Realty Agents Reply: You Get What You Pay For

One of the major flaws of the Aug. 23 article titled “Cutting Your Costs” is that it overlooks the valuable negotiating skills of real estate agents.

In a transaction, a real estate agent can negotiate a higher price than a seller could on his own, and in many cases, the agent can make a seller more money than he or she costs in commission.

I know it is trite to say you get what you pay for, but in most cases, it’s true. Would the writer of the article have more confidence in an attorney who charges $25 an hour or one who charges $300 an hour?

Many years ago our company dealt with a client who was represented by a $25-an-hour attorney who was moonlighting. The attorney made an error in the trust deed being carried by the seller, and the consequences were disastrous.

Real estate agents prepare 40 documents in every sale. Many of these documents deal with state-mandated disclosure requirements. If a less-than-top-flight agent prepares these documents, the seller could experience significant legal problems.

We all know that we live in a terribly litigious society, especially here in California. Our role as a full-service broker is to protect our clients.

Our firm employs four in-house attorneys who review all standardized forms used by our agents. Agents are able to consult our attorneys on a regular basis.

I can assure you no discount brokerage firm provides these resources. This is not a broadside indictment against discount brokerage firms, but one should be aware of what they provide and don’t provide.

Another important element in getting a home sold is a strong marketing program. Discount firms generally provide very minimal advertising, which may inhibit their ability to attract buyers and obtain the best possible price for their clients.

The bottom line is, don’t trust to chance the purchase or sale of what may be your most valuable asset.

FRED C. SANDS

Founder and CEO

Fred Sands Realtors

Los Angeles

*

As a Realtor who has, in my 20-year career, helped thousands of buyers and sellers get the most for their money, I was disappointed that The Times mistook penny-wise and pound-foolish advice for sophisticated real estate reportage.

At best, the approach advocated by Scott J. Wilson encourages buyers and sellers to engage in time-consuming errands, such as photocopying their own set of covenants instead of paying a homeowners’ association $65.

At worst, Wilson’s do-it-yourself approach could result in serious liability questions and consequences. Who will be responsible when a buyer finds out that he or she must abide by, but can’t live with, a restriction recently approved by the homeowners’ association that wasn’t included in the seller’s outdated copy?

Wilson does give some sound advice when he warns sellers to check for errors in escrow and loan documents. That’s all the more reason to work with a professional, whose keener eye will know precisely what to look for.

ROBERT A. KATZ

Coldwell-Banker

Santa Monica

*

I have been a real estate broker since 1968 and I own my own firm. I have no quarrel with discount brokers. I believe a man has the right to price his services as he wishes.

My wife is working with a woman buyer who is looking for a home in our area. Her home is listed for sale with a discount broker in her area. We ran the comparables on the home, just to see if her home has a reasonable chance of selling.

It’s listed at $15,000 under market. But the only exposure is open houses, and it hasn’t sold in 30 days in a hot market area. The woman’s discount broker may cost her about $8,000.

There is no doubt one may sell his own home, or use the services of a discount broker to sell, and get a job as good as can be. But far more often you get what you pay for.

FRANK J. LYNCH III

Cerritos

*

Saving money when you sell a home is a very important consideration. A seller must judge costs when deciding to list a home or try to sell it alone.

Selling by owner, according to the article itself, fails 85% to 95% of the time, so ask yourself: Do you absolutely have to sell? If yes, should you use a way that fails that often?

Or should you use an agent who will do the transaction for a flat fee of $750, plus the buyer’s agent commission of 3%?

What do you think of the value of an agent who will work during a six-month listing contract and handle a 45- to 60-day escrow for $750? That could be $100 per month.

How good do you think they are at $100 a month? Do you think they care about getting you the best price and terms or are they just providing secretarial service?

Cut costs by shopping for the lowest escrow and title prices? How about using the Boy Scouts for the termite inspection and the man who works for food at the corner for your open houses? Come on!

RON MURRAY

Re/Max Palos Verdes Realty

*

As a Realtor, I myself have encouraged some clients to try selling their homes themselves, due to the savings they would realize.

However, most people are not fully informed on the multitude of disclosure forms and various other documents needed to protect themselves.

The professionals in this industry, I assure you, earn every cent. We pride ourselves on the performance and attention to detail necessary to make a transaction as smooth as possible.

I would caution Wilson that you still get only what you pay for.

D. GRACE

Stockton

*

I am a Realtor who has worked for a full-service broker for more than 16 years. I have never encountered such a one-sided article biased toward using so-called discount brokers.

How about hearing from the other side? I see no mention of how many sellers who used discount brokers had to take less on the sales prices for their houses because of poor marketing or lack of representation at the negotiating table.

CURT BEITEL

Via e-mail

*

Wilson claims his discount agent, who worked for a total commission of $750, did a thorough job. I calculate that such an agent, to make a living, must sell no fewer than 100 homes a year. That is extremely unlikely.

The major part of an agent’s time is not in marketing the property but in closing the sale. The 45 to 60 days after the sales contract and all the other forms are signed are what occupies the many hours of a listing agent’s time.

The balance of Wilson’s article is good advice to home sellers. If people have the time to shop for the best deal in any major transaction, they can save money.

SOL TAYLOR

Realtor-associate

Re/Max on the Boulevard

Sherman Oaks

Letters must include the writer’s name, address and daytime telephone number and should be sent to the Real Estate Editor, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053 or faxed to Real Estate Editor at (213) 237-4712 or E-mailed to Real.Estate@LATimes.com.

Letters may be edited for reasons of space and clarity.