I love the real estate industry, but it has gone astray and continues to go that way. The result has been a labyrinth of rules and misguided priorities that make it harder for me to sell homes and protect my clients.
I’m not afraid to criticize when I believe it’s due, particularly when it could start a dialogue leading to positive change. So here goes.
Why has the real estate industry gone astray?
The culprit has been weak and wimpy real estate leadership, and a lack of understanding for why our profession exists: to help home sellers sell homes.
We pay our trade organization, The National Association of Realtors (NAR), over $200,000,000 in annual dues. Its mission should be to help us help our clients. It has failed. A few examples:
- NAR failed to stop congress from reducing the interest deduction on loans to buy luxury homes. This reduced the value of high-end properties because it made them more expensive to own.
- NAR failed to stop online home search portals (like Zillow) from displaying agents next to homes they know nothing about. This causes homebuyers to obtain information from agents who know nothing about the homes those buyers are interested in. It also harms you, as a home seller, because buyers interested in your home connect with an agent who is clueless about your home.
Home seller commissions foot the bill for our profession, even paying buyer agents (a ridiculous tradition). While we should protect homebuyers, we shouldn’t let them take advantage of our paying clients (home sellers). Yet, we do. Here are a few examples.
The Multiple Listing Service (MLS)
The MLS informs buyer agents how long a home has been for sale. This is ridiculous.
No buyer has the right to know that. If your home takes a while to sell, buyers presume it’s overpriced (even when it’s not). This causes them to offer less.
The Inspection Provision
The inspection provision in our standard purchase contract allows buyers to tie up your home, take it off the market, and then walk away if they change their mind. This is outrageous.
Buyers should have the right to inspect your home to make sure everything is working. But they shouldn’t be able to cancel when your home is in good repair, or you are willing to fix what’s broken.
The Loan Contingency
The loan contingency in our standard purchase contract allows buyers to walk away days before closing after you may have purchased another home and moved out.
Homebuyers should get their loan lined up before they start shopping, not after they buy a home. If their chosen lender doesn’t deliver as promised, the buyer’s deposit should go to you, the seller, not be refunded to the buyer. This amount will represent fair compensation for your lost marketing time.
Sorry my post this week is a bit “heavy.” Last week’s “Finding A Ralph” was more fun. I’m just frustrated with real estate leaders who don’t understand who we all work for you, the home seller.
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You might also enjoy “Know Your Home Seller Rights” and how what you don’t know can hurt you.