yours alone.
When you hire a licensed agent to professionally represent you, then the agent undertakes some risk.
To address your disclosure example - in NC a Seller is allowed to check "No Representation", even if for example any human being can see a gaping hole in the roof. If you're represented, however, the agent must disclose that gaping hole, which would be reasonable to identify.
One important point that I've discovered recently, that may be of interest to you, and where I suspect our opinions would match ... in NC, there is NO requirement for E&O insurance. There's also no requirement for higher automobile insurance coverage. So, it might be worthwhile as a consumer to ask your agent what their insurance coverage is on both counts. Would you agree or disagree that there is an economic benefit to consumers to use agents that have insurance? Or would you rather rely on suing someone in court and hoping they have enough money to pay the damages?
This is not a matter of whether you assume all risks or some risks, or one risk, etc. You do not assume the risks of your clients. PERIOD. Unless you can specifically say what risks of the clients you indemnify, insure, or otherwise assume from your clients you should abandon this way of representing your services as it's misrepresentation or even fraud.
I agree that you carrying E&O insurance is responsible compared to agents who do not (and general liability insurance too). However, I think that you need to be very careful in how you represent this and any sales messages around it. E&O insurance is there to protect YOU and not the client. Obviously it can provide comfort that any judgements against you can be paid but you're responsible for paying any negligence judgements against you. But using terms like your insurance providing an "economic benefit" to clients is very misleading. The client pays you to do your job competently so any possible benefit from E&O is in the instance that you are negligent in doing your job (your risk). And if this occurs, it's likely that you and your insurer will defend the claim and your client becomes the opposing side of a claim in a dispute and possible lawsuit. It's not a matter of something going wrong and you and your client work together to claim against your 'malpractice'/E&O insurance.
This is like a doctor suggesting/implying that her malpractice insurance provides some kind of insurance or risk reduction benefit in the case of the patient's death or incapacity, etc. No, the doctor is paid to do her job competently and if she doesn't, the malpractice insurance is there to protect her if there is a judgement against her. A doctor would be in a lot of trouble if she somehow implied that malpractice insurance is like life or incapacity insurance for the patient. I said 'implied' as it's misleading and potentially confusing to clients, even if it's not explicit. That's why no doctor is going to be even coming close to ANY kind of suggestion that malpractice insurance provides protection or "economic benefit" to patients or that the doctor is somehow assuming or sharing risks of the patient's death or incapacity. That would be very irresponsible and probably fraudulent.
You're completely missing the fundamental point that you being negligent is YOUR risk as you risk a liability suit against you. There are potential lawsuits that a client could face - failure to disclose, etc, etc. Those are not assumed by you and the language that you're using falsely implies that you are.
if you want to argue that your experience helps a client avoid making mistakes with things like pricing, sales/marketing strategy then that's another thing. But I would most certainly not be using false and misleading legal-ese like "I'm assuming [or sharing] your risks [or some of your risks]".
Just my opinion offered to try to help both consumers and you.
There are not many real estate attorneys that will walk the home with you and point out deficiencies prior to writing the offer. None of them will help you decide on an offer price or inclusions & exclusions or timing of dates and deadlines. How do you know what you don't know?
There have been many Errors & Ommissions insurance claims. Attorneys also have E&O insurance.
Can you renegotiate the price in a hot Seller's market if the inspector finds deal breaker type items?
My experience with residential real estate attorneys over 28 years would leave the buyer disappointed. Our contracts are written in plain language and it's not enough money in it unless there is a breach of contract suit.
I do not argue with your general positioning of agents vs lawyers. I don't think anyone would suggest that an attorney could or should do what a realtor does.
My main issue is that the responsibilities of realtors, particularly in the buyer's agent context is too vague. For example, you suggest that you walk through the home to identify deficiencies. My opinion (and I believe it's the same opinion of many others, including industry experts) is that this is a very dangerous representation of agents' services for 2 reasons:
1. You are not qualified or licensed (if applicable in the state) to perform inspections. Inspection is mainly how deficiencies are identified. For obvious reasons, you purposefully use vague language like "walk through" and "point out" instead of "inspect" which has a much more specific meaning. My opinion is that this is very dangerous for you and very unhelpful and potentially confusing to consumers. What does "walk through and point out" mean and what responsibility are you taking for the competent execution of this service? You also use the word "deficiency" which is also vague and I suppose you like this word better than "defect" or "problem" because you might claim that you meant things like a "poor layout" or "bathroom too far from bedroom". In fact "deficiency" could mean both defect and "drawback" so it's really unclear what you are talking about. If this is an important service provided by agents, it should be very clear what exactly you are talking about.
2. Once you start pointing out deficiencies, defects or whatever you're talking about pointing out, you start to look like an inspector and you could be more liable for the things that you don't "point out". In other words, I think this is dangerous for you to do.
I am sympathetic to some degree with agents because I believe that their ability to articulate their value is getting increasingly difficult. This is a good example. In the past I think it could all be looser. You didn't have to worry as much about getting sued for things like pointing out some but not all defects or deficiencies (i.e. avoiding getting sued for acting as an inspector and missing things). You could tell clients that you point out deficiencies, etc without much worry about that language. You could talk about helping with contracts, etc but now you need to tread very carefully and avoid liability related to "practicing law".
I think it's hard because agents' traditional 'turf' is getting squeezed by specialists whose roles are becoming professionalized, licensed, and have their own liability insurance for their part of their responsibilities in the sale.
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