Like what you are reading here? Then let us email you with all our new content.
XML FeedsIt's an uphill battle.
And it seems to be neverending, doesn't it? The national news media just isn't going to rest until each and every person related to real estate is suffering and until each and every homeowner lies awake at night panicking over houses. The sad part is that I EXPECT this behavior from the left-wing liberal media. I do NOT expect it from a highly regarded university.
My beloved University of North Carolina at Chapel Hill is getting into the swing of negativity. I'm a graduate of the Kenan-Flagler Business School, and as such, receive the publication that talks about the current business climate, what alumni are doing, etc. Usually, it's enlightening and enjoyable. But this time, they slammed me and every other residential real estate expert who graduated from UNC and KFBS.
In an article with six 'tips' for making money in real estate, I took exception to two. One-the author proclaims that when purchasing a personal residence (and let's be realistic, folks, you approach your personal residence in a slightly different manner than you approach a pure investment play)-you should select 3 or 4 favorite houses and then lowball them, with offers 10-25% below asking price. See who comes in lowest and buy that one. The fundamental flaw in this advice is that REAL ESTATE IS LOCAL. Here in the Charlotte NC area, our average list price/sales price ratio has been holding at 97% for quite some time. In several micromarkets, the ratio is higher. If you come in here with the expectation of 10-25% below market, you'll never buy a blasted thing. Your expectations will be so skewed that you will still be on the sidelines as prices continue to increase (we were UP 5% for 2007).
Two-the author states that because real estate is in the tank, you should beat your agent up on commission. He even states that you should be paying 4, 4.5, 5% commission. Several flaws here-where to begin?? There is no set commission rate. I can virtually guarantee that if you canvas 100 different agents in my market or anywhere, you will get 100 different commission/compensation plans. Heck, I offer several myself. It's not a one-size-fits-all world anymore. Many of us already get that. (the few that don't won't last anyway no matter what the market conditions, but i digress). What are you giving up when you pay less? I refer to those agents as the 'we do nothing for less' agents. Are you sacrificing marketing? Are you sacrificing market knowledge? Are you sacrificing negotiating skills? You're giving something up-so you better ask a million questions before you beat up a good agent who is worth every penny. There are many times when I should have charged more (and my clients will tell you flat-out that I deserved more). But I don't. My fees are fair. All agents who are worth their salts should be able to tell you WHY they are worth whatever it is they're charging. But don't paint us all with the same brush.
Just because some agents are suffering doesn't mean that I am. My skills are worth more in this oddball market than ever. It's more expensive to market each listing right now. Every agent has about a hundred hands in his/her pocket, with the latest-greatest-neatest gadget and advertising tool. We have to sift through to determine what's actually going to benefit our clients-and then shell out the money. Expectations have never been higher for agents (as it should be), but it costs money to produce all of those tricks in our hats. That, and it's taking longer for houses to sell-so we're paying more over a longer period of time.
And dadgummit, my family has to eat, too.
I'll get off my soapbox now, but I will tell you this. If I don't get a response back from my alma mater, my charitable contribitions will go elsewhere. And I hope that my fellow UNC grads and real estate professionals will tell them the same thing.
