What’s the dirty little secret no one else will tell you about the real estate industry? I’ll share it with you today.
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As we head into spring, the weather is starting to warm up a bit. We are seeing great buyer activity, and inventory remains low. Interest rates are starting to move up, so if you’re a buyer, you may want to make your move now before they get even higher.
Now that you’ve been briefed on our current market conditions, I want to talk about the dirty little secret in real estate that no one likes to talk about.
In my opinion, the real estate industry is broken. There are 3,100 brokers in the Capitol region, and 99% of them are set up as independent contractors within a real estate firm. On average, these agents sell seven or eight homes a year. What tends to happen is that these agents do some crazy things in an unethical environment.
As a result, consumers lose tens of millions of dollars a year because of unscrupulous activities by Realtors.
This week alone, I had three Realtors ask me or say things that were an ethical violation. Whenever a Realtor says to me, “Hey Kevin, between you, me, and the lamppost . . .” I know the next words out of their mouth are going to be some sort of ethical violation.
It’s really disheartening, but when you think about the way our industry is set up, it’s not surprising. You have these very large commissions and agents that are only doing six or seven transactions a year, which means there is a huge motivation to work unethically.
I really want to stress that our firm is different. We have the saying “clients first” posted everywhere in our office. We have a fiduciary responsibility to treat your transaction like our own and put your needs before ours. That’s what we always do at our firm.
If I ever get wind that anyone at my office is doing anything unethical, I will take action. They are not going to work with our firm any longer.
Just to give you an idea of what I mean, I had an agent call me from another firm and we went out for coffee. They told me that they had called up a listing agent and said, “Hey, I have an offer coming in. What’s it going to take to put this transaction together?” That listing agent responded, “Bring me an offer of $340,000.”
The thing is, the buyer was going to offer $360,000, so the listing agent just cost their seller $20,000. The seller doesn’t even know that this conversation happened. They got sold out by their listing agent for $20,000, but they are probably happy because their home sold in two weeks.
That’s just one of the many atrocities that go on in our business and it drives me nuts. Going forward, I think something needs to change. I believe the industry will change. It’s likely that going forward, Realtors will become employees with most teams. That’s why we work as a team; we do things differently at my firm.
If you have any other questions about how my team operates or if you need help buying or selling a home, just give me a call or send me an email. I would be happy to help you!