A short while ago I was at a luncheon with a business group that was new to me. Of course this business group is not new – it is one of Calgary's longest standing organizations with some very well respected individuals.
This was the fourth lunch I attended with the group. Typically there are thirty to fifty individuals there. After brief introductions, one of the gentlemen asked me what I did for a living. When I told him I was a REALTOR®, his response shocked me with its bluntness.
"You ‘realtors’ are just parasites!" He stated in a loud and clear voice. Even others at the table were taken aback. When they questioned his bluntness, he responded that given the nature and maturity of the group, open debate was ok, and I should be able to put up with some of that openness.
I wish I could say that I had some snappy comeback that would turn him around - I did not.
What I did was even more valuable.
I listened to him when he expressed his thoughts as to why ‘realtors were parasites’.
He proceeded with a story of his last home sale and subsequent purchase. He said in his last set of transactions, he put his existing home up for sale by owner (FSBO) and bought another FSBO from a retired judge. He and his wife lived in a very prestigious area of the city and he listed his home for $750,000. Almost immediately he started receiving calls on his doorstep from interested buyers. He tried to delay their interest until his wife could prepare the home for their upcoming open house before letting anyone inside.
Still, the people came and eventually two gentlemen bought it. Did he get his $750,000?
They came in and offered him a cool million. He then found a smaller FSBO, liked it and immediately offered a price. It was accepted immediately and they got the seller's lawyer to seal the deal.
He used this “hassle free” set of transactions to illustrate his philosophy of why ‘realtors are parasites’, who do not earn their commissions. After all, he calculated he saved a cool $35,000 and only had to pay legal fees. He did put a caveat in that maybe they have a use in hard to sell properties.
But what he missed, was WHAT HE ALMOST LEFT ON THE TABLE.
Yes, he sold his property quickly. Because he UNDER-PRICED it and the PEOPLE FLOCKED.
If it hadn’t been for two REALTORS® who were honest and ensured market value was paid, he very well could have under-sold his property, and by a significant amount!
Further, he only used his internet search knowledge, along with the ‘trusted seller's numbers’ to determine a fair price for the new home. Along with trust in this stranger's lawyer to ensure his interests were taken care of, he purchased the property.
Yes, he thinks he saved ‘realtor's’ fees (by his estimate: $35,000).
He also almost lost a quick quarter of a million. And who knows how much the property he bought, could have been purchased for.
A REALTOR® does get paid to sell your home or to help you buy a new home. But they also get paid to ensure your best interests are taken care of. And they have similar fiduciary duties as a lawyer or accountant. They also get paid to do a lot more – like have difficult conversations about pricing appropriately vs. pricing for desire.
So yes, you may think you can save thousands of dollars in fees from those "parasites", or, REALTORS® can help you save thousands of dollars in money left on the table or over from overpaying for something.
Your choice - but it seems simple to me.