Recently, a couple of web sites, Opendoor.com and openlistings.com, have gotten a lot of press. The premise of these sites is to take the agents out of the real estate business by providing flat fee service to homebuyers and sellers. These companies are focused on the DIY section of the consumer market, wherein people think they can do it all themselves.
The consumer finds the home and then makes an offer. The offer gets accepted. They pay a flat fee. We all live happily ever after? That’s not really the case.
Because two-thirds of the entire residential market involves repeat buyers, it seems lots of folks forget what it was like when they bought their home in first place. Now, anyone who has had a baby can understand what I’m about to state: You forget how hard it is to do and decide you want to do it again. But this time you’re going to do it relying on advice from a website instead of a doctor. Does that sound like a fun and stress free experience?
Their belief is that the Internet is diminishing the role of the real estate agent by making it a lot easier to find homes, but commissions are getting out of control as they rise with the overall cost of real estate. However, the buyer does not pay a commission to their agent. Sellers pay the entire commission as a percentage of the sales price. Commission is paid to listing agents and those agents split the commission with the buyer’s agent. We get paid to sell your house and doctors get paid to deliver your babies.
Now, you two-thirds, just think back to the last time you purchased or sold a home. Your experience might have been good or bad, but I guarantee you remember it as stressful and mysterious. Your agent at the time did the best they could to get you what you wanted, but in the end you got what you got.
For those of you that have not bought or sold a home, the home selling process is filled with tiny pitfalls, emotional turmoil, and idiosyncrasies that could cost you thousands of dollars if you’re not properly represented. Agents get paid to be anxious for you and watch out for your best interests. In fact, we’re heavily regulated and licensed by the state in which we work. Our licensing is governed by a multitude of state civil codes, and if we do make a mistake, we are held accountable.
I sell a lot of real estate all over the Bay Area and am in a constant state of anxiety. I’m anxious because my clients, most of whom are part of the two-thirds, are constantly in a state of anxiety themselves. No matter how many times they have bought or sold real estate, the experience is the same. There are always a million little variables that can sink a deal, or put thousands of dollars into jeopardy. That’s not even beginning to take into account all of the emotional turmoil and the “what ifs” that come into play when making one of the largest financial decisions of most people’s lives.
It may be a little extreme to equate buying and selling real estate without an agent to giving birth without a doctor, but they are both one of the biggest and costliest decisions most people will make in their entire lives. Why not get a little help?
America Foy is a top producing Bay Area real estate agent with Bay Sotheby’s International Realty. You can contact him with your questions or comments at firstname.lastname@example.org Follow him on Twitter @americafoy, Facebook America Foy, and Instagram @americafoyrealtor