Are Realtors To Blame?

Posted at 5:24 AM, May. 15, 2009

Alright, I just can't help but get in on this debate.  I just received a video clip from FoxBusiness.com (via Coldwell Banker) regarding a recent interview with our chief CEO.  The main topic is, should real estate agents bare blame for the housing mess?  Well...

First and foremost I will answer the direct overall question that was unsaid.  Yes, there have been, currently are and will always be the few in the business that spoil the bunch.  We are held in contempt by the average consumer as being money hungry, immoral and down right shady.  This is not your average Realtor.  Like any profession, there are mostly good, and some, not so good.  The character of the person should be held in question, not the occupation.

Now to the direct question that was being asked, is it right for an agent to take a commission (the reporter stated 6%) representing the buyer for a property than turning around and getting a commission again for representing that past buyer (now current seller) in a short sale/foreclosure situation?  The question eludes that agents who have been involved (or as this report suggests, somewhat responsible for the seller being underwater) should try to sell that home for free.  I have to again ask, why is it that people become blinded when they think of commission as means of payment?  If I were a doctor, I could just bill you for the time spent with you regardless if I fixed your problem or not.  Same applies to an attorney.  You are billed whether you win or lose (so to speak).  So, should real estate agents just start billing flat fees for anytime spent on a property regardless of performance?  Do people forget that we can spend months on a property putting up our own hard earned dollars risking that the property might not sell and we too are out money?  We are not always rewarded for good works with payment.  In fact, every agent can recall how often they have lost money on dead listings and flaky buyers.

 Let us not forget the most important factor here, accountability.  NO ONE made the buyers buy.  That was a sole decision.  Were they advised to buy more than they should, possibly, but in the end, the bills were theirs and theirs alone.  If you can't make an adult decision and accept the consequences and responsibility that goes with that, well I'm sorry.  Enough of the finger-pointing and blame shifting.  We are  accountable for our own actions, regardless of the advise we heeded. 

In addition to that note, there is no one factor as to why a person loses their home.  It's not just because of adjusting mortgages.  In fact, the primary reasons people lose their home is due to job loss and/or medical debt/illness.  No super star Realtor is going to be able to tell if someone is bound to lose their job or go on sick leave in the future.  Nor should we be expected to.  We are not responsible for individuals saving or spending habits.   I can speak first hand.  My husband was just laid off from his job.  I could very well be facing losing my home even though we did not buy out of our financial capabilities or have an adjustable mortgage.  My income however, is unpredictable.  You can only prepare for so much.

 On a final note, FYI reporters, if the property is foreclosed on (or a short sale for that matter), the bank can influence and decide what commission will be paid out, not the seller.  Often than not, it is considerably less than the time, energy and frustration involved to get one of these deals to the closing table.  Let's grow up people and look forward to correcting the problem instead of figuring out who caused it.  The answer won't change anything nor will it necessarily make the public any wiser.