Realtors - Unrealistic Optimism without Consequences

[Terrel L. Shields]

I understand the cruel pinch of want and the need for a salesperson, in any business, to maintain an upbeat attitude, but REALTOR magazine takes the cake. They take positive attitude far beyond unreal spin. Realtor Dick McBain in a letter to the magazine literally argues this is "a huge buyer's market" [maybe so...but what if it goes lower?] and even describes like-minded Realtors as "believers". Never mind reality. Further, he lays all the blame for foreclosures upon "unscrupulous lenders"...right. The Realtors were innocent bystanders..standing by Skippy that is.
And how can I say enough about Lawrence Yun? I mean the spin doctor should be on TV....as the straight man setting up a real comedian. Yun stated that "an investor who bought a property in Las Vegas five year ago would be ahead by $150,000 today"....ok. How many "investors" were in the market five years ago? How many got in it Two years ago? A dang sight more than was in it five years ago. He claimed investors only "face a potential loss". It isn't real until you sell, right? So hang on...don't bail out now. Never mind you might sell, lose some capital, reinvest in something else that will make money. Never mind you are trying to clean up someone's estate, are being bought out by a government taking you by eminent domain, or otherwise are pressured to sell.
And, of course, the NAR is opposed to Rep. John Dingell's idea of eliminating the mortgage interest deduction for homes of 3,000 SF or more. They claim it would cost consumers $34 billion. Yep, and Realtors couldn't sell those overpriced, supersized white elephants at all if that was the case.
I don't expect anyone in sales to be doom and gloom but there is a place for a reality check among Realtors. If I was trying to buy a home and some idiot Realtor told me this is "a buyer's market"; "a great investment"; "it's all caused by "sensation-seeking" press; and, that they know it is a great long term investment....then I will consider that I am working with someone who would lie to me about anything and everything.
I would ask them to put those promises in writing with a 3 - 5 year time limit and if they haven't met expectations at the end of that period, to court we go. I would bet 99% of them would backtrack because in their heart they know that they cannot predict the future. There ought to be consequences for making outrageous claims with no caveats.

 

[Crunch Hardtack]

Bingo

I spent a good number of years in retail sales and management before getting into appraisal and I have never seen anything like realtors. As Terrel notes, optimism is a key attitude to have if you are in sales, but many realtors seem to have optimism coupled with their heads up their ***. Makes for a strange combination...........kind of like a cross between a Mary Kay salesperson and a cheerleader with a lobotomy. Just odd.

 

[Abschatzer]

In my opinion, Realtors were the biggest player in the destruction of this market. They need to get a grip.

Well put Terrel...

 

[Ray Miller]

In my opinion, Realtors were the biggest player in the destruction of this market. They need to get a grip.

Well put Terrel...

They caused me just as much grief as the MB and LO for not hitting numbers that they needed to make a deal work. Even to the tune of saying I never went into some of the homes on a walk through. That is what they used to request a Mr. & Mrs. Skippy. they really did huff and puff and they help blow this house of cards down.

 

[Jozsef Poor]

I am a Realtor, however, with the exception of a few well trained real professionals on the market they make me laugh, sometime angry and often cry...(well the crying is not true but really sad is pretty close). I am watching some of the so called real estate expert Realtors on the TV as they explain the owner how much they will receive back (return) on they renovated kitchen/bathroom...etc. I have a magazine in front of me with COST vs VALUE on the front page. I was looking at the numbers for a while and I remember having the same article when the market was rising.
When the market was going up, two house the same model purchased at 300K for flip, one they remodeled the kitchen and the bathrooms the other they left original. The one that was remodeled sold for 360K and a situation like this the magazines explain that the kitchen contributed 40K in value and the two bathrooms are 20K in value. Great. The only part was left out that the other house left in original condition sold for 345K at the same time. In reality the remodeling made only a 15K profit and the cost most probably were way above that.
Than the Realtor looking at the appraiser report and complaining that "my client spent a fortune on the remodeling, and the adjustments are incorrect"

To receive a sales license takes less hours than the registered trainee license. To be a Realtor there is a mandatory 3 hours of ethics. Compare to the 2500 hours mandatory experience a certified appraiser required, where exactly Realtors learn valuation, to become COST vs VALUE experts...?

 

[murray stroupe]

Re

I am a Realtor, however, with the exception of a few well trained real professionals on the market they make me laugh, sometime angry and often cry...(well the crying is not true but really sad is pretty close). I am watching some of the so called real estate expert Realtors on the TV as they explain the owner how much they will receive back (return) on they renovated kitchen/bathroom...etc. I have a magazine in front of me with COST vs VALUE on the front page. I was looking at the numbers for a while and I remember having the same article when the market was rising.
When the market was going up, two house the same model purchased at 300K for flip, one they remodeled the kitchen and the bathrooms the other they left original. The one that was remodeled sold for 360K and a situation like this the magazines explain that the kitchen contributed 40K in value and the two bathrooms are 20K in value. Great. The only part was left out that the other house left in original condition sold for 345K at the same time. In reality the remodeling made only a 15K profit and the cost most probably were way above that.
Than the Realtor looking at the appraiser report and complaining that "my client spent a fortune on the remodeling, and the adjustments are incorrect"

To receive a sales license takes less hours than the registered trainee license. To be a Realtor there is a mandatory 3 hours of ethics. Compare to the 2500 hours mandatory experience a certified appraiser required, where exactly Realtors learn valuation, to become COST vs VALUE experts...?

==============
Fun /educational read,Joseph.
Perhaps the bottom line of that story''dont spend a fortune in RE, just because the flip/flipper tv show showed it that way ''LOL

See your points Terrel, but Donald Trump is buying now;
as he said RE isnt like GM, not that exact.Not that D Trump is the gold standard, but thats from one who puts his money where his mouth is perhaps.

So when it comes to buying or selling RE, no truthful person hits the target 100% of time;perhaps we could frame the question-''early or late''????????????????

Terell;
have you ever thought like me , CEO Angelo Mazola, of Countrywide Financial;
could do well like ''Flip/flipper Wilson'' & advertise Sea & Ski suntan lotion.LOL?????????????????????????????????????????????????????????????

Dont have time to spell check now.

 

[DeanHarris]

I don't think one should bash an entire profession based on the actions of a few.

If the barrier to entry is so great for appraisal then how can there possibly be any "skippy's" as you folks call them?

When people are involved and it's an art not a science perhaps there's no black and white, just shades of gray?

Was speaking to several MB's regarding UK buyers for the 1st time yesterday.

Aside from fewer lenders handling them the gist I got is much more down payment required.

Now, every MB wants an agent to bring them buyers. I have sent folks buyers but have never gotten a buyer lead back...but I digress...

I tell MB's that often I deal with relos who are attached to a lender already.

The MB's tell me that if the lender is based in South Carolina for example the may issue a more national based appraiser franchise (?) whereas they new local appraisers who "knew the local market better" and wouldn't be quite as conservative.

Uh uh.

Even if agents get an emotional over logic based buyer, one would think the appraiser would save them, especially in this market.

I had one couple who kept going up in budget - to $450k+

They are renting a brand new 3000sq ft house now. We looked at 30+ homes. We started in a very established subdivision and resale is pretty good. Values holding up better than other areas. They expect to live here 10-20+ yrs.

Still, we did look at newer subdivisions. Buyer purchased new 2yrs ago for $360k. Asking $499k. Has part time friend and neighbor list it.

I tore them to shreds telling them how many similar homes were available within just a 3 mile radius.

In these new subdivisions I am thinking 10% above initial mortgage for my buyers.

This was a lease to purchase at the time, so we need to come up with a sales price in the near future. I stated 6 mos from now clearly the property will decline we just don't know how much.

His buddy sheepishly states 'we don't know that'.

I confidently state "YES. We DO know that." then explained his own subdivision market to him. There were 3 Foreclosures and 1 bank owned pending sale- not many others pending sale.

He again tried to tell me we don't know for sure prices will decline 6 mos from now.

I then explained to him even during the peak of 2005 sales during fall/winter were almost half spring/summer. We were just entering fall.

There was a 5yr supply in his subdivision based on last 3 mos sales...end of summer btw.

6 mos or less is sellers market. Even if we went back to the peak of the market we'd be doing 10% monthly inventory.

Therefore, the math is certain. I assured him the value would be quite a bit less 6 mos from now.

BTW, this was in front of the seller and my buyers. Even my buyers asked him if he wanted to go out for a beer after that.

ANYWHO...please do not make such a blanket statement about Realtors.

There are and always will be people in all fields who abuse opportunity at the expense of others.

Also, pure 100% commission sales is sales. You don't expect a Ford commercial to reveal how many more repairs they get compared to Toyota do you?

Realtor magazine is for other agents. The hardest people to sell are other agents.

One needs to be most on guard yet appear most natural at the office than anywhere else.

You know what many good agents run into as to WHY someone's house shouldn't need to list for less? An appraisal done for the seller by an appraiser 3-6 mos earlier that was inflated even for back then.

You folks are looked upon as the ultimate source of value.

It shouldn't matter if the agents involved with the deal are as unethical as they come, as long as there is a lender involved and they get an appraisal, right?

Unless it is an all cash deal nobody can pay too much since the lender will look out for them. ;-)

Really, it is the lenders as they are the people who pressure you folks and got rewarded more for sub prime loans. 99% of the time it's only a phone relationship. It becomes all to easy for the MB or lender account reps (who are under enormous pressure and have quotas) to get greedy.

I don't get how Realtors or even just agents (more and more cannot pay dues) can be the evil part of the puzzle here. Isn't it presumed the listing agent wants to and is required to get the most money for the house?

It's one thing to have drunk agents and mortgage brokers, but you folks are the final stop on the money train.

 

[DeanHarris]

I
I don't expect anyone in sales to be doom and gloom but there is a place for a reality check among Realtors. If I was trying to buy a home and some idiot Realtor told me this is "a buyer's market"; "a great investment"; "it's all caused by "sensation-seeking" press; and, that they know it is a great long term investment....then I will consider that I am working with someone who would lie to me about anything and everything.
I would ask them to put those promises in writing with a 3 - 5 year time limit and if they haven't met expectations at the end of that period, to court we go. I would bet 99% of them would backtrack because in their heart they know that they cannot predict the future. There ought to be consequences for making outrageous claims with no caveats.

How would an idiot have so much influence over a smart person? You must have been burned many times to presume we'd all make outrageous claims.

All those claims are very broad, btw.

Have you checked the name of the magazine you were reading?

I don't have a hissy. I just laugh a bit.

If you really want to see outrageous claims I can pull an appraisal one of my sellers had done 6 mos ago stating the subdivision has stabilized.

Then look at recent comps showing the builder taking 55% of their own list price on new homes and GINORMUS price reductions across the board.

Guess the price he came up with for the home purchased 8 months earlier? EXACTLY what he paid for it.



Outrageous claims do have consequences for us. Those people won't have any repeat customers. Then again, they really didn't care since they were in for 12 mos or so.

 

[Jesus Barreto]

I am a Realtor, however, with the exception of a few well trained real professionals on the market they make me laugh, sometime angry and often cry...(well the crying is not true but really sad is pretty close). I am watching some of the so called real estate expert Realtors on the TV as they explain the owner how much they will receive back (return) on they renovated kitchen/bathroom...etc. I have a magazine in front of me with COST vs VALUE on the front page. I was looking at the numbers for a while and I remember having the same article when the market was rising.
When the market was going up, two house the same model purchased at 300K for flip, one they remodeled the kitchen and the bathrooms the other they left original. The one that was remodeled sold for 360K and a situation like this the magazines explain that the kitchen contributed 40K in value and the two bathrooms are 20K in value. Great. The only part was left out that the other house left in original condition sold for 345K at the same time. In reality the remodeling made only a 15K profit and the cost most probably were way above that.
Than the Realtor looking at the appraiser report and complaining that "my client spent a fortune on the remodeling, and the adjustments are incorrect"

To receive a sales license takes less hours than the registered trainee license. To be a Realtor there is a mandatory 3 hours of ethics. Compare to the 2500 hours mandatory experience a certified appraiser required, where exactly Realtors learn valuation, to become COST vs VALUE experts...?

I got the magazine also, and it is just amazing the return on $. LOL

Did you know in the South Atlantic you can add a wood deck for $10k and get 8k back?

Apparently, 100,000 appraisers, sales associates, and brokers were used as part of the survey. I was not a part of the survey

 

[murray stroupe]

Re

I got the magazine also, and it is just amazing the return on $. LOL

Did you know in the South Atlantic you can add a wood deck for $10k and get 8k back?

Apparently, 100,000 appraisers, sales associates, and brokers were used as part of the survey. I was not a part of the survey

====================================
You must be talking about the amazing return on the magazine dollars, Jesus;
& part of that could be explained with Jim Rogers saying recently too many bears on the US dollar. LOL

Flip this house TV show [San Antonio]finally admitted he didn't get anything back recently on sale 3 of his houses, but was able to rent 2.