Dirty Little Secrets

Over the course of the last 10 to 15 years, real estate “transaction fees” have become somewhat commonplace. These fees come in many shapes and sizes, including “document retention fees,” “compliance fees” and “transaction fees,” to name three we see commonly. Here is what you need to know: most of these “fees” are actually thinly-disguised money grabs. Worse yet, we’ve seen many agents charge these fees without ever telling their clients until the poor client discovers it at the closing table. Worse yet, these fees can be steep (we saw one in a closing recently that was $595). Buyer (and seller) beware! Make sure you know all the charges you’re responsible for BEFORE it’s too late! 

Per every study we’ve ever read, open houses are remarkably ineffective in terms of selling homes. In fact, most indicate that open houses “work” (that is, they lead to a sale of the home) less than 1% of the time. So, if open houses are so clearly ineffective, why do so many agents do them? Read these items and you’ll begin to understand…

(Note also that most of the reasons agents do open houses could also be considered examples of things agents do place their own selfish interests above the interests of their clients, so all of these examples could also be included in that section below as well.)

There was a time when print advertising was the king of the real estate advertising hierarchy. But the power and effectiveness of print advertising has been steadily declining for many years. As proof, think about how “skinny” most magazines are these days. Why? Because companies are not getting good ROI on the money they spend on print. Why? Because people are consuming things digitally now. Ergo, the rise of the internet has all but killed print advertising in real estate. Here are some resources that prove this…

The level of professionalism in real estate is very low. While it is true there are many reasons for this (and we touch on a few more later on this page), a primary reason for this is that (in most states) it’s simply too easy to get a real estate license. This impacts professionalism because most markets have been flooded with too many agents, and that has thrown supply and demand out of balance. Here are articles in support of the widely-held belief that it’s too easy to get a license… 

Real estate is a highly competitive, intense job. Agents often need to react quickly to new information and to client requests that can be very time sensitive. We’ve been doing this a very long time, and one thing we can tell you without any hesitation is this: you cannot do real estate on a part-time basis and serve your clients properly. One leading industry trends analyst estimated that 93% of the business in real estate in America is done by 7% of the agents. That means there are a lot of people working part-time. Here is more information on this issue you and why it matters…

One of the most troubling things about real estate that many people don’t know is that the larger culture tends to be oriented far more toward real estate agents and maximizing the income of agents than it is toward client service and honoring the fiduciary duties we almost always have to clients. In fact, the brand with the largest number of agents in America (Keller Williams) openly says that their client IS the agent, not the consumer. While that may be effective in terms of recruiting agents and building a large franchise organization, we think that sort of a philosophy may not produce the highest level of service for the clients of that organization. In any event, here are some things you can watch and read to help you better understand this philosophy…

While we’ve not done an exhaustive state-by-state analysis to fully assess how common this problem is,  we’ve encountered this issue enough to feel it’s something you should know about. Without really trying, we’ve discovered that it’s possible to get a real estate license in Florida, Virginia, Texas and Pennsylvania even if you have a felony conviction on your record (and there could be more states; that’s what we found by accident). We think that’s a problem, given how important a typical real estate purchase or sale is to a typical real estate buyer or seller. You can read more about this in these resources…

OK, we are perhaps exaggerating here…because it’s not exactly a secret that the public by and large does not trust the real estate industry. For as long as we’ve been in real estate (going back all the way to the early 1970s), that lack of trust is one thing that has remained relatively constant all those years. Here’s some evidence of that unfortunate phenomenon…