From time to time, when the Answer Desk inbox gets flooded with mail on a single subject, we like to turn the space over to readers. Two recent columns on real estate agents really touched a nerve.
The purpose of the columns was not so much to malign real estate agents as it was to point out what we see as a conflict of interest when agents represent a buyer but get paid by the seller -– an arrangement that some home buyers, especially first timers, are apparently not aware of.
We heard from a number of agents who protested that they are honorable people who always put buyers’ interests first -- even when their fee is paid by the party on the other end of the transaction. But we also heard from readers who thanked us for the columns, including professional appraisers, home inspectors and home buyers who said they had not been treated fairly by an agent in the past.
Here are some of their opinions on the subject:
As a realtor, obviously I'm not happy about your characterization of our industry, but I do understand where much of that perception comes from. But I do take exception to the notion that we all represent the seller in a sale. That is a false representation at a minimum. In California, all buyers sign an agency disclosure stating that we have a fiduciary duty to the buyer ONLY, and that is and has been the case now for many years. …
Ken J. -- Lafayette, Calif.
Tell me about "disclosure" and how it applies to New York State. My wife and I purchased a property some years ago which is subject to spring flooding and we were not aware or we would not have made the purchase. Now I hear we would have to disclose this information if we were to sell making it difficult to recoup our investment.
Bernie C. -- Churchville, NY
.. I would like to defend myself as a mortgage broker who does look out for her clients. My name and reputation is on the line every time I take an application and if I made a habit of sending people right to foreclosure I am pretty sure I would be out of a job. I would like to thank you though for pointing out some big mistakes that people in general do make!
Amber T. – Ocala, Fla.
Hear, Hear! Well said in your defense of your comments about real estate agents. My experience of an “honest” real estate agent is one that I will never forget. She encouraged me to make a full asking price bid on a house with a sink hole, after it was disclosed as a “settling issue.” A real estate agent in Florida should advise clients to stay away from sinkholes, especially after we told her that it was one of our few requirements of a prospective house; no sinkhole houses.
Tom B. -- Tampa, Fla.
I can sell my own vehicle without an agent. I can sell my own firearm without an agent. Why can't I sell my own home without all the hassle of an agent? Do you think there will ever be a time when it will be much easier to sell your own home? Who made it so difficult?
Michele G. -- Greeley, Colo.
I still don't think you've got it right about realtors. You are correct that there is a built-in conflict of interest between them and buyers. What you left out - inadvertently or not - is that in most states, the realtor represents the seller and is LEGALLY obligated to get the best price for the seller. It is the buyer who needs to change the way they do business, by hiring their own broker.
Brian G.--Escondido, Calif.
(As we pointed out in last week’s column, so-called “buyer brokers” do get paid by sellers, but it’s an arrangement that is not as widespread as buyer agents paid by sellers.)
I couldn't agree with you more on the topic of realtors. I'll take it one step further and say that you are being too kind in your assessment of the lot. They are salespeople and most of them may know comparative analysis but do not know squat about economics, politics or anything else that has an effect on home values. Most of these people, realtors, are not the brightest bulbs. I wish there was a way to remove them from process or force them to accept a more reasonable fee. I know there are alternatives out there. Unfortunately the collusion that exists amongst realty companies makes those alternatives less than adequate. I firmly believe that most realtors don't earn their income.
I am a real estate agent in Kentucky. I have been in the business since 1994 after retiring from the Army. I take personal offense to that statement. When I encounter buyers that lack finances for the down payment or have a poor financial history, I counsel them. I ask if they want to give up life as they currently know it: no more going on vacations, going out to eat, if they want to be ball and chained to their house. … Your comment makes it sound like we are greedy and ruthless. While ALL industries have scoundrels, real estate included, most of my peers are honest and caring.
Wolf P. --Elizabethtown, Ky.
I think you hit the nail on the head. There is no more despicable, useless parasite than a realtor. The average used car salesperson is a saint compared to the average realtor. And the stakes are far, far higher in real estate than anything else the average consumer is likely to be involved in. And the realtors can spare me their platitudes that most of them are decent, honest folks, and only a few give the rest a bad name. The opposite is true. Their entire industry is based on fraud.
Arthur D. -- Lebanon, N.H.
You are so off target, it's unbelievable that you could be published. I am a part-time agent and I can tell you that I always act as a buyer's agent when showing homes to a buyer. We are required by Virginia State law to disclose to all parties, who we are representing. I don't know of any agents that don't act as a buyer's agent when working with a buyer. ...
Terri K. Virginia Beach, Va.
As an appraiser with over 20 year’s experience, I have seen realtors that would steal you blind if they had the chance... Ethically challenged agents, loan officers, and appraisers ruin the deal for many new home owners who are forced into foreclosure as they learn their house is worth much less than it's purchase price or loan amount.
Rick --Lewisville, Tex
As a Realtor, a Certified Residential Specialist, Senior Real Estate Specialist, and Certified New Home Specialist I feel a bit insulted at your persistent notion that Realtors are only concerned about our bottom line. Please obtain and read a copy of the Code of Ethics that we are pledged to abide by. Most of us know that abiding by this code and putting the best interests of our customers first is the very best way to maintain our business...
Ann T. -- Pensacola, Fla.
Give me a break!! How would any Realtor who treats a buyer like that get referrals and repeat business? Trust me that when I act as a buyer's agent I have MY CLIENT, THE BUYER's best interest at heart. That way, he will be pleased enough to use me in future transactions, and refer his friends to me with confidence. How long would any business last without repeat customers? …
Heather E. --Leesburg, Va.
Any real estate agent who does not represent the buyer in an honest and fair manner will not last long in the business. He/she is looking for return business and this will not happen if he/she is dishonest with a buyer. You do not have a clue as to what you are talking about.
James W. – Naples, Fla.
..Several years ago I decided to give up my home inspection business, in part because of the very topic you wrote about. I dealt with literally hundreds of agents, brokers and agencies in general and my learned opinion is that the only difference between a real estate agent and a used car salesman is that you don't normally see real estate agent wearing a plaid polyester sports jacket with white shoes…. I've often heard it said that 20 percent of the brokers/agents make 80 percent of the profits in that business. That seems fairly accurate when I consider the turnover of people I witnessed coming and going in the industry. I think until the profit motive system is replaced with something more workable, or until greed is abolished, we'll not see many changes in this arena. …
Michael C. -- Address withheld
… I have purchased and sold two homes in the last five years and in 3 of the 4 transactions, felt like I was not given all the information I needed from my realtor. Both of the homes I purchased were new homes which were custom built. One thing I was not made aware of during either of these purchases is that the price is negotiable with new homes, just like they are with pre-existing homes. Granted, I should have done my own due diligence with regard to this fact, but nonetheless, my real estate agent should have been more forthcoming with negotiating on my behalf. I was the person who decided to retain this agent, even though I wasn't technically paying his bill. "Shame on you" to any real estate agent who fails to see this fact.
Steven -- Austin, Tex.
I was recently sold property with a fraudulent lot size description. (1,755 square feet less then shown on documents.) Neither seller or real estate agent will take responsibility or admit wrong doing. What are my options?
Mark D. -- Millsradt, Ill
(It sounds like you'll need to hire a lawyer to sort this out.)
Real estate agents/brokers must have, in their tiny little brains, the idea that both the buyer and seller must "win" in order for the transaction to complete. If this does not happen, then move on to the next thing. Been in the business for over 15 years, small town, people know my name and greet me with a big hello. Some of us care about our reputations.
John F. -- McKinleyville, Calif.
…. Many real estate agents prefer to make their money through volume sales and prefer to put in as little time as possible on a given property and make a quick sale. To do this, it has been my experience that they often try to convince their sellers to list houses for a lower price than what the house could bring if the agent actually put in some effort to sell it. ... So my word of advice is this: take the agents recommended selling price with a grain of salt and determine your own price. Make your agent work for their commission.
Kevin K. -- Omaha, Neb.