Real Estate Agents, friend or foe

[FreezingHot]

Hey all

As part of my journey towards my first IP, I have dealt with various RE Agents. I am beginning to wonder just whose best interest they are working on behalf of. I am trying to work with the same agent and am trying to build up that all important trust, but am finding at times what
their real motives are.

I know they are there to make an income but my trust seems to be less
than my faith in their ability to deliver a great deal.

Is there any techniques I can use to maximise my ability to invest in a
+ve cashflow property or am I looking in a time where the deals are scarce and RE Agents have the greatest reason to celebrate!

Any takers on this one?


FH not so hot @ the moment.

FH.

[Kiwi_Investor]

Hi freezing, I would suggest that RE Agents are like any other sector, you have good and bad.
I am currently doing a Diploma of Real Estate here in Brisbane, this is proving to be an eye opener, but very interesting.
Agents are trying to make a living like everybody else, the real challenge for agents and RE companies will come when there is a true recession.

I think ethics and personal integrity goes a long way, also an agent who actually has some IP's would be a good start. I would be as professional as possible when dealing with REA's, treat your investing as a business and tell them what you are looking for.

My main motivation for doing the RE study is to gain an advantage and one day set up my own RE company, as I believe things can be done better for less cost, and of benefit to the consumers who are buying and selling ppty.

Good luck !

KI

[LondonKiwi]

Yep I agree with kiwi investor, real estate agents are like any other sales based industry, you get the good with the bad.

Remember also that RE agents are working in the main for the property vendor.

You will find that the attitude will change when they realise you are a serious property investor (i.e.. have bought a couple of properties through them) but it shouldn't need to get to that stage. Remember as I have said before not all agencies have all properties so it could just be a matter of finding that first property dealing with the listed agent and then going from there but do not limit yourself to one agent.

Also keep in regular contact with those that seem proactive (i.e.. return your calls, ring you with potential properties etc).

Cheers


LK

[Ianacek]

LondonKiwi

Don't get confused with the well-ordered waty things work in the UK. It's still the wild west in Enzed.

You say :
RE agents are working in the main for the property vendor.
That's what their contract says. However, most in my experience turn into buyer's agents when the property enters the last few days of the listing agreement. With an eye on the commission, yesterday's "ridiculously cheap" price becomes today's " excellent offer". A process of conditioning follows during which the vendor is subjected to criticism & humiliation in order to get the asking price down to whatever level the only buyer they have managed to find is prepared to pay. .. Some agencies even hire "closing" specialists. I'll never forget the severe looking and sounding lady from Barfoots , with the horn rimmed glasses, who called twice to tell me an offer for $130,000 for a flat was "wonderfull". I toughed it out, appointed a new agent & it sold for my target price of $135,000 within a week.

Later, I multilisted another house & land property, ran the open homes myself & ended up selling it myself. The difference between the price I got & the best price of the previous ( 3 month ) sole agency was $49,000 - or $73,000 after adjusting for the commission I would have to have paid on the first offer. For the work I put in for this extra $73,000 , I effectively earned about $800 per hour.A well trained & experienced salesperson could probably have doubled that - I had a lot to learn in a hurry. Estate agencies truly do get money for jam, even considering they waste half their time scrambling for sole agencies instead of selling.A couple of them have told me so, off the record.

Agents try to trap you into sole agencies on the pretext that that is the only way they can justify working for you. But most salespeople working for agencies are not directly bound by a Code of Ethics.Their boss may be bound. He or she may not be able to offer "bait " pricing & vendor "conditioning" under the Real Estate Institute's Code of Ethics, but they turn a blind eye while their poorly trained staff do so.

Also, Londonkiwi, you say that not all agencies have all listings. This is not true. Once the listing is on www.realenz.co.nz , all agencies effectively have & can sell it by a 50/50 or so "workin" commission arrangement. Now you can see why they fight so hard for sole agencies, the sole agency commission gives them half the commission rights.

You may as well keep this commission for yourself & only give a General Listing ( regardless of what they say ( it's all b....t) or a multiolisting.If you are also able to market it yourself, you have a benchmark by which to evaluate the offers salesperople are bringing you. I turned 2 away because they could justify their commissions.

Sole agencies are only worthwhile if you have a guarantee the salespeople working it are ethical & competent & able to get the premium price to justify their commission.Of course, no agent is willing to give such a guarantee

[LondonKiwi]

Hi Ianacek

The orderly way things work in the UK? Believe me I could write a thesis on how bad the levels of service and customer relations are in this country. The only thing you can bank on is that when your are told a delivery will arrive, it definitely won't arrive on either the day or time its supposed to! And you won't get a call from anyone either you will need to do the chasing all yourself!

Liked your post though, interesting to see the comments from someone who has done the sale themselves.

I intend to list my properties in future on a home made website so may use this avenue also if I ever come to selling.

Cheers

LK

[fudosan]

That's what their contract says. However, most in my experience turn into buyer's agents when the property enters the last few days of the listing agreement.

My experience is the opposite. When the market is booming, the salespeople are not helpful, give little informaiton, don't return calls, but pressure me to make the highest offer with minimum conditions right away without doing any due deligence. When the market goes south, it's the sellers who now have to suffer. So if I want to buy, I'll buy during the slump times. If I want to sell, I'd rather sell it myself when the market is booming.

[FreezingHot]

Wow.

Did I just open up a can of worms!

Thanks for the great replys. I can't help agree with fudosan though.

Some of the RE Agents I have called in regards to a viewing a property
have not either returned my call or have just said I don't think that sort of
return is possible in todays market. Too many easy sales around today maybe?

I think back to what Ron has said in reply to one of my posts
" The deals are not found at the listed price, but at the negotiated price"
great advice I think.

However I have found a few agents that are replying to my calls and seem willing
to find me good deals so I find myself calling these agents more often, trying to gain
their trust.

Might have to wait for that slump as fudosan says.

FH.

[fudosan]

I'm still actively looking and negotiating, but the returns of most deals are not attractive.

[pixie]

I have done my real estate papers twice (I was successful as an agent) and the second time (15 years later) because of ambitions to work as a professonal property manager.

Frankly it is a shameful industry full of far, far too many agents with some very unsaviourly habits. So many companies say "hey look we are the biggest in town because we have x agents whereas the other companies only have y agents" like that will make a blind bit of difference. But you know what - the public buys that approach, "buys" the glossy weekly magazine and they get listings as a result.

I don't believe the majority of agents are on anybody's side other than their own. If it suits them to assist a buyer they will, if it suits them to slay the owner then they will. We have all watched them promise high prices to get a listing and then wear the owner down. We have all watched them list properties that they haven't a hope in hell of selling and then argue that you should still pay the full commission on your place even though it sold inside of a week because their buyer came to them off the back of the overpriced place down the road.

And how many times I have inspected a home to then have the agent tell me I have make an immediate decision to put an offer in because "someone else is making one this arvo". Yeah right!

BUT - I believe it is seriously the 80/20 rule as to who is selling and earning. Most of todays agents will disappear when the going gets tough and only the best are really stay with the industry.

I look for individuals who have been in the industry many years - through the bad times and the best. I dont' regret listing with these individuals and have achieved good results through doing so.

Bear in mind - the NZ public love houses and like the idea of dealing with real estate agents when buying. Many even make visiting home homes a hobby. Many of them are very loath to deal directly with an owner. So, inspite of very concerted efforts in the past to create different models for buying and selling the vast majority of people are still listing and buying with RE agents.

So - stick to the experienced successful people and don't respond to pressure. These guys work for themselves - stuff the vendor and stuff the buyer. For most of the agents it is all about them earning a living. If you remember this then when you meet the good guys you will be delighted - they are there.

[FreezingHot]

Thanks Pixie.

I hope I hav'nt started a thread that puts down the RE Agent industry.

As you say there are those agents that have been there thru good times
as well as bad, I suppose it is up to me to find them.
The reason I started this topic was to get ideas on how to work with the
agents to get the desired result, but along the way have found that alot
of them are talking a whole lot of *#*% to put it mildly.

Has been good to find out what all of your thoughts are.

Keep on truckin!

FH.

[leapy]

Look to deal with companies that have long-serving agents, a strong principal who is well-respected in the general community, and a good history of lack of arbitration.

A good agent will gain the vast amount of her or his business through personal referrals. If they are not scrupulous, word of mouth will eventually dirty their reputation. (This works particularly well in smaller towns.)

There is such a thing as ethical agents and they are not as scarce on the ground as some would have you believe. It serves you well to put in the time and conversation necessary to find them.

[paulette]

A good agent should work for the vendor but be fair to the purchaser. It is the vendor who is paying them, they should always put their interests first.
You are right, the sales person certificate can be sat by anyone and is very easy, but as times get tough it will only be the ones that are genuine that will make it.
It is not as easy as it sounds being an REA, at the moment vendors expectations are very high and purchasers are low, as the market slows vendors are going to have to move price which isn't that easy to educate them to do.
They are out their to make a living, like any of us. But it is what they do to make that living that counts, some are sharks.
As far as a general versus sole agent, think about this, the agent that get a sole agency, they are fully responsible for the sale of your house, on a general, their is more competition, are the agents trying to get you the best price or sell your property first at any price.

P