Wall Street Journal article – 3/18/19
Two experts offered their opinions: one for – one against.
Here are some important facts for Consumers and WSJ Readers to consider:
1. Real estate always has been, and always will be, a local business. Know Your Neighborhood is a cardinal rule in this business. A real estate professional knows what is going in their local market area. An automated valuation model does not (AVM algorithm). And as a result produces wildly inaccurate valuations. If you want comical proof of this fact, the founder of Zillow, sold his Seattle home for 40% less that the Zillow estimated value!
2. Critics falsely claim, Licensed Property Appraisers are the only professionals, who can estimate the market value of a property. Nothing could be further from the truth. Property Appraisers work hand in glove, with local real estate professionals, to find our what is really going on with values, in their local markets. They pull all of their critical sales data, from local MLS systems. Who supplies this “critical sales data” to the local system ? The local real estate community. Appraisers could not do their job, without the critical sales data, Realtors supply every day to the MLS system.
3. The MLS system is the most important and effective sales tool for Sellers. The MLS system exposes your property for sale to thousands of qualified Buyers, by informing hundreds, sometimes thousands of licensed local Realtors, that your property is for sale. and by offering to pay them a commission if they sell it. No For Sale By Owner (FSBO) Ad can do this, whether it be a private ad, or an ad on any of the popular real estate websites. The vast majority of For Sale By Owner homes, do not sell in a timely fashion, and if they do sell, they typically do not sell for top dollar. Why is this the case ? Selling real estate at a Fair Price is a numbers game. Exposing your property to hundreds of potential Buyers, is far more likely to produce a fair market offer, than exposing it to a few Buyers, through the private ads. Most private buyers are tire kickers and bottom feeders, happy to take your home off your hands, if you want to give it away, at a fire sale price.
4. Real estate commissions. Critics claim fees are too high. Here are the facts. In majority of real estate transactions, fees are split 50/50 between the listing agent and selling agent. Top Listing and Selling agents typically spend 50% or more of their commissions in marketing and administrative costs. Your agent pays a percentage of their commissions to their Broker for MLS access, E&O insurance, Board membership, etc. Add in advertising costs, vehicle costs, and all the other costs involved in running any small business. Anyone who thinks being a professional Realtor, is an easy business, full of easy money, is in for a rude awakening. Just ask any FSBO seller, who has tried for months to sell their home privately, without success. Being a professional Realtor is a full time job. Typically 6 plus days a week, 60 plus hours a week, that most Consumers are happy to have handled by a Professional Realtor.
Professional Realtors are in the business of helping Consumers solve a problem. Whether Buying or Selling a home, which is the single largest investment and financial transaction, most Consumers make in their lifetimes. Our ability to help Consumers successfully navigate this complex and time consuming process, is the sole reason Realtors exist, and why professional Realtors will not be replaced by Robots or Online Websites anytime soon.
Brent Leathwood, MBA, Licensed Real Estate Broker, SRQ Boomer Homes, Sarasota, FL, 4/8/19