Real Estate Agent Induced Anguish

Real Estate Agent Induced Anguish

Would You Hire this Real Estate Agent to Sell Your House?

I recently went to an open house in Hawaii Kai. It’s a 4 bedroom and 2.5 bathroom home with 2,000 SF of living space and 14,000 SF land.

Properties in Mariner’s Valley

The house is not in excellent condition. You can tell the foundation is bad. The bathroom in the master bedroom is “dinty” (not just small).

The “gourmet kitchen” that they claim is a joke. The kitchen is quite good size with plenty of so-called new cabinets. Looks nice in the picture…but when you see it in person, it’s nothing to desire for. The cabinets do look new but looks like a 12-year-old did it for a school project. One of the cabinet by the door is obviously crooked.

Then, there’s a “bonus room” that the listing agent proudly showed off to visitors are the Open House. First of all, this “bonus room” is an extension from the kitchen with its own entrance. The big room with a closet looking enclosure, which is obviously still under construction. The listing agent cannot tell what this enclosure is going to be “is it going to be a bathroom or a walk-in closet?”

That’s not the worst yet…she claims there’s a permit for this construction from here to here only, gesturing from one side of the room to the other side. When asked “what’s the permit for?” she just ignored me. When I asked “so does that mean part of this is illegal?” she ignored me again.

One nice thing about this house is there’s a big back yard and no neighbor in the back. So we asked “what’s in the back behind the fence? Reservation land? Vacant lot? Alien testing ground?”

“I don’t know” was the answer we got.

Oh well…sorry that I asked.

These are important things I need to know if you want me to dough out “$1,200,000” for this piece of work that I still need to put another at least $100,000 to fix before I can move in.

Did I say she is the “listing agent”? Which means it’s her “fiduciary duty” to know all these things.

By the way, this property is NOT worth $1,200,000. A block from this property, there’s another similar home in a lot greater condition and they’re asking for only $960,000.

Properties in Koko Head Terrace

$1.2 million for an old house in Hawaii Kai with illegal structure?

No, thank you…I’ll pass.

The sad thing is, in Hawaii, everyone just hires their cousins or neighbor’s kid, who’s a real estate agent to buy or sell. So this lady is probably somehow related to the seller. And that's how these people can still be in business.

Remember, knowledge is power.

For Sale by Owner Makes Perfect Sense

Where Buyers Find their Homes

Did you know you do not need a real estate agent or broker in a real estate transaction?

If you think about it, buying and selling real estate property is like buying and selling a car, you can do it yourself.

Real estate agents and brokers are just car sales men in the real estate. They just want to make money from you.

For sale by owner makes sense and saves you lots of money.

And here’s how.

The median single family homes in Hawaii is $750,000. The average commission for a real estate transaction with a real estate agent or broker is 6%. You’re paying $45,000 for a random joe to sell your home. If your home is worth a million (which is majority of the homes in Honolulu), you’re paying this random joe $60,000 to push papers for you.

How about you save the $60,000 and hire an attorney, who can draft your purchase contract and give you legal advise about your estate planning and tax at the same time.

People are afraid of lawyers because they think they cost too much, which is true. They do charge a lot for good reasons, they have your ass cover when the time comes.

My attorney charges $400 an hour. The $60,000 commission you pay for your real estate agent, who does not provide any legal advice because they don’t know anything, will buy you 150 hours of attorney time.

My attorney went to 4-year undergrad, 2-year law school and passed his BAR exam, and is entitled to charge $400 an hour for legal fee, which is consider expensive.

A real estate agent (may or may not have a college degree) went to real estate agent prelicensing course for 60 hours and passed the real estate salesperson license test.

Say your real estate agent spends 50 hours for your listing…I don’t know, they may do 1 or 2 open house (4 hours each), writing listing description, etc, etc. Let’s say 50 hours, that’s $1,200 an hour.

Seriously?!

Unless you make more than $1,200 an hour, I would do it myself.

Did you know how easy it is to sell your home on your own. The hardest part is marketing.

Read “How to Market Your Real Estate Property?”

Chances are if you’ll need your attorney to draft the purchase contract and go over your trust and estate planning stuff, you’ll probably needs a few hours of your attorney’s time, which probably would cost you a few thousand.

Even if you use a lot of your attorney’s time chit-chatting, say 50 hours, you’ll still come out only $20,000 on attorney fees.

Remember, the commission you pay your broker or real estate agent is just one of the closing cost. You still have more to worry about when you close.

If you used a real estate agent or broker, his/her only tasks are writing you listing description, list in MLS, find a new agent to do open house for them, answer calls from other agents about showing. Most of the time, it’s the buyer’s agent who show up to showing, so your agent just sits pretty in the office waiting for an offer to come through, and get you to say “yes” to the first offer that come through, so he/she can close and pocket the commission.

Once you have an agreement with the buyer, signed the contract and start escrow. There’s not much left to do - schedule home inspection, and just wait.

Real estate agent or brokers are not allow to give any legal advice. The standard Hawaii realtor’s Purchase Contract specifically provides that your real estate agent is not providing you with legal advice, and you should seek legal counsel. So, you are might as well hire an attorney from the beginning.

You know what’s worst?

Of course in Hawaii, everyone knows a friend or a relative who is a real estate agent. Hiring a Hawaii realtor is especially inefficient when the sale is between family members, and both sides are using a family friend to be the dual agency broker. That “family friend or relative” may receive a six percent (6%) commission for processing paperwork, even though as a dual agent they have probably utilized the standard “Dual Agency” disclosure which provides that he/she cannot really take sides. So who does he/she work for?

They can't give legal advise, and they can't take sides. So why are you pay this person?

Related article: Real Estate Agent…Absurd?

Anyway, if you decide to sell your real estate property on your own and put up a for sale by owner sign in your front yard, the process is really simple.

Advertise your real estate property like you would selling your car. Seriously, do you hire someone to sell your car?

Write a very descriptive ads from your property.

Show your property to potential buyers. You can do a open house event or private showing.

When you have a potential buyer, contact your real estate attorney to have him/her draft your real estate purchase contract.

Have both parties signed.

You’ll contact an escrow company to open escrow. Actually, the buyer opens escrow. When I purchase my last real estate property, I went to Downtown to the escrow company myself. My agent did nothing.

Your buyer should contact a home inspector for home inspection. This is a buyer’s expense. It’s up to the buyer to have an home inspection.

If you’re a condo owner, you’ll contact your property manager to have condo doc send over to your buyer.

The escrow and title company will make sure the transaction goes smoothly and both parties get what they agreed upon.

The other advantage of selling the real estate property on your own is that you know the property best. You get to meet the buyer directly, interact and negotiate with them directly without a third or fourth person involved.

According to the National Board of REaltors, 44% of buyers find their homes online (not from an agent).

Related article: Simple Home Selling Tips to Sell Your Home FAST.

There are many available sites to market your real estate property for sale. Here’s are a few that I use. If you type in “for sale by owner” in Google, more sites would show up.

Craigslist

Owners.com allows your listing to be posted in your local MLS.

ForSaleByOwner.com

For Sale By Owner on Zillow

Don’t forget social media. Share your postings on Facebook, Twitter, Instagram, wherever your people hang out.

Having hard time selling your real estate property? Let us help

Related article: Sell Your Home Fast

Real Estate Agent…Absurd?

Unless yours is like mine…

I have to laugh every time I see something in the media from the Board of Realtor that says something about how their “realtors” are real estate professionals, or “contact your local Realtor” if you need to learn more about the real estate market you’re interested in investing.

I’m sorry but the profession of real estate agent is such as joke. No matter how much they claim these are professional real estate agent with expertise knowledge in real estate, it just does not make it true.

You have to remember whatever pictures the Board of Realtor wants to paint the image of a real estate agent, they are still just sales persons, no different than a car sales person, the sales clerk at GNC. Their professional goal is the make money from your sales.

Have you ever been to any dealership and the sales person would tell you something like, this is a really ridiculous price for a car, and the safety rating is really poor. No…they are all trained to upsale to get you to pay as much as you can afford.

As you know my original profession is a nutritionist. I always laugh when a client came and told me that they bought some fancy supplements from GNC because the SALES CLERK says it is good for this and that. Does this sound ridiculous to you? Why would you take medical or scientific advice from a sales person? Their training is in sales, not nutrition or medicine.

Same for real estate agent. Their training is in sales. It is true that they have to get a license, the license only make sure that these sales people abide by the law. But after that all the training is about sales, how to make a sales.

If you think closely, the real estate agent’s objective is actually conflict with you as a buyer. The real estate agent’s goal is to make a sale and earn your commission in the least amount of time possible. Do you really think these people enjoy showing you properties after properties for months, and then negotiate on your behalf a good price for you. How many times you’ve heard your real estate agent told you that your offer price is too low? And threatened that the seller would reject the offer?

So what if the seller rejects the offer?

You, as the buyer, can make another offer or just move on to check out other properties.

Your real estate professional on the other hand, will become pissed because they miss another chance of earning your commission, and have to keep showing you properties.

People sometimes feel the pressure from their real estate agent to make a higher offer saying that properties like this is not easy to come by, or they’ll say this is a good property at a really good price. Of course, most people would trust them as ”they are supposed to be the expert”.

How many times I have contacted a real estate agent for a property that I’m interested in purchasing as an investment, and I would always ask for the rental income.

Many times that answer is “I’m not a property management and do not have that information available. Please contact a local property management company to find that information.”

If you think this is bad, get this one. I saw another property that I’m interested in so I contacted the agent on their website. I got a pretty quick response from email with the contact information of the listing agent, and I was told that I could contact the listing agent myself to set up the appointment for showing.

So you they want my business or what?

Another time I have to fire my real estate agent after I put in an offer. It is a pretty nice condo is Makiki. After some discussion with my real estate agent, he suggested that I put an offer a litter higher than the asking price. I mistakes I make was trusting him in “his expertise”. He did not even give me a list of comparables. The evening after I put in the offer, I talked to a friend of mind, and he told my offer was too high. I checked the comp online myself. BTW, you can easily check the comparables online nowadays without a real estate agent. All information are public. The property is not worth the price I offered. BTW, most sellers list their properties way too high for what it is worth.

Anyway, long story short, I call up my real estate agent to cancel my offer and fired him over the phone.

And after that, I do all my own research.

Here’s how real estate agent can screw you as a seller.

I can’t tell you how many times I’ve seen properties that are listed way too high of a price and ended up sitting on the market for months.

Again, real estate agent wants commission, which is tied to the sales price of the property. The higher the sales price the more commission they make. So they’ll let the property sits on the market a higher price. You know how people nowadays look up every thing online with a search criteria. If your property’s price is out of their search range, you have one less potential buyer.

But putting your property at a reasonable price will entice more potential buyer to want to look at the property. Many people do not know about negotiation and their real estate agent do not want to negotiate for you either, so they would not volunteer that to you. Most people look at the price as not affordable to them, and would not even bother to check it out. As the property sits on the market long enough, the new batch of potential homebuyers who see your property as something is wrong with this property otherwise, why would it be still on the market.

Another silly thing that real estate agent would suggest their seller to do is let test the market. So they list their client’s property in the MLS at a ridiculous price. What’s the purpose exactly? No one is going to look at the property because the price is too high. Then you withdraw the listing. Then when finally you’re ready to sell the property, people can see that you did try to sell the property before at a higher price. Now the potential buyers are thinking that you must be desperate to sell, and it didn’t happen a year ago. Now is their chance to lowball you.

BOTTOMLINE:

Be a smart homeowner and real estate investor. Educate yourself. And if you do use a real estate agent, make them earn their commission – ask for comparables, sales history, shows you similar properties in the area to compare shop, negotiate – I always start my first offer at least 10% below the asking price. Don’t get bullied by real estate agent who complains your offer is too low. What they mean is their commission will be too low. Whose money are we dealing with?

My agent who helped me with last rental purchase told me my sale is his lowest sale, but it doesn't matter to him. He still treat my sale as any of his bigger sales, he answer my call right away, returns call promptly, schedule my showings the next day, negotiate on my behalf for at least 2 weeks before seller accept my offer, fight with me to make sure I did the right thing...he's a keeper.

I purchased my first condo at $65,000 below the initial asking price, that’s a 15% discount. Bought the next at 10% below initial asking price, and my timeshares for free.

Everything is possible...when you believe.

Related article: For Sale by Owner

Real Estate Agent...choose carefully.

This is Why I Hate Real Estate Agent…

I just came across the most ridiculous thing when I was checking out this update from my favorite real estate website OahuRE.com. They have all the information you need when researching on any Oahu properties.

The ridicules is the restriction the Honolulu Board of Realtors impost on this site. Technically, the information that the Board of Realtors is trying to restrict are public information. If you are a member of the Honolulu Board of Realtors, you'll have access to that information in their MLS system. Which means, you should be able to have your loyal (if you're lucky) "realtor" pull up that information for you.

But most of the time, they won't, unless you ask for it.

It irks me every time I heard the advertising from the Honolulu Board of Realtors on the radio. The Board is not here to serve or protect the buyer or seller. They are only interested in making profit for their paid-member real estate agents.

If they're are here for the consumers, why would they restrict public information. The Board of Realtors is trying to monopolized public information.

If you're buyer, did you know you can ask your agent to print out the stats on the home you're interested in with all the market comparison, past sold history, tax assessment information, and most importantly, how much mortgage did the current owner took out to purchase the home and how much is still own on the home.

If your real estate agent told you, he/she can't provide you with that information...tell him/her "you're fire", and find another real estate agent who can get you that information.

Do you know why the Board of Realtors trying to restrict public access to this information? Membership to the Board of Realtors is about $1,000 a year. Among other benefits of the membership is access to the public information related to the real estate properties.

As I'm trying to emphasize here that these are "public information".

It's just another tactic to force people to hire a so-call "realtor", who claims to be real estate "expert".

I once had an "realtor" told me to put in a higher offer for a property because the seller would not make any money with the offer price I made. Who does he work for? Me (the buyer) or the seller. Real estate expert?! I don't think so.