Why is real estate a "game of telephone"?

Question

We're in the process of buying a new private residence and, as in the past, I feel this kind of...like...hush hush disconnect about the whole process. Everything has to go through the realtors, the home owners kinda aren't supposed to be in the house we're looking at while we're looking at it, negotiations are more detached than a broken driveshaft, etc.

Why is that?

Why is it this way?

Sure, I can see realtors being useful and all, but why can't I, the buyer, sit down at a table with the homeowner, the seller, and negotiate? Realtors/agents/lawyers can all be there too, but this seems like such a faux pas.

Am I wrong? If not, is there a reason behind this?...because I hate it.

Thank you!!

Account Closed · Answer

Sure, because homeowners get "emotional" about their property and think it is worth more than it really is. Then they say stupid things like "we buried Aunt Edna in the backyard because she loved the Orange Tree" and buyers say stupid things like "What an ugly collection of Urns on the mantle" when Fluffy the favored cat has her ashes in the Urn. You know, typical conversation stuff. Most RE Agents want the deal to Close so they can get paid, not have a conversation that turns into a Thanksgiving Dinner fight over whether Ohio should beat Michigan or that Hillary really DID launder money through the Clinton Foundation. They just want emotion out of the equation. Sure you're a nice guy and all, I get that. But, the seller isn't. So get used to it. ;-)

Russell Brazil · Answer

The real reasons agents exist is primarily two fold. Agents are the grease that makes the whole thing happen, because in reality 99% of home sales wouldnt happen with buyers and sellers talking directly. Lots of fighting would occur and not much else. The secondary reason is to make sure the clients dont do or say something illegal. You wouldnt believe the incredibly stupid and illegal things that come out of peoples mouths.

Andrew Johnson · Answer

@Brent Bialik So, I do think realtors do help with both the negotiation and 'prevent hurt feelings' aspect of it.  I know when I'm looking at a property I definitely ask my realtor or property manager: What will it cost to fix ___?  Can I raise rents?  Is ____ normal?  Is this property good enough to get an ROI on new cabinets?  Lots of questions that can be insulting to a homeowner that might have made design or decorative choices that I wouldn't have.  You might want to talk through comps that you've seen with your realtor and the last thing an emotional homeowner wants to hear is how you think their house is worth less than their neighbors.

Now can you sit down at a table in FSBO scenarios or other randomly in these cases?  Sure.  But the seller is probably going to have a realtor because they wanted to list the property, market it, bring in lots of potential buyers, assist with the transaction, etc.  So your best case "no agent" scenario is that they have an agent at the table and you don't.  Since the seller is paying for the agent, why wouldn't you at least want to have another set of eyes and ears?

Steven J. · Answer

The Realtors are there to assist with the complicated paperwork aspect and 'proper' negotiations. They are supposed to handle the inside of the business by marketing, showing homes, and setting up paperwork properly giving the seller and buyer the comfort that things are being done correctly.

Does this happen? OF COURSE! Does it not happen? OF COURSE! I think if you have a comfort level of dealing with the paperwork and negotiating you likely don't need that Realtor on your end. Unfortunately, you can't just cut out the Realtor on the buyer's side. The buyer may not want to worry about scheduling showings and negotiation when they know what they want.

I definitely prefer not to work with Realtors because I feel I can bring a human element to the conversation that a Realtor is not able to. Can I bring the same level of security that paperwork is being done correctly? Likely not. I think for most, its a matter of not having done research, not feeling comfortable, and not wanting the headaches associated with a handful of real estate deals the average home owner participates in. If you're looking to do multiple deals per year then you can likely learn to do it on your own but keep in mind, you'll still have your fair share of screw ups!

Brent Bialik · Answer

Legalities.  This is the kind of thing that would make the whole thing make more sense.

Brent Bialik · Answer

It's not that I don't want, like, find value in, etc having a realtor, even if they are just another set of eyes and ears.  What I don't like is the way we as buyers are almost shielded from sellers by realtors.  And, as a seller, we're almost not even supposed to be there when buyers are looking at our house...let alone, God forbid, TALK to the buyers...

That is what I don't understand.  The "Game of Telephone".

Brent Bialik · Answer

Hmmmm...Interesting. Thanks, guys.

Why is real estate a "game of telephone"?

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