One of the main arguments that the traditional real estate establishment is making against discount, flat rate, and online real estate companies is the following:
- Your businesses may return money to the consumer, but the consumer is losing money overall because they don’t know how to price their home.
Basically, traditional real estate says that discount and rebate companies do two things:
- We advise our buyer clients to overpay for the homes they buy
- We advise our selling clients to sell their home for very little, that is. we list them at a lower price than a traditional Realtor
Therefore, the main argument of traditional real estate against the new generation of real estate companies based on discounts and rebates is that the consumer ends up losing money. What?
This argument is so insulting to the average real estate consumer and so logically flawed that it is difficult to choose a place to begin my own critique.
Let’s start with point # 1 above: our buyers are overpaying for the homes they buy. Let’s say I represent a buyer to buy a home in Denver. Traditional real estate leads you to believe that our agents advise you to submit an offer at a very high price (just to get it accepted), and that it doesn’t matter that our buyers get an average refund of $ 8,000 from us, because they probably paid over $ 8,000 to start. Good god. This argument assumes a couple of things:
- That you, the consumer, are not very smart
- That I, the agent, am completely dishonest
Traditional real estate accuses you of being unsophisticated by saying that you would have no idea of the prices that only a “traditional real estate broker” (read: a real estate broker who charges 6% and does not give refunds to the buyer) has the incredible skill, honesty, and cunning in negotiation to convince you to offer a lower price for the home you want to buy. Traditional real estate makes you believe they have a corner in the market for pricing information data and that you better use a traditional real estate agent or you will never really know how much a home is worth.
Can you see the incredible dishonesty here? Can we all agree that the internet revolution has brought one thing to the public? easy access to lots of information. Do you think you could go out right now and find out what houses in your area have sold for? You’re probably saying ‘yes’. Many people use sites like Zillow, Cyberhomes, or even their county registries for comparable statistics. I know that many of my clients who are interested in Denver real estate have already done this type of research when they visit me.
But you don’t even have to go to these places yourself. You simply have to know that the housing data is available.. Wouldn’t most of you want your real estate agent to present you recent sales data before bidding? Traditional real estate leads us to believe that you don’t even know enough to request this information.
They would have us believe that you are so unsophisticated that unless a traditional real estate agent He says that you should base your offer on recently sold information, that you are in danger of allowing a rogue discount broker like myself to write an offer that ignores this basic information. Is the typical homeowner as uninformed, or is the traditional real estate argument as flawed and insulting as I suggested above?
Let’s look at point # 2: I am dishonest because I am not a traditional Realtor.
Where to start with this argument? This suggests that the problem of the public image of real estate agents is a recent development triggered by discount and rebate-based businesses that are trying to lower real estate costs for consumers. Did you get it? Traditional real estate makes you believe that traditional real estate agents were respected by the general public until reimbursement companies appeared. Do you believe that?
In order for me to practice real estate with this level of dishonesty (forcing my clients to list their houses at prices below market value and guiding my buyers to buy houses at above-market values), the vast majority of my clients would have to be completely clueless (see point # 1). The truth is, most of my clients find me because they don’t trust traditional real estate, or because they’ve been through the buying and selling process before and realize that there are should be a better way than the traditional method.
The truth is that my typical clients know more than the average real estate customer. So point # 2 is ridiculous on many levels.
The truth is, traditional real estate is terrified of competition from discount and rebate companies because they know we’re right. We know we are on to something here too. And all of our satisfied customers can attest to our own honesty and incredible cost savings.
