Why Real Estate Agents Are Like Hamsters

As I write this I can’t believe that Thanksgiving is next week?  It will then be Christmas and 2017… Where the heck do does the time go?

I am constantly disappointed in the Real Estate Industry and how the ‘unethicals’ prey on everyone that they encounter.  That these rodents are in the same industry that I chose pains me.  I wish that this were not true and at EVERY turn I choose to disassociate myself.

The unfortunate part, is that the rodents don’t think there is anything wrong with what they are doing.  They live by the rule, “Look out for #1!”  They have no regard for others and as long as they are taking care of themselves they don’t care who they devour along the way.

You might be thinking, “Eric, why are so you against real estate agents?  You are one.  What are these rodents as you call them doing that has you so upset?”

That’s a great question.  Thanks for asking!

First.  I don’t consider myself a ‘Real Estate Agent.’  Yes, I help clients sell and purchase homes, but what I really consider myself is a Storyteller.  See the act of writing a contract, getting clients to settlement, attending home inspections, those are jobs that can be taught and done by nearly anyone.  That’s why you see these big Teams of real estate agents where there is a figurehead, the one you see on all the advertising, the one on the signs and then you really end up dealing with one of the minions.  These ‘figureheads’, what they are good at is pestering people, at making phone calls, and chasing down clients.   They are ‘expert’ pests.  They can ‘close’ better than any used car salesman you’ve ever encountered.  These are the Real Estate Agents.

Because of their nature.  Because they have no shame.  Because they are expert pests.  They only care about themselves and it shows in their business.

On the other hand, and I’ve told you this before, I do none of the above.  Because we produce content (a monthly newsletter, a book of the Documented ‘Steve Jobs’ Approach, the Frederick Advice Givers Podcast, the Morning Musings) we don’t have time to chase and pester.  I’d much rather just receive phone calls, texts, and emails from my audience and from referrals from my audience of new business.

I don’t have time to chase people.  I don’t have the intestinal fortitude to pester.  It goes against my core beliefs.

Before I tell you a recent Story, let me tell you about Hamsters.  Did you know that they are the most Cannibalistic Animals?  This story comes from a website call animalplanet.com:

  1. HAMSTER

Aw. So cute. So fuzzy. So … cannibalistic.

Hamsters are SO prone to kill and eat other hamsters, it’s not even limited to one species. It’s MULTIPLE species. Dwarf hamsters? Cannibals. Robo hamsters? Cannibals. Syrian hamsters? Cannibals.

Cannibals, cannibals, cannibals.

The most likely cause of hamster cannibalism is territory … and if you’re picturing fur flying in the fight for space, you’re right. But also a female might kill and eat her young if she’s feeling that her territory is threatened; if she can’t defend her babies, she’ll … dispose of them, if you will, to avoid attracting predators. She’ll also kill and eat her young if they are weak or sick. There’s also when she realizes she has too MANY babies and she knows she can’t take care of them all …

Hmmm.

I had no idea that Hamsters ate their own.

The parallels between Hamsters and Real Estate Agents are stunning. 

Just recently I encountered a Hamster in Real Estate.  Here is one specific example, but I’m sorry to say that this happens far too often and occurs daily in Real Estate.

Let me set the scene for you and explain how Real Estate commission works.  If you are selling your home you hire an agent to ‘list your home.’  They do the marketing, and their fiduciary responsibility is with the seller.  And they do this for a commission.  This is usually a percentage based on the sales price.  For the purposes of this example we’ll call it X%.  The listing agent, through a brokerage agreement with the seller, then offers commission to a buyer agent for bringing a buyer to the table and completing the transaction.  Now the buyer agent has the same fiduciary responsibility to the buyer.  The listing agent TYPICALLY offers ½ of that X% commission to a Buyer Agent.

You see where I’m going here?

The quote about Hamsters, “The most likely cause of hamster cannibalism is territory … and if you’re picturing fur flying in the fight for space, you’re right.”

If these Rodent Agents can find a way to cannibalize their own kind (other agents) they will eat them for their own benefit.

I, recently, was working with a buyer.  They had been looking at a home for MONTHS.  They were first time home buyers so money was important.  They were on a budget, and the ‘numbers’ need to make sense for a purchase to work.  One weekend we find a GREAT house, one that fit their needs perfectly.  Yes, it was a little dated, but it was perfect for them and they were ready to make an offer.

The negotiations on this one were tough.  We started out like $7,000 apart.  We’d go up $1,500, the sellers would come down $500.  Up another $1,000, the sellers would counter down $1,000.   It was exhausting.  Each time I would talk to the other agent, he would tell me how ‘tight’ the sellers were and they had to watch every penny.  I get it, sellers want and need to get every penny out of their sale.

We finally came to terms after a long drawn out process of negotiations.  My buyers were thrilled, but nervous about the process from contract to settlement.

We then had home inspections and there were issues with inspections.  We had to go through another round of negotiations.  Again.  PAINFUL.  Had to hear about how ‘tight’ the sellers were.  The buyer and sellers agreed on these inspection items.

So, all the issues were resolved, and at that point we were just waiting for settlement.

About a week before settlement the ‘settlement sheet (ALTA)’ with all of the financial information comes out.  We first checked to make sure that figures were what was expected from my buyer.

WELL…. The lender messed up on her figures from her initial estimate.  And when I pressed her for an answer, she didn’t really have any reason.  She JUST MESSED UP but wouldn’t admit it.  The figures were about $1,000 higher than expected.  So, I talk to Katrina at Signature Settlements to see if we could help the buyer out because of this oversight from the lender.  Katrina agrees to credit $250 from her fee, and I give a broker credit of $450 off my commission to help OUR client.

We didn’t have to do this, but the lender wouldn’t step to the plate, so Katrina and I did.

Then after looking at the buyer fees, I glanced at the commission expecting the amounts to match.

What did I find?

Oh CRAP.  I forgot, I had heard ‘rumors’ of this agent being a cannibal only looking out for himself and devouring everyone in his path.

The commissions were split 3.5% to HIM and instead of doing the ‘norm’ of the business he found a way to manipulate the system, to cannibalize someone of his own kind, he -through an agreement with his seller- he offered 2.5% of a buyer agent.  YES, he took 3.5%.  MORE than what he offered a Buyer agent.

And remember this quote, ”She’ll also kill and eat her young if they are weak or sick.”

Guess who are the weak, who are the uninformed in a real estate transaction?  The clients.  They have no clue about the process, and they lean on agents for advice and education…

I find a ‘hidden fee’ that the listing agent charged the seller.  It hides under the blanket called a ‘Transaction Fee’, but it really should be called ‘Let me try and find another way to F*** You Fee.’

This Cannibal, the one whose seller was so ‘tight’ who ‘watched every penny’, charged his client and additional $495 ‘F*** You Fee’

I really wish this shocked me, but this is far more the norm than it should be in real estate.  The Cannibals who hide behind their pretty suits, their perfectly groomed hair, their fancy car, try to look professional.  But all you have to do is pull back the mask, and they are ‘Hamsters at Heart’ eating others like them, eating their young, only caring for themselves.

I refuse to stoop to THEIR level.  The short term monetary loss means NOTHING to me.  IT is the the relationship that I’m after.  The long-term sustainability of my business is built on helping people and forming relationships.

Think about this… If you Cannibilize everyone around you how could you sustain a long-term business?

That is why I recently wrote 8 ‘Core Beliefs’ about agents that we’ll partner with and bring to MREG, and here is just the beginning of the first one.  There is a reason this is first:

 

  1. Protect Your Client at All Costs

“If you want to make a billion dollars, you have to impact a billion people.” Peter Diamandis, founder of the private space travel program Space X, said that after investing years of his time, energy and passion into the revolutionary movement that is privatized space flight. We can all take a page out of Diamandis’ playbook and choose to define our success by the impact it will have on others. 

The good news is that a real estate agent, you are solving one of the biggest problems a person faces in their life: protecting their most important investment.

Focus on your client at all cosst, and fight to serve their needs above your own. When you make it your end goal to be a servant leader, instead of a self-serving, opportunist salesman, you will solve more problems. Your client will spread the word, and more clients will come looking for the solutions you provide.

But you have to keep yourself in check and always keep your end cause in view. If you aren’t fighting for a cause that’s bigger than your needs, you will always end up looking out for yourself.

My promise to you is our Core Belief #1…  Unlike others, we will NEVER be the Hamsters of Real Estate.