Real Estate Agents - Real Estate Agents

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Real Estate Agents - Evolution of a Shark

michael@zeroagents.com.au

2006-09-01, 9:25 am

Or survival of the most dishonest

Real Estate agents are regarded poorly by the general public. To be
fair, there are many conditions that impact on a real estate agent.
These impacts can either spit them straight out of the industry or have
them evolve into sharks. In many cases it becomes survival of the most
dishonest.

Now before all the trustworthy hard working real estate agents groan
and moan, about another person giving their industry a hard time,
please read on. I believe it is the system in many cases that is
broken, and it is that system which shapes many a real estate agent
into that predatory shark.

Firstly, becoming a real estate agent isn't difficult. Most states
within Australia have a real estate institute where you can complete a
course in under a week.
(I completed my course by distance learning in one night and I am no
mental giant. The before mentioned groaning agents are really agreeing
with me now!)

In the US you can complete a course online and be accredited. All it
costs is $99 US.

We are talking a very easy entry point to become a real estate agent.

Now that you are a real estate agent - with your suitable
qualifications, you expect people to trust you with their single most
expensive asset, typically their home! Sounds a little bit out of whack
right from the start doesn't it?

Now from an external point of view, real estate looks like a pot of
gold.
Commission rates of between 2.5% to 3.0% to sell a house. A property
worth $500,000 represents a commission of approximately $12,500 to
$15,000.

"WOW, I should be able to do one of them each week and earn $650,000
per year. Finally an industry that pays me what I am worth."

And thus the evolutionary cycle begins. You have an easy entry and the
prospect of a huge amount of money. Sounds damn perfect. In fact so
perfect it attracts a huge amount of willing entrants with that simple
view. Most may I say have the full intention of doing real estate far
better than what they have experienced when dealing with real estate
agents themselves. Ahhh the noblest of intentions.

The problem is, it attracts far too many people.

Now we have a vast amount of agents all vying for that property sale.
The industry cannot support all the agents that are working within it.
People rush to enter this industry and there simply is not enough
property sales or money to go around.

Now we have the 2nd most critical issue in the evolutionary cycle from
person with best intentions to shark real estate agent. COMMISSION
ONLY.

Most agents are on commission only. This means they only get paid when
they make a sale.

Any agent competing against a vast number of agents for any one
property sale, if they don't say the right things, they won't get
the job. Which means they don't get paid. It means agents learn to
say what ever it takes to get that property listed for sale and then
whatever it takes to get it sold. It 's the only way they get paid.
It's survival of the most dishonest, because many times, potential
buyers and sellers really don't want to hear the truth.

Yes, I can hear Jack Nicholson bellow out to all buyers and
sellers..."You can't handle the truth"

Typically agents will say the property is worth more to the owners.
This way they will have those owners sign up with them. Because most
owners like to think their property is worth more. It's a simple
human trait called greed. (Michael Douglas just stepped in and added
his line "Greed is Good")

But for the real estate agent it's a simple numbers game. The more
properties they have for sale the better the chances they will make a
sale and therefore get paid.

Guess what comes next? Agents learn that it is far easier to sell
something cheap.
Everyone wants to buy a bargain so the agent pursues a process of
marketing the property with such clich=E9s as "marriage bust up",
"owner desperate". "bank instructs to sell" and "owner wants
all offers". They are simply aimed at attracting the most buyers with
the lure - BARGAIN BUYING. Now the poor owner at this stage is
horrified at this approach, but the agent convinces them it is the way
to attract the most interest. They should know - they completed a
course within a week!

Conditioning follows, stage 3 in the evolutionary process. The agent
will now try to get the owner to accept less for their property. The
buyers won't offer more - because they are the bargain hunters, so
the agent tells the owner with all sincerity - this is all the market
will offer. Cheap is easy to sell. The faster an agent can convince an
owner to accept less the faster they get paid. This is largely the
whole auction process. Auctions are designed by agents to get paid as
fast as possible.

The sad thing about most of this is that the larger franchise groups
have corporate training which promotes these processes as the best way
to get a result for their clients. Many an agent is brainwashed with
corporate training that simply focuses on evolution of the shark.

Now whilst all these activities are occurring, we have the 4th issue in
the evolutionary process. VALUE FOR MONEY.

Buyers and sellers assess the agents' activities. Most buyers and
sellers will have at least one unhappy experience with a real estate
agent to describe. Yet they both know the agent is paid handsomely.

The owner has the added grief of being very aware, that they pay for
the advertising, the sign, the internet, the brochure, which will
attract the buyer that they then have to pay for again. Yes, that is
exactly what occurs. Sounds quite stupid when you say it like that! The
agent may throw it around they can organise a better sign or get a
cheaper ad etc, but usually the owner is required to pay. They have
training for this process as well. It's called Vendor Paid
Advertising.

Lets not even talk about agents suggesting they have better negotiation
skills. They do, it has been finely honed by corporate training to get
the owner to accept less and pay for all the advertising.

So, with all these processes in mind, the general public are very
dubious about the honesty and integrity of any agent they deal with.
The agents counter this with expressions such as "Buyers are Liars"
and "Vendors are Benders".

And the evolution is finished. You have a shark or you have someone
leaving the industry. Survival of the most dishonest, well it would
make for a funny reality tv show.

Da dum, Da Dum, Da Dum, I think I hear the agents circling my home
right now.

Michael Eroz
Property Analyst

http://www.zeroagents.com.au

darrenli516@yahoo.com

2006-09-01, 9:25 am

Michael,
You need to corrected on several points.
I do not know of any state in the USA where you can get your RE license
"on-line".
In New York you are required to complete a 45 hour course in a
classroom, pass the school's exam, and then pass the state exam. You
are also required to take 22.5 hours of continuing education classes
every 2 years, as well as state mandated courses on fair housing
practices and Realtor ethics.
When I started in the industry I was with a Century 21 office and also
attended more than 300 hours of additional training.
I also have a Bachelor's degree as well as an MBA.
The real estate course you take to get your license doesn't teach you
the ins and outs of the business. It teaches you about real estate
laws, practices and terminology.
I learned the basics of the business from a senior agent and mentor at
my office.
While I agree that the commission-only pay structure is problematic, I
don't think it is the root of the industry's problems.
Of course there are dishonest and disreputable agents in the business,
just as there are in any business. Many people get into the business
thinking they can make quick and easy money, but that is simply not the
case.
Of course there are the "sharks", but they do NOT represent the average
agent.
It certainly takes a special kind of temperament to deal with greedy
homeowners and clueless buyers. We sort of have to try and please
everyone during a sale, and that is not easy.

Darren

Jeff Olsen

2006-09-01, 5:25 pm

michael@zeroagents.com.au wrote:

> In the US you can complete a course online and be accredited. All it
> costs is $99 US.
>
> We are talking a very easy entry point to become a real estate agent.

I don't know if that is true in other states (I doubt it), but it is
emphatically NOT true in the state that I just got licensed in. In
Oregon, it's a 150-hour course that costs around $800, then there are
numberous OTHER fees and expenses to total about 2 grand. I did the
coursework in 5 weeks and and that was about as fast as humanly
possible. It's not easy, nor trivial, nor cheap.

In addition to that I have two colllege degrees.

To you other points, it's not at all hard to denigrate ANY group of
professionals who charge a fee for their service, and anything that
resembles sales in any way is extra easy to pick on. However, the good
agents I know work very hard and make a decent living at it. The
people they serve are free to choose from a large pool of available
"talent" and free to sign or not sign whatever employment (listing etc)
contracts offered to them. And, quite frankly, a real estate
transaction is a big, complex mess that many people are happy to pay a
professional to help with. So then it comes down to the quality of
service an individual agent gives. Those who suck shall not prosper.
Those who take good care of their clients shall prosper. What's so
evil about that? Why should a group of people who hustle hard, work
crazy hours, and are legally liable for the consequences of large
transactions NOT have the potential to make a decent living? Are you
advocating some sort of "race to the bottom" here?

I'm guessing, and I didn't click your link but by all appearances you
have a seperate axe to grind. It looks to me that you are attempting
to put down real estate agents because, basically, you want their
clients, right? You are in the profession of real estate but not as an
agent? THERE'S a disinterested party for ya.

Good luck with that.

-jeff

darrenli516@yahoo.com

2006-09-01, 5:25 pm

Well said, Jeff!!!
I did check the original poster's link, and sure enough it is a fsbo
site for homeowners, and touts the usual claims about selling your
property for $99, etc.
No wonder the guy wants to disparage us Realtors!

Darren

Jeff Olsen wrote:
> michael@zeroagents.com.au wrote:
>
>
> I don't know if that is true in other states (I doubt it), but it is
> emphatically NOT true in the state that I just got licensed in. In
> Oregon, it's a 150-hour course that costs around $800, then there are
> numberous OTHER fees and expenses to total about 2 grand. I did the
> coursework in 5 weeks and and that was about as fast as humanly
> possible. It's not easy, nor trivial, nor cheap.
>
> In addition to that I have two colllege degrees.
>
> To you other points, it's not at all hard to denigrate ANY group of
> professionals who charge a fee for their service, and anything that
> resembles sales in any way is extra easy to pick on. However, the good
> agents I know work very hard and make a decent living at it. The
> people they serve are free to choose from a large pool of available
> "talent" and free to sign or not sign whatever employment (listing etc)
> contracts offered to them. And, quite frankly, a real estate
> transaction is a big, complex mess that many people are happy to pay a
> professional to help with. So then it comes down to the quality of
> service an individual agent gives. Those who suck shall not prosper.
> Those who take good care of their clients shall prosper. What's so
> evil about that? Why should a group of people who hustle hard, work
> crazy hours, and are legally liable for the consequences of large
> transactions NOT have the potential to make a decent living? Are you
> advocating some sort of "race to the bottom" here?
>
> I'm guessing, and I didn't click your link but by all appearances you
> have a seperate axe to grind. It looks to me that you are attempting
> to put down real estate agents because, basically, you want their
> clients, right? You are in the profession of real estate but not as an
> agent? THERE'S a disinterested party for ya.
>
> Good luck with that.
>
> -jeff

lobo

2006-09-01, 5:25 pm

Don't feed into the Australian troll. What would he now about US Real Estate
anyway.....

<darrenli516@yahoo.com> wrote in message
news:1157137711.736802.132420@e3g2000cwe.googlegroups.com...
> Well said, Jeff!!!
> I did check the original poster's link, and sure enough it is a fsbo
> site for homeowners, and touts the usual claims about selling your
> property for $99, etc.
> No wonder the guy wants to disparage us Realtors!
>
> Darren
>
>SNIPPED AS NOT TO PROMOTE THE TROLLS ADDRESS<
> Jeff Olsen wrote:
>

michael@zeroagents.com.au

2006-09-01, 5:25 pm

Jeff Olsen wrote:
> michael@zeroagents.com.au wrote:
>
>
> I don't know if that is true in other states (I doubt it), but it is
> emphatically NOT true in the state that I just got licensed in. In
> Oregon, it's a 150-hour course that costs around $800, then there are
> numberous OTHER fees and expenses to total about 2 grand. I did the
> coursework in 5 weeks and and that was about as fast as humanly
> possible. It's not easy, nor trivial, nor cheap.
>
> In addition to that I have two colllege degrees.
>
> To you other points, it's not at all hard to denigrate ANY group of
> professionals who charge a fee for their service, and anything that
> resembles sales in any way is extra easy to pick on. However, the good
> agents I know work very hard and make a decent living at it. The
> people they serve are free to choose from a large pool of available
> "talent" and free to sign or not sign whatever employment (listing etc)
> contracts offered to them. And, quite frankly, a real estate
> transaction is a big, complex mess that many people are happy to pay a
> professional to help with. So then it comes down to the quality of
> service an individual agent gives. Those who suck shall not prosper.
> Those who take good care of their clients shall prosper. What's so
> evil about that? Why should a group of people who hustle hard, work
> crazy hours, and are legally liable for the consequences of large
> transactions NOT have the potential to make a decent living? Are you
> advocating some sort of "race to the bottom" here?
>
> I'm guessing, and I didn't click your link but by all appearances you
> have a seperate axe to grind. It looks to me that you are attempting
> to put down real estate agents because, basically, you want their
> clients, right? You are in the profession of real estate but not as an
> agent? THERE'S a disinterested party for ya.
>
> Good luck with that.
>
> -jeff

Jeff - if i have misrepresented what processes are required to get
licenced in the states - i apologise. As for a disinterested party - i
also own a real estate office - it employs 15 staff plus myself. We
sell prestige homes around $1.5 to $2.5 Million (Thats $A dollar)(So
multiply by .75 to get a $us equivalent) Also produce my own prestige
magazine which gets published in my area - promoting waterfront
properties. So i have a fair understanding of real estate. Do agents
work hard - damn yes - not questioning that - but honestly tell me why
using the owners money to advertise their property and to generate
enquiry - we should also then charge for commission. Especially when
the owner could do it themselves. (And all my real estate advertising
is provided completely free to all my clients - as i know i use the
advertising to promote my business as well)

michael@zeroagents.com.au

2006-09-01, 8:25 pm

Also - i was concerned i misquoted US sales person requirements - so i
googled - first one popped up was in fact $99

Here's the link

http://www.californialicense.com/

michael@zeroagents.com.au wrote:
> Jeff Olsen wrote:
>
> Jeff - if i have misrepresented what processes are required to get
> licenced in the states - i apologise. As for a disinterested party - i
> also own a real estate office - it employs 15 staff plus myself. We
> sell prestige homes around $1.5 to $2.5 Million (Thats $A dollar)(So
> multiply by .75 to get a $us equivalent) Also produce my own prestige
> magazine which gets published in my area - promoting waterfront
> properties. So i have a fair understanding of real estate. Do agents
> work hard - damn yes - not questioning that - but honestly tell me why
> using the owners money to advertise their property and to generate
> enquiry - we should also then charge for commission. Especially when
> the owner could do it themselves. (And all my real estate advertising
> is provided completely free to all my clients - as i know i use the
> advertising to promote my business as well)

michael@zeroagents.com.au

2006-09-01, 8:25 pm

darrenli516@yahoo.com wrote:
> Michael,
> You need to corrected on several points.
> I do not know of any state in the USA where you can get your RE license
> "on-line".
> In New York you are required to complete a 45 hour course in a
> classroom, pass the school's exam, and then pass the state exam. You
> are also required to take 22.5 hours of continuing education classes
> every 2 years, as well as state mandated courses on fair housing
> practices and Realtor ethics.
> When I started in the industry I was with a Century 21 office and also
> attended more than 300 hours of additional training.
> I also have a Bachelor's degree as well as an MBA.
> The real estate course you take to get your license doesn't teach you
> the ins and outs of the business. It teaches you about real estate
> laws, practices and terminology.
> I learned the basics of the business from a senior agent and mentor at
> my office.
> While I agree that the commission-only pay structure is problematic, I
> don't think it is the root of the industry's problems.
> Of course there are dishonest and disreputable agents in the business,
> just as there are in any business. Many people get into the business
> thinking they can make quick and easy money, but that is simply not the
> case.
> Of course there are the "sharks", but they do NOT represent the average
> agent.
> It certainly takes a special kind of temperament to deal with greedy
> homeowners and clueless buyers. We sort of have to try and please
> everyone during a sale, and that is not easy.
>
>
> Darren

Look at this site Darren
http://www.californialicense.com/

DANIELHOMAN

2006-09-02, 1:25 pm

You forgot the last two steps:

The agent cuts his commission and moves more to the advertising side of the
business. He begins to rag on agents that dare charge more than he does.
To make up for the loss of income, he leaves work that you need a license
for such as showing the house, writing and negotiating contracts to the home
owner.

And the last step in the evoloution of a shark is he abandons all activity
that requires a licence and starts co-op advertising FSBO homes, ragging on
any licensed agent and accusing them of stealing sellers' money by charging
commissions amd playing off the ego and emotions of people who have to sell
their homes and realy need the money to shoot down agents.

DANIELHOMAN

2006-09-02, 1:25 pm

"michael@zeroagents.com.au" <anthony@zeroagents.com.au> wrote in message
news:1157150314.958591.111210@h48g2000cwc.googlegroups.com...
>
> darrenli516@yahoo.com wrote:
>
> Look at this site Darren
> http://www.californialicense.com/
>
Wow, no wonder there are so many California agents, it is so cheap to get
into the business. You are just demonstrating your ignorance of how the
business really works. The sad part is that the uneducated public is much
more inclined to believe your misinformation than find out the truth.

DANIELHOMAN

2006-09-02, 1:25 pm

"michael@zeroagents.com.au" <anthony@zeroagents.com.au> wrote in message
news:1157147978.656236.217590@i3g2000cwc.googlegroups.com...
> Jeff - if i have misrepresented what processes are required to get
> licenced in the states - i apologise. As for a disinterested party - i
> also own a real estate office - it employs 15 staff plus myself. We
> sell prestige homes around $1.5 to $2.5 Million (Thats $A dollar)(So
> multiply by .75 to get a $us equivalent) Also produce my own prestige
> magazine which gets published in my area - promoting waterfront
> properties. So i have a fair understanding of real estate. Do agents
> work hard - damn yes - not questioning that - but honestly tell me why
> using the owners money to advertise their property and to generate
> enquiry - we should also then charge for commission. Especially when
> the owner could do it themselves. (And all my real estate advertising
> is provided completely free to all my clients - as i know i use the
> advertising to promote my business as well)
>

If you are sorry, perhaps you should do your homework, before making any
more inflammatory posts based on misinformation and misrepresentation. Why
not grow up and get your facts straight before you attack others.

I also question the value of the service you provide, because of how you
advertise. Most advertise by saying "this is what I do, this is how I do it
and this is why." Your approach is "realtors suck, this is why. If you
don't like these greedy, fat and lazy realtors, I don't blame you. For an
alternative to these pigs, go to my web site."

You clearly have not taken the high road to advertise your business.

DANIELHOMAN

2006-09-02, 1:25 pm

"michael@zeroagents.com.au" <anthony@zeroagents.com.au> wrote in message
news:1157150241.643359.139770@b28g2000cwb.googlegroups.com...
> Also - i was concerned i misquoted US sales person requirements - so i
> googled - first one popped up was in fact $99
>
My apologies, you read it on the internet, google's first choice, it must be
right. I googled "failure" the first thing to pop up is George W. Bush's
official biography. Leaving politics aside, this demonstrates the accuracy
of Google. Even if this is just in jest on the part of Google, it shows
that higher placement on Google is no measure of reliability. To shoot your
mouth off without doing research to get accurate information is flat out
lazy, careless and irresponsible - particularly when you use this
misinformation to promote your business interests. Tell me again about the
ethics of brokers and agents.

michael@zeroagents.com.au

2006-09-02, 1:25 pm

DANIELHOMAN wrote:
> You forgot the last two steps:
>
> The agent cuts his commission and moves more to the advertising side of the
> business. He begins to rag on agents that dare charge more than he does.
> To make up for the loss of income, he leaves work that you need a license
> for such as showing the house, writing and negotiating contracts to the home
> owner.
>
> And the last step in the evoloution of a shark is he abandons all activity
> that requires a licence and starts co-op advertising FSBO homes, ragging on
> any licensed agent and accusing them of stealing sellers' money by charging
> commissions amd playing off the ego and emotions of people who have to sell
> their homes and realy need the money to shoot down agents.

Ahhhhh - - Sounds like an agent on Shark Patrol

Jeff Olsen

2006-09-02, 5:25 pm

michael@zeroagents.com.au wrote:
> Jeff Olsen wrote:
>
> Jeff - if i have misrepresented what processes are required to get
> licenced in the states - i apologise. As for a disinterested party - i
> also own a real estate office - it employs 15 staff plus myself. We
> sell prestige homes around $1.5 to $2.5 Million (Thats $A dollar)(So
> multiply by .75 to get a $us equivalent) Also produce my own prestige
> magazine which gets published in my area - promoting waterfront
> properties. So i have a fair understanding of real estate. Do agents
> work hard - damn yes - not questioning that - but honestly tell me why
> using the owners money to advertise their property and to generate
> enquiry - we should also then charge for commission.

In my market, advertising is typically paid by the listing agent. Up
front.

Why a commission? Because in the US of A, putting together a deal to
buy/sell a house is a large, long, time-consuming, pain-in-the-XXX
process! I'm a rookie, so you can beat me up on that if you want, but
the principal broker who I am licensed under is a good friend who has
given me a lot of education on the realities of the process. There's a
whole heck of a lot of work involved. It is the opposite of a simple
transaction. In fact, in my area, Realtors won't touch a transaction
if the commission is under $3000 or so because it's simply not worth
it. Too much work for the return.

-jeff

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