| First, you may have recently read articles that the real estate industry is about to change, this, involving how agents are paid. Some of the articles have been adequate and some bad. Few were good.
Good means an author fully explains what the changes are and might be. In my upcoming news blogs I’m going to write about the subject with an insider’s knowledge.
I started the concept of Buyer Agency in Wisconsin in 1985 which gives me the right to say “insider.” Now to this month’s news blog.
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When I was young, I thought that money was the most important thing in life; now that I am old, I know that it is. – Oscar Wilde
I write about real estate but spending your money (real estate) or investing your money (stock/bonds) should come with a certain level of competence.
 Not to be too money centric, but life is easier with some lettuce (money). Home ownership is a significant part of wealth building (along with stock and bond investments, 401K’s, etc.). “Lettuce” buys freedom.
According to the Census Bureau the median wealth of homeowners is $305,000 and renters $8,000. Almost hard to believe. Leads one to ask:
Who is the person advising you on the largest purchase of your life?
Is your financial planner a hairdresser who works part-time as your advisor? I ask because for the largest investment you may make – buying a home – your agent may not be who you think he/she is.
Agents make money by spending your money. Let me write that again, Agents make money by spending your money. I write this because you are relying on the experience and opinion of an agent to make (most often) the largest purchase of your life.
Four facts and one opinion:
1. Last year there were more real estate agents then in the history of the National Association of Realtors.
2. The Consumer Federation of America noted there were 1.5 million agents competing for the sale of 5-6 million homes.
3. The majority of real estate agents worked on 5 transactions or fewer in the past year and of those, ½ only did one. A transaction is defined as working on ½ of the transaction, the buy or sell side.
4. New agents can earn the same as agents with 20 years’ experience.
5. It is very easy to become a real estate agent.
The National Association of Realtors wrote in a recent private report that the #1 danger in real estate is that:
“Masses of marginal agents are a threat to destroy agents’ reputations.”
The report went on to say, “The real estate industry is saddled with a large number of part-time, untrained, unethical or incompetent agents.” This, from the governing body of real estate agents.
 I recently read an article in the Wall Street Journal that referenced Valerie, “who is a small business hairdresser and Realtor.” Now this balding man means no offense to hairdressers but…
People. This is about Money. Your Money.
To paraphrase the Consumer Federation of America:
“There is no other service industry involving money – lawyer, investor, financial planner – where part-time, marginal workers are so ubiquitous.”
The proliferation of part-time agents is because the industry thrives on numbers. A real estate company may have 10 agents who do 20 transactions a year or 50 agents who do 4, but either way the company is rewarded with the same numbers of commissions, title policies and closings. Agents win. It may be only the consumer that loses.
Pardon my double entendre but we won’t give you a “haircut”. Experience matters. Our agents work on triple the transactions of average agents.
 In my opening I wrote it’s your job to determine the skill level of the person spending your money. A starting point: “Ask questions and question the answers.” Your money is at stake.
Please forward this newsletter to at least one person who needs it.
Selling? We don’t list homes for sale so contact us for an objective, independent opinion on price and the process of selling in today’s market.
We’ll give you the inside scoop on the good and bad practices in real estate. Having helped over 1,800 homebuyers you learn a lot about the selling side.
The goal: Make educated and informed decisions
Thanks for reading,
Michael D. Holloway
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